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Udall takes Senate floor on MBLs

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WASHINGTON (7/29/10)--Sen. Mark Udall (D-Colo.) on Wednesday again promoted legislation that would lift the current 12.25% cap on credit union member business lending ahead of a potential Senate vote on small business legislation. Udall’s new amendment, which was reintroduced on procedural grounds, is identical to earlier legislation that proposed lifting the current MBL cap to 27.5% of total assets. Speaking before the Senate on Wednesday, Udall said that his legislation was a “small step” to help small businesses at no cost to taxpayers. Udall added that he would work with senators from both sides of the aisle in hopes of gaining support for his “sensible reforms.” The Credit Union National Association (CUNA) has estimated that lifting the cap even to 25% of assets would inject about $10 billion in new funds into the economy and create more than 100,000 new jobs, at no cost to taxpayers. Udall during his remarks cited the effect that his legislation could have on currently tight credit markets, and estimated that lifting the cap could create $200 million in new small business funding in his state. The small business jobs bill may come up this week for a vote, though it is not known whether leading Senators can gather the votes needed to end debate. That legislation would provide small banks with $30 billion in funds to lend to small businesses. Udall, who supports the small business legislation, said that he did so with the understanding that if the Senate was “going to finance $30 billion to increase lending,” they would “at the very least” also move to “increase lending without costing taxpayers a dime.” Negotiations on which amendments could be potentially added to the small business legislation continued late yesterday, and the Senate will likely hold a vote on limiting debate and amendments later today. President Barack Obama on Wednesday urged the Senate to approve the jobs bill, which he said would cut taxes for small businesses and make more loans available. Obama this week encouraged members of Congress to approve the legislation before the House and Senate begin their respective summer recesses.

Inside Washington (07/28/2010)

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* ALEXANDRIA, Va. (7/29/10)--The National Credit Union Administration (NCUA) has posted the third of three explanatory tracks to help credit unions better understand the history and prevailing situation involving the nation’s corporate credit union system. Track 3 outlines steps NCUA has taken to help stabilize the corporate credit union system. A DVD with all three tracks will soon be sent for free to all federally insured credit unions. The presentations provide an overview of the corporate credit union crisis. Track 1 covers the history and services of corporate credit unions. Track 2 describes types of corporate credit union investments; how these investments were affected by financial market declines; and how problems with the investments affected corporates and threatened the entire credit union system ... * WASHINGTON (7/29/10)--The Community Development Financial Institutions (CDFI) Fund is seeking comments about the CDFI/Community Development Entities (CDE) Project Profile Web Form. The voluntary collection of narrative descriptions of projects financed by CDFI Fund provides more narrative information on impact and best practices associated with all of the CDFI Fund’s programs. The purpose is to more fully describe and record the innovative approaches CDFIs and community development entities use in revitalizing communities and serving families. The form may be found on the CDFI Fund’s website. The CDFI Fund proposes adding four more check boxes to reflect new programs it administers, and rewording or adding clarifying language to the narrative questions for easier comprehension. Comments are due by Sept. 27 ... * WASHINGTON (7/29/10)--Comments filed by more than 300 individuals making suggestions for the futures of Fannie Mae and Freddie Mac have a common theme, according to American Banker (July 28). The commonality is that the individuals who authored the letters cannot agree on how to handle the enterprises, the publication added. Some suggest eliminating Fannie and Freddie, nationalizing them, or creating a mortgage insurance fund to guarantee mortgage-backed securities. Others say the government-sponsored enterprises (GSEs) should return to the way they were before the economic crisis, or the government should create a covered bond market so banks can issue mortgage-backed debt to finance loans. The Obama administration is planning a conference Aug. 17 with industry groups, academics and consumer representatives to discuss a plan for the GSEs. The administration has said it wants to submit a plan to Congress by January. Fannie and Freddie were taken into conservatorship in September 2008 ... * WASHINGTON (7/29/10)--The Government Accountability Office (GAO) has launched a mobile version of its website to allow users to access the site on Blackberrys, iPhones, Droids and other devices. The site’s content is organized under three tabs. The first allows users to browse the latest GAO reports and testimonies; the second provides users with the agency’s legal decisions and opinions; and the third, entitled “In the Spotlight,” highlights especially timely GAO work. Website users also can search to quickly find specific GAO products. The mobile version of GAO’s website is automatically opened by visiting the same URL as GAO’s regular website,, via a mobile device ...

NCUA today Truth in Savings operating budget on agenda

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ALEXANDRIA, Va. (7/29/10)—The National Credit Union Administration (NCUA) later today is expected to approve an interim final rule addressing the Truth in Savings Act. The interim final rule follows the July 6 enactment of the Federal Reserve’s Regulation DD, which addresses depository institutions' disclosure practices related to overdraft services, including balances disclosed to consumers through automated systems. The NCUA will also discuss a proposed rule on so-called golden parachutes and indemnification payments as well as interim final rules that address the definition of low income. The Credit Union National Association will also be monitoring the NCUA’s discussion of its upcoming operating budget, as this discussion could portend changes to the regional structure of the NCUA. Increases in funding could also indicate expansion of some NCUA offices or programs. The monthly insurance fund report and the financial status of credit unions in general will also be addressed. The NCUA will cover supervisory activities during a closed session, and another cosed board meeting is scheduled for Friday.

