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Washington Archive

Washington

Inside Washington (07/07/2010)

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* WASHINGTON (7/8/10)--The Federal Deposit Insurance Corp. (FDIC) is moving forward with plans for a new resolution system regardless of the regulatory reform bill’s progress. The House approved the final reform bill last week and the Senate is expected to approve it soon (American Banker July 7). Under the bill, the FDIC would be required to unwind systemically significant institutions to prevent a collapse such as the one caused by the bankruptcy of Lehman Brothers in 2008. FDIC also would need to provide market clarity for creditors on what they would receive in the event of a failure; designate FDIC officials to focus on the new resolution powers and research companies it may have to unwind. The bill would give FDIC the power to lead or participate in rule-writing with other regulators, borrow from the Treasury and require large firms to write their own “living wills,” or resolution processes. Michael Krimminger, deputy to the FDIC chairman for policy, told the Banker that the FDIC plans to move quickly to establish a resolution process so that it won’t be caught unprepared in a situation similar to the Lehman Brothers bankruptcy ... * WASHINGTON (7/8/10)--Edward L. Yingling, president/CEO of the American Bankers Association (ABA), plans to retire Dec. 31, according to a press release. Yingling, 61, said he plans to stay active in the banking industry. He worked for the ABA for 25 years. A committee comprised of ABA board members and former officers has been created to search for Yingling’s replacement ...

CUNA posts analysis of Fed final CARD Act rule

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WASHINGTON (7/8/10)—The Credit Union National Association (CUNA) Wednesday issued an analysis of the last final rule that implements provisions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. The CARD Act was enacted last year to prohibit and restrict a number of credit card practices. This final rule implements provisions, effective Aug. 22, intended to protect credit card users from unreasonable penalty fees and that require card issuers to reconsider interest rate increases every six months after an increased rate becomes effective. Among other provisions, the final rule:
* Limits penalty fees to $25, unless there are repeated violations or the issuer can demonstrate that a higher fee represents a reasonable portion of the cost it incurs as a result of these violations; * Prohibits card issuers from charging penalty fees that exceed the dollar amount associated with the violation. For example, if the minimum payment is $20, the late payment fee can no longer exceed $20; * Bans inactivity fees or fees for closing and terminating the account; * Prevents card issuers from charging multiple penalty fees based on a single violation; * Implements requirements that card issuers inform consumers of the reasons for a rate hike; and * Requires that for rate increases since Jan. 1, 2009 , issuers must review these increases every six months and reduce the rate if the reasons for the increase no longer apply.
The rule applies to credit cards, but not to home equity lines of credit accessed by credit cards or to overdraft lines of credit accessed by debit cards. For more on the Fed’s final rule, use the resource link below.

NCUA schedules special closed meeting this month

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ALEXANDRIA, Va. (7/8/10)--The National Credit Union Administration (NCUA) added a special July 30 closed board meeting to its schedule yesterday. Already slated for the month are a July 29 open board meeting and a closed meeting following immediately after that session. The NCUA confirmed that the July 29 closed meeting remains on the schedule. Agendas are not yet available for any of the three meetings. Typically, the NCUA releases it’s agendas one week prior a meeting. Use the resource link below on July 22 and July 23 to see the NCUA agenda items.

Cheney refutes iAmerican Bankeri CU criticism

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WASHINGTON (7/8/10)—Responding to a recent American Banker story on poor credit union performance, Credit Union National Association (CUNA) President/CEO Bill Cheney said that credit unions are “coping with today's economic challenges and continue to shine.” Saying that credit unions did nothing to create the current financial difficulties, Cheney also noted that while there have been around 40 credit union failures since 2009 began, that number is relatively low when compared to the 225 banks that have failed in that same time period. Even with those difficulties, the credit union system has stabilized itself on its own, without direct government financial bailouts. CUNA is also developing initiatives to help the corporate credit union system evolve and strengthen, Cheney added. The delinquency and net charge off rates at credit unions are also well below those seen at banks, Cheney reported. Credit unions have also been steadily increasing their lending to small businesses, with those portfolios growing at a rate of 9% during the year ended March 2010. However, Cheney said, the American Banker item did make some valid points “about the impact that legislative and regulatory changes to overdraft protection and interchange fees will have on credit union balance sheets.” Credit unions continue to work to resolve the interchange fee issues, and are pushing senators to approve legislation that would increase the cap on credit union member business lending to 27.5% of assets. CUNA is also supporting legislation that would allow credit unions to raise supplemental capital.

IRS extends homebuyer tax credit closing deadline to Sept. 30

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WASHINGTON (7/8/10)--The U.S. Internal Revenue Service has announced that the closing deadline for homebuyer tax credits under the Homebuyer Assistance and Improvement Act of 2010 has been extended until Sept. 30. The tax credit applies to taxpayers that entered into binding home purchase contracts before April 30. The previous closing deadline was June 30. In a release, the IRS said that special filing and documentation requirements apply to those who are looking to claim the homebuyer credit. “To avoid refund delays, those who entered into a purchase contract on or before April 30, but closed after that date, should attach to their return a copy of the pages from the signed contract showing all parties' names and signatures if required by local law, the property address, the purchase price, and the date of the contract,” the IRS added. Eligible homebuyers should also include a copy of the settlement statement, an executed retail sales contract, or a certificate of occupancy with their returns, the IRS added. Taxpayers must have lived in their previous home for a period of at least five years to qualify for the tax break. For the full IRS release, use the resource link.