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CU interchange MBL fight moves to home districts

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WASHINGTON (3/22/11)—With Congress leaving town for a week-long district work period, the front in the fight for interchange implementation delay and member business lending advocacy will spread to congressional districts across the country. Credit Union National Association (CUNA) Director of Grassroots Advocacy Elizabeth Kangas said that credit unions and their state leagues this week will be asking Congress to “stop, study and start over” on the interchange rule, as well as pushing hard for the MBL bill in individual district meetings with their members of Congress. Others will attend town hall-style meetings in the home district, she added. These district actions will seek to add to the growing list of cosponsors for legislation on both key credit union issues. CUNA has created a grassroots action alert to encourage credit union nationwide to contact their lawmakers to urge support of these vital pieces of credit union legislation. Tens of thousands of credit union advocates have reached out to their legislators within the past month on the interchange and MBL bills. Bills to delay the implementation of a cap for debit card interchange fees were introduced last week in both the House and Senate. The Senate version of the delay, which would push back implementation by two years, had a total of 13 cosponsors as of Monday. Sens. Daniel Akaka (D-Hawaii) and Max Baucus (D-Mont.) were the latest to sign on to the Senate interchange delay bill, with the pair adding their names as cosponsors last Thursday. Similar House legislation, introduced by Rep. Shelley Moore Capito (R-W. Va.) with 27 cosponsors, had reached 42 cosponsors as of yesterday. Sen. Mark Udall (D-Colo.) on March 8 introduced legislation (S. 509) that would establish a maximum MBL limit of 27.5% of a credit union's total assets. The MBL bill had 18 Senate co-sponsors as of Monday. Sens. Olympia Snowe (R-Maine), Charles Schumer (D-N.Y.), Barbara Boxer (D-Calif.), Sherrod Brown (D-Ohio), Susan Collins (R-Maine), Al Franken (D-Minn.), Kirsten Gillibrand (D-N.Y.), Patrick Leahy (D-Vt.), Joseph Lieberman (I-Conn.), Bill Nelson (D-Fla.), Jack Reed (D-R.I.), Sheldon Whitehouse (D-R.I.), and Ron Wyden (D-Ore.) joined Udall as original co-sponsors of the bill. Bernie Sanders (I-Vt.), John Ensign (R-Nev.), Daniel Inouye (D-Hawaii), Carl Levin (D-Mich.) and Debbie Ann Stabenow (D-Mich.) have signed on to support the bill following its March 8 debut. For the CUNA grassroots action alert, use the resource link.

CUNA calls for credit score comments

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WASHINGTON (3/22/11)--Credit unions are encouraged to comment on a joint agency proposal to require creditors that use a consumer's credit score in risk-based pricing to disclose that score and other related information to that consumer. Under the Federal Reserve-Federal Trade Commission (FTC) proposal, credit unions and others would be required to provide consumers with a statement that a credit score takes into account information in a consumer report and that a credit score can change over time. They must disclose the specific numerical credit score used in making the credit decision, as well as information on the full range of FICO scores that could be assessed for a given member or customer. The lender must also disclose any factors that adversely affected the credit score, the date on which that credit score was created, and the entity that provided the credit score. The Credit Union National Association (CUNA) has issued a Comment Call asking credit unions for general comment on several areas of the proposal. CUNA has also included a Fed and FTC request for additional information. The regulators have asked for additional comment on whether the proposed additional content for general risk-based pricing notices and account review notices in the proposed rules are appropriate. They have also solicited extra input on their proposal’s potential impact on smaller credit unions. The proposal is scheduled to go into effect on July 21. Comments should be submitted to CUNA by April 8. The Fed and FTC are accepting comments until April 14. Separate RegFlex analysis and any comments regarding the paperwork reduction act must be submitted by May 16.

Inside Washington (03/21/2011)

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* WASHINGTON (3/22/11)—The Federal Reserve has given the go-ahead to some of the country’s 19 largest banks to increase dividends, buy back their company’s shares or repay government aide—citing the country’s economic improvements and the banks’ marked improvement in capital standings as the reasons behind the decisions. The Fed recently released a paper that said the banks had increased common equity by more than $300 billion from the end of 2008 through the end of 2010. The Fed said in a release that both the quantity and quality of capital at many large bank holding companies, by and large, have improved since the financial crisis. In fact, the Fed noted that the 19 companies’ Tier 1 common ratio rose to 9.4% in the fourth quarter of 2010, up from a 2008 level of 5.4%. (Bloomberg March 21)… * WASHINGTON (3/22/11)--New York Banking Superintendent Richard Neiman is expected to step down in April (American Banker March 21). Neiman, who has been with the department for four years, has also served on Congressional Oversight Panel for the Troubled Asset Relief Program for the past two years. With the oversight panel terminating April 3, Neiman said the time was right for a transition. He has also been rumored as a candidate for the next comptroller of the currency or as a possible head of the Consumer Financial Protection Bureau. Prior to accepting his position with the New York State Banking Department, Neiman was the chairman, president and chief executive of TD Bank USA.

Fed could cut card availability too deeply CUNA

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WASHINGTON (3/22/11)—The Credit Union National Association (CUNA) continues to analyze the Federal Reserve’s proposed changes to rules governing open-end credit plans, and CUNA Deputy General Counsel Mary Dunn has noted that portions of the proposal could limit access to credit cards for some non-working members of households. The Fed proposal would prevent card issuers from requesting a consumer's household income on credit applications. The amended rule will instead require issuers to request a consumer's individual income or salary, the Fed said. Specifically, the rule states that if a card issuer prompts an applicant to provide his or her “household income” on a credit card application,the card issuer cannot rely solely on the information provided by an applicant to satisfy the proposed regulatory requirements. Instead, the card issuer would need to obtain additional information about an applicant’s independent income by contacting the applicant or through similar means. Dunn said that this is one of many issues that CUNA would like to discuss with members of the Consumer Financial Protection Bureau once that entity becomes fully operational later this year. The Fed release would also prohibit issuers from revoking initial offers of interest-free credit during a specified amount of time "unless the account becomes more than 60 days delinquent." The Fed currently imposes similar rules on so-called "teaser" credit card rates. It has also moved to include application and other first-time fees under a rule that limits the total amount of fees charged on a credit account to 25% of the account's credit limit. The proposed clarifications to Regulation Z, Truth in Lending, were released last Friday and total 323 pages in length. For the full proposal, use the resource link.

NCUA bans trio from CU-related work

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ALEXANDRIA, Va. (3/22/11)—Three former credit union employees have been banned from future work at any federally insured financial institution under prohibition orders issued by the National Credit Union Administration (NCUA). In a Monday announcement, the NCUA noted the following details of the enforcement orders:
* Virginia Anderson, a former employee of TPEA No. 5 CU in Del Rio, Texas, was convicted of theft and sentenced to one year of imprisonment, one year of probation, and ordered to pay just over $1.7 million in restitution; * Gary Ellis, a former employee of River Valley FCU in Brattleboro, Vermont, was convicted of embezzlement and sentenced to six months imprisonment, five years of probation, and ordered to pay $150,000 in restitution; * Kathleen Hammer, a former employee of Western Region FCU of Cleveland, Ohio, entered into a pretrial diversion program with the State of Ohio Court of Common Pleas-Cuyahoga County.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.