House committee approves Internet gambling legalization

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WASHINGTON (7/29/10)—H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, will move on to the full house after the House Financial Services Committee approved the legislation by a 41 to 21 vote margin on Wednesday. The legislation, which was introduced by committee head Barney Frank (D-Mass.), would allow the U.S. Treasury to license internet gambling operators and would permit approved operators to accept bets from U.S. citizens. Both Credit Union National Association (CUNA) President/CEO Bill Cheney and Discovery FCU President/CEO Ed Williams, who testified on behalf of CUNA, have spoken on the good that the gambling legislation could do for credit unions that are currently mired in the compliance burdens of the Unlawful Internet Gaming Enforcement Act (UIGEA). UIGEA, as currently constructed, requires credit unions and other financial institutions are required to establish and implement policies and procedures to identify and block restricted internet gambling transactions, or rely on those procedures established by the payments system. While many transactions that are made with illegal gambling operators are blocked, the UIGEA regulations do result in a large number of false positives, creating issues for both credit union members and credit unions. H.R. 2267 would ease the compliance burdens by supplying a list of approved Internet gambling providers that financial institutions could use to help determine what transactions to validate. However, Cheney, in a letter sent to House members this week, also urged legislators to direct the Treasury and the Department of Justice to develop and maintain a list of illegal Internet gambling providers, as well as the list of licensed operators, to further reduce the compliance burden on credit unions and other financial institutions. It is not known when the gambling legislation will come up for debate or a full House vote.

New interchange issue creeps into subcommittee appropriations bill

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WASHIINGTON (7/29/10)--Sen. Susan Collins (R-Maine) today may offer an amendment to an appropriations bill with an interchange provision in an effort to mitigate the impact of the provision on credit unions and community banks. Collins expressed concern for credit unions earlier this week as the ranking Republican member of the Senate subcommittee that approved a funding package, which included a ban on payment card networks charging the federal government a credit card interchange rate higher than the lowest interchange rate available on the market. Collins noted at that time her intention to offer a substitute" amendment when the full Senate Appropriations Committee considers the measure today, and the Credit Union National Association (CUNA) is asking credit unions to contact members of the committee to express concern about further interchange regulation. “This legislation has a long path before enactment--and there is significant time to affect this legislative language. Nevertheless, we will not take this threat lightly and will work with Sen. Collins and other senators who have concerns about interchange regulation,” CUNA Senior Vice President of Legislative Affairs John Magill said Wednesday. The subcommittee, which added the interchange language to the funding bill, is chaired by Sen. Richard Durbin (D-Ill.), who drove the successful push to include government limits on interchange fees in the comprehensive financial services regulatory reform bill signed into law June 21. Prior to a final vote in Congress, CUNA called for credit union grassroots action against the government controls, which resulted in hundreds of credit union advocates making personal visit to lawmakers on Capitol Hill. CUNA’s call to action also spurred in excess of 600,000 emails and phone calls to lawmakers, urging their opposition to the interchange provision. The final law includes an exemption from the interchange limits that should cover all but the three largest credit unions. CUNA continues to advocate for credit unions on interchange by working closely with the Federal Reserve as that agency works to implement the new rules affecting debit card interchange fees. Also of interest to credit unions in the bill before the Appropriations Committee today are provisions that would set funding for the U.S. Treasury Department Community Development Financial Institutions (CDFI) Fund, and the National Credit Union Administration’s Community Development Revolving Loan Fund (CDRLF), and Central Liquidity Facility.

SAFE Act rules effective Oct. 1

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WASHINGTON (7/29/10)--The National Credit Union Administration (NCUA) and the other federal financial regulators have released the final rule implementing the Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act and it is effective Oct. 1. Published in the Federal Register Wednesday, the SAFE Act final rule implements the new law that requires all residential loan originators that work for federally regulated financial institutions to register with a new Nationwide Mortgage Licensing System and Registry. The SAFE regulations require that credit unions and other financial institutions adopt policies to assure that their employees who originate residential mortgages provide the required information (such as fingerprints and employment history), obtain a unique identifying number, and register. However, compliance with the registration requirement is not required until 180 days after the agencies provide public notice that the registry is accepting initial registrations. Financial institutions that are covered under the SAFE Act are also required to adopt and implement written policies and procedures to ensure compliance with these the law’s 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. Only bank and credit union employees are subject to the registration procedures. Others engaged in residential mortgage lending, including employees of credit union service organization (CUSOs), are subject to more extensive state licensing procedures that include not only registration and having a unique identifier number, but also periodic testing. The rules also apply to privately insured credit unions when certain conditions are met and agreements reached between the National Credit Union Administration and the state regulator. Otherwise, these privately insured credit unions will need to be registered and licensed under state law.