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Inside Washington (07/13/2010)

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* WASHINGTON (7/14/10)--Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said Tuesday he secured the 60 votes he needs to pass financial reform in the Senate, with Sen. Olympia Snowe (R-Maine) agreeing to support the measure. The House approved the legislation last month (American Banker July 13). Dodd commended the three Republicans who agreed to support the bill--Snowe, Susan Collins (R-Maine) and Scott Brown (R-Mass.) ... * WASHINGTON (7/14/10)--Federal Reserve Board Chairman Ben Bernanke has called on banks to help small business owners obtain credit. Lenders should do all they can to help creditworthy borrowers, Bernanke said Monday at a small-business lending conference. He noted a series of meetings conducted by the Fed to gain perspectives on lending from small business owners, and said solving the issues faced by small businesses will require collaboration. Some concerns noted by businesses include the declining value of real estate and other collateral securing their loans, and the fact that current lending conditions don't represent credit tightening as much as a return to more traditional underwriting standards following a period of too-lax standards, Bernanke said. “Making credit accessible to sound small businesses is crucial to our economic recovery and so should be front and center among our current policy challenges,” he added ... * WASHINGTON (7/14/10)--The Federal Reserve Board yesterday released the results of the inaugural Senior Credit Officer Opinion Survey on Dealer Financing Terms (SCOOS), a quarterly survey providing information about the availability and terms of credit in securities financing and over-the counter (OTC) derivatives markets. Overall, the responses to the questions dealing with OTC derivatives trades suggested little change over the past three months in terms for plain vanilla and customized derivatives. SCOOS is modeled after the long-established Senior Loan Officer Opinion Survey on Bank Lending Practices, which provides qualitative information about changes in supply and demand for loans to households and businesses at commercial banks ...

Winning young members A iHuff Posti topic

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WASHINGTON (7/14/10)—Rob Rubin, the Huffington Post creator of FindaBetterBank.com, a tool to drive consumers to find “the best-fit” credit union or bank for their checking needs, has some advice to credit unions. The Post is behind the huge and hugely popular “Move Your Money Campaign,” which it began in January urging fed-up big bank customers—tired of high fees, run-arounds and bailouts--to put their money into credit unions or community banks. Rubin notes a concern, however, that credit unions are not doing enough with the opportunities the current climate is affording them for membership growth—at least not in the area of attracting young members. “The financial crisis and the attention given to the greed and hubris of big banks has created a window of opportunity for smaller institutions to win some customers - especially younger consumers who aren't heavily invested with a bank. But most credit unions are blowing it because they're not winning this younger set,” Rubin blogged this week. It’s a topic that comes up in credit union circles a lot—how to attract younger members, as well as younger officers in a work-world dominated by graying heads. In fact, at the Credit Union National Association’s “The 1 Conference” being held in Las Vegas this week, the topic is hot. For instance speaker Jim Collins, author of the best-selling book Good to Great: Why Some Coampanies Make the Leap…And Others Don’t, called the challenge to attract young members one of the “brutal facts” that face credit unions today. Rattling through some Filene Institution 2005 study numbers that are quite well known in the credit unions movement, Rubin noted in his blog posting: Only 6% of credit union board members were under 40; more than 42% were over 60; and average age of a credit union member was 47, nearly 10 years older than the median age of people in the US. “This older average age means many of their members are past their prime borrowing years. Importantly, over 27% of the US population is under 20 (Source: US Census),” Rubin wrote. So what does Rubin suggest? Here’s his to-do list for credit unions, in his words:
* Make appealing to younger consumers a primary part of your mission -- even if it alienates some of your older members; * Update your websites (seriously, most are horrible): * Offer features that younger consumers want--for example, mobile banking, ATM fee rebates, remote deposit, expedited bill payment, online chat for customer service, online account opening; * Start "socializing" online. Yes, many credit unions have Twitter accounts and Facebook pages, but most of those are used to broadcast information. Have 2-way conversations; and * Reach people who use the Internet to do research. People can be drawn to you from other online resources (like FindABetterBank ).
“Signing younger consumers up as members is essential for credit unions to survive. Therefore, failing to recognize that a coherent online strategy is mission-critical does not serve the long-term needs of your membership. That's my 2-cents, Rubin concludes.

