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Letter to CUs reiterates first-half data

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ALEXANDRIA, Va. (10/12/11)--The National Credit Union Administration has re-released credit union system financial results for the first half of 2011 in a letter to credit unions (11-CU-16). The letter features the results of call reports from 7,239 federally insured credit unions. Those results, which were originally released in early September, generally showed “stabilization and continued improvement," the NCUA said. (See related Sept. 2 story: Slow growth for CUs in 2Q, NCUA reports.) For the full NCUA letter, use the resource link.

C-SPAN features CU benefits via CUNA interview

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WASHINGTON (10/12/11)--In a 40-minute segment on C-SPAN’s Washington Journal, Credit Union National Association (CUNA) Chief Economist Bill Hampel on Tuesday discussed the many benefits credit union membership brings consumers, among other issues currently facing credit unions.
Click to view larger imageCUNA Chief Economist Bill Hampel addressed several credit union issues in a Tuesday appearance on C-SPAN. For video of his appearance, use the resource link below.
Hampel told host John McArdle that while credit unions have received much attention following the recent announcements that Bank of America and other large banks would charge customers for debit cards or checking accounts, credit unions “have always offered a better deal,” including lower loan rates and higher deposit rates, and fewer and lower fees. McArdle noted a recent Baltimore Sun article as one of many venues where anti-bank, pro-credit union sentiments are being covered. (See related story: CUs' woo consumers with bank fee campaigns.) The article underscores the convenience and broad array of services available through credit union membership. Hampel warned that there are certain “myths” about credit union membership that sometimes keep consumers from pursuing that option. For instance, credit union fields of membership were once job-based, but now are often extended to residents in communities. Hampel estimated that every American could easily qualify as a member for two or three credit unions, and recommended that any potential members begin their search for their new credit union at CUNA’s consumer website, There’s been a “huge increase in interest” in credit unions over the last few weeks due to stories on high bank fees, and while switching accounts can be a hassle, credit unions offer so-called “switch kits” to help potential members with the paperwork needed to leave their bank, Hampel said. He noted that most credit union members have access to 28,000 surcharge-free ATMs nationwide, and a caller to the show wanted to make sure listeners knew about the convenience that credit union shared branching networks provide. “The whole range of typical consumer financial services,” including ATM use, debit and credit cards, investments, and mortgages, are available to “virtually all credit union members,” Hampel said. In response to another caller, Hampel underscored that the credit union tax status is tied to their not-for—profit, cooperative structure and that all profits are returned to members in the form of better fees and rates or retained as capital. Credit unions, he said, don’t have stockholders to pay. Hampel also addressed caller questions on credit unions’ work with businesses, and noted the drive by CUNA, the leagues and credit unions to increase the current member business lending (MBL) cap to help the economy and create jobs. (See related story: Pre-hearing ad urges MBL action to add jobs: CUNA). The MBL cap will also be addressed during a House Financial Services subcommittee on financial institutions and consumer credit hearing today.

CUNA launches Action Alert to boost MBL contacts

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WASHINGTON (10/12/11)--The Credit Union National Association (CUNA) on Tuesday issued an action alert that urges credit union advocates to ask their U.S. House members to support legislation that would increase the credit union member business lending (MBL) cap. “The time is right to get the MBL cap raised for credit unions, and your advocacy efforts are needed more than ever,” the action alert says. The alert adds that “there are already 86 co-sponsors of this bipartisan legislation,” and says credit union advocates “need to assure members of the House of Representatives that there is broad support for this legislation.” CUNA estimates the MBL cap increase would inject $13 billion in new credit for small businesses into the ailing economy, adding 140,000 new jobs within the first year of enactment--all at no cost to the American taxpayer. H.R. 1418, which would raise the MBL cap to 27.5% of assets, will be the subject of a House Financial Services subcommittee on financial institutions and consumer credit hearing set for 2 p.m. (ET) today. Jeff York, pPresident/CEO of Coasthills FCU in Lompoc, Calif., will testify on behalf of CUNA. National Credit Union Administration (NCUA) Chairman Debbie Matz will also testify at the hearing. For the CUNA action alert, use the resource link.

