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Mica urges CUs Keep pushing on interchange

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WASHINGTON (6/16/10)--Credit Union National Association (CUNA) President/CEO Dan Mica Tuesday urged credit union leaders to keep up the drive against interchange limits, particularly in the face of this week’s massive push by merchants to convince lawmakers to impose controls on the fees paid to use the electronic payments network. Mica said on a national call to credit union league presidents that
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credit unions still face an uphill battle to convince lawmakers to remove interchange limits from a final financial regulatory reform package, which is currently being hammered out in Congress. But despite the enormity of the challenge, Mica said, credit unions have gotten further on the issue than may have been considered possible just a few weeks earlier. Last week, hundreds of credit union advocates came to Washington, D.C., to urge lawmakers to contact the House-Senate conferees and urge them to remove interchange language form the regulatory reform legislation. In addition, about 525,000 contacts were made via email and phone calls. The interchange provisions as written would hurt consumers by driving up debit card fees, with no compensatory advantages to consumers, the credit union representatives told lawmakers. The credit union reps also urged lawmakers on both sides of the aisle to sign a letter being circulated by Reps. Debbie Wasserman Schultz (D-Fla.) and Kenny Marchant (R-Texas) that calls on conferees to strip the interchange language from the bill. More than 120 House members have signed on in support of the letter after the credit unions visits. In the midst of this week’s merchants’ fly-in, there is also a
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battle-of-the-ads running in Capitol Hill publication. The minority bankers group, the National Bankers Association, warns in an ad that the interchange amendment would hurt “low-income consumers” the most. An ad sponsored by America’s Credit Unions states, “92 Million Credit Union Members Say No to a Fee on Their Debit Card.” And another, backed by the California Credit Union League, California Independent Bankers, the Texas Credit Union League, IBAT, and the Nevada Credit Union League, says, “Giant retailers want you to pay their cost of doing business.” On the other side of the debate, one ad with a "if it quacks like a duck" theme urges Congress to tax credit unions for opposing the interchange amendment, saying if credit unions want to take the same position as the banks they should be taxed like banks. The ad is sponsored by a group calling itself American Family Voices--and yesterday the group began faxing the ad to credit unions. "Faxes to CUs? That tactic is ridiculous and will only get our members even more fired up at the grassroots level to oppose the interchange amendment," Mica noted. Another such ad, one by the National Association of Convenience Stores, urges lawmakers to accept the interchange amendment and attempts to draw a connection to “big bank bailouts” in the interchange discussion. Informally calling the latest call to action “Operation Push Back,” CUNA’s Mica again urged credit union advocates to re-double efforts to gain lawmaker support in removing interchange language from the bill, even if only to give it a full vetting under the congressional hearing process. The amendment was added late in the Senate’s debate of its reform package through the amendment process. Mica encouraged credit union advocates to go out of their ways to thank federal lawmakers who have already signed on to the Wasserman Schultz-Marchant letter. It is expected that the House-Senate conferees may vote on the interchange amendment next Tuesday.

Inside Washington (06/15/2010)

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* WASHINGTON (6/16/10)--If the Office of Thrift Supervision (OTS) and Office of the Comptroller of the Currency (OCC) merge, the thrift charter’s days might be numbered, according to American Banker (June 15). The agencies’ merger--through enactment of the regulatory reform bill--could get rid of some of the benefits associated with choosing the thrift charter, which means a single agency would tasked with enforcing two different sets of rules, the Banker noted. Conferees were expected to address some of the issues about the merger during a session Tuesday. The OTS and OCC already have transition teams, though the House and Senate bills would give the agencies a year to finish the merger, with an extension of six months, if needed. After the merger, the OTS would be gone within 90 days. OCC will then supervise thrifts and the Federal Reserve Board will oversee their holding companies ... * WASHINGTON (6/16/10)--Sen. Tom Carper (D-Del.) and other senators Monday wrote to conferees on regulatory reform legislation, requesting that language in the Senate bill regarding a pre-emption compromise be placed in the final bill (American Banker June 15). Carper’s pre-emption amendment was changed from its original version to allow greater authority for state attorneys general to enforce over national banks. The compromise will provide national banks with “greater certainty and predictability” while strengthening consumer protection, they wrote ... * WASHINGTON (6/16/10)--President Barack Obama has written a letter to House and Senate leaders asking them to approve legislation that would create a $30 billion fund to boost small business lending. The House is expected to tackle the legislation this week, and the Senate is slated to follow suit. Obama also asked Congress to tax financial institutions that benefited from the financial bailout ...