FedACH SameDay Service CUNA analysis

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WASHINGTON (7/14/10)—In just a couple of weeks, credit unions and other depository institutions can use a new Federal Reserve same-day automated clearing house (ACH) service, but they must opt-in to participate. In a new final rule analysis, the Credit Union National Association (CUNA) reminds credit unions that the new service goes into effect Aug. 2. To opt-in, depository institutions must execute a participation agreement with the Fed. CUNA notes that credit unions that opt-in may choose the extent of their participation and indicate whether they wish to:
* Send only; * Receive only; or * Send and receive same-day debit items.
CUNA notes that same-day settlement is limited to transactions that arise from consumer checks converted to ACH and consumer debit transfers initiated over the Internet and phone. Specifically, the “FedACH SameDay” service only applies to origination of non-government debit payments and includes only Accounts Receivable Entry (ARC), Back Office Conversion Entry (BOC), Point-of-Purchase Entry (POP), Telephone-Initiated Entry (TEL), Represented Check Entry (RCK), and Internet-Initiated Entry (WEB). The transmission deadlines and settlement times for the FedACH SameDay service are as follows: For "forward same-day debit transfers," the transmission deadline to FedACH is 2:00 pm EST and the posting time is 5:00 pm EST; for "return same-day debit transfers," the transmission deadline to FedACH is 4:30 pm EST and the posting time is 5:30 pm EST. Use the resource link below for more CUNA analysis of the Fed rule.

Keep up grassroots on CU issues says Cheney

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WASHINGTON (7/14/10)-With the U.S. Senate seemingly poised on the brink for votes on key bills for credit unions, Credit Union National Association (CUNA) President/CEO Bill Cheney urged credit union Tuesday to keep up their grassroots action. The Senate has on its near-term agenda a final vote on H.R. 4173, the Wall Street Reform and Consumer Protection Act, and a vote on the Small Business Lending Fund Act (H.R. 5297). (See related story: NCUA strongly endorses increased MBL authority) Regarding the Small Business Lending Fund Act, Sen. Mark Udall (D-Colo.) has introduced an amendment that would increase the credit union member business lending (MBL) cap to 27.5% of total assets, up from the current 12.25%. CUNA and credit unions have worked in support of this change, which CUNA notes could add $10 billion in credit for the country’s struggling small businesses and add more than 100,000 new jobs—at no cost to taxpayers. CUNA and credit unions oppose H.R. 4173, the regulatory reform bill, because it includes an interchange provision that allows the government to set the cost of interchange fees, a rule change that CUNA argues will harm both credit unions and their members. “Credit union voices must continue to be heard on Capitol Hill about these important pieces of legislation as they move toward a vote in the Senate,” Cheney said and urged credit unions to light up the Capitol switchboard (202-224-3121) to reach their senators.

As vote nears Udall NCUA strongly endorse increased MBL authority

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WASHINGTON (7/14/10)--Mentioning the support of the Credit Union National Association (CUNA) among others, Sen. Mark Udall (D-Colo.) took the Senate floor last evening to speak on behalf of his measure that would raise the credit union member business lending (MBL) cap to 27.5%, up from 12.25%. Udall has drafted the language as an amendment to The Small Business Lending Fund Act, which is now up for a Senate vote. The MBL cap increase is backed by the Obama administration, and the Udall amendment reflects legislative language sent to federal lawmakers by the U.S. Treasury earlier this year. CUNA President/CEO Bill Cheney said after Udall's remarks, “Our sincere thanks to Sen. Udall for bringing this important issue before the Senate today and particularly for his passionate support of helping credit unions play a role--at no cost to taxpayers--in increasing jobs during this economic recovery.” Cheney added, “The legislation he spoke of today would create more than 100,000 new jobs, and inject $10 billion into the economy, in the first year, just by increasing the capacity of credit unions to make business loans. In making the point that this amendment is about helping small businesses, Sen. Udall spoke about two Coloradans who have received credit union financing to start their small businesses; small businesses that are thriving today. "We are also very grateful for his comments about CUNA and credit unions generally. We urge all senators to support the Udall amendment to the small business jobs bill." Earlier Tuesday, the National Credit Union Administration (NCUA) urged the U.S. Congress to pass a zero-cost “stimulus for America’s small businesses” by increasing the statutory limit on credit union MBLs. “There has never been a better time, or a better opportunity, to move the economy forward," said Chairman Debbie Matz in a release. “Congress now has an opportunity to increase the ability of credit unions to lend to small businesses, and in doing so empower credit union members to create more jobs and spur economic growth. “Credit union member business lending, when done in a safe and prudent manner that includes appropriate regulatory safeguards, can be of significant benefit to a small business community that is too often limited in their access to credit,” Matz said in her call to action on MBL legislation. The Senate was expected to resume work yesterday on the Small Business Lending Fund Act (H.R. 5297) and begin voting on possible amendments. Sen. Udall has introduced the amendment to increase the credit union MBL cap to 27.5% of total assets, up from the current 12.25%. CUNA and credit unions have led a sustained grassroots push for MBL legislation, and have amplified their efforts to garner bipartisan support for the Udall provision in advance of a vote. Cheney urged credit union advocates to continue to light up the switchboard (202-224-3121) at the U.S. Capitol to contact senators to urge them to support the Udall amendment. (See related story: Keep up grassroots on CU issues, says Cheney) H.R. 5297 also is the bill that would allocate $30 billion for community banks to try to stimulate increase lending by those institutions to small businesses. CUNA has underscored that an MBL increase would carry no cost to taxpayers, but could infuse $10 billion of credit into small business and create more than 100,000 jobs.