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Inside Washington (05/02/2008)

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* WASHINGTON (5/5/08)--A vote on a bill that would call for the overhaul of regulation on government-sponsored enterprises (GSEs) was delayed Thursday. The bill was scheduled to be voted on Tuesday (American Banker May 2). Senate Banking Committee Chairman Christopher Dodd (D-Conn.) sent a draft of the bill to Sen. Richard Shelby (R-Ala.) Thursday, but the vote was cancelled. The cancellation also pushes back a separate measure to help borrowers who can’t afford to pay their mortgages on properties worth more than they owe. Shelby is expected to continue working with Dodd to reach a bipartisan consensus on GSE issues ... * WASHINGTON (5/5/08)--Banking industry representatives are working toward legally challenging an agreement Fannie Mae and Freddie Mac made with New York Attorney General Andrew Cuomo (American Banker May 2). The agreement would create new appraisal standards for the enterprises, and in the process of doing so, would violate the Financial Institutions Reform Recovery and Enforcement Act, representatives argued in a comment letter. The Office of Thrift Supervision called the agreement flawed and encouraged the enterprises and the Office of Housing Enterprise Oversight to reconsider. Cuomo has said much of the feedback received on the agreement has been positive ... * WASHINGTON (5/5/08)--Many of the problems from last year’s subprime mortgage debacle have dissipated, Federal Deposit Insurance Corp. Chairman Sheila Bair said Thursday. Bair was a guest on CNBC’s “Squawk Box” (American Banker May 2). The country is likely to continue seeing challenges regarding credit quality, but Bair said she couldn’t predict what would happen next. Last week, Bair proposed a plan that would allow the Treasury to lend to borrowers facing foreclosure, which would let services write down some loans up to 20% ... * WASHINGTON (5/5/08)--Sixteen North Carolina credit union representatives hiked Capitol Hill last week to meet with congressional members. The timing of the meetings with legislators and the debate in the House over the Credit Union Regulatory Relief Act (CURRA) was a coincidence, said Dan Schline, North Carolina Credit Union League senior vice president of association services (Weekly Update May 2). “It adds a real layer of urgency to be able to walk the halls of Congress to make the case for legislation,” he said. On Thursday, Sen. Joseph Lieberman (I-Conn.) introduced the Credit Union Regulatory Improvements Act (CURIA) in the Senate. Credit union representatives from New York, New Jersey, Rhode Island and the Mid-America Credit Union Association will hike the Hill May 13-14. Representatives from Texas and South Carolina will hike the Hill May 20-22 ...

CUNA NAFCU file brief in conversion lawsuit

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WASHINGTON (5/5/08)—A lower court ruling dismissing the Coalition for Credit Union Charter Option’s (CCUCO’s) legal challenge against the National Credit Union Administration (NCUA) should be upheld on appeal, said the Credit Union National Association (CUNA) and the National Association of Federal Credit Union (NAFCU) in a joint amicus brief. CUNA General Counsel Eric Richard said of the case, “So far, CCUCO's lawsuit has gotten nowhere, and we think that is for good reason. We are urging the Fourth U.S. Circuit Court of Appeals to affirm the decision of the district court." The brief, filed Friday, noted that the plaintiff has repeatedly failed to show it has standing in the case that challenges the NCUA’s conversion regulations. CCUCO, it argues, has not produced a single member that has been or will be injured by the NCUA conversion rule CCUCO is protesting in court. The joint brief says that CCUCO has failed to:
* Demonstrate that it is an organization capable of asserting associational standing; and * Identify a single credit union member that would have standing in its own right.
“The Coalitions’ complaint did not identify any of its alleged credit union members, let alone any specific members that have been injured by the challenged regulations,” the amicus brief argues. “Nor did the Coalition disclose to the district court (or to this court) that its ‘members’ also include banks and companies serving banks.” Those omissions, the brief asserts, may “suggest the possibility that the Coalition is not acting as a representative of its alleged credit union members but rather is a stalking horse for members of the thrift banking and mutual savings bank conversion industries that seek to encourage credit unions to convert to banks.”

Mica outlines next step for CURRA

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WASHIGNTON (5/5/08)—The Credit Union National Association (CUNA) met Friday with House Financial Services Committee Chairman Barney Frank (D-Mass.) and his staff to address the next steps for the Credit Union Regulatory Relief Act (CURRA, H.R. 5519). CUNA President/CEO Dan Mica said the session was productive and discussions lasted about an hour. Mica noted after the meeting that the bill now is in the hands of the committee chairman. “There is nothing more we can do at this time for CURRA,” Mica said. “Our focus has turned completely to the broader Credit Union Regulatory Improvements Act, known as CURIA in both the House and Senate.” The package has 149 sponsors in the House and was introduced in the Senate just last week by Sen. Joseph Lieberman (I-Conn.).