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CUNA league to begin MBL push anew over recess

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WASHINGTON (8/9/10)--With both bodies of Congress away on their yearly summer recess this month, the Credit Union National Association (CUNA) is encouraging credit union backers to urge their senators to support pending member business lending (MBL) legislation. Credit unions can expect to be contacted by their respective leagues as CUNA and the leagues organize in the coming weeks. The focus of MBL advocacy will be Sen. Mark Udall’s (D-Colo.) recently introduced legislation that would lift the current cap on MBLs. Udall’s legislation would increase credit union business lending authority to 27.5% of total assets, up from the current 12.25% cap. As Udall has noted on the Senate floor, CUNA estimates that more than $10 billion in credit could become available if the MBL cap were lifted, even if just to 25%. The statutory change would also serve to add 108,000 jobs into a struggling market. CUNA and Udall were aiming to include the MBL legislation as part of a small business jobs package, but the jobs legislation will not see action until Congress returns in September. While the small business legislation may have ultimately become a victim of politics, credit unions have received attention and recognition on Capitol Hill, and CUNA will be back at the first opportunity to finish the job, CUNA Senior Vice President of Legislative Affairs John Magill said recently.

IRS will not offer debt indicator program in 2011

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WASHINGTON (8/9/10)--The U.S. Internal Revenue Service (IRS) has announced that it will not make its debt indicator program available to tax preparers and financial institutions for the 2011 tax season. The debt indicator, which helps financial institutions discern whether a tax filer's refund will be delayed, facilitates refund anticipation loans (RALs). RALs are short-term, high-interest loans that are heavily marketed by paid tax preparation firms during tax time. They can deplete hundreds of dollars from a typical tax refund. Many credit unions offer Volunteer Income Tax Assistance (VITA) programs to steer tax filers away from the costly RALs. VITA is an IRS program that helps low- and moderate-income taxpayers complete their annual tax returns at no cost. Credit unions and community organizations receive IRS- provided training in preparing basic tax returns and establishing tax-preparation sites. The National Credit Union Foundation’s REAL Solutions program estimated in 2009 that the free tax preparation, electronic filing, and refund deposits provided by the VITA program to low-income tax filers has saved those tax filers a combined $20 million. The National Credit Union Administration (NCUA) earlier this year announced that it will expand its participation in the credit union-based VITA tax prep program. A total of 541 credit unions participated in the VITA program in 2009, the NCUA reported.

Inside Washington (08/06/2010)

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* WASHINGTON (8/9/10)–The Obama administration last week approved $600 million in foreclosure prevention assistance funds that will be used to “support local initiatives to assist struggling homeowners” in states with high unemployment. The funds are targeted to aid areas in North Carolina, Ohio, Oregon, Rhode Island and South Carolina. The funds will be distributed through state housing authorities. State authorities estimated that 50,000 eligible homeowners would receive aid via various programs to address mortgage payment issues. The funds also will be used to facilitate first and second liens, short sales, and/or deeds-in-lieu of foreclosure, according to a U.S. Treasury release … * WASHINGTON (8/9/10)—Christina Romer, who had served as chair of President Barack Obama’s Council of Economic Advisers, announced last week that she would leave the administration, effective Sept. 3. Romer will teach at the University of California, the White House said. Office of Management and Budget Director Peter Orszag left the administration in July … * WASHINGTON (8/9/10)—Representatives from President Barack Obama’s White House have been privately encouraging banks, including Citigroup, Bank of America, Wells Fargo, and JP Morgan Chase to adopt portions of the recently enacted financial regulatory reforms ahead of schedule. One provision the administration is promoting would allow consumers to access their credit scores at no charge if those credit scores will negatively effect their finances, American Banker reported Friday. U.S. Treasury Secretary Tim Geithner said last week that financial institutions should adopt the reform measures early. While many banks were still undecided on whether to participate, President Obama is reportedly hoping to promote their compliance in the coming days, the Banker said …