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CARD Act audio call offered Oct. 20

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WASHINGTON (10/8/09)—The Credit Union National Association (CUNA) on Oct. 20 will hold an audio conference call on portions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act that will become effective on Feb. 22, 2010. Topics covered during the audio conference call will include portions of the CARD Act addressing minimum payment warnings on credit card statements, some interest rate increase prohibitions, and portions of the act that require co-signors for cardholders that are under the age of 21. Additional requirements of this portion of the CARD Act will also be discussed during the call, which will be led by CUNA Senior Assistant General Counsel Jeff Bloch. The call will also feature commentary from Federal Reserve representative Benjamin Olson, PSCU Financial Services’ Steve Salzer, CUNA associate Michael McLain, and UW Credit Union Chief Credit Officer Mike Long. To register for the 90-minute, 2:00 p.m. (ET) audio conference, use the resource link.

Interchange fees help consumer choice CUNA will testify today

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WASHINGTON (10/8/09)--Both interchange fees and the Credit Card Accountability, Responsibility and Disclosure (CARD) Act will be discussed in a hearing before the House Financial Services Committee today, with Mark Caverly, executive vice president of Raleigh, N.C.-based Local Government FCU testifying on behalf of the Credit Union National Association (CUNA) and the Electronic Payments Coalition (EPC). In prepared testimony, Caverly said that the current card payment system allows his credit union to grant its members “the opportunity to deal with a local institution they know and trust” while also “gaining access to a global payments system,” and also allows his credit union to “compete with the largest financial institutions” while addressing the “expenses and responsibilities” of a credit card program. The hearing will focus on H.R.2382, the Credit Card Interchange Fees Act of 2009, which would aim to limit so-called unfair practices in electronic payment systems, and H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009, which would move up the effective date of some portions of the CARD Act to December of this year. Commenting on H.R. 2382, the EPC in a recent release called that legislation “one of the most egregious assaults on consumer protection that this country has seen in some time.” The bill, which the EPC said “details precisely how consumers would end up paying more,” is an outlet for retailers to continue to use a service that brings them “more sales, higher profits and reduced acceptance,” while leaving their customers to “pick up the tab.” CUNA has publicly opposed any interchange fee legislation, saying that any restrictions on interchange fee negotiation would ultimately harm consumers by limiting options and hindering competition and technological innovation. H.R. 3639 will set an earlier effective date for the CARD Act and would push forward the effective dates for CARD Act provisions addressing gift cards, reviews of past consumer interest rate increases, and requirements addressing the penalties and fees that can be assessed to credit accounts to Dec. 1. While CUNA is not scheduled to testify on H.R. 3639, CUNA did express opposition to the bill in a letter sent Wednesday to Committee Chairman Barney Frank (D-Mass.) and Ranking Member Spencer Bachus (R-Ala.). In the letter, CUNA stated that the accelerated compliance timetable presented in H.R. 3639 may “raise even greater compliance concerns for credit unions,” as they “do not typically run their own credit card operations” and “cannot simply pour more resources into their programs to comply on short notice.” Credit unions would also need greater leeway to test some of the data processing changes associated with implementation of the CARD Act, CUNA President/CEO Dan Mica added. Other witnesses scheduled to testify at the hearing include Independent Community Bankers of America representative Ann Duplessis and National Association of Federal Credit Unions President/CEO Fred Becker. Several retail and banking industry representatives and academics are also scheduled to appear during the hearing. To read the CUNA letter in full, use the resource link.

Changes to CARD Act in view

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WASHINGTON (10/8/09)--The Credit Union National Association (CUNA) has advised leaders of the House Financial Services Committee that credit union members may face increased costs and reduced services if technical corrections to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act are not made. In a letter sent Wednesday to the committee chairman Barney Frank (D-Mass.) and ranking member Spencer Bachus (R-Ala.), CUNA President/CEO Dan Mica reiterated that credit unions are “currently reeling from an unintended consequence of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act,” enacted earlier this year. In the letter, CUNA advocates that legislators support H.R. 3606, which was recently introduced by Rep. Peter Welch (D-Vt.). This legislation would change troublesome Section 106 of the CARD Act, a provision that prohibits creditors from treating payments as being late unless the creditor adopts reasonable procedures to ensure that periodic statements are mailed or delivered to the consumer no later than 21 days before the payment due date. As written, the section applies to all open-end loans, including general lines of credit, lines of credit associated with share draft and checking accounts, signature loans, and other forms of loans, not just credit cards. Welch’s bill would insert the words “a credit card account under” into Section 106, thereby removing its application from the other forms of open-end credit. CUNA believes the provision was originally intended to cover only credit card accounts and was inadvertently changed during the legislative process. CUNA has highlighted some of the problems faced by credit unions due to the current structure of the CARD Act provision. One example given in the letter was an increase in costs associated with an inability to provide credit union members with consolidated billing statements, a change that Mica estimated could cost credit unions as much as $2.25 per month per loan. Credit union members may also lose the right to choose their payment date and would see changes to the terms of their home equity lines of credit if the CARD Act legislation is not altered, according to CUNA. "We hope the Committee will agree that a technical correction is appropriate and will support passage of technical corrections legislation as quickly as possible,” Mica wrote. To read the full letter, use the resource link.

