Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

CRA hearing largely uneventful for CUs

 Permanent link
WASHINGTON (9/17/09)--Rep. Eddie Bernice Johnson (D-Texas) on Wednesday indicated that she would support expanding the terms of H.R.1479, the Community Reinvestment Act (CRA) Modernization Act of 2009,to cover what she called “mainstream” credit unions. House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.), who chaired much of the discussion during a Wednesday hearing before the committee, indicated that CRA legislation could be taken up later this year or early in 2010.
Click to view larger image House Financial Services Committee Chairman Barney Frank (D-Mass.), shown right, who says he wants to see a bill to enhance the Community Reinvestment Act this year or next, and committee member Rep. Jeb Hensarling (R-Texas), who proposes the act be "repealed not expanded" talk just prior to their panel's hearing Wednesday on CRA issues. (CUNA photo)
Rep. Luis Gutierrez (D-Ill.) spoke in support of keeping the CRA issue separate from the pending debate on the proposed Consumer Financial Protection Agency, stating that he would hold a full hearing on H.R. 1479 later in the year. While Rep. André Carson (D-Ind.) called for CRA requirements to be applied to all financial institutions, Rep. Jeb Hensarling (R-Tex.) said that CRA should be repealed. Rep. Michelle Bachmann (R-Minn.) also opposed any expansion of CRA, calling it irresponsible. National Community Reinvestment Coalition President/CEO John Taylor, Massachusetts Commissioner of Banks Steven Antonakes, and National Urban League President/CEO Marc Morial testified during the hearing, along with academics and representatives from various Washington-based interest groups. In the event that credit unions are brought under the scope of the CRA, Antonakes said that the costs born by credit unions should only be commensurate to their market share. Legislators should also add provisions that require a full review of all affiliate lending and that increase asset standards for large institutions to help focus on market share rather than asset size. Banks that originate unsustainable loans or that have partnerships which can harm the unbanked should be downgraded, he added. Senior Vice President of Legislative Affairs John Magill said that the Credit Union National Association (CUNA) will continue to watch CRA discussions on the Hill very closely. CUNA strongly opposes expansion of the act to cover credit unions. Of yesterday's hearing Magill observed that the focus clearly was not on credit unions. Rather, other issues, including federal funding for ACORN, took up the majority of discussion time.

Inside Washington (09/16/2009)

 Permanent link
* WASHINGTON (9/17/09)--Sen. Carl Levin (D-Mich.), in a letter to Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair, urged the agency not to impose another special assessment fee on the banking industry. The FDIC should use its credit line--recently expanded by the Treasury Department--instead of charging more fees to community banks. Community banks’ capital would be depleted if they had to pay more fees. They also didn’t cause the economic crisis, Levin said (American Banker Sept. 16). In May, the FDIC said it would charge another special premium in addition to its normal assessments because its reserves are declining. Bair told CNBC Tuesday that that she could not say if the agency would ask Treasury for assistance ... * WASHINGTON (9/17/09)--Regulators are expected to release data that indicate a record number of syndicated loans have experienced a drop in credit quality. Classified loans--which are viewed as substandard--have tripled over the past year to 15.5% of the total syndicated loan portfolio (American Banker Sept. 16). Almost a quarter--22.3%--of the industry’s syndicated business loans is termed “criticized,” compared with 13.4% last year. In 1991, at the top of the savings and loan crisis, the proportion of criticized loans hit 16%. Kathy Murphy, chief accountant at the Office of the Comptroller of the Currency, said the picture is not expected to brighten, and there are still problems that need to be worked through ... * WASHINGTON (9/17/09)--The Federal Reserve announced Tuesday that it will implement a consumer compliance supervision program in nonbank subsidiaries of bank holding companies and foreign banking organizations with activities covered by the consumer protection laws and regulations it has the authority to enforce. The policy, announced today and effective immediately, also provides for the investigation of consumer complaints against nonbank entities. It builds upon the groundwork of a pilot program launched in 2007 by the Federal Trade Commission, Office of Thrift Supervision and two associations of state regulators. It is designed to improve the Federal Reserve's understanding of the consumer compliance risk that certain products and services may pose to the holding companies and consumers, and to guide supervisory activity for these entities, the Fed said ...

