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CUNA NCRC report needs close look

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WASHINGTON (9/09/09)—The Credit Union National Association (CUNA) said Tuesday that a National Community Reinvestment Coalition (NCRC) report unfavorably comparing credit union fair lending practices to that of banks needs a closer look because past analysis of Home Mortgage Disclosure Act data has shown NCRC to be off base. “In fact,” said CUNA Vice President of Economics and Statistics Mike Schenk, “both lower-income and minority applicants are more likely to have their loans approved at credit unions than at banks.” He said CUNA will closely review the newest NCRC report, released late yesterday. The NCRC said it analyzed several credit unions and compared them to bank service to working and minority communities. The report contends credit unions lag behind banks on 64% of the fair lending indicators that were examined.

Inside Washington (09/08/2009)

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* WASHINGTON (9/9/09)--Sen. Christopher Dodd (D-Conn.), chair of the Senate Banking Committee, has decided against succeeding the late Sen. Edward M. Kennedy (D-Mass.) as chair of the Senate Health, Education, Labor and Pensions (HELP) Committee, Washingtonpost.com reported late Tuesday. Dodd has scheduled an 11 a.m. press conference today to announce his decision. Dodd was overseer of the HELP Committee's health care legislatioin while Kennedy battled brain cancer for more than a year. According to a report in Roll Call earlier in the day, Dodd was being encouraged by some financial industry lobbyists to head the health panel. If Dodd had taken the position, Sen. Tim Johnson (D-S.D.) would have become chair of the Senate Banking Committee ... * WASHINGTON (9/9/09)--Rep. Barney Frank (D-Mass.) would like to be in President Barack Obama’s cabinet, according to Frank’s new biography, written by Stuart Weisberg (The Hill newspaper Sept. 7). Frank said his departure from Congress is not imminent. He wants to pass more legislation on affordable housing and to have at least two years with Obama as president and a Democratic Senate, he said ... * WASHINGTON (9/9/09)--Lenders are supporting the Small Business Administration’s decision to increase the amount of goodwill value a lender can finance when making a loan to a borrower that wants to buy a small business. The change, which doubles the goodwill value to $500,000, was announced by SBA last week. The SBA is “addressing our issues, and seems to be taking steps” to attract new lenders, said Tony Wilkinson, president, National Association of Government Guaranteed Lenders ... * WASHINGTON (9/9/09)--The Department of Housing and Urban Development (HUD) has confirmed a final rule attempts to improve the quality of HECM counseling. The rule amends the department’s Home Equity Conversion Mortgage (HECM) program by establishing testing standards to qualify individuals as HECM counselors eligible to provide counseling to prospective borrowers. It also establishes an HECM Counseling Roster of eligible counselors. The rule is effective Oct. 2 ...

Schumer to back Sen. overdraft bill

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WASHINGTON (9/09/09)—Sen. Charles Schumer (D-N.Y.) announced Tuesday that he wants to see more consumer protections associated with overdraft protection plans and that he will back legislation targeting abusive practices. Speaking at The College of Saint Rose in his state’s capitol, Albany, Schumer said overdraft legislation should:
* Require that consumers either must opt in, or have a chance to opt out, of financial institutions’ overdraft protection programs; * Increase disclosure of the fees and APR charges on overdraft loans to help consumers factor in that information when choosing a debit card provider; * Require a warning to consumers that an electronic transaction may trigger an overdraft loan fee. The warning should be joined with a notice allowing the consumer to cancel the transaction after receiving this warning; * Prohibit financial institutions from manipulating the order in which checks and other debits are posted if it causes more overdrafts and maximizes fees; and * Require them to gradate fees proportionally so that a fee for a nickel overdraft is lower than a fee for a $100 overdraft.
Legislation that has been introduced in the House by another New York Democrat, Rep. Carolyn Maloney (H.R. 1456, the Consumer Overdraft Protection Fair Practices Act), carries the provisions listed above. Schumer said Tuesday that he will be an original co-sponsor for legislation being introduced in the Senate by Sen. Christopher Dodd (D-Conn.), who heads the Senate Banking Committee. The Credit Union National Association (CUNA) has adopted policy positions supporting the ability of credit unions to offer overdraft privilege programs, but urging credit unions to avoid unfair or deceptive practices, which are inconsistent with credit philosophy and principles.

With Congress return reg revamp debate heats up

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WASHINGTON (9/9/09)--Congress came back to Washington this week and lawmakers face a full slate of legislative activity at the start of this eight-week legislative work period, including a hearing on Community Reinvestment Act issues, perhaps as early as next week. While the upcoming eight-week legislative period is expected to end on Oct. 30, there is speculation that work on Capitol Hill could continue beyond that deadline. Rep. Barney Frank (D-Mass.) recently stated that larger financial regulatory reforms could be passed by the House by October, with President Barack Obama signing the completed legislation by the end of this year. The House Financial Services Committee, which is chaired by Frank, today will open business with a hearing on the progress of the Obama administration’s “Making Home Affordable Program.” There are a number of other issues that are of great importance to credit unions on the legislative calendar, but one of the first credit union-specific pieces of legislation should be the simplest of all, as the House this week is expected to discuss H. Res. 556, which recognizes the 75th anniversary of the enactment of the Federal Credit Union Act. "This resolution not only recognizes the anniversary of the Act, but also the valuable service all credit unions provide their members as well as the economic stimulus credit unions are providing during the financial crisis," said Ryan Donovan, vice president of legislative affairs. It is also thought that the committee may soon mark up H.R. 3216, the Consumer Financial Protection Agency (CFPA) Act. This legislation would seek to protect consumers of financial products through the creation of a powerful independent agency with extensive rulemaking, oversight, and enforcement tools. Debate and markup of this legislation was scheduled to occur before the recently ended summer district work period, but other business prevented the Committee from taking any action at that time. Member business lending (MBL) is another important issue for credit unions, and Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) in late July introduced legislation that would double the current statutory MBL cap of 12.25%, a move that CUNA believes could produce as much as $10 billion in new capital for investment in the first year of the change. The Credit Union National Association (CUNA), the National Credit Union Administration, and member credit unions continue to explore a legislative remedy addressing the unintended consequences of the 21-day rule in the recently enacted Credit Card Accountability, Responsibility, and Disclosure (CARD) Act. Legislation addressing interchange fees is not expected to be brought up during the fall session, but related measures were introduced on both the House and Senate sides in early summer, and similar legislation could be brought up during discussion of the CFPA. One such bill introduced by Rep. John Conyers (D-Mich.) would allow merchants to negotiate interchange with card issuers. However, federally chartered credit unions and all financial institutions with less than $1 billion in assets are exempted from the terms of the bill. Another bill from Sen. Richard Durbin (D-Ill.) would also provide for these sorts of negotiations. National convenience retailers Circle-K and 7-11 have circulated and are expected to present petitions claiming that consumers support their position on interchange, but CUNA’s Federal Legislative Affairs Director Michele Johnson has countered that argument, saying that changes to the current interchange fee structure would “give merchants an antitrust advantage in negotiations with card issuers, networks, and other payment system participants.”