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CUNA keeps MBL heat on as Obama plans session to talk jobs

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WASHINGTON (9/1/11)--Strengthening small businesses will be at the center of President Barack Obama’s planned economic speech, which is tentatively scheduled to take place next week before a joint session of Congress, and the Credit Union National Association (CUNA) continues to speak out on how expanding credit union member business lending (MBL) authority would help small businesses and the economy at large. The president requested that his speech take place at 8 p.m. ET on Sept. 7, but House Speaker John Boehner (R-Ohio) suggested Obama move the speech to Sept. 8. A Republican presidential candidate debate is set to take place on Sept. 7. Obama previewed portions of his speech in a letter to members of Congress saying he planned to “lay out a series of bipartisan proposals” that can be taken on immediately “to continue to rebuild the American economy by strengthening small businesses.” The proposals will also focus on “helping Americans get back to work, and putting more money in the paychecks of the Middle Class and working Americans, while still reducing our deficit and getting our fiscal house in order,” Obama added. CUNA President/CEO Bill Cheney made the case for increasing the MBL cap this week in an interview on CNN Money, noting that while banks claim there is low demand for small business credit, credit unions have witnessed a 30% increase in their MBLs. Cheney also reached out directly to the president in August, urging Obama in a letter to encourage Congress to pass MBL cap lift legislation in the fall legislative session. "As the economy continues to recover from the financial crisis, Americans need credit unions now more than ever," Cheney wrote. Legislation to allow increased credit union MBL is "job-creation legislation that costs the taxpayers nothing and could help employ over 140,000 Americans in the next year, and many more in years to come," Cheney added. The MBL cap increase would also provide $13 billion in new credit for small businesses in the first year of enactment, according to CUNA figures. Obama also heard the call to lift the cap face to face from The University of Iowa Community CU CEO Jeff Disterhoft. Disterhoft addressed the MBL issue with Obama during a White House Rural Economic Forum at Northeast Iowa Community College in Peosta, Iowa, last month, and he reported that the president “promised to go back to Washington and look further into it." Among many other efforts to promote an MBL cap lift, CUNA will launch its Hike the Hill effort this month, and high on the list of topics that credit unions will discuss with their federal lawmakers are bills pending in the House and Senate that would lift the MBL cap to 27.5% of assets, up from 12.25%. About 450 credit union advocates are expected to visit Capitol Hill lawmakers in September and October alone.

CDFI Fund advisory board sets Sept. 13 meeting

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WASHINGTON (9/1/11)--The Community Development Advisory Board of the U.S. Department of the Treasury's Community Development Financial Institutions (CDFI) Fund will hold its next meeting on Sept. 13 in Washington. The meeting is scheduled to take place between 9 a.m. and 5 p.m. ET, and will be open to the public. Fifty seats are available. However, the CDFI Fund in its release noted that discussions at the meeting would be “limited to Advisory Board members, Department of the Treasury staff, and certain invited guests.” The Advisory Board makes broad policy recommendations to CDFI Fund Director Donna Gambrell, but the CDFI Fund notes that “the granting or denial of any particular application for monetary or non-monetary awards” is not discussed during the meetings. The CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit. The number of certified CDFIs reached 960 last month, and the fund eclipsed $1 billion in total awards this year. The CDFI Fund has also scheduled a national listening session on its potential CDFI Bond Guarantee Program. The listening session is set to take place on Friday at 12:30 p.m. ET in Newark, N.J. The Credit Union National Association (CUNA) has recommended that credit unions that are designated Community Development Financial Institutions (CDFIs) be eligible for this program, which would provide guarantees on notes that could be used as secondary capital. For more on the CDFI Fund, use the resource link.

