Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

No support for NCUA underserved plan says CUNA

 Permanent link
WASHINGTON (8/19/08)—The Credit Union National Association (CUNA) does not support a National Credit Union Administration (NCUA) proposal that would dramatically alter the current federal regulatory process for approving multiple group credit unions' applications to serve underserved areas. In fact, in an Aug. 18 comment letter CUNA questioned the very basis of the NCUA plan. “Before addressing concerns with various aspects of the proposal, CUNA has a fundamental disagreement with the basic rationale for the proposal and the analysis of the Federal Credit Union Act’s provisions regarding underserved areas that underlie the proposal,” wrote CUNA Deputy General Counsel Mary Dunn. “While we appreciate efforts to clarify and update rules, we are not aware of problems with the current process that indicate that the (field of membership) FOM Manual provisions on underserved applications are not clear and which would justify a broad new regulation on underserved areas and the application process,” the CUNA letter said. CUNA noted that under FCU Act, a federal credit union must have a field of membership that is a single common bond, multiple common bond, or which encompasses a community FOM. The Act provides an exception for underserved areas. “As these provisions indicate, and as NCUA’s current FOM provisions recognize, Congress envisioned a process for approving undeserved areas that first starts with a determination that a recognizable geographic area--a local community, neighborhood or rural district (i.e., community)--exists,” CUNA pointed out. The letter added that the legislative history to the Credit Union Membership Access Act reinforces that vision but added that the proposal would erroneously rely on geographical, rather than economic, criteria from the Community Development Financial Institutions Fund's regulations. "In our view, Congress intended that NCUA would implement the provisions of the Act carefully but in a manner that would facilitate service to undeserved eras. The proposal undermines both these objectives," Dunn said. CUNA urged the NCUA to retain the current process , not to proceed with the proposal and said the agency should “be mindful” that the Credit Union, Bank, and Thrift Regulatory Relief Act, HR 6312, remains pending in Congress, That legislation would change the definition of “undeserved area.” Meanwhile, the American Bankers Association has written to NCUA supporting limitations on undeserved areas, such as limiting underserved designations to census tracts. The ABA also recommends that if a branch of any financial institution is located in a proposed area, "this would indicate with high probability that the area is not undeserved." To read CUNA’s complete comment letter, use the resource link below.

Education bill with CUNA-sought changes signed into law

 Permanent link
WASHINGTON (8/19/08)—President George W. Bush last week signed the Higher Education Opportunity Act into law. The new law includes two changes sought by the Credit Union National Association (CUNA) during the legislative process. The act reauthorizes the Higher Education Act of 1965 for the first time since 1998. The 2008 package made significant amendments to the original law, which governs federal higher education programs, including financial assistance for students. As different versions of the bill made their way through the House and Senate in July and early August, CUNA worked with Capitol Hill legislative staffers to ensure two changes were included before final passage by both houses of Congress. The new act requires lenders and colleges to adopt strict codes of conduct for their student lending programs. A concern was expressed that the bill, as originally passed by the House, may have prevented university-sponsored credit unions from using the name of their educational institution in marketing the lender’s private educational loans. CUNA sought and received language that should provide credit unions that are named for a university sufficient latitude to market their student loans-- provided that they do not imply that the loan is made by the university and not the financial institution. Also, CUNA won for credit unions an exemption to a 50% rule that the act granted national and state-chartered banks. Specifically, the bill imposes a 50% limitation stating that an eligible lender cannot have as its primary credit function the making or holding of federal student loans. Under the House-approved version of the bill, Federal Family Education Loan Program (FFELP) loans may not represent more than 50% of a lender's consumer credit loan portfolio, including home mortgages. The bill provided an exemption for national banks with assets under $1 billion and CUNA secured that exemption for credit unions.

Inside Washington (08/18/2008)

 Permanent link
* WASHINGTON (8/19/08)--Phil Gramm and Thomas Bliley of the Gramm-Leach-Bliley Act, or the Financial Modernization Act of 1999, will back Sen. John McCain (R-Ariz.) for president. Jim Leach said he will support Barack Obama (D-Ill.). The three former legislators are Republicans (American Banker Aug. 18). Leach, a former chair of the House Banking Committee, helped launch the Republicans for Obama group. Gramm worked as a top adviser for McCain’s campaign until he stepped down, saying the nation’s economic problems were overblown. Gramm was seen in Aspen, Colo., at a McCain event last week, according to ABC News. The Gramm-Leach-Bliley Act protects consumers’ personal financial information held by financial institutions ...