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Inside Washington (01/27/2011)

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* WASHINGTON (1/28/11)--The U.S. will record a profit of $312.2 million from the sale of 465.1 million warrants to purchase common shares of Citigroup Inc., the Treasury Department announced Wednesday (American Banker Jan.27). The sale of the warrants is the government’s remaining stake in Citi, which it obtained through the Troubled Asset Relief Program (TARP). Treasury invested a total of $45 billion in Citigroup through TARP. It has recovered all of the $45 billion plus about $12.2 billion in profits, consisting of dividends, interest and gains on the sale of Citigroup common stock, warrants and other securities. Last year Treasury sold its 34% share common stock investment in Citigroup. With the expected closings of the warrant offerings, Treasury’s remaining interest in Citigroup will consist only of trust preferred securities with a principal value of $800 million held by the Federal Deposit Insurance Corp. … * WASHINGTON (1/28/11)--The House Financial Services Committee’s first hearing of the year was dominated by criticism of the Dodd-Frank Act, policies of the Federal Reserve Board and the role of the government-sponsored enterprises in the financial crisis, and indication that panel’s direction will be as partisan as its predecessor (American Banker Jan.27). The committee’s vice chairman, Rep. Jeb Hensarling, (R-Texas), citing President Barack Obama’s State of the Union pledge to target burdensome regulations, said the Dodd-Frank Act was one such example. But Democrats disagreed, saying Republican were over-politicizing the issues before the committee. For example, Rep. Al Green (D-Texas) said Republicans were overstating the impact of Fannie Mae and Freddie Mac in the crisis with the objective of abolishing the government-sponsored enterprises, which the GOP has never supported. Credit Union National Association (CUNA) President/CEO Bill Cheney sent a letter ahead of Wednesday's hearing advising that the cap on credit union member business lending should be a key part of the economic recovery and job creation plans touted by the committee and other members of Congress (News Now Jan. 27). … * WASHINGTON (1/28/11)--Lawmakers were disappointed that President Barack Obama failed to address key banking issues in his State of the Union address on Tuesday (American Banker Jan.27). Most notably absent from the speech were the continuing foreclosure crisis and the future of the government-sponsored enterprises. Obama’s shift away from financial issues differed from his approach in the previous two years. In 2009, the financial crisis still cast a dark cloud over the economy. Last year, the president was pushing for financial reform. This year, with banks beginning to regain profits and the Dodd-Frank Act made into law. Obama mainly mentioned legislative accomplishments related to financial services. Questions still remain in the financial services sector. The administration’s Home Affordable Modification Program, which uses federal money to help troubled borrowers avoid foreclosure, has largely failed. And the administration has yet to offer a proposal on the future of Fannie Mae and Freddie Mac, which are still being run by the government …

NCUA settles first NGN offering of 2011

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ALEXANDRIA, Va. (1/28/11)--The first National Credit Union Administration (NCUA) Guaranteed Note (NGN) offering of this year brought in $1.5 billion in proceeds, bringing the total revenue gained from NGN sales to over $19 billion. The first 2011 NGN sale began on Jan. 18 and ended yesterday. The offering was comprised of NGN Trust Senior Notes. The coupon on those Senior Notes will be 45 basis points over LIBOR, “indicating strong investor interest,” the NCUA said. Collateral for the transaction consisted of previously issued residential mortgage-backed securities. The NCUA said that, with this sale, it has completed 65% of the securitization designed to fund deposits assumed by the bridge corporate credit unions. The remainder of the NGNs will be sold in the coming months, the NCUA added. NCUA Chairman Debbie Matz said that the offering “demonstrates the value of the NCUA securitization program,” adding that credit unions should be encouraged by the positive results. The NCUA NGNs will receive monthly payments of principal and interest from cash flows of related underlying securities, which are passed on to investors. Timely payment of principal and interest due on the notes is guaranteed by NCUA, and that guaranty is backed by the full faith and credit of the United States.

