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Washington Archive

Washington

Land of Enchantment FCU closed by NCUA

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ALEXANDRIA, Va. (3/8/11)--Land of Enchantment FCU, established in 1951 to serve the employees of the New Mexico Department of Public Welfare, was closed yesterday by the National Credit Union Administration (NCUA). It had approximately $8.6 million in assets and served 1,593 members. Guadalupe CU, based in Sante Fe, as was Land of Enchantment, purchased and assumed the liquidated credit union’s assets, liabilities and members. Former members of Land of Enchantment will experience no interruption in credit union service, and their accounts, of course, remain federally insured up to at least $250,000 by the National Credit Union Share Insurance Fund. Guadalupe CU has $102 million in assets and serves approximately 10,500 members. NCUA assumed control of operations at Land of Enchantment FCU with a goal of continuing credit union service to the members at a safe, sound credit union. This was the fifth federally insured credit union liquidation in 2011.

Inside Washington (03/07/2011)

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* WASHINGTON (3/8/11)--House Financial Services Committee Chairman Spencer Bachus said on Monday U.S. House lawmakers will wait for the Senate to offer changes to the Federal Reserve’s interchange proposal. Bachus (R-Ala.), speaking at a conference hosted by the Institute of International Bankers in Washington, said House members wanted assurance that the Senate would move to change the law as well (Bloomberg.com March 7). The House committee’s decision to wait for the Democrat-controlled Senate to act may delay legislative activity on the rule. Sen. Richard Durbin (D-Ill.), who introduced the proposal under the Dodd-Frank Act, said he will block efforts to change that provision of the regulatory law. Fed Chairman Ben S. Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair have questioned whether the proposal’s exemption for financial institutions under $10 billion in assets would make community banks and credit unions less competitive … * WASHINGTON (3/8/11)--During the Credit Union National Association (CUNA) Governmental Affairs Conference, in Washington, Minnesota credit union leaders spent an afternoon on Capitol Hill urging (members of Minnesota’s congressional delegation to join credit unions in their efforts to better serve American consumers. Interchange has been a concern for the state’s credit unions since December when the Federal Reserve Board released its proposed rule to reduce interchange fees by an estimated 70%. Advocates stressed to elected officials that even though most credit unions are technically exempt from the proposed rule, it will affect Minnesota credit unions’ ability to offer affordable checking products. For this reason, credit unions urged Minnesota’s Congressional Delegation to support measures that would allow Congress to stop, study and start over on the interchange issue. Minnesota credit unions also asked members of Congress to co-sponsor a bill that would increase credit unions’ member business lending (MBL) cap from 12.25% of total assets to 27%. The MBL increase would generate an additional $180 million in small business loans and nearly 2,000 jobs in Minnesota, according to CUNA. Prior to Hill visits, Minnesota legislators attended a luncheon and issues briefing coordinated by the Minnesota Credit Union Network. Sen. Amy Klobuchar, shown here, (D-Minn.) keynoted the luncheon and commended credit unions for their role in the economy … * WASHINGTON (3/8/11)--A free webinar on Small Business Administration (SBA) disaster assistance funding, hosted by the SBA and Agility Recovery Solutions, will be held at 2 p.m. ET March 15. Representatives from SBA’s Office of Disaster Assistance will explain how the disaster loan program works, how an SBA declaration is made, details on the application process, and tips on managing a swift recovery. A question and answer session will follow. SBA has partnered with Agility Recovery Solutions, which is also a CUNA Strategic Services Provider, to offer business continuity strategies for entrepreneurs via their “PrepareMyBusiness” website. Visit www.preparemybusiness.org to access previous webinars and for more preparedness tips.

Congress this week Housing tax policies in focus

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WASHINGTON (3/8/11)--National housing policy and reform of the tax code may be the two biggest issues of credit union interest facing the U.S. House and Senate this week. On the congressional agenda:
* On Tuesday, the Senate Budget Committee will conduct a hearing on the report of the National Commission on Fiscal Responsibility and Reform. Former Sen. Alan Simpson (R-Wyo.), and Erskine Bowles, former White House chief of staff, who are co-chairman of the National Commission on Fiscal Responsibility and Reform, are expected to testify. Also, the Senate Finance Committee has scheduled a hearing, "Does the Tax System Support Economic Efficiency, Job Creation and Broad-Based Economic Growth?" This hearing will feature several witnesses from academia. * Also on Tuesday, the House Oversight and Government Reform Committee will hold a field hearing on "The Foreclosure Crisis," focusing on abuses by mortgage servicing companies, including allegations of fraud. Maryland Governor Martin O’Malley, Baltimore Mayor Stephanie Rawlings-Blake and others will testify. The hearing will take place in Baltimore, Md. * On Wednesday, the Senate Budget Committee will conduct a look at "Distribution and Efficiency of Spending in the Tax Code." Witnesses from the Center for Budget and Policy, Citizens for Tax Justice, and the Tax Foundation are expected to testify. And the Senate Banking Committee will conduct a hearing on the state of the housing market, with witnesses from the National Association of Home Builders, the National Association of Realtors and the Center for Housing Policy expected to testify. * Also on Wednesday, the House Financial Services Committee will hold a full committee markup of H.R.839, the "HAMP (Home Affordable Modification Program) Termination Act"; and H.R.861, the "Neighborhood Stabilization Program Termination Act." This vote was rescheduled from last week. * On Thursday, the Senate Judiciary Committee vote on pending nominations and legislation, including S. 222, the Limiting Investor and Homeowner Loss in Foreclosure Act of 2010.
Also of interest, the Senate Banking Committee Tuesday will hold a hearing on the nominations of Peter Diamond to be a member of the Federal Reserve Board of Governors; Katharine Abraham to be a member of the Council of Economic Advisers; and Carl Shapiro to be a member of the Council of Economic Advisers. And on Friday, the House Financial Services subcommittee on insurance, housing and community opportunity will hold a hearing on the reauthorization of the National Flood Insurance Program. Also on the radar, last week at the Credit Union National Association's Governmental Affairs Conference, House and Senate lawmakers indicated that they soon would re-introduce bills to increase the member business lending cap.

