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TARP reform bill takes another step forward

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WASHINGTON (1/16/09)—In an action perhaps meant to be more symbolic than real, the House voted Thursday on amendments to a bill intended to provide the incoming Obama administration greater guidance on the use of the second installment of Troubled Asset Relief Program (TARP) funds. The House voted 273 to 152 in favor of a “manager’s amendment” that could facilitate a vote on Rep. Barney Frank’s bill to modify TARP (H.R. 384). A final vote on the legislation could come as early as next week. The bill, titled the "TARP Reform and Accountability Act," was introduced just last Friday. There is no comparable bill in the Senate and Frank himself has said he does not expect his bill to become law. “The House wants to sent a message to the new administration regarding how they would like to see the next $350 billion spent," Ryan Donovan said. He is vice president for legislative affairs for the Credit Union National Association (CUNA). As reported earlier, the Frank bill includes an amendment that would provide a limited form of alternative capital to help credit unions participate in government assistance programs. "The manager's amendment includes language that would permit credit unions to count TARP assistance as net worth," Donovan said. "Even though this provision is not likely to become law through this legislation, we believe it will strengthen our hand at Treasury," Donovan said. CUNA has been addressing all levels of government, seeking credit union access to government economic relief programs. CUNA has noted that even without expectations of being signed into law, a House vote for the Frank bill would make it clear that it wants credit unions to have access and is willing to change the law if the Treasury Department doesn't facilitate such changes in its TARP plan.

Inside Washington (01/15/2009)

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* WASHINGTON (1/16/09)--A Housing and Economic Recovery Act of 2008 program that will help cities and states purchase foreclosed real estate is moving forward. Consumer advocates have formed a trust company to act as a liaison between lenders and the municipalities who received $4 billion in grants from the government under the program. The company’s first program started in Minneapolis late last year. The city has used $5.6 million to buy 20 foreclosed properties. JPMorgan Chase and Co., Citigroup, Fannie Mae and Wells Fargo are participating. The Minneapolis program is a “success,” Wells Fargo said in a statement. The group is asking Congress for another $5 billion, which would be used to stabilize home prices ... * WASHINGTON (1/16/09)--The Federal Reserve Board needs to create an exit strategy from the various lending programs it is using to cope with the economic crisis, Charles Plosser, president/CEO of the Federal Reserve Bank of Philadelphia, said in a speech Wednesday. The Fed’s lending programs to reduce interest rate spreads and revive credit markets were “created for extraordinary times and involve significant intervention in the credit markets. They are not part of the normal operation of a central bank and should not be expected to continue,” he said. Simply terminating the programs will not work, so the Fed should develop objectives and boundaries for lending that it can use in the future, he suggested. “Clarifying the criteria under which we will intervene in markets or extend credit, including defining what constitutes the ‘unusual and exigent’ circumstances that form the legal basis for the Fed’s nontraditional lending, will be essential if we are to mitigate the moral hazard we have created,” Plosser concluded ...

Official sign main item on NCUA agenda

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ALEXANDRIA, Va. (1/16/09)—The National Credit Union Administration (NCUA) Thursday announced three items for its Jan. 22 open board meeting including a vote to change the share insurance fund sign rules. The official sign rule provides options for displaying the official share insurance sign to reflect the increase in the maximum share insurance amount from $100,000 to $250,000. As proposed, the rule would provide the following options with regard to the extent changes need to be made to the official sign to reflect the temporary increase in the maximum share insurance limit:
* Continue to display the current sign, and there will be no penalty for credit unions that choose this option. Credit unions that do not alter the current signs may post additional signs in their lobbies or place a notice on their websites. * Display the sign that NCUA will distribute and post on its website that reflects the temporary increase. *Alter the current sign to reflect the temporary increase, by hand or otherwise, as long as the altered sign is legible. An example would be placing a sticker that reads “$250,000” over the portion of the current sign that reads “$100,000.”
The other items on the NCUA agenda were labeled simply: Public Notice – Central Liquidity Facility, and Insurance Fund Report. The NCUA recently instituted monthly public reports on the state of its National Share Insurance Fund (NCUSIF). Last month, NCUA Chief Financial Officer Mary Ann Woodson said the fund’s equity level was at 1.27% and was expected to be at that level at the end of the year. Regarding the CLF item, it is expected that staff will discuss a document modification to the repayment security and credit reporting agreement that is used in CLF lending.

House Financial Services Bachus joins GAC lineup

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WASHINGTON (1/16/09)—The ranking Republican member of the House
Rep. Spencer Bachus (R-Ala.), ranking minority member of the House Financial Services Committee, said at the CUNA’s 2008 GAC, ““I respect what credit unions do. There are so many people you serve that would not be served otherwise.” (Photo provided by CUNA)
Financial Services Committee, Rep. Spencer Bachus of Alabama, is now scheduled to address the Credit Union National Association's (CUNA) 2009 Governmental Affairs Conference (GAC) on Wednesday, Feb. 25. He joins a growing list of key speakers, including his panel’s chairman, Rep. Barney Frank (D-Mass.), Rep. Carolyn Maloney (D-N.Y.), who heads the panel's subcommittee on financial institutions and consumer credit, and Senate Banking Committee Chairman Christopher Dodd (D-Conn.). Additional Hill speakers will be announced in coming weeks. More highlights already slated for the program include economic commentary from Steve Forbes, editor-in-chief of Forbes magazine, and a political face-off between pundits Paul Begala and Tucker Carlson. Forbes will offer economic outlook and commentary at a time when the nation continues to struggle through one of the worst financial crises in its history. He attained national visibility in the political arena both 1996 and 2000 when he campaigned for the Republican nomination for President. Carlson and Begala will face off over current developments in national news, politics, and world issues. Carlson is a senior correspondent for MSNBC, and Begala is a CNN political analyst and former top aide to President Bill Clinton. Also, Bob Woodruff of ABC News and his wife, Lee, will provide a poignant start to CUNA's 2009 Governmental Affairs Conference as they recall the shattering moment when Woodruff was seriously injured by a roadside bomb when assigned to report U.S. and Iraqi security forces near Taji. The Woodruffs will highlight the GAC's opening general session on Monday, Feb. 23. And wrapping things up will be Al Roker, NBC’s beloved weatherman and host of its Today Show. Roker will bring his charisma and sense of humor to the podium during a talk entitled, "Let a Smile Be Your Umbrella." Use the resource link below for more program highlight and registration information.