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Cramdown vote coming prospects unclear

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WASHINGTON (4/24/09)—A measure that would allow bankruptcy judges to change--or “cramdown”—the terms of existing mortgages could come up for a vote in the Senate as early as next week, according to press reports Thursday. Senate Majority Whip Richard Durbin held a press conference mid-day on the legislation, which is an amended version of a House bill (H. R. 1106), strongly opposed by the Credit Union National Association (CUNA). Although against the broad cramdown provisions in the House bill, CUNA has continued to work with Senate lawmakers and their staffs to mitigate the effect on credit unions if such a bill is passed into law. The measure primarily has been supported by Democrats and opposed by Republicans. Enough centrist Democrats oppose the mortgage bankruptcy provisions, of what is a broader bill, to put its prospects into question, according to press reports. John Magill, CUNA senior vice president of legislative affairs, said CUNA-supported portions of the bill, such as authority for credit unions to spread out assessment costs associated with the National Credit Union Administration’s corporate credit union stabilization fund, may may still come up as part of a larger housing bill.

Inside Washington (04/23/2009)

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* WASHINGTON (4/24/09)--The National Credit Union Administration (NCUA) board approved revisions to delegations of authority that transfer the responsibilty for chartering new federal credit unions from the regions to the Office of Small Credit Union Initiatives (OSCUI). Under the changes, the OSCUI now has the authority to approve or disapprove new charters and has authority to enter into a Letter of Understanding and Agreement. The OSCUI must concur if a regional director wants to revokie a new charter if the credit union fails to commence operations within a specific time frame ... * WASHINGTON (4/24/09)--The Obama administration would like to see changes to a credit card bill that could be taken up by the House Thursday. Among the changes: the administration would like card companies to disclose how long it would take cardholders to pay off a balance when they only make minimum payments, and force card issuers to get cardholders’ permission before they are charged a fee for exceeding credit limits. The administration also wants to require that banks apply payments first to balances carrying the highest interest rate, and require any teaser interest rate to be offered for at least six months (American Banker April 23). The legislation, by Rep. Carolyn Maloney (D-N.Y.) passed the House Financial Services Committee Wednesday ... * WASHINGTON (4/24/09)--It has been two months since the Treasury Department announced its intention to expand the Term Asset-Backed Securities Loan Facility (Talf) but so far, no changes have been made and financial observers express doubt that the changes will ever happen (American Banker April 23). The Treasury said it would expand Talf to include mortgage-backed securities and eventually take on legacy securities. The Federal Reserve Board runs and finances Talf and has not indicated that it will act on the proposed expansion. Chris Low, FTN Financial economist, said there isn’t much that can get Talf going because the [economic] climate has changed. Bert Ely, a consultant in Alexandria, Va., said few companies have used Talf, which makes it more challenging to expand it. The biggest obstacle to expanding Talf, however, is executive compensation restrictions. Most investors would not be interested in having to follow the restrictions, although it is not clear if the restrictions apply to Talf, observers said ...

Upcoming NCUA small CU workshops look at red flags more

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ALEXANDRIA, Va. (4/24/09)—The National Credit Union Administration (NCUA) is offering a free training workshop, hosted by the agency's Office of Small Credit Union Initiatives, in Philadelphia today. The session is the third in a series offered around the nation and is expected to address the following topics:
* Issues facing credit unions from a regional perspective; * Updates regarding identify theft “red flags;” * Credit and liquidity risks; and * Updates to the credit practices rule and proposed amendments to Truth in Lending rules.
The schedule for the training sessions for the rest of the year is as follows:
* May 2, sessions in Phoenix and in New York, NY; * May 8, Detroit, Mich.; *May14, Minneapolis, Minn.; * June 4, Portland, Maine.; * June 6, Salt Lake City, Utah; * June 27, San Antonio, Texas; * July 16, Louisville, Ky.; * Aug. 13, Kansas City, Mo.; * Aug. 26, Alexandria, Va.; * Aug. 27, Cleveland, Ohio; * Sept. 10, Charleston, W.V.; * Sept. 12, Seattle, Wash.; * September 23, Erie, Pa.; * Sept. 24, Chicago, Ill.; * Sept. 26, Boston, Mass.; * Oct. 4, Los Angeles, Calif.; * Oct. 7, Baton Rouge, La.; * Oct. 15, Memphis, Tenn.; and * Oct. 17, Honolulu, Hawaii.
Use the resource link below to access agenda and registration information.

