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NCUA bans one from financial institution work

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ALEXANDRIA, Va. (3/26/12)--The National Credit Union Administration (NCUA) has issued an order prohibiting Mary Carmen Hartley, a former employee of Mutual Diversified Employees FCU, Santa Ana, Calif., from participating in the affairs of any federally insured financial institution.

The NCUA said in a release Friday that Hartley consented to the issuance of the prohibition order to avoid the time, cost and expense of administrative litigation.

Mutual Diversified Employees was liquidated by the NCUA early in 2010 (News Now 3/2/10). The credit unions' members and assets, which totaled 748 and $6.1 million, respectively, as well as its shares, were purchased and assumed by SchoolsFirst FCU, also based in Santa Ana.

Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

iHuffington Posti covers CUcommunity bank conflict

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WASHINGTON (3/26/12)--In an article that calls credit unions and the Credit Union National Association (CUNA), and community banks, two of the "most quietly influential" Washington, D.C. advocacy groups, The Huffington Post examined the political conflicts between credit unions and community banks.

While some in the general public imagine that Washington that is being run by Wall Street banks, retiring Rep. Barney Frank (D-Mass.) told the Post, "the big banks aren't the most potent lobbyists, because everybody hates them.

"It's the credit unions and the community banks because of their grassroots networks," he added. Frank is the ranking minority member on the House Financial Services Committee.

The story goes on to describe the climate as CUNA works for legislation to increase the credit union member business lending (MBL) cap and the Independent Community Bankers Association (ICBA) works for a bill drafters called the Communities First Act (H.R. 1697).

The article noted a request by House Financial Services Committee Chairman Spencer Bachus (R-Ala.) for the two bodies, CUNA and the ICBA, to meet and discuss the pending bills--in an effort to move things forward. CUNA agreed to the meeting. ICBA did at first, but the bankers then balked and refused to attend. The bankers' move was likened to "cussing out the boss at an office Christmas party."

CUNA Senior Vice President of Legislative Affairs Ryan Donovan was quoted in the article as noting the "very visceral reaction" of the community bankers in this and other cases. "The ICBA would rather have their entire legislative agenda burned than let our small bill pass," he said.

Legislation that would increase the credit union MBL cap from 12.25% to 27.5% of assets remains active in both the House and Senate. CUNA estimates the MBL bill would inject $13 billion into the economy, creating as many as 140,000 new jobs.

The ICBA told The Huffington Post that it will "fight [the MBL legislation] to the death," but the story noted "banks have little to lose from the credit union bill, and large potential profits to gain from their own legislation."

The community bank bill would loosen some community-bank related regulations. The article recalled that Georgetown University Law Professor Adam Levitin in a November hearing called this bill "narrow, special-interest pleading" that "does nothing for communities."

Mark Wolff, CUNA senior vice president of communications, said a misunderstanding of credit unions' nonprofit business model by bankers contributes to the conflict, and Bethpage FCU Senior Vice President Linda Armyn said that the banker objections to credit union growth are "silly.

"If you look at the marketplace, the banks have 95% of the market share. There isn't a whole lot of data that supports we're taking their business," she told the Post. "We all just want to move forward and grow," she added.

Senate MBL vote likely soon

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WASHINGTON (3/26/12)--A full Senate vote on credit union member business lending legislation could now come at any time after a new version of the legislation was introduced late last week.

The bill, the Small Business Lending Enhancement Act, has a new number, S. 2231, but is identical to Sen. Mark Udall's (D-Colo.) S. 509. The new bill has been introduced under Rule 14 of Senate rules, and, as a result, has bypassed the committee process and can be called for a full vote immediately.

It is scheduled to be placed on the Senate calendar this week, but a vote could also be delayed until after the April recess. The Senate is in session this week, then off for two weeks, and back in session the week of April 16.

Increasing the credit union member business lending cap from 12.25% to 27.5% of assets would inject $3 billion in new funds into the economy, creating as many as 140,000 new jobs in the first year after enactment, according to Credit Union National Association (CUNA) estimates.

Udall last week started an online petition to garner support for his bill, and noted the critical role that small businesses play in job creation and growing the American economy in a statement on his official website. "For the past 15 years, small businesses have created two-thirds of all new jobs, but the recession has cut off a lot of their access to capital. As it is, many small-business owners have been forced to resort to credit cards with comparatively high interest rates in order to invest in equipment to grow their businesses or to hire more people. By simply lifting this burdensome federal regulation, credit unions will be in a position to provide small businesses with the small, low-interest loans they need to create new jobs," Udall said.

