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Ad touts CU opposition to interchange bill

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WASHINGTON (7/16/08)--Several Capitol Hill newspapers this week are carrying advertisements voicing credit unions’ opposition to the Credit Card Fair Fee Act (H.R. 5546), which would give merchants an antitrust exemption to negotiate interchange fees. The Credit Union National Association (CUNA) and the National Association of Federal Credit Unions (NAFCU) logos appear in the advertisements. A vote on the bill is expected today in the House Judiciary Committee. CUNA, all members of the Electronic Payments Coalition and the U.S. Department of Justice are among opponents of the "fair fee" legislation. CUNA believes regulation of interchange fees would not only harm consumers but also would adversely affect competition and technology innovation.

Conversion group quits legal challenge to NCUA

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RICHMOND, Va. (7/16/08)--Rather than disclose the identities of its membership, the Coalition for Credit Union Charter Options (CCUCO) has abandoned its appeal of a lower court ruling dismissing the group’s lawsuit against the National Credit Union Administration (NCUA). CCUCO filed its appeal earlier this year in the U.S. Court of Appeals for the Fourth Circuit, located in Richmond, Va., after a federal district court ruled Dec. 7 that the coalition lacked standing to bring suit against NCUA and dismissed the case challenging the agency's rules on credit union conversions to banks. The Credit Union National Association (CUNA) and the National Association of Federal Credit Union (NAFCU) filed a joint amicus brief in May and said the lower court’s dismissal should be upheld on appeal. The joint brief argued that the “coalition’s complaint did not identify any of its alleged credit union members, let alone any specific members that have been injured by the challenged regulations...Nor did the coalition disclose to the district court (or to this court) that its ‘members' also include banks and companies serving banks." The outcome was no surprise to CUNA General Counsel Eric Richard. “Without proper disclosure of its membership and what their true interests are, it is impossible to tell whether the coalition was acting as a representative of its alleged credit union members, or rather a stalking horse for members of the thrift banking and mutual savings bank conversion industries that seek to encourage credit unions to convert to banks," he said.

CUNA urges vote no on interchange bill

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WASHINGTON (7/16/08)—In advance of a vote expected today on the Credit Card Fair Fee Act (H.R. 5546), the Credit Union National Association (CUNA) blanketed House Judiciary Committee with letters in opposition to the bill that would give merchants an antitrust exemption to negotiate interchange fees. “We strongly urge you to oppose H.R. 5546, a bill that would negatively affect the interchange credit unions rely upon to support their debit card and credit card programs,” CUNA President/CEO Dan Mica urged in the letter sent to each member of the committee.
The CUNA letter noted that 97% of the country’s approximately 90 million credit union members belong to a credit union that issues debit cards. Eighty-three percent belong to a credit union that issues credit cards. “Credit unions can offer these products because of interchange, the transaction fee that flows from the merchant, through its bank, to the credit union that issued the card to the consumer. “Interchange helps the credit union cover its expenses and losses. Merchants benefit as they are guaranteed payment at the time the transaction is completed,” Mica wrote. But now, Mica pointed out, merchants want more and are pushing for H.R. 5546. “Under H.R. 5546, merchants win and consumers lose. Consumers will lose as credit unions reassess their ability to offer convenient debit cards and competitive credit cards as interchange is reduced under the provisions of H.R. 5546. “In addition, any reduction in interchange is not passed through to the consumer. Only the merchants win under H.R. 5546,” the CUNA leader warned. H.R. 5546 has a companion bill (S. 3086) of the same name pending action in the Senate. Additionally, Rep. Peter Welch (D-Vt.) has introduced a bill to require credit card companies to disclose their interchange rates, terms, and conditions to consumers and businesses. CUNA, all members of the Electronic Payments Coalition and the U.S. Department of Justice are among opponents of the "fair fee" legislation. CUNA believes regulation of interchange fees would not only harm consumers but also would adversely affect competition and technology innovation.

Bernanke Akaka praise CUs at hearing

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WASHINGTON (7/16/08)—Federal Reserve Chairman Ben Bernanke acknowledged credit unions Tuesday for their products that provide alternatives to high-cost payday loans. At a Senate Banking Committee hearing on monetary policy, Bernanke was queried by Sen. Daniel Akaka (D-Hawaii) about what must be done to protect consumers from high-cost payday loans and encourage the development of affordable payday loan alternatives. The Fed chairman responded that he believes competition is the best solution, but then gave the nod to credit unions: “And I think banks and credit unions--I give particular credit to credit unions. They have done some particularly good work in terms of providing remittance services to allow people to get money back to their families without exorbitant costs.” Bernanke added that he would encourage all financial institutions to continue outreach efforts to underserved communities. He said he also supports financial education efforts. The senator from Hawaii also noted credit union efforts to provide alternatives to payday loans. Akaka said that as a result of a National Credit Union Administration grant, Community FCU, Kailua, has developed an affordable alternative to payday loans, which he said are popular with members of the U.S. Marines and other members.