Mortgage reform bill should be last resort say CUNA

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WASHINGTON (4/24/09)—Lawmakers should continue to work closely with federal regulators to revise mortgage lending laws before pushing on with legislation that could be redundant or conflicting with new regulations, said the Credit Union National Association (CUNA) Thursday. In a letter to the top members of the House Financial Services Committee, CUNA President/CEO Dan Mica said credit unions support efforts to eliminate predatory mortgage lending practices. The committee conducted a hearing Thursday on H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act, and the CUNA letter will be added to the hearing record. While supporting the bill’s intent, Mica urged lawmakers to resist pressing for additional laws before assessing the effectiveness of a series of regulatory actions currently underway to address mortgage lending problems and concerns. Among the five regulatory proposals named, Mica noted that the Federal Reserve Board currently is reviewing its closed-end lending rules and its home equity lending rules under Regulation Z, which implements the Truth in Lending Act. Proposed rules are expected to be issued for comment later this year. “As the Committee proceeds with consideration of H.R. 1728, CUNA urges consideration of only those statutory changes which are absolutely essential,” Mica said in his letter to Chairman Barney Frank (D-Mass.) and Rep. Spencer Bachus (R-Ala.), the panel’s ranking member. The CUNA letter also addressed concerns specific to the bill under consideration, which was introduced in March by Reps. Frank, Brad Miller (D-N.C.) and Mel Watts (D-N.C.). For example, CUNA noted that certain provisions could trigger lawsuits under the Truth in Lending Act (TILA), an area already rife with legal challenges. To read more about this and other concerns, use the resource link below to access the CUNA letter.

Mica Use emotions energy constructively

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WASHINGTON (4/24/09)—Whether you are a lawmaker or the head of a trade association, there will be a time when constituents’ emotion over a hot topic will have to be transformed into positive energy, said Credit Union National Association (CUNA) President/CEO Dan Mica in his latest monthly column in The Hill. Mica has experience in both roles. He is a former U.S. congressman representing Florida and currently in his thirteenth year heading CUNA. In his April “K Street Insider” contribution, Mica said that in both positions he has needed to be able to help those he represents to contain their strong feelings and find the right solution to a pressing challenge. He added that the country’s deep recessionary environment is demanding that those who work on Capitol Hill, or for constituency groups like CUNA, be more mindful than ever of heated emotions. He cited CUNA’s recent example of channeling members’ upset about some federal regulatory decisions addressing corporate credit union liquidity into positive action. Mica noted that the governing body for federally insured credit unions recently had to step in and take over two wholesale “corporate” credit unions. That action is funded through insurance assessments on the country’s 8,000 federally insured “natural person” credit unions. Never in his 13 years at CUNA, Mica said, has an issue generated as much e-mail from members. And some of the messages, he added, were quite heated. CUNA successfully turned the passion behind the issue into an email-writing campaign in which 15,000 messages were sent from credit unions directly to the three-member National Credit Union Administration board. One board member congratulated CUNA and credit unions on their grassroots approach to their concerns, but others at the regulatory agency were not happy to receive so many e-mails. “I explained to the agency’s chairman that expressing concerns in this way was more productive for us and for the agency than having our members storm Capitol Hill, which many were ready to do,” Mica said. “A prominent and savvy CEO said in a recent conversation: ‘A good leader never lets a crisis go to waste,’” Mica said.