Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

CUNA welcomes bill to help unbanked

 Permanent link
WASHINGTON (8/4/08)—The Credit Union National Association (CUNA) Friday welcomed new legislation introduced by Sen. Daniel Akaka (D-Hawaii) intended to help more Americans gain access to mainstream financial services. Akaka gave credit unions the nod when introducing his bill. In a release, he noted that several credit unions have developed low-cost payday loan alternatives similar to what he proposes in the Improving Access to Mainstream Financial Institutions Act of 2008. The bill would create two grant programs within the Department of the Treasury. One is intended to provide consumers with a lower-cost, short-term alternative to payday loans by encouraging the development of affordable payday loan alternatives at mainstream financial institutions. Consumers who apply for the loans would be provided with financial education opportunities. Loans extended under the grant would be subject to the annual percentage rate promulgated by the National Credit Union Administration's (NCUA) Loan Interest Rates, currently capped at an annual percentage rate of 18%. The other program would authorize grants to help unbanked low- and moderate- income individuals establish credit union or bank accounts specifically to provide consumers with alternatives to rapid refund loans, check cashing services, and lower cost remittances. A side benefit noted by Akaka is that credit union and bank accounts provide access to savings as well as affordable borrowing opportunities. Akaka said: "About 45 million Americans do not have a bank or credit union account, denying them access to basic financial services. With these federal resources, mainstream institutions will be better able to bank the unbanked.” Last month, Akaka signaled his interest action to protect consumers from predatory lending practices during a Senate Banking Committee hearing on monetary policy. Akaka queried Federal Reserve Chairman Ben Bernanke about what must be done to 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."

Cardholder rights bill sends signal

 Permanent link
WASHINGTON (8/4/08)--The Credit Cardholders’ Bill of Rights Act of 2008 (H.R. 5244) passed the House Financial Services Committee 39-27 last week, just before both Houses of Congress adjourned for a month-long August recess. Although there is similar legislation pending in the Senate, S. 3252 introduced by Senate Banking Committee Chairman Christopher Dodd (D-Conn.), it appears unlikely that a final bill will pass Congress this year. The House committee vote in favor of the bill to ban unfair and deceptive credit card practices may serve to send a message to federal regulators to adopt strong measures to protect consumers. In fact, the Aug. 1 issue of American Banker said the lawmakers intended just that with their vote. The Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration have issued a joint proposal that addresses several of the concerns raised in the legislation. The joint proposed rule is open for public comment until Aug. 4 and CUNA will submit its comments in the near future. It is expected that the agencies will finalize their plan by the end of the year. CUNA has recommended in a letter to Rep. Carolyn Maloney (D-N.Y.), the chief sponsor of the House bill, that it may be “more prudent to let the regulatory process run its course prior to legislating a remedy." CUNA backs much of Maloney’s bill, but has urged balance in rules to end discriminatory, predatory, deceptive and abusive lending practices to avoid unintended consequences.

Work from home Recess means lobbying time for CUs

 Permanent link
WASHINGTON (8/4/08)--August is an opportune time for credit unions to visit their members of Congress in the home districts during the month-long recess away from Washington, D.C. Bridging the periods between the 15 successful Hike the Hill campaigns executed through July and the 17 lined up for September, the summer District Work Session can give credit union representatives more time with lawmakers. CUNA Legislative Affairs Senior Vice President John Magill said CUNA and the state leagues are emphasizing the importance of such meeting to credit unions. "During a congressional visit in Washington, D.C., visitors may only get 10 minutes of face-to-face time with your member of Congress," said Magill. "But at home in the district, you're likely to 30 or 45 minutes." "We think it will help pull in more cosponsors for the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537)," added CUNA Political Affairs Senior Vice President Richard Gose. Both CUNA officials reminded that such visits are an important time to underscore for lawmakers the safety and soundness of the credit union system. “It’s a good time to reiterate that, while credit unions did not create the problems in the subprime mortgage market, we are here to be part of the solution,” Gose said. He added that a number of leagues have made August in-district visits with lawmakers a priority. Many have scheduled meetings and invited lawmakers to tour credit unions.

