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CUNA celebrates a decade of CU Run support

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WASHINGTON (4/4/11)—A cadre of volunteers from the Credit Union National Association were among those that helped set the stage for Sunday’s Credit Union Cherry Blossom 10-mile run.
Click for slide showCUNA volunteers were on the National Mall bright and early Sunday to show support for the Credit Union Cherry Blossom 10K Race by stowing racers' gear. This was CUNA's tenth year of involvement in the event that has raised $5 million for Children's Hospitals. (CUNA Photo)
The CUNA volunteers braved the relatively cold temperatures, and an early wake up call, to work the bag check tent for this year’s race. CUNA vice president of communications and media outreach Pat Keefe said that the volunteer efforts of CUNA and other credit unions again demonstrated "the credit union difference" to those running the race. This is the tenth straight year that CUNA has supported the race. A total of 15,000 runners took part in this year’s run, and race organizers said that over 28,000 prospective runners applied for a spot in the race. More than 600 members and staffers from Capitol Hill participated in the race. Around 1,000 soldiers and civilians overseas also took part in a “satellite” race at Camp Arifjan in Kuwait. The race continued to attract elite competition, with three-time winners Lineth Chepkurui and John Korir returning to compete for a $45,000 race purse, the largest fee to be awarded in race history. Ethiopian Lelisa Desisa won the mens competition, tying the course record of 45:37. Julliah Tinega placed first in the womens race. Former record-holding marathoner Bill Rodgers also again took part in this year’s race. Ninety-one members of Congress from 30 separate states served as honorary race chairs. CUNA President/CEO Bill Cheney helped to kick off the event Friday by participating, with other credit union officials, in a "play day" with patients at Washington Children's Hospital--meant to be a visible sign of credit union commitment to working in support Children's Miracle Network Hospitals and their mission of supporting childrens' hospitals nationwide. ALso, at a press conference at the hospital, Cheney noted that credit unions have had a major role in helping to raise $5 million for sick children over 10 years through support of the Credit Union Cherry Blossom Race. Cheney and CUNA Board Cairman Harriet May also particpated in the race day events.

CUNA urges FTC to protect auto loan consumers

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WASHINGTON (4/4/11)--The Credit Union National Association last week came out in support of the Federal Trade Commission’s (FTC) proposed efforts to protect consumers with respect to motor vehicle loans, and urged the FTC to apply consistent consumer protection rules for motor vehicle dealers offering motor vehicle financing. CUNA in its comment letter noted that auto dealers, who are often the single point of contact for consumers during an auto purchase, are not always concerned with consumer protection. “Motor vehicle dealers provide a significant portion of all motor vehicle loans and should not have a special exemption to inflate rates, charge hidden fees, or engage in other harmful practices,” the letter adds. Providing consistent consumer protection rules would ensure a level playing field for all financial entities that provide motor vehicle lending or lease arrangements. CUNA noted that credit unions provide both direct and indirect loans to prospective motor vehicle purchasers, and said that 95% of credit unions nationwide are involved in the auto loan business. Loans for new and used motor vehicles represent about 29% of all loans at credit unions. Consumers that use credit union loans instead of bank-originated loans to purchase a new vehicle worth $30,000 would save an average of $1,300 over the span of a five year loan, according to CUNA estimates. For the full CUNA comment letter, use the resource link.

Inside Washington (04/01/2011)

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* WASHINGTON (4/4/11)--As talks between state attorneys general (AG) and mortgage servicers, regarding best practices for the servicing industry, seem to drag on, federal regulators are expected to move ahead on their own with cease-and-desist actions targeting 14 servicers (American Banker April 1). The enforcement orders are likely to spell out best practices on such things as documentation verification procedures, oversight from third parties and additional legal counsel, limitations for dual tracking foreclosures and modifications simultaneously, and a comprehensive look back to uncover prior mistakes. While some observers remarked that a comprehensive settlement would be preferable to individual actions, they agreed that the regulators need to perform oversight of the banks where there are determined weaknesses. But others said the separate enforcements benefit the servicers by giving more leverage to push back against the state AGs … * WASHINGTON (4/4/11)--Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA), said he is concerned that pending House legislation aimed at an overhaul of compensation levels for Fannie Mae and Freddie Mac employees could carry great risks for the conservatorships, and thereby to the American taxpayer. The legislation would apply a federal pay system to nonfederal employees at Freddie and Fannie (American Banker April 1). DeMarco said the bill would make it harder for the government-sponsored enterprises (GSE) to retain employees. He also maintained it would have the ironic effect of spurring more complaints about the size of the two housing-related GSEs. DeMarco cited other concerns regarding some of the eight GSE reform bills introduced last week by House Republicans. In a separate story, American Banker reported on an inspector general report released Thursday that questions whether the FHFA, as regulator of Freddie and Fannie, should do more to trim executive compensation packages at both GSEs. Fannie and Freddie CEOs combined received about $17 million in 2009 and 2010, the report noted. At the same time, the top six officers at the GSEs received more than $35 million total compensation. The IG report also notes that the U.S. Treasury Department, to date, has spent $153 billion to stabilize Freddie and Fannie …

