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CUNA to keep up drive as jobs packages develop

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WASHINGTON (3/18/10)—The U.S. Senate yesterday passed a $17.6 billion jobs package, a bill that tackles tax provisions and which is expected to be one in a series of measures to create employment opportunities. The focus on jobs creation has been pivotal in gaining more support on Capitol Hill for legislation that would increase the credit union member business lending (MBL) cap to 25% of assets, up from the current 12.25% limit. The Credit Union National Association (CUNA) estimates that the increase could create as many as 108,000 new jobs and result in $10 billion in new business loans through credit unions in the first year after enactment. “CUNA, the leagues and credit unions have made significant progress over the last several weeks, which has led to more than 100 MBL co-sponsors in the House and 11 in the Senate,” noted CUNA Senior Vice President of Legislative Affairs John Magill. He added that there is growing recognition that MBL language would be a good fit for future jobs bills, as illustrated by a recent endorsement by Sen. Kristin Gillibrand (D-N.Y.). Gillibrand, earlier this year, said the MBL legislation "would free up lending at not-for-profit credit unions in every corner of America to small businesses" and is necessary "if we're going to create new jobs and rebuild our economy for the long term." She was speaking at Long Island, N.Y.-based Bethpage FCU. Gillibrand called the Senate MBL bill, the Small Business Lending Enhancement Act (S. 2919) "common-sense legislation" that would "give small businesses more of the capital they need to get off the ground, grow and get thousands of Americans back to work." The similar House bill is H.R. 3380, the Promoting Lending to America's Small Businesses Act. CUNA’s Magill said that CUNA continues its advocacy drive, aware that the Congress will continue to discuss job creation legislation as the year wears on. “CUNA will continue to work to get MBL legislation on one of those legislative vehicles." Richard Gose, CUNA’s senior vice president of political affairs, urged credit unions to continue to work with legislators to convince them of the importance of including MBLs in jobs legislation as a way to create jobs and increase credit to small businesses at no cost to the taxpayer.

Inside Washington (03/17/2010)

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* ALEXANDRIA, Va. (3/18/10)--The National Credit Union Administration (NCUA) on Thursday named Christopher Colford as senior advisor for communications to Chairman Debbie Matz. Colford will oversee Matz’s communications strategies and programs, according to the NCUA. In the release, Matz said that Colford is a “recognized expert in communications and public affairs” and a “gifted writer” that “brings communication management, speechwriting, editorial and public affairs expertise to NCUA.” A native of Elizabeth, N.J. Colford received a B.A. from Duke University and an M.A. from Harvard. Colford began his writing career as a Washington-based editorial writer and op-ed columnist for the Cleveland Plain Dealer before taking on various posts as a Capitol Hill communications director and a special assistant at the Securities and Exchange Commission.... * WASHINGTON (3/18/10)--Senate Banking Committee Chairman Christopher Dodd’s (D-Conn.) financial reform legislation could consolidate the Federal Reserve Bank’s structure by combining the 12 district banks (American Banker March 17). The Dodd bill would narrow the scope of banks the Fed supervises to 55 holding companies with more than $50 billion in assets. Now, the Fed supervises 4,974 companies and 844 individual state-chartered banks. The Federal Reserve Banks of Chicago and New York would oversee most institutions--while St. Louis and Kansas City would not regulate any institution. Kansas City currently supervises 810 bank holding companies and 172 state banks. With fewer district banks, the Federal Open Market Committee structure also could be reworked, Banker said ... * WASHINGTON (3/18/10)--The number of banks deemed systemically significant would change under Senate Banking Committee Chairman Christopher Dodd’s (D-Conn.) financial reform bill, according to financial observers. Dodd’s bill would place the Fed in charge of the 55 holding companies worth more than $50 billion each but give the rest of the institutions’ oversight to the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency (American Banker March 17). Neither agency has supervised holding companies before. Kip Weissman, partner at Luse Gorman, said the $50 billion cutoff would unfairly label too many banks as systemically significant. Ellen Seidman, former director of the Office of Thrift Supervision, said the bill was a compromise to try and keep the dual banking system and could work ...

NCUA proposes changes to RegFlex program today

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ALEXANDRIA, Va. (3/18/10)--Today's National Credit Union Administration (NCUA) open board meeting will be headlined by discussion of proposed changes to portions of the NCUA’s regulatory flexibility (RegFlex) program. The NCUA's five-year strategic plan and the fiduciary duties of federal credit union officials when considering merging or conversion of credit unions will also be discussed. The merger/conversion changes were first proposed in a notice of proposed rulemaking issued by the NCUA in early 2008. The goal of that ANPR was to determine if any new rules were needed for credit unions that merge or convert to another type of financial institution. The Credit Union National Association has recently set up a working group to address how the NCUA selects and pursues credit union mergers. The board will also be updated on the status of the National Credit Union Share Insurance Fund during the open portion of the meeting, with a closed NCUA board meeting set to follow.