Hyland touts NCUA tools to explain share insurance

 Permanent link
WASHINGTON (8/4/08)—Gigi Hyland used her address this week at the Louisiana CU League (LCUL) annual meeting to tout the National Credit Union Administration’s available resources to enable credit unions to help members better understand that their deposits in federally insured credit unions are safe and sound. The NCUA board member noted credit unions members’ increased interest in federal share insurance, which has been peaked amid the country’s economic upheavals and three recently reported bank closings. The resources include publications such as:
* How Your Accounts Are Federally Insured; * Your Insured Funds; * NCUA Increases Retirement Insurance Coverage (Special Bulletin); and * Media Release - Federal Insurance Protection Strong At Mid-Year.
Also during her speech, Hyland reviewed that the key NCUA examination issue this year will is third party due diligence. She stressed the importance of credit unions understanding the vendors that they enter in to relationships with, and doing the proper research when selecting vendors that are critical to credit union operations. She noted the variety of resources available from NCUA on the topic, including an archived webinar, a document listing frequently asked questions, and the AIRES questionnaire that examiners will use when looking at third party due diligence. The Credit Union National Association (CUNA) is also exploring every avenue to broadcast the safety, soundness and strength of credit unions and to underscore they are backed by federal insurance. Use the resource links below to access NCUA and CUNA information.

Inside Washington (08/01/2008)

 Permanent link
* WASHINGTON (8/4/08)--The Federal Deposit Insurance Corp. (FDIC) transferred the deposits of First Heritage Bank in Newport Beach, Calif., and First National Bank of Nevada to Mutual of Omaha Bank before they failed two weeks ago, a move the agency likely made to avoid another IndyMac-like failure, observers said (American Banker Aug. 1). The FDIC is required to follow a “least-cost” resolution test, which requires it to act on events in a way that is cost-effective for the insurance fund. About 27% of the two banks’ $3.2 billion deposits were not insured, which results in a higher cost to the insurance fund. Despite the least-cost resolution law, the FDIC may have moved in the way that was most practical to avoid another IndyMac, said Bert Ely, an independent banking consultant from Alexandria, Va. ... * WASHINGTON (8/4/08)--The House Financial Services Committee approved Rep. Carolyn Maloney’s (D-N.Y.) measure to crack down on credit card practices. The bill would ban double cycle billing, restrict certain card fees, prevent companies from raising interest rates on existing debt if a consumer is late paying a bill and block minors from owning cards. Lawmakers said the measure passed so that the Federal Reserve Board wouldn’t ease its proposal to bar deceptive credit card practices (American Banker Aug. 1) ... * ARLINGTON, Va. (8/4/08)--Michael Fryzel, National Credit Union Administration (NCUA) chairman, is scheduled to give a speech at the National Association for State Credit Union Supervisors (NASCUS) State System Summit Aug. 21 in Seattle, NASCUS announced Friday. Fryzel led the Illinois Department of Financial Institutions for seven years in the 1980s. He was sworn in as NCUA chairman Tuesday ...

Indiana league article CUs a bright spot in economy

 Permanent link
INDIANAPOLIS (8/4/08)--Building Indiana magazine will feature in its September/October issue a column written by Indiana Credit Union League President John McKenzie promoting credit union mortgage and business lending successes. The column discusses how credit unions are expanding lending while other institutions pull back. It will be read by business owners, executives, management staff and board chairmen, and elected officials in a seven-county area of Northern Indiana. "During 2007 and into 2008, credit unions have represented a bright spot in the midst of a generally cloudy picture for the financial services industry," McKenzie wrote. He provided state statistics on the state's 208 credit unions and noted their asset growth continued at a strong pace. The article cited strong mortgage growth, with first mortgages growing 12% in 2007, as other mortgage lenders scaled back. Business lending "grew at a 17% pace last year" and surpassed $1 billion in loans outstanding" at time when credit availability for businesses has tightened, especially for small business owners, McKenzie said. As Congress considers how to stimulate the economy and create jobs, he wrote, "credit unions could do even more to make additional credit available to help businesses in their communities if Congress would pass H.R. 1537 (the Credit Union Regulatory Improvements Act)." Credit unions' services are based on the needs of their memberships, with an increasing number of credit unions offering business loans. "As locally owned financial institutions rooted in their communities, many credit unions are finding increased interest in being a source of borrowing for businesses for a number of reasons," McKenzie wrote. He also explained that credit unions have "steered clear of the subprime mortgage mess" by operating more conservatively and holding most mortgage loans in their portfolios, instead of selling them on the secondary market. He added that "credit unions focus on serving the consumers and business owners who are the members/owners of their credit unions. There is no separate group of stockholders with lofty profit expectations, which contributed to problems" at other types of financial institutions. The economy and financial environment had consumers considering whom they can trust, and this has "resulted in more people and business owners looking to credit unions as an attractive, safe option for financial services, especially during challenging economic times," he concluded.