Inside Washington (07/15/2008)

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* WASHINGTON (7/16/08)—Federal Reserve Chairman Ben Bernanke, testifying before the Senate Banking Committee Tuesday, said the country’s current economic situation poses “significant challenges” for Fed policymakers attempting to keep the economy growing, while avoiding a dangerous inflation flare up. The Fed chief warned that rising energy and food prices are increasing inflation risks at a time when officials try to cope with persistent strains in financial markets, loss of jobs and problems in the housing industry. Bernanke was later joined before the banking panel by U.S. Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Chris Cox. They were summoned to detail a rescue plan announced over the weekend intended to bolster Fannie Mae and Freddie Mac. The Bush administration plan asks Congress to temporarily increase lines of credit to Fannie and Freddie. It also would allow the government to buy their stock. (Associated Press July 15)… * WASHINGTON (7/16/08)--A premium increase could hit the Federal Deposit Insurance Corp. (FDIC) in September if the IndyMac failure lowers the Deposit Insurance Fund’s reserve ratio to 1.01% as expected (American Banker July 15). FDIC will be required to rebuild the fund if it drops below $1.15 per each $100 of insured deposits. The premiums could cost the FDIC up to 15 cents per $100 of domestic deposits, said Jaret Seiberg, Stanford Group Co. analyst. The failure could cost the Deposit Insurance Fund $4 billion to $8 billion. The IndyMac failure is the second largest in history, asset-wise ... * WASHINGTON (7/16/08)--The Federal Deposit Insurance Corp. (FDIC) announced Monday that it will stall foreclosures on $15 billion of loans on IndyMac’s books, FDIC Chairman Sheila Bair said (American Banker July 15). Bair said she’d like to look at the loans to see if they can be modified. The loans are worth 7.5% of the thrift’s servicing portfolio ... * WASHINGTON (7/16/08)--Legislators are pushing to create a new regulator for Fannie Mae and Freddie Mac after the Treasury Department moved to backstop the enterprises late last week. The House is expected to vote on the bill this week and it could be approved next week (American Banker July 15). Though Republicans have earned enough votes in the Senate to block the measure, House Financial Services Committee Chairman Barney Frank (D-Mass.) is viewed as having more leverage in passing the legislation because the Treasury added changes to the bill and problems surrounding Fannie and Freddie continue to grow. The House is expected to accept the Treasury’s changes and allow the Federal Reserve Board to take on a regulatory role for the enterprises. Frank said he wants to stall the enactment date for a new regulator and instead raise the enterprises’ conforming loan limits. Sen. Richard Shelby (R-Ala.), the ranking Republican on the committee, opposes both moves ... * WASHINGTON (7/16/08)--The federal banking and thrift agencies today issued final guidance outlining the supervisory review process for banking organizations implementing Basel II. The final guidance aims to help banking organizations meet certain qualification requirements in the advanced approaches rule, which took effect April 1 ... * WASHINGTON (7/16/08)--National Credit Union Administration (NCUA) Vice Chairman Rodney Hood announced Tuesday that registration for his 2008 Risk Mitigation Summit in Chicago Aug. 7 is full. Registrants may be placed on a wait list ... * WASHINGTON (7/16/08)--The Federal Reserve Board approved amendments to Appendix A of Regulation CC, which reflects the restructuring of the Federal Reserve’s check processing operations in the First and Third Districts. Appendix A provides a routing number guide that helps depository institutions determine the maximum permissible hold periods for most deposited checks. As of Sept. 20, the Windsor Locks office of the Federal Reserve Bank of Boston no longer will process checks, and banks served by the office will be reassigned to the Federal Reserve Bank of Philadelphia ...

Insiders Look keeps CUs in view of Hill

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WASHINGTON (7/16/08)--The Credit Union National Association (CUNA) continued to keep credit unions in the focus of Capitol Hill Wednesday with its eighth "Power Breakfast," this called “An Insider’s Look at the Battle for Congress.” Organized by National Journal and MSNBC, co-sponsored by CUNA and other enterprises, the power breakfast series has typically attracted close to 100 Capitol Hill staffers, lobbyists and reporters. This session had an RSVP figure of 180 attendees. Today’s program spotlight the upcoming November elections and how both Democrats and Republicans will be striving for the majority in Congress amidst tight margins. Scheduled participants include:
* Glen Bolger, partner and co-founder, Public Opinion Strategies, described as a national Republican political and public affairs research firm; and * John Lapp, partner, McMahon Squier Lapp & Assoc., a Democratic media consultancy firm.
The session will be moderated by Amy Walter, editor-in-chief of “The Hotline,” with Charlie Cook, publisher of The Cook Political Report, and political analyst for National Journal Group. According to CUNA Political Director Trey Hawkins, by participating in the power breakfast series, CUNA assures that "insiders from Capitol Hill and in the Washington lobbying community are seeing credit unions in the thick of the political process."

Third-quarter boost belies a recession Hampel in iPoliticoi

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WASHINGTON (7/16/08)—The economy may see a slight uptick soon as a result of the recent delivery of 112 million federal stimulus checks, but that relief just belies the year’s recession, according to Bill Hampel, Credit Union National Association (CUNA) chief economist. “The third quarter will look good because of the tax rebate checks,” said Hampel, in a recent article in Politico. The article broadly focused on a point that the country’s next president will “inherit an economy on the brink of a full-blown recession.” In his comments, Hampel added that, “As soon as that money is spent, the economy will slip back to just above or in a recession.” Economists generally argued in the piece that even if the housing and financial markets start to regain stability by the end of the year, low spending rates for consumers would erase any chance of a recovery by then. “Consumers face a perfect economic storm: Consumer confidence is its lowest level in about 30 years. Most Americans have lost value in their homes and stocks. And they find it harder to get new lines of credit and have little savings and high debt,” wrote reporter Lisa Lerer. Others who contributed views to the article included: Jason Furman, economic advisor to Barack Obama, the U.S. Senator from Illinois and presumptive Democratic nominee for the 2008 presidential election; and former Sen. Phil Gramm (R-Texas), considered a top economic advisor to Sen. John McCain (R-Ariz.), Obama’s Republican counterpart in the presidential race.