The Colorado senator spoke at last week's CUNA 2012 Governmental Affairs Conference, telling credit unions to fight for what they believe in on Capitol Hill and help members of the U.S. Congress convince their fellow members to support the legislation. He also encouraged the assembled credit union representatives to ask their senators to cosponsor his legislation, or, at the very least, to agree to vote for the bill. "If there are credit unions with capacity to lend, and small businesses that need loans, why not allow our economy to grow?" he asked.

CFPB FAQ helps consumers speak financial services

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WASHINGTON (3/26/12)--The Consumer Financial Protection Bureau (CFPB) last week introduced "Ask CFPB," a new interactive website to help consumers decode the complicated world of personal finance.

The online tool features clear definitions of financial terms and products, such as credit reports and reverse mortgages, and also explains many of the terms and features of financial products.

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The tool also provides advice on how consumers can proceed if they are stuck in tricky financial situations, including foreclosures and bankruptcy.

Consumers can type in keywords into a search field on the site, or click through a list of keywords on the top of the page to try to find the answer they are looking for. The database contains more than 350 questions and answers, and the CFPB said the guide is currently "primarily focused on credit cards and mortgages."

The agency plans to build the database going forward, adding more information on student loans, auto loans, prepaid cards, and checking and savings accounts.

The CFPB is also accepting suggestions on how individual definitions and explanations provided in the database can be improved.

For more on the site, use the resource link.

Inside Washington (03/23/2012)

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  • WASHINGTON (3/26/12)--A House Financial Services financial institutions and consumer credit subcommittee hearing on mobile payments held last week revealed the complexity of mobile payment options and the lack of existing regulations to address those options. (American Banker March 23) While one MasterCard representative that testified said that mobile payments with cell phones are more secure than credit or debit cards, the Payment Card Industry Security Standards Council's Troy Leach said a lack of mobile payment security controls, and potential abuse of computer programs and encryption methods, do pose security risks. Members of Congress questioned who would regulate these types of transactions. "Most importantly, we must make sure these payments are safe and secure, at least as safe as using cash, checks or credit cards, and hopefully even more so," subcommittee chair Shelley Moore Capito (R-W.Va.) said. Additional hearings on the topic have been planned…
  • WASHINGTON (3/26/12)--Separate bills that would make it easier for small banks to draw investors and would ban insider trading by members of the U.S. Congress and federal employees passed the Senate last week. The first bill, which would require small financial institutions with 2000 or more investors to register with the Securities and Exchange Commission, passed by a 73 to 26 vote. (American Banker March 23) The current SEC registration threshold is 500 investors. Similar legislation passed the House earlier this month, but the House will need to again consider the bill after the Senate made some changes. The bill is expected to be signed into law if it passes the House. The insider trading legislation, which passed the Senate by unanimous consent, is expected to be signed into law soon. That bill, the STOCK Act, would increase financial-disclosure requirements legislators and their staffers, as well as presidential staff…
  • RALEIGH, N.C. (3/26/12)--A total of 85 North Carolina credit union representatives covered the need for greater member business lending capacity and access to supplemental capital in meetings with legislators last week.
    North Carolina Credit Union League (NCCUL) Senior Vice President of Association Services Dan Schline (left) discussed credit union issues with Sen. Richard Burr (R) during the NCCUL's Capitol Hill visits at CUNA's 20120 Governmental Affairs Conference. (NCCUL Photo)
     The delegation, led by the North Carolina Credit Union League (NCCUL), met with Sens. Richard Burr (R) and Kay Hagan (D), and various N.C. members of the U.S. House of Representatives. The League also hosted a reception for the members of Congress and their staff. "It was a great exchange of information on a variety of topics," said NCCUL Senior Vice President of Association Services Dan Schline, "and our credit unions got to share their concerns on issues of importance. Overall the tone of the meetings was positive and credit union representatives updated their elected leaders about how issues before Congress impact credit unions and their ability to serve members back home," said Schline. "The League really appreciates everyone taking the time to make the trip, and for being so engaged in the political process," NCCUL President/CEO John Radebaugh added. One credit union advocate who made the trip, Allegacy FCU, Winston Salem, N.C., vice president of community relations and government affairs John Williams, did so for the last time. Williams, who has represented credit unions for 34 years, said he plans to retire at the end of April. "I'm getting my last whack at legislators," Williams said during the Capitol Hill visits…