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Washington Archive

Washington

CUNA CUs gather ahead of interchange Hill visits

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WASHINGTON (6/9/10)—Credit Union National Association (CUNA) President/CEO Dan Mica last night welcomed hundreds of credit union advocates, who have come here in planes, trains, buses and cars to fight possible statutory interchange controls, by saying, “You are doing what is right for credit unions. You are doing what is right for consumers. You are doing what is right for the country.”
Click to view larger imageCUNA and league leaders take some time to relax at the CUNA reception before the Wednesday Hike the Hill on interchange. (From Left): CUNA President/ CEO Dan Mica, CUNA Chairman Harriet May (foreground), New Jersey League President Paul Gentile, and Connecticut League President Tony Emerson. (CUNA Photo)
CUNA hosted a briefing and reception for some 800 credit union and state league activists who are bringing the credit union message--opposing government controls on interchange fees-- to every member of the U.S. Congress this week. Rep. Jason Chaffetz (R-Utah) also welcomed the credit unions crowd, as did newly seated CUNA Chairman Harriet May. Chaffetz, a member of the House Judiciary Committee, said the interchange provisions in the Senate-approved version of a financial regulatory reform package are “absolutely, totally wrong.” “The consequences will be that it will hurt the people you are trying most to help,” Chaffetz said, reflecting CUNA’s argument that the interchange provisions will hurt ordinary Americans who have a need of affordable financial services. May told the crowd she was “absolutely amazed” and “thrilled” by the turn out of credit union grassroots power. “It is so incredibly important what we are facing right now,” she said, and added, “It is your job this week to stand up for credit unions and what credit unions stand for—that members get financial services at a reasonable price.” The focus of this week’s flood of Capitol Hill visits, which come just before the House and Senate conferees are set to hash out a compromise version of financial regulatory reform, will be a provision that would require the federal reserve to intervene in the setting of interchange fees. CUNA Senior Vice President John Magill, also speaking to the credit union crowd, said, “The message to lawmakers is simple: Remove the Senate interchange amendment.” Magill has noted that CUNA, credit unions and state leagues will "reach every member of Congress" during the Hike. Also, nearly 280,000 separate contacts have been made by credit union backers nationwide in the last two weeks urging their legislators to remove the interchange legislation from the final version of regulatory reform.

Mica Retailers wrong on interchange

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WASHINGTON (6/9/10)--Responding to Retail Industry Leaders Association (RILA) claims that most credit unions are exempt from pending interchange changes, Credit Union National Association (CUNA) President/CEO Dan Mica on Tuesday said that the Senate interchange amendment would adversely affect credit unions and urged lawmakers to talk to credit unions, not the RILA, if they want to know the real story. In a message distributed to members of the U.S. Congress, the RILA claimed that 99.96% of all credit unions would be unaffected by Sen. Richard Durbin’s (D-Ill.) interchange amendment in the Senate financial regulatory reform bill. That's not so, Mica countered, noting that CUNA has repeatedly stated that the legislation’s “carve-out” for credit unions with under $10 billion in assets “will not be meaningful because there is no requirement for the payment card networks to operate a higher rate system for small issuers, and there would be no incentive for them to do so.” The interchange language, added to the Senate’s financial regulatory reform bill during the amendment process, would allow government intervention in setting interchange fees. The House version of the reform package is silent on interchange, and CUNA has launched an aggressive push to keep it out of a final bill. Mica added that many observers expect that if the Federal Reserve is given authority to set the debit interchange rate for large issuers, that rate, or a rate quite close to it, will become the debit interchange rate for all issuers, including smaller ones that are not intended to be covered under the rules. “Coupled with the expanded discounting ability of merchants, even if a two-tiered pricing system persisted, interchange rates paid to smaller issuers would come under substantial downward pressure,” Mica added. Credit union representatives from across the country are in Washington this week to urge their lawmakers to remove Durbin’s amendment from the final version of regulatory reform legislation. An additional 270,000 credit union representatives, employees and members have contacted their legislators with the aid of CUNA and credit union leagues. The Arizona Consumers Council also wrote legislators on Tuesday, urging them to remove interchange fee legislation from consideration in order to, at a minimum, study the impact that the legislation would have on the financial services options that are made available to consumers. A group of House and Senate conferees is expected to begin the financial regulatory reform conference process this week.