NCUA NGN sales now total 24B

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ALEXANDRIA, Va. (4/4/11)--The National Credit Union Administration's (NCUA) tenth sale of NCUA Guaranteed Notes (NGNs) was completed last week, and the sale of NGNs has netted nearly $24 billion since it began last October. The most recent transaction yielded $1.5 billion in proceeds. The NGNs were priced at 38 basis points over LIBOR, which the NCUA said is an indication of “strong investor interest.” This latest offering of NGNs is comprised of previously issued residential mortgage-backed securities, the agency said. NCUA Chairman Debbie Matz in a release said that the NCUA securitization program “continues to perform well.” The NGNs are comprised of $35 billion of distressed legacy assets that were conserved from failed and conserved corporate credit unions, and are fully backed by the U.S. Government. The NCUA has amended its definition of low-risk assets to allow credit unions to invest in NGNs. The NCUA said it has securitized 85% of these legacy assets, and expects to sell off the rest of these assets within the next two months. For the full NCUA release, use the resource link.

House to roll out MBL cap lift bill this week

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WASHINGTON (4/4/11)—A House version of legislation that would lift the credit union member business lending (MBL) cap to 27.5% of total assets will be introduced this week, with Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) serving as the leading co-sponsors. The bill will be known as the Small Business Lending Enhancement Act. The bill is similar to Senate legislation offered by Sens. Mark Udall (D-Colo.) and Olympia Snowe (R-Maine) last month. The Credit Union National Association (CUNA) has estimated that the MBL cap lift could provide up to $13 billion to small businesses in the first year alone and create over 140,000 new jobs, at no cost to taxpayers. The House members in a statement said that the MBL cap lift legislation “will be an important step in shifting our current economic path and putting Americans back to work.” Royce, a friend of credit unions, earlier this year told attendees of CUNA’s 2011 Governmental Affairs Conference that increasing the amount of credit available to small businesses is a key way to build communities. Royce is a longtime member of the House Financial Services Committee. McCarthy is a key cosponsor of a House bill that would delay the implementation of the Federal Reserve’s planned interchange cap. She also currently serves as the ranking minority member of the House Financial Services Committee’s subcommittee on international monetary policy and trade. Both House members have previously backed an MBL cap lift for credit unions. Udall spoke in support of his bill on the Senate floor last week, calling on his fellow Senators to help him "get government out of the way" and allow credit unions to increase their lending to small businesses. The Senate bill had 18 co-sponsors as of late last week, and Senate Banking Chairman Tim Johnson (D-S.D.) has said he is interested in examining the MBL legislation in his committee.

Interchange delay bill Co-sponsor list growing

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WASHINGTON (4/4/11)—The ranks of House interchange delay supporters grew to 64 late last week, and support for an examination of interchange fee cap legislation is growing as the July 21 effective date comes ever nearer. Similar Senate legislation boasted 17 total sponsors last week. The House and Senate bills listed 42 and 13 cosponsors, respectively, as of March 21. Notable new cosponsors include James Sensenbrenner (R-Wisc.) in the House and Bill Nelson (D-Fla.) in the Senate. The House and Senate bills, which were introduced by Rep. Shelley Moore Capito (R-W.V.) and Sen. Jon Tester (D-S.D.), respectively, would delay implementation of the Federal Reserve’s proposed interchange fee regulations and order a study of the new rules impact on consumers, financial institutions, and merchants. The House bill proposes a one year delay, while the Senate bill would push the effective date back by two years. A vote on the Senate delay legislation could happen early this week if the legislation is attached to a pending small business bill. However, a vote may not happen for several weeks. Credit union backers nationwide stressed the need for delay to their legislators during the recent district work period, which took place between March 21 and 25. Texas was one of the front lines for credit union / congressional interaction, with local credit union chapters meeting with Sens. John Cornyn (R) and Kay Bailey Hutchison (R). San Antonio, Texas-based credit union representatives also met with House cosponsors Henry Cuellar (D) and Quico Canseco (R). The Michigan Credit Union League was also active during the week, meeting with Rep. Sander Levin (D) and other congressional representatives. The Credit Union National Association continues to urge credit union backers to continue to contact their representatives via CapWiz. A total of 55,000 separate interchange contacts had been made through this system as of last week. To contact your local legislator, use the resource link.