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NCUA gives strong support to financial reform bill
ALEXANDRIA, Va. (7/1/10)—The National Credit Union Administration (NCUA) has come out in “strong support” of the financial regulatory reform bill that was hammered out last week by a House-Senate conference committee and now awaits a final vote in both chambers of the U.S. Congress. The legislative package, aimed primarily at Wall Street and meant to establish barriers to a repeat of the country’s recent crisis prompted by a meltdown of housing and mortgage markets, also includes reforms of interest to credit unions. Those reforms include the creation of a consumer financial protection bureau, making permanent an increase in federal deposit insurance to $250,000 per account, and extending on an equal basis for credit unions and banks unlimited federal insurance for non-interest bearing accounts. In a letter to House Financial Services Committee Chairman Barney Frank (D-Mass.) and Senate Banking Committee Chairman Christopher Dodd (D-Conn.) Tuesday, NCUA Chairman Debbie Matz cited the above provisions as reason for her agency’s support of the reg reform package. Frank and Dodd were leadership of the conference committee. Matz’s letter did not address a hot-button topic that has been in the forefront of many credit unions’ concerns in recent weeks, that of a provision that would require government controls of a portion of the fees merchants pay to use the electronic payments system, known as interchange fees. Credit Union National Association (CUNA) President/CEO Dan Mica expressed surprise that the NCUA’s letter did not take note of debit interchange. “The bill’s interchange provision has generated more outpouring of concern from credit unions than any issue we have seen in many years. In the short time since NCUA released its letter I have been deluged with calls and comments from credit unions expressing their frustration that NCUA would 'throw them under the bus' by endorsing the legislation without at least acknowledging the concerns raised about the interchange language," Mica said. The Credit Union National Association (CUNA), which along with the state leagues and credit unions launched a herculean effort to block the provision, ultimately has opposed the overall reform bill because of its inclusion of the interchange language. The reg reform package was expected to be voted by the House Wednesday and is awaiting a final vote by the Senate. CUNA’s strong opposition to the interchange language has been fueled, in large part, because of concerns that the amendment would hurt consumers by driving up their debit card fees, with no compensatory advantages to those consumers. CUNA has also said that the interchange rule change forces the Federal Reserve into a role of a price-fixing body, when interchange fees should be driven by market forces. CUNA’s opposition campaign generated hundreds of visits by credit union advocates to federal lawmakers, as well as over 600,000 email and phone contacts seeking withdrawal of the amendment. If signed into law, CUNA will spearhead efforts to address credit union concerns during the regulation and implementation process.


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