NCUA removes interest rate risk policy discussion from agenda

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ALEXANDRIA, Va. (6/16/10)--The National Credit Union Administration (NCUA) on Tuesday removed discussion of a proposed rule on interest rate risk policies from the list of items to be considered at its June 17 board meeting. An additional discussion on NCUA supervisory activities was also added to the closed portion of the meeting. The NCUA is still scheduled to discuss the final version of recently proposed changes to its chartering and field of membership (FOM) policies at the board meeting, which will take place at 10 a.m. ET. Other topics of discussion will include the delegation of chartering authority and a proposed rule addressing the NCUA's requirements for insurance, interest rate risk policies and programs. The NCUA also will discuss the accounting standards, the payment of insured shares, and assessments related to its Temporary Corporate Credit Union Stabilization Fund will have its monthly report on the status of its National Credit Union Share Insurance Fund during the meeting.

Narrow interchange hearing set for this afternoon

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WASHINGTON (6/16/10)—Although debate on the interchange legislation contained in the Senate’s financial regulatory reform package will not occur in earnest until next week, interchange will be discussed later today during a Senate Appropriations Committee hearing entitled “Oversight of Federal Payment of Interchange Fees: How to Save Taxpayer Dollars.” The hearing, which will take place at 2:30 this afternoon, will feature testimony from the U.S. Treasury’s Gary Grippo, the Government Accountability Office’s Alicia Puente Cackley, and Amtrak’s Janet Langenderfer. A second panel will include testimony from both financial and mercantile representatives, as well as the U.S. Public Interest Research Group. The hearing will be chaired by Financial Services and General Government subcommittee chairman Richard Durbin (D-Ill.) who introduced the interchange legislation that is in the Senate version of regulatory reform. The House version of the bill does not contain any interchange-related language. The hearing follows the Monday release of a U.S. Treasury report which found that the federal government would save taxpayer funds by negotiating future interchange charges with card networks. The Electronic Payment Coalition, which counts the Credit Union National Association among it's members, has said that this study proves that broad-based regulations to limit interchange fees are not needed. The Senate bill’s interchange language would allow the government to control interchange fees. Durbin has written in a carve out that would exempt financial institutions with under $10 billion in assets from the terms of the interchange legislation, but the Credit Union National Association has repeatedly said that that carve out would not be meaningful because there is no requirement for the payment card networks to operate a higher rate system for small issuers. Hundreds of credit union representatives from across the country came to Washington last week to voice their opposition to the interchange changes, and over half a million credit union backers have done the same through phone calls or electronic messages to their elected representatives.

CUNA releases SAFE Act Analysis

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WASHINGTON (6/16/10)--The Credit Union National Association (CUNA) on Tuesday released a final rule analysis on the final rules for implementing the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act. The SAFE Act requires residential loan originators that work for financial institutions that are regulated by the National Credit Union Administration (NCUA) and other federal financial institution agencies to register with the Nationwide Mortgage Licensing System and Registry. These employees will also be required to maintain this registration. Financial institutions that are covered under the Act will also be required to adopt and implement written policies and procedures to ensure compliance with these requirements. The SAFE Act also requires lenders to tailor these policies to best meet the nature, size, complexity, and scope of their mortgage lending activities. Federally-insured credit unions will be covered by these rules, but credit union service organizations (CUSOs) will not. The rules will also apply to privately insured credit unions when certain conditions are met and agreements reached between NCUA and the state regulator. Otherwise, these privately insured credit unions will need to be registered and licensed under state law. The new rules will come into effect on the first day of the calendar quarter 60 days following the SAFE Act’s publication in the Federal Register. However, full compliance dates will be staggered over a 180-day implementation period. For the full CUNA Final Rule Analysis, use the resource link.

Fed releases final Reg Z changes

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WASHINGTON (6/16/10)--The Federal Reserve Board has begun implementation of the third stage of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 by officially approving a final rule that will protect card users from “unreasonable late payment and other penalty fees.” The rule also requires lenders to “reevaluate recent interest rate increases and, if appropriate, reduce the rate," Fed Governor Elizabeth Duke said in a release. Specifically, the final rule amends Regulation Z (Truth in Lending) by preventing lenders from charging late fees that are over $25 or penalty fees that “exceed the dollar amount associated with the consumer's violation.” The changes also prevent lenders from charging so-called "inactivity" fees on accounts. These rules will come into effect on August 22. Portions of the CARD Act that prohibit rate increases in the first year that a credit card account is active, require cosignors for credit card accounts taken out by an individual under 21 years of age, require that creditors obtain the consent of the cardholder before charging over the limit fees, and limit many of the fees associated with so-called "subprime" credit cards were approved by the Fed earlier this year. For the Fed release and the Fed’s guide on the new credit card rules, use the resource links.