Inside Washington (10/07/2009)

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* WASHINGTON (10/8/09)--Bank of America Corp. announced Tuesday that it would not reprice its customers’ credit card accounts after consumers expressed concerns about the change in terms of consumer credit card accounts between now and the effective date of the Credit Card Accountability, Responsibility and Disclosures (CARD) Act. Senate Banking Committee Chairman Christopher Dodd (D-Conn.) applauded the move, saying that more credit card companies should do the same (American Banker Oct. 7). The announcement precedes a hearing scheduled for today in the House Financial Services Committee, which will discuss moving up the date of the CARD Act’s effective date ... * WASHINGTON (10/8/09)--It’s unlikely that many banks will receive a waiver from the prepayment assessments the Federal Deposit Insurance Corp. (FDIC) has imposed on financial institutions to bolster the reserves of the Deposit Insurance Fund. The FDIC said it would give distressed institutions a waiver, but financial institutions said applying for a waiver could bring their troubles to light (American Banker Oct. 7). The FDIC has said it would not disclose names of institutions asking for waivers. The waivers could be especially problematic for institutions that are publicly traded and under Securities and Exchange Commission rules, said John Douglas, former FDIC counsel. In addition, banks may not want to make the case to regulators that they’re having problems, said Kip Weissman, partner at Luse Gorman Pomerenk and Schick PC ... * WASHINGTON (10/8/09)--The League of Southeastern Credit Unions went to Washington, D.C., for its first Hike the Hill events Sept. 30 and Oct. 1. Participants included credit union and league staff. During the hike, the league met with the entire Alabama congressional delegation and 23 of 27 members of the Florida delegation.
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Hill hikers discussed the Credit Card Responsibility, Accountability and Disclosures Act; overdraft protection; interchange fees; maintaining the National Credit Union Administration’s independence as the sole credit union regulator; member business lending; and preventing Community Reinvestment Act requirements from being applied to credit unions. From left are: Mark Landreth, league senior vice president of governmental affairs; Rich Simonton, CEO, Insight Financial CU, Orlando, Fla.; Patrick La Pine, league president/CEO; Rep. Bill Posey (R-Fla.); Justin Thames, league political action coordinator; and Tom Gannon, senior legislative representative, Credit Union National Association. (Photo provided by the League of Southeastern Credit Unions) ...

Presidents council on fin lit to meet Nov. 3

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WASHINGTON (10/8/09)--The President's Advisory Council on Financial Literacy has scheduled an open meeting for Nov. 3 to discuss the council's priorities and how it can best advise the President and the Secretary of the Treasury. According to a Federal Register announcement of the meeting, a Treasury official also will provide an update about the status of the recommendations made by the advisory council in January 2008. The 19-member advisory panel was established under then-President George W. Bush. The National Endowment for Financial Education (NEFE)—the Credit Union National Association's partner in expanding financial literacy education throughout U.S. schools--was named as member to the new board. At the inaugural meeting in February 2008, NEFE CEO Ted Beck told the council that NEFE's High School Financial Planning Program (HSFPP) has reached more than 800,000 high school students. He also noted NEFE's efforts to create a pilot program for college students. CUNA’s own Financial Literacy Task Force has found that credit unions have been strong backers of financial literacy efforts. At the time the President’s council was launched, a CUNA poll found that nearly 80% of responding credit unions with assets of $10 million or more offered financial education to adults or youth. To participate in the advisory council session, please refer to the Federal Register link below.

CUNA Improvements still possible in CFPA mark up

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WASHINGTON (10/8/09)—With a mark up on Consumer Financial Protection Agency (CFPA) legislation expected next week, the Credit Union National Association (CUNA) continues to work with Capitol Hill staff of credit union concerns regarding the planned new agency. CUNA Senior Vice President of Legislative Affairs John Magill has noted that House Financial Services Committee Chairman Barney Frank (D-Mass.) continues his interest in discussing possible changes to the bill, H.R. 3216, the Consumer Financial Protection Agency Act. CUNA has been circulating alternative language to the bill that would address credit union issues such as the CFPA’s impact on examinations, enforcement, preemption of existing rules, and regulatory burden. “Chairman Frank is holding his cards close to his chest regarding what changes he would or would not allow in mark up,” Magill said. “So we continue to work with members of the committee in preparation for the committee’s vote.” In general, H.R. 3216 seeks to protect consumers of financial products through the creation of a powerful independent agency with extensive rulemaking, oversight, and enforcement tools, an idea that was introduced by the Obama administration earlier this year. Frank has circulated some possible changes to the bill, such as eliminating a requirement that financial institutions offer so-called "plain vanilla" financial products, as well as language that would prevent the proposed CFPA from approving or changing the business plans of a financial institution under the agency's oversight. While Frank's legislative changes, which have been circulated via a discussion draft, would still allow the CFPA to require financial institutions to provide improved disclosures to their consumers, non-financial businesses, including merchants, retailers, and other non-finance-related businesses would not come under the CFPA.

NCUA releases 2010 open meeting schedule

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ALEXANDRIA, Va. (10/8/09)--The National Credit Union Administration (NCUA) has set its 2010 monthly board meeting schedule. The three-member NCUA board routinely meets the third or fourth week of each month, except August, when no meeting is scheduled. Specific dates for 2010 NCUA Board meetings follow:
* January 29 * February 18 * March 18 * April 29 * May 20 * June 17 * July 15 * No August meeting * September 16 * October 21 * November 18 * December 16
The Board meeting schedule is subject to change. Use the resource link below to view the calendar online.
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