Pre-hearing ad urges MBL action to add jobs CUNA

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WASHINGTON (10/12/11)--Seven new names have joined the list of small business and policy organizations that have joined the Credit Union National Association (CUNA) to support increasing the credit union member business lending (MBL) cap ahead of today’s House Financial Services subcommittee on financial institutions and consumer credit hearing on MBLs.
Click to view larger image Click to download.
Those new supporters are the Progressive Policy Institute, Small Business Majority, the CCIM Institute, the Institute of Real Estate Management, MultiFunding, the Realtors Land Institute, and the Society of Industrial and Office Realtors. The seven supporters are among the 27 groups that have co-signed an open letter that urges President Barack Obama and members of Congress to allow credit unions to expand lending to their business members. The letter, which will run in Washington, D.C. publications with Capitol Hill readerships today, notes that credit unions continue to lend to their members, even as banks have cut back. A similar MBL-push letter was published in D.C.-based publications in late 2009. The letter also addresses the vital role that credit unions play in providing capital to underserved communities and small businesses, and adds that credit unions understand the special needs of their business members and can make loans that banks will not. These and other similar details will be covered Wednesday afternoon when Jeff York, president/CEO of Coasthills FCU, Lompoc, Calif., testifies before Congress on MBLs. The credit union CEO will testify on CUNA’s behalf and is scheduled to cover the benefits a higher MBL cap would have on the nation's economy and its small businesses. York is testifying on CUNA’s behalf. York in a written statement will cover how H.R. 1418 “would permit credit unions with the most experience successfully offering business loans to their members the opportunity to continue to do so as they approach the cap, while at the same time ensuring that these credit unions engaged in additional business lending continue to do so safely and soundly.” National Credit Union Administration (NCUA) Chairman Debbie Matz is also scheduled to testify during today’s hearing, which is set for 2 p.m. (ET).

Inside Washington (10/11/2011)

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* WASHINGTON (10/12/11)--The Federal Reserve Board and the Office of Comptroller of Currency (OCC) Tuesday issued a proposal outlining a ban of proprietary trading and limitations on private equity investments. Part of the Dodd-Frank Act, the proposal, which will be issued jointly with the Fed, the OCC, Federal Deposit Insurance Corp., and the Securities and Exchange Commission, clarifies the scope of the act’s prohibitions and provides certain exemptions. The proposed rule would require banking entities to establish an internal compliance program, subject to supervisory oversight, that is designed to ensure and monitor compliance with the statute’s prohibitions and restrictions. Banks with significant trading operations would be required to report to the appropriate federal supervisory agency certain quantitative measurements designed to assist agencies and banking entities in identifying prohibited proprietary trading in the context of certain exempt activities and identifying high-risk trading assets and strategies. Transactions in certain instruments--including obligations of the U.S. government or a U.S. government agency, government-sponsored enterprises, and state and local governments--are exempt from the statute’s prohibitions. Activities exempted include market making, underwriting and risk-mitigating hedging. The statute also would allow banks to offer a hedge fund or private-equity fund subject to certain conditions. The proposal distinguishes permitted market making-related activities from prohibited proprietary trading activities and includes elements to reduce its effect on smaller, less-complex banks … * WASHINGTON (10/12/11)--Faced with hundreds of comment letters objecting to their risk-retention proposal, regulators may issue a new proposal rather than make an attempt to finalize the existing plan, according to industry observers (American Banker Oct. 11). The proposal seeks to implement a Dodd-Frank provision requiring banks to retain 5% of the credit risk when reselling mortgage loans. But industry feedback has been critical of the plan’s scope, including how risk retention would be calculated, what regulators di to prohibit securitizers from avoiding retention and proposed exemptions. If too many changes to the initial proposal are made, regulators must seek comment again or issue an interim final rule with a comment period. Agencies said they would meet about rule, but did not indicate if they had decided to issue a new proposal … * NEW ORLEANS (10/12/11)--National Credit Union Administration (NCUA) Board Member Michael E. Fryzel spoke to the National Coalition of Firefighter Credit Unions summit in New Orleans on Monday, drawing comparisons between the firefighter family and how credit unions support their members. “For firefighters, success or failure depends on cooperation,” said Fryzel. “This is why firefighters, first-responders and credit unions are such a natural fit together. Credit unions embrace and reinforce the family of their members. They are cooperatives.” Discussing the member business lending (MBL) needs of firefighter entrepreneurs, Fryzel said, “Making firefighter credit unions a greater source of credit to firefighter family businesses can be very helpful for members, and continue the bond that firefighters share.” The Credit Union National Association (CUNA) and credit unions are urging Congress to increase the credit union MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity for credit unions to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said …