Weak economy keeps CU member focus on debts not new loans

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WASHINGTON (9/1/11)--While labor market weakness, a lackluster housing market and stock market jitters are seemingly keeping consumers focused on paying down their debts, the number of loans taken out by credit union members increased for the fourth straight month in July, rising by 0.23%, CUNA Senior Economist Mike Schenk told News Now. The 0.23% uptick in loans is consistent with last month’s numbers. Overall, the increase in loans remains very weak, sticking at a 2.7% annualized, but not seasonally adjusted, rate, Schenk noted in his analysis of July's monthly estimates of credit unions.
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Adjustable-rate mortgages led loan growth in July, increasing by 1.9%, with personal unsecured loans increasing by 0.9% and used-auto loans and credit cards each increasing by 0.7%. New-auto balances, fixed-rate mortgages, and home equity Lines of credit/second mortgages declined. Current economic conditions “are apt to keep many consumers focused on paying down debt rather than acquiring more--and that suggests that annual loan increases will continue to be far below those normally seen in economic recoveries,” Schenk said, adding that CUNA’s baseline forecast for credit union loan growth in 2011 remains at 2%. Savings growth was even slower than loan growth, totaling 0.13% during the month. The fastest growth was seen in individual retirement accounts (IRAs) (4.1%); share drafts (2.1%) and money market accounts (0.48%), but regular share and certificate account balances declined in the month.
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“Because loans grew and savings declined credit union loan-to-savings ratios increased slightly from 69.6% to 69.7% --the third consecutive increase,” Schenk added. “ Nevertheless, credit unions continue to reflect large liquidity buffers and their large and low-yielding investment portfolios are likely to continue to put a significant drag on earnings,” he said. Credit union asset quality improved slightly for the third consecutive month, and Schenk said that “slowly improving labor markets should help to buoy incomes and fuel further improvement in asset quality as the tepid but sustainable U.S. economic recovery continues.” Credit unions’ 60-plus-day delinquency rate declined to 1.56% in July, down from 1.6% in June. That rate stood at 1.75% at the start of 2011, and 1.79% in July 2010. The movement’s overall capital-to-asset ratio increased for the fourth consecutive month, totaling 10.19% at the end of July. Credit unions’ capital-to-asset ratio totaled 9.97% as of Dec. 31, 2010, and was 9.9% in July of 2010.

Ryan Donovan promoted as CUNAs svp of legislative affairs

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WASHINGTON (9/1/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney announced Wednesday the promotion of Ryan Donovan to senior vice president, legislative affairs, effective today. Donovan, who joined CUNA in September 2007, has previously been the association’s vice president of legislative affairs. In his new position, he will lead CUNA’s on-the-ground lobbying team and manage CUNA’s legislative affairs department. “Ryan is an outstanding lobbyist and advocate for credit unions, well-known and highly regarded on Capitol Hill,” said Cheney. “CUNA continues to benefit enormously from his experience, energy and insight.” Before joining CUNA, Donovan was director of federal government affairs for the California and Nevada Credit Union Leagues, establishing the league’s office in Washington. On Capitol Hill, Donovan has worked for Rep. Brad Sherman (D-Calif.), handling his financial services committee issues before becoming legislative director and then chief of staff. Donovan first came to Washington to work for then-House Democratic leader Richard Gephardt (D-Mo). Donovan’s promotion comes after Cheney in July announced he was expanding the Washington office roles of John Magill, who was named executive vice president of government affairs and special assistant to the president, and Susan Newton, who became executive vice president of system relations. Magill and Newton also assume their new duties today. Donovan will reporting to Magill, who also took note of his accomplishments and abilities. “Ryan has been deeply involved and has had a major impact on virtually every legislative issue we’ve taken on, and we have been in some very tough battles,” Magill said. “Credit unions are in a better position as a direct result of his tireless efforts and legislative skill.” Earlier this year, CEO Update newsletter named Donovan one of 2011's top lobbyists. CEO Update is a widely read, twice-monthly print publication for executives in the association and non-profit fields.

Inside Washington (08/31/2011)

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* WASHINGTON (9/1/11)--The U.S. Treasury Department announced Wednesday that it has awarded an additional 50 community banks across the country a total of $767 million as part of the newest wave of funding provided through the Small Business Lending Fund (SBLF), established as part of the Small Business Jobs Act. With this newest allotment of funds, a total of 130 community banks have now received more than $1.8 billion in SBLF funding. Additional SBLF funding announcements will be made on a rolling basis in the weeks ahead … * WASHINGTON (9/1/11)--Federal Reserve officials considered possible actions to stabilize financial markets if Congress did not lift the debt ceiling by its Aug. 2 deadline, according to minutes released Tuesday by the Federal Open Market Committee of its Aug. 9 meeting. Officials met via videoconferencing Aug. 1 (American Banker Aug. 31). The Fed did not specify what actions it would have taken to stabilize markets. Meeting participants agreed any response would have to be considered against unfolding events. “With respect to potential policy actions, participants agreed that the appropriate response would depend importantly on the actual conditions in markets and should generally consist of standard operations,” the minutes said …