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Washington Archive

Washington

NCUAs Matz backs small biz MBL cap lift

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ALEXANDRIA, Va. (6/1/10)--National Credit Union Administration (NCUA) Chairman Debbie Matz, marking the end of National Small Business Week on Friday, praised small businesses as vital contributors to job creation and again spoke in favor of increasing the current cap on credit union member business lending (MBL). “An enhanced ability for credit unions to lend for business purposes – if properly regulated, with appropriate safeguards – can become an even greater spur to job creation in the future,” Matz said, adding that the NCUA would “promptly revise” its regulation “to ensure that additional capacity in the credit union system would not result in unintended safety and soundness concerns” if the MBL cap was lifted. The Treasury last week sent its own proposed legislation that could lift the MBL cap to as high as 27.5% of a credit union’s assets, and Rep. Barney Frank (D-Mass.), who chairs the House Financial Services Committee, recently said that his committee would soon hold a hearing on MBLs. The Credit Union National Association has steadfastly supported lifting the MBL cap, saying that increasing the current 12.25% of assets loan ceiling to 25% would inject over $10 billion in assets into the economy, creating as many as 100,000 new jobs.

Inside Washington (05/31/2010)

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* WASHINGTON (6/1/10)--The battle over preemption continues as the Office of the Comptroller of the Currency (OCC) and banking industry representatives back the Senate version of the regulatory reform bill, saying it more explicitly restores the Barnett standard. State regulators and consumer groups support the House provision, which they said is more flexible and would require the OCC to take additional steps before preempting a law, said American Banker (May 28). Under the Barnett standard, the OCC can preempt state laws on a case-by-case basis. The House version said the OCC can preempt a law if it prevents, interferes with or impairs banking. The House version also would require OCC to prove that a federal law already exists that addresses the issue the state law is trying to address. The OCC and bankers said if the Senate version were adopted, they would have a better chance of winning court battles on preemption. The two versions also differ in how much power they give state attorneys general. The House bill would allow state attorneys general to enforce any federal law against national banks, while the Senate bill would only allow states to enforce federal rules from a new consumer protection regulator. It also limits attorneys general’s actions to their own states ... * WASHINGTON (6/1/10)--The Obama administration is focused on several provisions within the regulatory reform bill: ensuring the Volcker rule is part of the final bill, subjecting retail brokers to a fiduciary duty and preventing auto dealers from being exempted from consumer protection (American Banker May 28). Neal Wolin, Treasury deputy secretary, said the administration will work to ensure the Volcker rule’s ban on proprietary trading is in the final bill. The administration also wants to maintain safeguards to prevent resolution authority from being used unless necessary. However, he avoided taking a position on a provision of the Senate bill by Sen. Blanche Lincoln (R-Ark.) that would force banks to divest their swap desks ...

CUNA CUs continue interchange push

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WASHINGTON (6/1/10)—The Credit Union National Association (CUNA) continues its push to have interchange fee legislation removed. The interchange amendment was included in the Senate version of the regulatory reform package, S. 3217, the Restoring American Financial Stability Act (RAFSA), which passed the Senate earlier this month by a 59-39 vote. However, the House version of regulatory reform, which was passed late last year, does not address interchange fees. CUNA, associated credit union leagues, and credit union employees and members are all working over the Memorial Day recess, which lasts until June 7, to spread their anti-interchange-legislation message throughout various congressional district meetings. A toll free action line created by CUNA is available for credit unions and their members to use to call their legislators' offices. That line can be reached by calling 877-223-5275. CUNA and credit union leagues have also provided other means of contact for credit union backers at http://capwiz.com/cuna/home/(Use the resource link). CUNA and the leagues' efforts, as well as outreach by individual credit union members, have resulted in 60,000 individual contacts with legislators as of Friday. More direct action will follow next week, with CUNA and the leagues backing a nationwide fly-in and another round of CUNA's National Hike the Hill on June 8, 9 and 10.

Despite House approval NFIP some SBA programs to lapse

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WASHINGTON (6/1/10)--Although the House on Friday approved legislation that would extend the National Flood Insurance Program (NFIP) and some fee eliminations and increased guarantees for Small Business Administration (SBA) 7(a) and 504 loans, both of those programs will still lapse for a minimum of a week. The legislation, known as the "American Jobs and Closing Tax Loopholes Act of 2010,” still requires Senate approval, and that body of Congress will not return to Washington until June 7. Both the NFIP and SBA programs that are addressed in this legislation expired on Monday. The extender legislation, once approved, would extend these programs until Dec. 31. The NFIP is important to credit unions because the mortgages they write for properties in a floodplain are required to have flood insurance. Since flood insurance is unavailable in many parts of the country, the NFIP is an important resource to credit unions and other lenders.

Fed releases Reg DD E clarifications

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WASHINGTON (6/1/10)--The Federal Reserve last week clarified some aspects of its Regulation E, Electronic Fund Transfers, and Regulation DD, Truth in Savings, that address overdraft services. The Fed made slight alterations to Reg E, which requires consumers' affirmative consent (opt-in) before institutions could charge overdraft fees for ATM and one-time debit card transactions. The Fed has clarified that institutions “cannot assess a fee for the payment of ATM and one-time debit card overdrafts” if consumers do not opt-in to their overdraft programs, “even if the institution has a policy and practice of declining ATM and one-time debit card transactions upon a reasonable belief that an account has insufficient funds.” "The final rule does not provide any exceptions for allowing overdraft fees for ATM and one-time debit card transactions to be imposed without consumer consent,” the Fed added. According to the Fed, “adopting exceptions to the fee prohibition would undermine the consumer’s ability to understand the institution’s overdraft practices and to make an informed choice.” This prohibition applies to all financial institutions, the Fed release said. The Fed release also addressed opt-in confirmation, stating that institutions must provide their consumers or members with written documentation of their opt-in choice in written form. These disclosures may not be made orally, the Fed said. Overall, the Fed said that its Regulation E final rule applies “solely to overdraft fees imposed in connection with ATM and one-time debit card transactions,” not overdraft fees that are related to check, ACH and recurring debit card transactions. Addressing Reg DD, the Fed clarified that section 230.11(c) of that rules does not require institutions “to exclude from the consumer’s balance funds that may be transferred from another account” under retail sweep programs. Consumers that take part in retail sweep programs “may reasonably expect to see a single balance combining the funds in the transaction subaccount and the savings subaccount when they request an account balance.” The Fed also amended the effective date of Section 230.11(a)(1)(i), which requires financial institutions to use the term "total overdraft fees" on their periodic statements, pushing it back to Oct. 1. The remainder of the rule will come into effect on July 1. For the Fed releases in full, use the resource link.