Reg M Z comment deadlines near

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WASHINGTON (1/28/11)--The Credit Union National Association (CUNA) has issued a regulatory comment call on the Federal Reserve Board’s proposal that would increase the threshold for Regulation Z consumer credit disclosures to $50,000. Consumer credit transactions of up to $25,000 are currently subject to several disclosure requirements under the Truth in Lending Act (TILA) and Regulation Z. Private education loans and loans secured by real property, such as mortgages, are subject to TILA regardless of the amount of the loan. Regulation Z implements the Home Ownership and Equity Protection Act (HOEPA) by adjusting the thresholds used to determine which loans are covered under HOEPA. A separate but similar Fed proposal would increase the threshold for Regulation M consumer lease disclosures to $50,000. Regulation M generally applies to consumer leases for the use of personal property, such as automobiles, where the contractual obligation has a term of more than four months. All of the above regulatory changes will come into effect on July 21, and the amount of the applicable thresholds will be adjusted annually to reflect any increase in the Consumer Price Index. Comments are due to CUNA by Jan. 31. Comments solicited by the NCUA should be submitted by Feb. 1. To view the CUNA comment calls, use the links.

Sen. Republicans Democrats reveal committee assignments

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WASHINGTON (1/28/11)--Senate Republicans and Democrats on Thursday announced their respective committee assignments for the 112th Congress. Sen. Tim Johnson (D-S.D.) will take over as Senate Banking, Housing, and Urban Affairs Committeec chairman following the recent retirement of Chris Dodd. Sens. Jack Reed (D-R.I.), Charles Schumer (D-N.Y.), Robert Menendez (D-N.J.), Daniel Akaka (D-Hawaii), Sherrod Brown (D-Ohio), Jon Tester (D-Mont.), Herb Kohl (D-Wis.), Mark Warner (D-Va.), Jeff Merkley (D-Ore.), Michael Bennet (D-Colo.) and Kay Hagan (D-N.C.) will join Johnson on the committee. Sen. Richard Shelby (R-Ala.) will continue his role as minority leader of that committee, and will be joined by fellow Republicans Mike Crapo (R-Idaho), Bob Corker (R-Tenn.), Jim DeMint (R-S.C.), David Vitter (R-La.), Mike Johanns (R-Neb.), Pat Toomey (R-Pa.), Mark Kirk (R-Ill.), Jerry Moran (R-Kan.) and Roger Wicker (R-Miss.). The lineups for the Senate’s Finance, Veterans Affairs, Small Business, Rules and Administration, Intelligence, Indian Affairs and Budget committees were also announced. The makeup of the Senate Joint Economic Committee as well as the committees on Appropriations, Armed Services, Foreign Relations and Agriculture, Nutrition, and Forestry were also revealed on Thursday. The Senate Republicans and Democrats also disclosed the members of the Commerce, Science, and Transportation; Energy and Natural Resources; Environment and Public Works; Homeland Security and Governmental Affairs; Judiciary; Health, Education, Labor and Pensions; Aging; Budget; and Ethics committees.

Royce Tester added to GAC lineup

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WASHINGTON (1/28/11)--House Financial Services Committee member Rep. Ed Royce (R-Calif.) and Senate Banking Committee member Sen. Jon Tester (D-Mont.) are the latest Washington leaders set to speak at the Credit Union National Association’s (CUNA) Governmental Affairs Conference (GAC). Royce, a credit union champion who last year co-authored member business lending (MBL) legislation in the House, is currently scheduled to speak March 2. Tester is set to speak on that day as well. Sen. Mark Udall (D-Colo.), who was the top sponsor of a 2010 Senate credit union MBL bill, will also join members of Congress and leading political pundits, including Rep. Shelley Moore Capito (R-W. Va.), Sen. Roy Blunt (R-Mo.), and House Financial Services Committee Chairman Rep. Spencer Bachus (R-Ala.) as a GAC speaker. Sen. Mike Crapo (R-Idaho), and Reps. Barney Frank (D-Mass.), Debbie Wasserman Schultz (D-Fla.) and Steve Stivers (R-Ohio) are also currently slated to speak at the GAC. Consumer Financial Protection Bureau architect Elizabeth Warren and co-authors of The New York Times No. 1 best-seller "Game Change" Mark Halperin and John Heilemann are also scheduled to address GAC attendees. The GAC will also feature keynote speeches from actor and Children's Miracle Network Hospitals co-founder John Schneider and "Miracle on the Hudson" pilot Captain Chesley B. "Sully" Sullenberger III. The 2011 GAC will begin on Feb. 28 and end on March 3. To register for the GAC, use the resource link.