CUs on the Tube North Carolina CUs Hike Capitol Hill

 Permanent link
WASHINGTON (8/4/08)—North Carolina credit union representatives brought a positive message to Capitol Hill during a recent Hike the Hill event in Washington, D.C. Noting that lawmakers have been buffeted by bad economic news from “Wall Street and Main Street” in recent weeks, the North Carolina credit union delegation said the good news about credit unions seemed well received. "The people helping people ethic that credit unions talk about is really on display, and our elected leaders seemed to really appreciate the difference," said North Carolina CU League Senior Vice President of Association Services Dan Schline. The credit union representatives updated lawmakers on the state of credit union mortgage performance, reporting that the default and delinquency rates on credit union mortgages in the state--and the rest of the country-- are below 1%. Click on the embedded video in this story to view the league’s report on its Hike the Hill experience, as well a video interview with Ryan Donovan, the Credit Union National Association’s vice president of legislative affairs.

Eddie Haskell nods to CUs at state legislative confab

 Permanent link
NEW ORLEANS (8/4/08)--Ken Osmond, who played the character Eddie Haskell on television’s “Leave it to Beaver,” told assembled state legislators that his credit union helped his family save and plan for retirement. Osmond was the special guest during two events hosted by the Credit Union National Association (CUNA) in conjunction with the annual Legislative Summit of the National Conference of State Legislatures (NCSL) in New Orleans on July 25. The events--a reception for legislators, preceded by a special photo opportunity--featured Osmond and his role as Haskell. Osmond, who became a police officer following the years in which he appeared on “Leave it to Beaver,” is a member of the Los Angeles Police CU. He spoke to the legislators following the screening of a video retrospective of his portrayal of Eddie Haskell. He also told the legislators, as well as representatives of eighteen state credit union leagues and CUNA staff who attended the reception, that he receives more fan mail now than when the show originally ran on network television. Osmond paid tribute to the benefits that credit unions provide to their members. He expressed appreciation to the Los Angeles Police CU for counseling him and his wife when they were first married to save and plan for their retirement, advice which he said had served him well. Legislators had a great time meeting and talking with Osmond and having their photos taken with him, according to CUNA State Governmental Affairs Vice President Chris Johnson.
Click to view larger image Pennsylvania State Representatives Chris Sainato (right) and Mark Longietti (left) met Ken Osmond during CUNA's reception for legislators. (Photo provided by CUNA)
State Reps. Chris Sainato and Mark Longietti, both of Pennsylvania, described meeting Osmond as a “fantastic” experience, and collaborated to film a video with the actor in the style of a news report on his appearance. State Rep. Richard Morrisette, of Oklahoma, said that meeting Osmond was a thrill for him because “he was my hero on ‘Leave It To Beaver.’” Morrisette added: “Some might even say that I am the Eddie Haskell of the Oklahoma Legislature.” CUNA’s Johnson said the events were part of the trade association’s ongoing effort to use creative means to remind state legislators who attend the Legislative Summit of how credit unions benefit their constituents. No credit union issues were on this year’s NCSL legislative policy agenda. However, Johnson pointed out that the policy will be considered at next year’s Legislative Summit in Philadelphia. Johnson said CUNA will be working with the state credit union leagues and key state legislators in the coming year to ensure that the current favorable policy is reaffirmed.