Inside Washington (06/08/2010)

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* WASHINGTON (6/9/10)--Candidates rumored for the next Comptroller of the Currency include Federal Deposit Insurance Corp. Vice Chairman Marty Gruenberg, Federal Reserve Board Gov. Dan Tarullo, Treasury Assistant Secretary Michael Barr, North Carolina Banking Commissioner Joe Smith, and New York Banking Commissioner Richard Neiman (American Banker June 8). President Barack Obama will nominate the next comptroller in several weeks. The regulatory reform bill, which financial observers expect will be signed by July 4, will remove the current comptroller, John Dugan. Dugan’s five-year term expires Aug. 4 ... * WASHINGTON (6/9/10)--Speaking to a Washington, D.C.-area affordable housing group, Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair said the government should re-evaluate 25 years of policies that helped contribute to a 69% homeownership rate. The policies include multiple tax reductions for homeownership, private securitization practices that appear flawed and risky growth of the government-sponsored enterprises (American Banker June 8). The effect pushed up home prices, making homes less affordable to the low-income. Also, Bair said the FDIC is close to implementing a plan to securitize failed-bank assets. The agency intends to finish its first securitization of commercial real estate loans within the next two months, she said ... * WASHINGTON (6/9/10)--There are five core principles for balancing access to credit and sound risk management, according to Federal Reserve Board Gov. Elizabeth Duke. They are: adequate consumer protection, prudent underwriting, transparency, simplicity and properly aligned incentives. Duke also said that she believes the nation “is on the right path” to financial stability after the financial crisis. It’s time to work together to build a new consumer banking model--one that will be shaped by the scars of the past, she added. Duke spoke Tuesday at a banking industry conference ... * WASHINGTON (6/9/10)--The Financial Crisis Inquiry Commission, which was assembled by Congress to find the roots of the nation’s financial crisis, has issued a subpoena to Goldman Sachs Group. The commission said Goldman “dragged its feet” over requests for information and then dropped “hundreds of millions of pages of documents” on the panel, said The Wall Street Journal (June 8). The commission is primarily interested in Goldman’s relationship with American International Group, an insurance giant that was bailed out by the government in 2008. The subpoena demands interviews with several Goldman executives, including CEO Lloyd Blankfein. A Goldman spokesman said the company will provide the information requested. Goldman was sued in April by the Securities and Exchange Commission over a subprime mortgage security, and was publicly criticized by the Senate permanent subcommittee on investigations regarding other deals Goldman unfairly profited from, lawmakers say. Goldman has said it did nothing wrong ...

NCUA bans four from CU work

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ALEXANDRIA, Va. (6/9/10)--The National Credit Union Administration (NCUA) issued orders prohibiting the following individuals from participating in the affairs of any federally insured financial institution.
* Jason Rene Kisor, a former employee of Pen Air FCU of Pensacola, Fla., was convicted of theft, embezzlement or misapplication of funds. Kisor was sentenced to three days imprisonment with a credit of one day, five years of supervised release and ordered to pay $58,123 in restitution; * Melissa Laliberte, a former employee of Meriden Franco-American FCU of Meriden, Conn., was convicted of embezzlement from a credit union and filing a false income tax return. Laliberte was sentenced to 51 months in prison on Count One and 36 months in prison on Count Two, followed by 36 months of supervised release on Count One, and 12 months supervised release on Count Two. Laliberte will also pay $961,871 in restitution to the NCUA and the Internal Revenue Service. * Christine McLamb, a former employee of Health Facilities FCU of Florence, S.C., was convicted of embezzlement and sentenced to 75 months imprisonment, five years supervised release, and ordered to pay $1,033,965 in restitution; and * Cynthia Vaughan, a former manager of Rockland Employees FCU, Spring Valley, N.Y., based upon her indictment for three counts of Bank Fraud in violation of 18 U.S.C. § 1344.
Use the resource link below to view NCUA enforcement orders online.