Heartland podcast features Cheney on interchange

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WASHINGTON (3/8/11)--A Washington, D.C.-based think tank, The Heartland Institute, recently interviewed Credit Union National Association (CUNA) President/CEO Bill Cheney on the impact of the Dodd-Frank Act-imposed debit interchange rule. The interview was for a podcast included in the institute’s series on financial issues. Cheney, the sole interview on the podcast, reiterated the concerns that credit unions and other debit card issuers have regarding the Dodd-Frank Act mandate that the Federal Reserve Board cap debit card fees, but without being able to consider all the costs that go into the service. “There are flaws in the legislation and they are being translated into regulation,” Cheney told interviewer Erin Greenwood. He warned that the long-term consequences of these flaws will be that consumers will pay more for debit card service. Cheney noted the “eleventh hour” passage of the interchange language by the U.S. Congress last year, and said that CUNA is seeking a delay in the July implementation date of the Fed’s proposed interchange rule. He said CUNA is urging Congress to take time to study any legitimate interchange issues through the regular hearing process, a process, he noted, the interchange amendment escaped the first time around. Use the resource link below to access the entire podcast.

NCUA Directors can delegate authority with limits

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WASHINGTON (3/8/11)--In a Letter to Federal Credit Unions (11-FCU-02), which discusses the general authorities and duties of directors in new Section 701.4, the National Credit Union Administration (NCUA) said an FCU’s board can, with some limitations, delegate to its CEO the authority to hire, fire, and compensate subordinate employees, including other management personnel. NCUA General Counsel Robert Fenner recently explained in a legal opinions letter that if a board delegates to the CEO the authority to hire, fire, fix the compensation of, or discipline other senior managers the board place “appropriate standards and controls on such delegated authority.” “This is particularly true in larger, complex credit unions where senior managers wield much more power than the “tellers, clerks, and bookkeepers” specifically named in articles of the bylaws, Fenner added. The letter, written in response to questions posed by the National Association of Federal Credit Unions, also addressed other clarifications of the agency rules regarding the duties of federal credit union directors. Use the resource link to access the full letter.

CUNA major trades to support interchange suit

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WASHINGTON (3/8/11)--A federal court granted a request by the Credit Union National Association (CUNA), and other financial trade associations, to be allowed to file a statement in support of TCF National Bank’s (TCF) lawsuit against the debit card interchange fee provisions of the Dodd-Frank Act. With the court’s favorable ruling, CUNA and the other associations could file the “amicus brief,” as early as Friday. The TCF suit, filed last October, charges that the interchange provisions of Dodd-Frank, which require the Federal Reserve Board to set restrictions on the fees debit card issuers can charge for the service they provide, are unconstitutional. The bank argues that the Fed’s implementation plan restricts the bank’s ability to recover costs associated with providing the debit card service. CUNA’s partners in the requested amicus brief represent “every major national banks and credit union trade association” in the United States, the petition notes. In addition to CUNA, the groups represented, in alphabetical order as they appear in the document, are The Clearing House Association L.L.C., American Bankers Association, Consumer Bankers Association, The Financial Services Roundtable, Independent Community Bankers of America, Midsize Bank Coalition of America, and the National Association of Federal Credit Unions. In the request to the U.S. District Court of the South Dakota Southern Division to file a brief, CUNA and the other groups state they should be heard in the case, in part, because the financial institutions represented have “collectively invested billions of dollars to help develop and efficient, convenient, and secure debit card payment system.” The groups want to formally support TCF in its case, the petition says, to explain the detrimental effect the Fed’s proposed plan to implement the interchange provisions would have on the “stability of the electronic payment structure that undergirds literally trillions of dollars of our economy, as well as the serious constitutional issues the (Fed’s) action raises.”