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Committee to vote on Fryzel Wednesday

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WASHINGTON (6/23/08, UPDATED 10:30 a.m. ET)—The Senate Banking Committee is scheduled to vote Wednesday on the nomination of Michael Fryzel for a position on the National Credit Union Administration (NCUA) board. If approved by the committee—and approval is expected—Fryzel would then have to be confirmed by the full Senate. That action is less sure because of an apparent standoff between the Senate and the White House on the confirmation process as a whole. With time running out for his administration, President George W. Bush has been pushing the Senate since the beginning of the year to confirm close to 200 judicial and agency nominees, action that has in some cases been pending for many months. Withholding votes this year would allow the winner of the 2008 presidential election in November to choose new candidates. However, Senate Democrats have blamed Bush for the confirmation delay, charging that the President has refused to compromise on choices they consider extreme. However, the committee vote puts Fryzel one step closer to the NCUA board. And since his nomination is not considered controversial, it could push through the logjam of disputed names and be approved soon. If approved by the Senate, the President would then appoint Fryzel as chairman of the NCUA to replace JoAnn Johnson, whose term ended last August.

Senate committee to decide Fryzel nomination

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WASHINGTON (6/24/08)--The Senate Banking Committee is scheduled to vote Wednesday on the nomination of Michael Fryzel for a position on the National Credit Union Administration (NCUA) board. If approved by the committee—and approval is expected—Fryzel would then have to be confirmed by the full Senate. That action is less sure because of an apparent standoff between the Senate and the White House on the confirmation process as a whole. With time running out for his administration, President George W. Bush has been pushing the Senate since the beginning of the year to confirm close to 200 judicial and agency nominees, action that has in some cases been pending for many months. Withholding votes this year would allow the winner of the 2008 presidential election in November to choose new candidates. However, Senate Democrats have blamed Bush for the confirmation delay, charging that the President has refused to compromise on choices they consider extreme. However, the committee vote puts Fryzel one step closer to the NCUA board. And since his nomination is not considered controversial, it could push through the logjam of disputed names and be approved soon. If okayed by the Senate, the President would then appoint Fryzel as chairman of the NCUA to replace JoAnn Johnson, whose term ended last August.

Inside Washington (06/23/2008)

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* WASHINGTON (6/24/08)--Thirty Michigan credit union leaders visited with federal legislators and staff members June 11-12 for a “Hike the Hill” trip in Washington, D.C. Two messages dominated the meetings--the need for comprehensive credit union regulatory reform and opposition to proposed legislation regarding interchange fees (Michigan Monitor June 23). Credit union representatives met with all 17 members of Michigan’s congressional delegation. They also thanked Michigan’s 11 co-sponsors of the Credit Union Regulatory Improvements Act (CURIA)--including U.S. Reps. Dave Camp (R-St. Joseph), John Conyers (D-Detroit), Pete Hoekstra (R-Holland), Dale Kildee (D-Flint), Carolyn Cheeks Kilpatrick (D-Detroit), Joe Knollenberg (R-Bloomfield Hills), Sander Levin (D-Royal Oak), Thaddeus McCotter (R-Livonia), Bart Stupak (D-Menominee), Tim Wahlberg (R-Tipton) and Fred Upton (R-St. Joseph). From left: Daniel Schneider, USA CU, and U.S. Sen. Carl Levin (D-Mich.) listen to Lon Bone of T&C FCU during a visit to the senator's Capitol Hill office on June 12. (Photo provided by CUNA) ... * WASHINGTON (6/24/08)--Legislators are cracking down on mortgage lenders and brokers through a bill intended to ensure lenders only write mortgagees that borrowers can afford. Lenders also would have to send borrowers a notice three months before a foreclosure could occur (American Banker June 23). The Senate was scheduled to vote on the measure yesterday. The bill is a result of a compromise between New York Gov. David Paterson and legislators, and would make the state one of the first to reform lending standards in light of the housing crisis. Lawmakers in Minnesota recently attempted to pass a measure addressing foreclosures, but it was vetoed by Gov. Tim Pawlenty ... * WASHINGTON (6/24/08)--Rep. Dennis Kucinich (D-Ohio) is asking for records from more than 24 mortgage servicers to see how defaults and delinquencies were handled. The deadline is Thursday (American Banker June 23). Wells Fargo, JP Morgan Chase, Washington Mutual and Countrywide Financial are among those asked to provide the data. Kucinich requested that companies break the data down by refinancings, short sales, forbearance, rate freezing, repayment plans and principal reductions ...

House committee considers UIGEA tweaks

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WASHINGTON (6/24/08)—The House Financial Services Committee is scheduled to mark up several bills Wednesday, including one that addresses problems with the implementation of the Unlawful Internet Gambling Enforcement Act (UIGEA). That bill, the Payment System Protection Act (H.R. 5767), would block the U.S. Treasury Department and the Federal Reserve Board from adopting their current plans to implement UIGEA. The Credit Union National Association (CUNA) opposes the agencies’ draft implementation proposal. Under the Internet gambling law, financial institutions must establish and implement policies and procedures to identify and block restricted transactions, or rely on those established by the payments system. CUNA testified against the plan at a House Financial Services Committee hearing in April. CUNA witness Harriet May, president/CEO of GECU, El Paso, Texas, reiterated CUNA’s concerns that aspects of the proposal would be difficult, if not impossible, to implement. May also said financial institutions could be swamped by the compliance burdens associated with UIGEA. The current plan to implement the complicated law, she said, lacks clarity and sufficient definition of terms. CUNA also testified that credit unions' have a fundamental concern that they already have an “extraordinary" burden with "heavy policing responsibilities" under the Bank Secrecy Act and Office of Foreign Assets Control (OFAC) rules. CUNA warned an increased policing role could interfere with financial institutions' fundamental business to provide financial services to their communities. It is expected that the committee’s version of H.R. 5767 will impose a two-step rulemaking process: First, the implementing agencies would hammer out a definition of what constitutes unlawful Internet gambling and report it to Congress. Then, if Congress had no objections to the definition, the Treasury and Fed would go ahead and draw up implementing rules for UIGEA. There is a possibility that an amendment will be added to H.R. 5767 at the time of the vote, one which would require that Treasury maintain a list of unlawful Internet gambling providers.

