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CU interests asserted in wrangling over financial bill

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WASHINGTON (9/23/08)—-“Fluid” was likely the best way to describe developments on Capitol Hill Monday as lawmakers and the Bush Administration--with help from the Credit Union National Association (CUNA)--hammered out details of the plan to save the floundering financial system. CUNA was working with both the legislative and executive branches to ensure that credit union interests were taken into account throughout the legislative drafting process, according to CUNA Legislative Affairs Vice President Ryan Donovan. As the day progressed, new versions of the legislation emerged, reflecting interests of both sides of the aisle in Congress, as well as the positions of the Treasury Department. Through it all, CUNA was working as a conduit for the credit union movement, to explain the impact on credit unions of the effort to authorize the Treasury to absorb up to $700 billion of sour mortgages and mortgage securities. “Each version includes credit unions and their interests implicitly or explicitly,” said Donovan. “We continue our conversations with authors of the legislation, as well as the National Credit Union Administration, to ensure credit unions are included.” CUNA’s first goal is to ensure credit unions are included in any legislation, said Donovan. Secondly, CUNA is working to “make sure such legislation is consistent with credit unions’ cooperative structure.” “The legislative language tends to presume all financial institutions operate the same,” he said. “We’re ensuring the details account for the credit union difference.” Donovan said developments are moving quickly in Washington and he praised lawmakers for addressing the issues in a mostly non-partisan manner.

Inside Washington (09/22/2008)

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* WASHINGTON (9/23/08)--The House Financial Services Committee has set a Sept. 24 hearing to bring U.S. Treasury Secretary Henry Paulson, Jr. and Federal Reserve Board Chairman Ben Bernanke before the panel to discuss the Bush administration’s capital markets intervention proposal. The hearing is entitled “The Future of Financial Services: Exploring Solutions for the Market Crisis.” The following day, the committee has scheduled an oversight hearing to examine earlier action by the Treasury to place the housing government-sponsored enterprises into conservatorship. On Friday, the House Judiciary subcommittee on commercial and administrative law will hold a hearing on whether Chapter 11 of the Bankruptcy Code and the 2005 amendments to the Code respond to the financial distress that today's businesses face. And of interest on the Senate side, the Senate Banking Committee is scheduled today to look at "Turmoil in U.S. Credit Markets: Recent Actions Regarding Investment Banks and Other Financial Institutions." Paulson, Bernanke, SEC Chairman Christopher Cox, and Federal Housing Financial Agency Director James Lockhart are expected to testify… * WASHINGTON (9/23/08)--Ameribank Inc. was closed Friday by the Office of Thrift Supervision. The Federal Deposit Insurance Corp. (FDIC) was named receiver. Ameribank has five branches in West Virginia and three branches in Ohio. Pioneer Community Bank, Iaeger, W. Va., will assume deposits for the five branches in West Virginia. The Citizens Savings Bank, Martins Ferry, Ohio, will assume all deposits for the three branches in Ohio. West Virginia branches re-opened Monday; Ohio branches re-opened Saturday. As of June 30, Ameribank had $114 million in assets and $102 million in deposits ... * WASHINGTON (9/23/08)--Democratic lawmakers are seeking to add provisions to the Treasury Department’s proposal to create a government entity that would purchase banks’ illiquid assets. Senate Banking Committee Chairman Christopher Dodd (D-Conn.) warned against adding too much to the proposal, stating that it would “not be a Christmas tree.” Changes relating to the entity’s operation likely will be added to the proposal, observers said (American Banker Sept. 22). Treasury Secretary Henry Paulson announced the plan Friday, saying that it would cost taxpayers hundreds of billions or dollars. The plan is needed to stabilize the deteriorating housing market, he said ... * WASHINGTON (9/23/08)--The presidential candidates responded differently to news of the Treasury Department’s proposal to solve the mortgage market crisis by creating a new entity to purchase illiquid bank assets. Sen. John McCain (R-Ariz.) said that he would create an entity to seek out troubled companies in the financial sector and help them become healthy, but he did not provide specifics (American Banker Sept. 22). Sen. Barack Obama (D-Ill.) chose to delay releasing his own financial plan, saying that he needed to study the administration’s plan first and that a solution could not be proposed in one day. The Treasury’s proposal will be significant for both McCain and Obama, because one will have to deal with the plan, said Larry Sabato, director of the University of Virginia Center for Politics ...

New CDFI guidance for certification requests

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WASHINGTON (9/23/08)—For credit unions and other financial institutions considering certification under the U.S. Treasury Department’s Community Development Financial Institution (CDFI) program, there is new guidance on how to apply, and also how to amend, certification. The CDFI Fund was created in 1994 to make capital grants, equity investment, and awards for technical assistance to CDFIs. One of the new guidance documents is designed in a frequently asked-questions (FAQ) format. It offers 18 questions and answers in six categories ranging from “general” to “recertification” to “contacting CDFI” program staff. The second document, on "Designating a Target Market In my CDFI Fund," provides guidance on defining an institution’s “target market” in the CDFI application and can also be useful for a CDFI needing to its target market. A CDFI release said this revised guide provides “clearer instructions on the step-by-step guidance for designating and submitting the Target Market Maps that are a part of a new CDFI Certification Application or a request from a certified CDFI to modify its certified Target Market.” Use the resource links below for more CDFI information.