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Senate vote on housing bill may be this week

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WASHINGTON (4/28/09)--Though the Senate is expected to act on one of two housing bills this week, it’s not clear which one will be considered. Last week, Sens. Dick Durbin (D-Ill.), Christopher Dodd (D-Conn.) and Charles Schumer (D-N.Y.) introduced two bills--S.895 and S.896. Both are similar to H.R. 1106--Helping Families Save Their Homes Act--which has been passed by the House. However, S. 896 does not contain judicial mortgage modification language, otherwise known as cramdown. The Credit Union National Association (CUNA) strongly opposed H.R. 1106 when it was passed by the House of Representatives in March. CUNA expects that the judicial mortgage modification provisions that are ultimately considered by the Senate will be significantly more limited than those passed by the House. A Senate bill also could include language that would allow credit unions to spread out assessment costs over seven years in association with the National Credit Union Administration’s (NCUA) corporate credit union stabilization fund. The added language also could increase NCUA borrowing authority and implement a permanent increase to $250,000 for federal share and deposit insurance for credit unions.

Inside Washington (04/27/2009)

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* WASHINGTON (4/28/09)--Last week, the Federal Reserve Board released some details about stress tests given to 19 of the nation’s largest banks. The Fed indicated that the tests showed banks were well-capitalized, but that doesn’t necessarily mean that several of those banks will not have to raise capital, said financial industry observers. According to an analysis by FBR Capital Markets, Bank of America Corp. is perceived to be one of the more vulnerable institutions. Wells Fargo, Regions Financial Corp., Fifth Third Bancorp and KeyCorp also are perceived to need more capital (American Banker April 27). The Fed has said it will release complete test results Monday. Regulators are encouraging banks to build up their capital to absorb potential losses. Fed officials also have cautioned that the stress tests may not be representative of worse-case scenarios ... * WASHINGTON (4/28/09)--Democrats are hoping to receive approval for a $3.5 trillion budget to celebrate President Barack Obama’s 100th day in office. A vote on the budget is scheduled in the House today and in the Senate Wednesday (The New York Times April 27). The budget, which is opposed by many Republications, is perceived to encompass Obama’s initiatives on transportation, education, energy and health care ... * WASHINGTON (4/28/09)--The Supreme Court is scheduled to meet today to decide whether the Office of the Comptroller of the Currency (OCC) can enforce laws--even state laws--against a national bank (American Banker April 27). The case is related to a 2005 investigation conducted by former New York Attorney General Eliot Spitzer, who asked Citigroup, Wells Fargo and Co., and JP Morgan Chase and Co. to provide him with data so he could determine if they engaged in discrimination. The banks did not give him the data, so Spitzer threatened to sue them. The agency said they did not have to give up the data because of visitorial powers. Current New York Attorney General Andrew Cuomo, who took on the case after Spitzer, argued that a federal preemption does not prevent a state from prosecuting its laws. The OCC said that the court has already supported their position in the Watters V. Wachovia case, which ruled that OCC could enforce laws over banks ... * WASHINGTON (4/28/09)--David Moffett, former Freddie Mac CEO, has made a temporary return to the enterprise as a consultant after its former chief financial officer, David Kellerman, died last week (The Wall Street Journal April 27). Moffett resigned from Freddie Mac in March ... * WASHINGTON (4/28/09)--The Federal Deposit Insurance Corp. (FDIC) warned banks Friday about shell scams. Shell companies are usually limited liability companies without significant assets (American Banker April 27). The businesses involved with the scams are offering customers with poor credit histories the ability to receive unsecured business loans by substituting their own information with the shell company’s information ...

Whats ahead this week in committee hearings

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WASHINGTON (4/28/09)--This week’s congressional hearings schedule is a bit lighter than usual--but there are still some issues relevant to credit unions, such as the mark up of a mortgage reform bill. On Tuesday, the House Financial Services Committee is set to mark up H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009. The bill was introduced in March by Reps. Brad Miller (D-N.C.) and Mel Watt (D-N.C.), and intends to curb predatory lending practices. CUNA submitted a letter to the committee regarding the legislation last week. CUNA supports the bill’s intent but said that lawmakers should revise existing mortgage lending laws before pressing for additional laws that could be redundant or conflicting with new regulations. Also on Tuesday, the Senate Banking Committee plans to meet on several pending nominations to the Treasury Department. On Thursday, the Joint Committee on Economics plans to hold a hearing on the economic outlook.

House could act on credit card practices bill

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WASHINGTON (4/28/09)--The House could vote on a bill this week--H.R. 627, the Credit Cardholders’ Bill of Rights Act--which aims to protect credit card holders. H.R. 627 would prohibit creditors from considering a payment as late unless the consumer is provided with reasonable time to make payments. The bill also would require creditors to mail statements to cardholders at least 25 days before the due date. The Credit Union National Association (CUNA) generally supports the bill. In its testimony, CUNA had encouraged the committee to consider a 21-day threshold because the 25-day requirement would be too close to the end of the billing cycle and create logistical problems for credit unions. A manager’s amendment was added that includes the threshold CUNA sought. CUNA also encouraged the committee to extend the effective date to July 1, 2010--which also was added in an amendment. H.R. 627 largely parallels rules that the National Credit Union Administration and Federal Reserve Board of Governors finalized and go into effect July 2010. However, CUNA is concerned that an amendment to regulate interchange fees may be offered by Reps. Peter Welch (D-Vt.) and Bill Schuster (R-Pa.). CUNA strongly opposes any effort to regulate interchange fees, and is hopeful that the rules committee will not make such an amendment in order.

Fin-lit survey results disheartening

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WASHINGTON (4/28/09)--About 41% of adults say they’d give themselves a C, D or F on financial literacy, according to the 2009 Consumer Financial Literacy Survey. Complete results of the survey are scheduled to be unveiled today at a congressional briefing on Capitol Hill. One thousand adults age 18 and older participated in the survey. Other findings:
* 26% admitted to not paying all of their bills on time; * 32% reported that they have no savings; and * 33% said they do not put any part of their income toward retirement; up from 28% in 2008.
The report indicated that if the survey results were applied to the general population, it would show that more than 58 million adults do not pay their bills on time, 72 million have no savings, and more than 74 million do not put any part of their income toward retirement. “These results are disheartening, but certainly not surprising,” said Jim Hanson, vice president of the Credit Union National Association’s (CUNA) Personal Finance department. “We know that financial literacy challenges are significant among all consumer demographic groups, not just among youth or new immigrants. And while there is no shortage of financial education materials available to consumers, the issue has often been about creating demand for financial education. “In today's economic market, the demand should certainly be there. Educating consumers about wise money management won't happen overnight. It's a marathon, not a sprint,” he added. The phone survey is conducted annually to gauge the financial literacy of Americans. The results were tracked by sex, age, ethnicity, income level, geographic region, and education and tracked over the three-year period, when available. In 2006, CUNA formed a Financial Literacy Task Force, which hosted a financial literacy summit in its inaugural year and has issued a report on improving member financial literacy. To see the full report, use the link.