House vote expected today on reg relief measure

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WASHINGTON (6/24/08)—Credit Union National Association (CUNA) Vice President of Legislative Affairs Ryan Donovan said he expects today’s House vote on an important credit union regulatory relief bill to proceed without a hitch. Donovan noted Monday that the bill, known as the Credit Union, Bank and Thrift Regulatory Relief Act (CUBTRRA, H.R. 6312), was placed on the House Suspension Calendar for a vote, an action reserved only for noncontroversial legislation. As its name suggestions, the bill contains measures that would benefit credit unions unions, as well as banks and thrifts. CUNA noted the bill offers significant relief for credit unions. Among provisions for credit unions, the bill proposes to:
* Allow all federal credit unions to apply to serve underserved areas , reversing the effect of a banker lawsuit that has prevented community and single-sponsor CUs from reaching out to underserved areas; * Provide increased member business lending (MBL) ability by exempting MBLs made in underserved areas from a statutory 12.25%-of-assets cap; CUNA estimates more than 40% of the nation's census tracts are located in underserved areas; * Grandfather previously approved underserved fields of membership for credit unions; * Allow short-term payday loan alternatives within a credit union's field of membership; * Raise the current investment limit in credit union service organizations (CUSOs) and to 3% of unimpaired capital and surplus, up from 1%; * Enhance the 2006 regulatory relief provisions that allowed the National Credit Union Administration (NCUA) to increase the 12-year maturity limit on non-real estate secured loans to 15 years, Section 104 would further permit the agency to issue regulations providing for loan terms exceeding 15 years for specific types of loans; * Give the NCUA greater flexibility to respond to market conditions; * Clarify existing law that permits credit unions to participate in loan programs secured by the insurance, guarantees, or commitments of State or Federal governments, such as the Small Business Administration's 504 program. The section provides that the loan maturities, terms, and conditions on these loans may be specified in applicable regulations; and * Encourage small business development in underserved urban and rural communities by excluding from the statutory cap any member business loans made to members in underserved communities. The bill's language clarifies that business loans made to businesses operating on a nationwide basis would not be exempt from the cap, but business loans made to locally owned franchises of businesses operating on a nationwide bases would be exempt if in an underserved area.
H.R. 6312 was introduced just last week by Reps. Paul Kanjorski (D-Penn.), Ed Royce (R-Calif.), and Dennis Moore (D-Kan.) and was backed by Rep. Barney Frank (D-Mass.), who is chairman of the House Financial Service Committee. For commercial banks, the House bill proposes to allow the payment of interest on business checking accounts. For thrifts, CUBTRRA would remove the current caps on auto and business lending. Just as the credit union provision of the newly introduced legislation were based on the Credit Union Regulatory Relief Act (CURRA), the bank and thrift provisions also were based on a currently pending bill, the Bank and Thrift Regulatory Relief Act of 2008 (H.R. 5841), introduced in April. Left behind from that bill, however, were sections that would have allowed banks and thrifts to reorganize more easily as LLC or Subchapter S organizations (Section 101, 102 and 206 of H.R. 5841). “But for credit unions, I think the important part of the bill is not what the banks got or didn't get, the important thing is to look at the relief that the bill provides credit unions,” Donovan advised. “This is a good bill that includes the underserved areas FOM provision and member business lending relief." He also noted that some provisions benefit credit unions, as well as banks and thrifts. One example is the proposed change in Gramm-Leach-Bliley privacy notification requirements. Under this bill, financial institutions would not be required to send annual privacy notifications under certain circumstances if it has not changed its policies and practices with respect to disclosing nonpublic personal information since its last disclosure. If approved by the House, as expected, the bill faces a tougher road in the Senate, according to Donovan. "The Senate just is not as far along in the process as was the House, but we will continue to make our case there," the CUNA vp said.. Both the House and Senate adjourn at the end of this week for a July 4 District Work Period and will return to session the week of July 7. Donovan said CUNA will work to garner support in the Senate, and also will continue to work with House lawmakers on additional relief measures. CUNA continues to pursue provisions contained in the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537), which propose a higher cap on member business lending , as well as prompt corrective action reform.

Fed seeks to add vocal reps on CAC

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WASHINGTON (6/24/08)--The Federal Reserve Board is seeking nominations to fill 10 upcoming vacancies on it Consumer Advisory Council (CAC), a panel that advises the Fed Board on the exercise of its responsibilities under various consumer financial services laws. The CAC is a 30-member council with a rotating membership. Each year, ten terms expire at yearend, and terms are for three years. Alan Cameron, president/CEO of the Idaho CU League, is currently the only CAC member from a credit union organization. Cameron’s term extends to 2010. In a Federal Register document soliciting nominations, the Fed said it wants nominations for candidates familiar with consumer financial services, community reinvestment, and consumer protection regulations, and nominees must be willing to “express their views.” Nominations must be submitted by Aug. 29. To read the Fed request for nominations, use the resource link below