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House to commemorate Federal Credit Union Act

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WASHINGTON (9/8/09)--The House of Representatives returns to Washington from summer recess this week, and one item on the table is H.Res. 556, a bill that recognizes the 75th anniversary of the passage of the federal credit union act. Credit Union National Association (CUNA) officials have been told that the commemorative bill, which celebrates the “vibrant Federal credit union community that was created” following the passage of the Act, would be considered under suspension of the rules this week. The bill also recognizes credit unions for their past service to the country as well as their continued “valuable services” provided to their members and the “economic stimulus” that credit unions have provided to the Nation “even as we face a financial crisis today.” The recognition precedes CUNA’s 75th anniversary celebration, which will be held in Estes Park, Colorado. A number of CUNA committee and board meetings will also take place during the celebration, which is scheduled for September 14-17. National Credit Union Administration board member Gigi Hyland is also scheduled to speak during a meeting of board members.

Matz continues to explore CARD Act concerns

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WASHINGTON (9/8/09) – Newly installed National Credit Union Administration (NCUA) Chairman Deborah Matz continues to examine credit union compliance hurdles related to the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act. On Friday, Matz gathered several credit union officials and representatives of the Credit Union National Association (CUNA), CUNA Mutual Group, and National Association of Federal Credit Unions to further explore and discuss the issues. Credit unions represented included Boeing Employees CU, Holy Rosary CU, American Airlines FCU, Missouri Central CU, and Justice Department FCU. Matz indicated NCUA has initiated efforts on Capitol Hill to get federal lawmakers to consider a legislative fix to the 21-day rule that is bedeviling credit union compliance efforts, reported CUNA Deputy General Counsel Mary Dunn, who represented CUNA. The CARD Act aims to prevent lenders from making arbitrary changes to interest rates and terms associated with credit cards that have an existing balance. However, credit unions have serious compliance challenges trying to meet provisions that prohibit creditors from treating a payment as late for any purpose, including reporting the late payment to the credit bureau, unless that creditor adopts reasonable procedures to ensure that periodic statements are delivered to consumers no later than 21 days before the payment due date. Matz reiterated at the Friday meeting that federal credit union examiners are being asked to take a close look at a credit union’s good-faith efforts to comply with the new law and demonstrate flexibility for a reasonable time while credit unions are developing compliance programs under the new law. Dunn said Matz, while saying credit unions need to respect the law, indicated a great deal of sympathy for credit unions trying to sort through what they need to do. She indicated a communication has gone to examiners directing them to work positively with credit unions that are making good faith efforts to comply. CUNA, the Connecticut Credit Union League, and other league representatives, have also been working toward a legislative fix to some of the compliance problems. In the meantime, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) in August urged the Federal Reserve Board to provide relief to credit unions regarding the 21-day rule Act as it applies to open-end plans other than credit cards. In a letter to Federal Reserve Board Chairman Ben Bernanke, Dodd urged the Fed to allow credit unions "more time to come into compliance" for such open-end plans. CUNA has prepared a document to assist state leagues and credit unions with credit unions' questions regarding their compliance obligations under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act provisions--especially on the 21-day periodic statements provision. Use the resource link below to access the document.

Inside Washington (09/07/2009)

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* WASHINGTON (9/8/09)--The U.S. Small Business Administration (SBA) has raised the amount of goodwill value a lender can finance when making a loan to the buyer of a small business to $500,000 from $250,000 (American Banker Sept. 4). SBA also eliminated a provision requiring that goodwill financing can amount to no more than half of a loan value for the purchase of a small business ... * WASHINGTON (9/8/09)--Financial observers continue to speculate about the future of Fannie Mae and Freddie Mac, which were taken into conservatorship last year. Some have suggested turning the GSEs into a public utility model, allowing them to create special purpose vehicles to operate in the secondary market, or forming a good bank/bad bank structure. The Obama administration has said it would not move to change the GSEs until early 2010 (American Banker Sept. 4). The changes to Fannie and Freddie likely won’t happen fast, said John Courson, president/CEO of the Mortgage Bankers Association. Judy Kennedy, CEO of the National Association of Affordable Housing Lenders, said maybe Fannie and Freddie can’t be helped ... * WASHINGTON (9/8/09)--European countries are pushing to make bankers’ pay and bonuses a top agenda item for the Group of 20 (G-20). However, Treasury Secretary Timothy Geithner has not brought up the bonus issue; instead, he favors discussing a new international accord to increase banks’ capital (Associated Press Sept. 4). A new accord could put in place a more conservative framework of constraints on leverage in the financial sector, he said. The Obama administration has proposed stronger international standards for the reserves banks hold to cover losses. The U.S. hopes to get an international agreement on the accord by the end of next year, with implementation by the end of 2012 ...

NCUA announces agenda for first town hall meeting

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ALEXANDRIA, Va. (9/8/09)--The National Credit Union Administration has announced the agenda for the first of three planned town hall-style meetings. The first meeting, which will take place outside of St. Louis, Mo. in Clayton, Mo. on September 15, will include two lengthy question and answer sessions. The meeting will also feature opening and closing remarks from NCUA Chairman Deborah Matz. Other topics scheduled for discussion during the meeting include the ongoing implementation of the corporate credit union stabilization plan and the NCUA’s pending rulemaking on the corporates. NCUA Deputy Executive Director Larry Fazio, NCUA General Counsel Bob Fenner, and Office of Corporate Credit Unions official Scott Hunt will also speak during the meeting.