In letter CUNA opposes elimination of FFELP

 Permanent link
WASHINGTON (9/17/09)--The Credit Union National Association (CUNA) in a letter sent Wednesday to House Speaker Nancy Pelosi and other members of Congress expressed concern at the potential elimination of the Federal Family Education Loan Program (FFELP), stating that the elimination of this private student funding would remove a “valuable option” for students. H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009, which would terminate FFELP, is on the House floor this week. CUNA has lobbied against the bill. CUNA President/CEO Dan Mica urged legislators to “retain the FFELP program,” adding that the program is an “important service” for credit unions that provide student loans. Over 1,000 credit unions provide student loans, according to CUNA, with a particular concentration among credit unions that base their membership around a university. Credit unions that provide direct student loans also provide individualized service and support to loan holders, but these services would be jeopardized if the FFELP is discontinued. The Obama administration has estimated that eliminating the subsidies provided under FFELP could save over $4 billion, annually. A portion of that $4 billion surplus could then be loaned directly to low-income students through need-based Pell Grants, the administration has claimed.

Corporates rulemaking topics at 1st NCUA town hall

 Permanent link
ALEXANDRIA, Va. (9/17/09)--Corporate credit unions, the National Credit Union Administration’s (NCUA) pending rulemaking, and compliance with the Credit Card Accountability, Responsibility and Disclosure (CARD) Act were among the topics discussed during the first of three NCUA town hall meetings held this week near St. Louis, Missouri. NCUA Chairman Deborah Matz commented that while “the credit union industry, and NCUA, have been through a hard year,” she is “hopeful” that the town hall meetings will allow credit union insiders to “look forward.” “Together, we will get through the next year by working hard, talking honestly, and applying our best thinking to the critical issues facing the credit union industry,” she added. According to an NCUA release, the meeting, which was attended by 120 credit union and trade association representatives, featured discussions of corporate liquidity, the NCUA’s Temporary Corporate Share and Loan programs, future corporate capital requirements, corporate competition and governance, and the current and future role of the payment system. Matz, NCUA Board Member Michael Fryzel, and other members of the NCUA’s staff also led discussions detailing potential changes to the corporate credit union regime. NCUA General Counsel Bob Fenner addressed some of the specific actions that are being discussed by the NCUA, including capital requirements, concentration limits, maturity mismatches, corporate management accountability and transparency, and the future structure of the corporate system, the NCUA release said. The town hall meeting also featured discussion of the CARD Act and the possible creation of the Consumer Financial Protection Agency. The NCUA has planned additional town hall meetings in Oxon Hill, Md. And San Diego, Calif.

Top leaders in Congress congratulate CUNA

 Permanent link
WASHINGTON (9/17/09)—Senate Majority Leader Harry Reid (D-Nev.) and Speaker of the House Nancy Pelosi each sent congratulatory letters to the Credit Union National Association (CUNA) to mark the organization’s 75th year of operations. Delivered Wednesday at CUNA’s 75th anniversary meeting in Estes Park, Colo., the messages noted CUNA’s “major rile in the financial services industry,” as well as the group’s “dedicated service” and “commitment” to credit unions and the members they serve. Reid—extending his wishes for another 75 years of successful service—said he is not surprised by the “immense growth of CUNA” over the decades. “The establishment of this association in the wake of the Great Depression and the passage of the Federal Credit Union Act (FCUA) signifies the determination of (CUNA) members to provide quality financial services” to members, Reid wrote. The FCUS was signed in 1934 by President Franklin D. Roosevelt. Pelosi said she is proud of CUNA’s commitment to its member credit unions and the communities they serve and noted that 96 million people across the nation rely on credit unions “to save their hard-earned dollars, plan their financial futures, realize the dream of homeownership, and even send remittance to other countries.”

No can be strong tool for a leader Mica

 Permanent link
WASHINGTON (9/17/09)—Leaders—whether on K Street or in Congress—earn constituents’ respect by making the tough decisions, even when that decision demands a ‘no’ answer to the constituent’s request, advised Dan Mica, president/CEO of the Credit Union National Association (CUNA). Mica, with decades of experience both as a leader on Capitol Hill and as a lobbyist, said strong leaders will ultimately earn the respect of constituents and gain credibility if they ultimately push back to clear the way to do what is right. Mica made his observations in his most recent “K Street Insider” column penned for The Hill. Mica said he has successfully practiced his own advice both as a federal lawmakers and association executive. For instance, he noted that early on as head of CUNA the credit union world faced a tremendous battle to over turn a U.S. Supreme Court ruling that limited consumer’s ability to join credit unions. There was heady pressure to move quickly but Mica said no to acting rashly and instead pursued a strategy that took more time and ultimately gained the credit union movement what it sought. Constituents may object and “even yell and send you some sharp e-mails, “but, Mica said, by and large they will support the leader because he/she is doing what is best. As its name implies, The Hill's “K Street Insider” column focuses on the lobbying business rather than credit union issues. For the past two years, Mica has been one of a select number of former policymakers who became lobbyists that write the widely read column in rotation. Use the resource link to access the column.