Need for liquidity risk management underscored by regulators

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WASHINGTON (3/18/10)--The National Credit Union Administration and other federal financial regualtory agencies in a joint policy statement released on Wednesday reiterated “the importance of effective liquidity risk management for the safety and soundness of financial institutions.” The policy statement was co-signed by the Board of Governors of the Federal Reserve System, the Conference of State Bank Supervisors, the Federal Deposit Insurance Corp., the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. The statement also emphasized “the importance of cash flow projections, diversified funding sources, stress testing, a cushion of liquid assets, and a formal, well-developed contingency funding plan as primary tools for measuring and managing liquidity risk” for financial institutions. According to the release, “the agencies expect each financial institution to manage funding and liquidity risk using processes and systems that are commensurate with the institution’s complexity, risk profile, and scope of operations.” The policy statement also supplements some of its own recommendations with the “Principles for Sound Liquidity Risk Management and Supervision” that the Basel Committee on Banking Supervision issued in 2008. The Credit Union National Association (CUNA) last year commented on joint federal regulatory guidance on funding and liquidity risk management, saying that the guidance, which clarified and summarized principles of sound liquidity risk management previously issued by the agencies, made sense for banking organizations, but would only be redundant to existing rules for credit unions. CUNA at that time said that if the NCUA feels it is necessary to address liquidity risk issues, it should develop a Letter to Credit Unions that focuses on specific problems and addresses steps credit unions can take to address them under the agency's current liquidity risk management requirements. For the full release, use the resource link.

House Senate to work out flood insurance SBA extensions

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WASHINGTON (3/18/10)--The House on Wednesday approved H.R. 4851, the Continuing Extension Act of 2010, which would extend authorization for the National Flood Insurance Program (NFIP) and federal unemployment insurance and continue federal subsidies to COBRA health insurance recipients through April 30, via voice vote. The legislation, which was introduced by Sen. Sander Levin (D-Mich.) on Tuesday, will now move on to the Senate. If the legislation is not signed into law, the NFIP and COBRA will both expire at the end of this month. Legislators earlier this year agreed to temporarily extend these and other benefits through the end of March, after significant legislative wrangling. H.R. 4213, which would extend the NFIP, COBRA, some Stimulus Act small business loan guarantee programs, federal unemployment insurance, and other select federal programs, passed the Senate 62 to 38 last week and should be discussed in a congressional conference in the near future. However, the Credit Union National Association (CUNA) does not expect this conference to begin before the upcoming April recess. CUNA is working to include language that would increase the cap on credit union member business loans to 25% in an upcoming jobs bill. This legislation would result in $10 billion in new funding for small businesses and create over 100,000 new jobs at no cost to taxpayers, CUNA has estimated.

CUs lend bankers dont says Texas league ad in D.C.s iRoll Calli

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WASHINGTON (3/18/10)--The Texas Credit Union League took the fight for increased credit union member business lending to the pages of Washington-based Roll Call on Wednesday, encouraging lawmakers to back H.R. 3380 and S. 2919. The ad comes as the American Bankers Association holds its annual Government Relations Summit this week in Washington. Sure to be an agenda item on bankers' visits with federal lawmakers is opposition to increased MBL authority for credit unions.
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While “15 banks said no” to the Frescas, the family featured in the ad, their credit union approved them for the loan needed to start their own day care center. “Banks say no all day… Our credit union worked with us. They made it happen,” Joe Frescas said in the ad. The ad also highlights the lower charge off rates and responsible lending practices of many credit unions. According to the Texas league's Winter Prosapio, the league “wanted to remind legislators of the key role that credit unions are playing for small businesses during these tough economic times. Knowing that the bankers will be in Washington this week, we felt that it was important to do all we could to prevent any unwinding of the positive member business lending work that credit unions have made recently. “Our approach is to tell the story from the small business perspective. For them, the case for change is simple--we're just making sure their voice is heard,” Prosapio added. Credit union leagues from across the country stressed the importance of increasing the cap for credit unions’ member business lending practices to their elected representatives during the Credit Union National Association’s (CUNA) recently completed Governmental Affairs Conference. CUNA has also directly promoted lifting the current member business lending cap of 12.25% to 25% of a credit union’s total assets, a move that would increase the amount of funding available to small businesses by $10 billion, creating up to 100,000 new jobs within the first year following its enactment. This legislation would help stimulate the economy at no cost to taxpayers, CUNA has said.