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N.C. S.C. leagues start spring Hill-hike season

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WASHINGTON (5/14/12)--Member business lending (MBL) legislation was again the focus last week, as credit union leaders from North Carolina and South Carolina hiked Capitol Hill to discuss key issues and other credit union priorities with their respective elected officials.

North Carolina Credit Union League (NCCUL)  staff and representatives from Raleigh's Local Government FCU; Winston Salem's Truliant FCU, Allegacy FCU, Winston-Salem FCU, and Members CU; Charlotte Metro FCU; and Salisbury's Lion's Share FCU took part in hill visits and an early reception at Credit Union House.

NCCUL President/CEO John Radebaugh, center-left, and others from the league and N.C. credit unions, discussed MBLs and other priorities with Rep. G.K. Butterfield's (D) legislative assistant Saul Hernandez (CUNA Photo)
Visits with Reps. Larry Kissell (D), Howard Coble (R), Renee Ellmers (R), David Price (D), Mike McIntyre (D), Mel Watt (D), G.K. Butterfield (D) and Patrick McHenry (R),  and Sen. Kay Hagan (D), and members of their staff were on the schedule. The hill visitors sought support on legislation that addresses financial examination fairness, ATM disclosure regulations, and supplemental capital for credit unions, as well as pending MBL legislation, during their visits.

"For the most part, the issues weren't new to our members of Congress," Dan Schline, NCCUL senior vice president of association services, said, "but the trip was another opportunity for credit union representatives to talk directly with our members of Congress."

Schline said this and other visits have helped North Carolina's credit unions develop strong  relationships with legislators that bring "real value" to the league's legislative advocacy efforts.

South Carolina Credit Union League (SCCUL) President/CEO Steve Fowler said his group's meetings were also productive. That group included SCCUL staff and representatives from Anderson (S.C.) FCU; Charleston's CPM FCU; Rock Hill's Family Trust FCU; Greenville's MTC FCU, SC Telco FCU and Greenville FCU; Florence's Health Facilities FCU; and Sumter's SAFE FCU.

SCCUL President/CEO Steve Fowler, right, and Rep. Mick Mulvaney (R) discuss the positive work credit unions have done in South Carolina at a Hike the Hill session held last week. (CUNA Photo)

Meetings with Reps. Joe Wilson (R) and Mick Mulvaney (R), and staffers from the offices of Reps. Jeff Duncan (R), James Clyburn (D) and Tim Scott (R), as well as Sens. Jim DeMint (R) and Lyndsey Graham (R), were on the agenda for the South Carolina group.

Both groups also met with National Credit Union Administration (NCUA) staff during their visit.

The Michigan Credit Union League and others from that state will make their own trek to Capitol Hill later this month, and groups from Maine, Kansas, Oregon, Washington, Missouri, Montana, Ohio and Texas are on the June Hike the Hill schedule. More visits are set to take place this fall.

MBL cap increase encourages competition ACI president says

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WASHINGTON (5/14/12)--Overall, America needs public policies that encourage competition, and Congress needs to "remove market entry barriers that suppress small business lending," American Consumer Institute (ACI) Center for Citizen Research President Steve Pociask said in a recent blog post on the group's website,

Pociask in his post again supported pending Senate and House bills that would increase the credit union member business lending (MBL) cap to 27.5% of a credit union's assets, up from 12.25%, under certain conditions. The Credit Union National Association (CUNA) has estimated that this increased MBL authority would help to inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.

Senate leadership remains committed to a floor vote on the MBL legislation, but a voting date has still not been determined.

The ACI president noted that credit union loans to small businesses increased by 40% during the recession, while small business lending by banks fell by 20% over that same time period. Credit unions remain willing to lend to small businesses, but "their lending has been capped by an outdated law that suppresses small business access to capital and deters smaller credit unions from serving these businesses," he wrote.

Ending the market barrier imposed by the MBL cap "would increase competition and stimulate economic investment, and do so without increasing government spending," Pociask said.

For the full blog post, use the resource link.

NCUA prohibits one from CU work

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ALEXANDRIA, Va. (5/14/12)--Cynthia Harvey, a former employee of Allied Tube Employees FCU, Harvey, Ill., has been prohibited from future work at any federally insured financial institution by the National Credit Union Administration (NCUA) following her conviction on federal credit union fraud.

Harvey was sentenced to 41 months in prison, three years of supervised probation, and ordered to pay $802,619 in restitution, according to an NCUA prohibition order released Friday.

Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

Use the resource link below to access NCUA enforcement orders online.

Inside Washington (05/11/2012)

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  • WASHINGTON (5/14/12)--The Consumer Financial Protection Bureau (CFPB) may require each financial institution to maintain a single database for all consumer complaints, a representative from a bank that has gone through CFPB's exam process said Thursday (American Banker April 11).  Scott Feinstein, a senior vice president and legal counsel at Sovereign Bank, said that CFPB examiners asked questions about how Sovereign tracks complaints for different products, such as mortgages and cards. Feinstein said he believes the CFPB wants to take a "holistic view" of consumer complaints. CFPB examiners visited Sovereign in the past month, staying for about a week, Feinstein said …
  • ALEXANDRIA, Va. (5/14/12)--The National Credit Union Administration (NCUA) has cancelled today's planned closed board meeting, which was set to begin at 10:00 a.m. ET. However, the agency said, the May 24 open and closed board meetings are still scheduled ...
  • WASHINGTON (5/14/12)--Federal Reserve Board Chairman Ben Bernanke on Thursday denied that restrictive bank examiners are hurting the lending market. Since the financial crisis, bankers have maintained that examiners have targeted even sound loans, making banks hesitant to extend further credit. Bernanke said the central bank looked into specific concerns raised about the examination process and its effect on banks' willingness to lend. The Fed analyzed documentation for more than 300 loans, he said.  "We found that Federal Reserve examiners were appropriately implementing the guidance and were consistently taking a balanced approach in determining loan classifications," Bernanke said. "Moreover, the documentation we reviewed indicated that examiners were carefully considering the full range of information provided by bankers, including relevant mitigating factors, in determining the regulatory treatment for the loans" …
  • WASHINGTON (5/14/12)--U.S. Sen. Bob Casey (D-Pa.) on Thursday questioned the Federal Reserve's recent decision to allow three Chinese, state-owned banks to offer or expand retail banking services in the U.S. In a letter to Federal Reserve Chairman Ben Bernanke, Casey raised questions about the scrutiny given to these banks before approval and whether having the existence of state-owned, Chinese banks would undermine the private U.S. banking system. "China has a long and well documented record of undercutting U.S. companies and workers," Casey said. "China's history of flouting international trade rules requires that any involvement in the U.S. banking system needs close scrutiny." The Fed board announced Wednesday it was approving the application of the Industrial and Commerce Bank of China Ltd., China's largest bank, and two other Chinese firms to purchase The Bank of East Asia U.S.A., which operates in New York and California. The Fed also approved an application by the Bank of China to set up a branch in Chicago and an application by the Agricultural Bank of China Ltd. to establish a branch in New York City …
  • WASHINGTON (5/14/12)--U.S. Sens. Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) on Thursday pressed the Federal Housing Finance Agency (FHFA) to introduce measures to make it easier for Fannie Mae and Freddie Mac borrowers to refinance their loans.  Menendez and Boxer introduced legislation last week that would enact those initiatives, but in a conference call Thursday they said the FHFA can move unilaterally to ease restrictions on homeowners. The bill would extend streamlined refinancing for all Fannie and Freddie borrowers, regardless of how much they owe compared to the value of their home; eliminate up-front fees on refinances; eliminate appraisal costs for all borrowers; remove additional barriers to competition; and require second lien holders and mortgage insurers who unreasonably block a refinance to pay a fine …
  • WASHINGTON (5/14/12)--Acting Federal Deposit Insurance Corp. (FDIC) Chairman Martin Gruenberg Thursday summarized the FDIC resolution strategy for winding down troubled banks. The FDIC would likely place the parent company into receivership and pass its assets, principally investments in its subsidiaries, to a newly created bridge holding company, Gruenberg said. Equity claims of the firm's shareholders and the claims of the subordinated and unsecured debt holders would be left behind in the receivership. In exchange the receivership would have the equity in the bridge holding company as an asset. Initially, the bridge holding company would be owned by the receivership. Once the bridge company has established a capital base and its liquidity concerns are addressed, ownership and control of the surviving franchise would be transferred to private hands. To create the capital base of the bridge, some of the debt of the former parent company, which has been left in the receivership, would be converted to equity in the new bridge holding company, Gruenberg said. To do this, the FDIC would estimate the extent of losses in the receivership and apportion these losses to the firm's equity and subordinated and unsecured debt holders according to their order of priority. Read the full text of the speech here  ...