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Inside Washington (03/12/2008)

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* WASHINGTON (3/13/08)--Pennsylvania Credit Union Association (PCUA) and Members 1st FCU staff met with Sen. Bob Casey (D-Pa.) to update him on the success of the Credit Union Better Choice Program, a payday lending alternative, during the Credit Union National Association (CUNA) Governmental Affairs Conference last week in Washington, D.C. (Life is a Highway March 7). PCUA staff also met with Rep. Paul Kanjorski (D-Pa.) prior to his address at the conference’s general session ... * WASHINGTON (3/13/08)--Sen. John McCain (R-Ariz.), the Republican presidential candidate, said he is opposed to a government bailout for lenders who were affected by the subprime mortgage market debacle. “It is not the government’s role to bail out investors who should understand that markets are about both return and risk, or lending institutions who didn’t do their job. It’s important that managers and investors are held accountable for their own decisions,” he said in a press release ... * WASHINGTON (3/13/08)--During a hearing Tuesday, Alphonso Jackson, Housing and Urban Development secretary, said he and Rep. Spencer Bachus (R-Ala.) are scheduled to meet with Senate members regarding the finalization of a Federal Housing Administration (FHA) reform bill (American Banker March 12). The Senate’s version of the bill would increase the mortgage limits the FHA could insure by about 15%, while the House version would increase the limits to $729,500 ... * WASHINGTON (3/13/08)--The Federal Deposit Insurance Corp. (FDIC) Advisory Committee on Economic Inclusion will meet March 19 to discuss saving and asset-building opportunities for individuals and banks. The committee will hear from experts addressing asset building for low- and moderate-income individuals, strategies for building assets, and the FDIC’s role in asset building. Last year, Norb Kaczmarek, president/CEO of Erie (Pa.) FCU and Pennsylvania Credit Union Association (PCUA) chairman, presented information about PCUA’s Better Choice Program, a payday lending alternative ... * WASHINGTON ( 3/13/08)--More than 125,000 entrepreneurs interested in starting or expanding a business have used the Small Business Administration’s (SBA’s) new online assessment resources in just three months, the SBA announced Wednesday. The Small Business Readiness assessment tool is intended to help interested individuals evaluate their readiness for starting a small business. Based on their scores, entrepreneurs are then directed to the SBA training resources that support identified needs to improve business preparedness…

CU-backed candidate wins House seat

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WASHINGTON (3/13/08)—A credit union-backed candidate has made a successful bid to win an Indiana seat in the House vacated by the death of his grandmother, the late U.S. Rep. Julia Carson. Furthermore, House Financial Services Committee Chairman Barney Frank (D-Mass.) has said that the newly elected Democrat Andre Carson may likely fill his grandmother’s place on that panel. (Roll Call Feb. 14) Carson won a special election Tuesday that enables him to fill the seat for the remaining 10 months of the elder Carson’s term. (Indianapolis Star March 12) The younger Carson won 54% to 43% over Republican state Rep. Jon Elrod. To win a full term, he will have to win a May primary election and the November general election. CUNA’s Credit Union Legislative Action Council and the Indiana Credit Union League supported Carson with the maximum allowed $5,000 donation, according to Hawkins.

CUNA urges relief for reg burden

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WASHINGTON (3/13/08)—The Credit Union National Association (CUNA) made its case against burdensome credit union regulations before the Small Business Administration’s (SBA’s) second national forum on regulatory fairness. The SBA hearing is intended to promote discussion on excessive regulation or enforcement by any federal agency that affects the country’s small businesses. Mary Dunn, CUNA senior vice president and deputy general counsel, in her testimony, underscored the "staggering regulatory burden" on credit unions. “Credit unions are one of the most heavily regulated entities and are currently subject to a wide range of regulatory requirements, including an array of consumer protection rules on issues such as truth-in-lending, privacy, the fair and accurate credit transactions act, and a number of others, as well as safety and soundness rules. "Because credit unions are member owned and want to avoid predatory practices, CUNA supports reasonable protections for consumers. However, new laws translate into regulatory requirements and as a result, the burdens imposed on credit unions today are staggering and costly,” Dunn said. She noted that excessive regulation not only proposes a compliance burden, but also diverts credit unions from their mission of providing financial services to their members. Dunn also pointed out that credit unions are subject to more restrictive capital requirements than those that apply to other types of financial institutions, field-of-membership and member-business-lending restrictions, as well as a usury ceiling, limitations on loan maturities, and stringent limitations on their investment options. The CUNA testimony reiterated the need for prompt corrective action reform to provide a more risk-based system for credit unions and the importance of allowing credit unions to offer more small business loans to their members. Both regulatory improvements are addressed within the language of the Credit Union Regulatory Improvements Act (H.R. 1537), and are expected to be included in a Senate version of the bill whose introduction is said to be imminent. Dunn also addressed CUNA’s recommended improvements in the SBA's processing of applications and backed H.R. 1849, a bill pending in the House that would facilitate SBA lending by credit union.