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Washington

Housing stimulus OKd 84-12 by Senate

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WASHINGTON (4/11/08)—Voting 84 to 12, the Senate passed its housing stimulus package Thursday clearing the way for the House and Senate to begin working out differences between their two versions of similar legislation. The Senate bill, known as The Foreclosure Prevention Act of 2008, would provide $4 billion to cities for the purchase and rehabilitation of foreclosed properties and almost another $13 billion in targeted tax breaks to spur additional home buying and ease the troubles of the housing industry. It also would authorize $200 million for housing counselors to help families about to lose their homes to foreclosure. The Credit Union National Association supports a higher allocation for housing counseling and will be working to encourage the House to increase that level before the bill gets final approval by both houses of Congress. The package contains a limited FHA reform provision, but both Senate Banking Committee Chairman Christopher Dodd (D-Conn.) and House Financial Services Committee Chairman Barney Frank (D-Mass.) have indicated they want more. Dodd favors adding loan guarantees of up to $400 billion and Frank wants the FHA to be able to back mortgages worth more than the value of the home if the lender takes a substantial loss. While press reports just a day earlier declared that President George W. Bush might veto the housing stimulus package, Congressional Quarterly reported Thursday that the president had softened his stance and may be eager to receive a final version of the bill he can sign.

Inside Washington (04/10/2008)

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* WASHINGTON (4/11/08)--Republicans appeared to be concerned about providing any more government bailouts to help the housing crisis at a hearing Wednesday. The hearing was intended to gather feedback on Rep. Barney Frank’s (D-Mass.) plan to write down mortgages for borrowers who can’t afford them, but the Federal Housing Administration (FHA) offered another idea--expanding FHA Secure (American Banker April 10). The plan would allow delinquent borrowers with adjustable-rate mortgages to qualify for assistance and would include a risk-based premium program subjecting borrowers with bad credit to higher rates. The higher rates would fund the program, and lenders could write down the principal with a range of 90% to 97%, said FHA Commissioner Brian Montgomery. A down payment assistance fund would also be dropped because it has drained the FHA’s fund. The administration’s plan was supported by some Republicans, and Frank pointed out its similarities with his own plan ... * WASHINGTON (4/11/08)--The House Financial Services subcommittee on capital markets, insurance, and government sponsored enterprises has scheduled its third in a series of hearings on insurance regulatory reform. On Wednesday, Rep. Paul Kanjorski’s (D-Pa.) subcommittee will hear from two panels of witnesses representing government and private entities. The hearing is intended to examine a variety of proposals to address insurance regulatory reform …

Tax measure could add HSA burden for CUs

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WASHINGTON (4/11/08)—The House Ways and Means Committee passed the Taxpayer Assistance and Simplification Act of 2008 this week, a measure could threaten credit union participation in Health Savings Accounts (HSAs), according to the Credit Union National Association (CUNA). Although the bulk of the measure is not cause for concern for credit unions, John Hildreth, CUNA senior legislative representative, said Thursday that it contains a provision that “would be very detrimental to HSAs and would drive many credit unions out of this market.” This legislation would require the account provider to take on the role of verifying that each distribution is used for a qualified medical expense. This, of course, would drive most credit unions and banks out of the HSA business and move it to plan administrators who are accustomed to substantiation from the services that they provide, like Flexible Spending Accounts (FSAs) and Health Reimbursement Accounts (HRAs). He said the increased compliance burden would be detrimental to consumers because it would likely restrict the general availability of HSAs. Also, Hildreth noted that if credit unions must track the validity of their members’ HSA expenses, they are place in the awkward position of disputing with their members as to whether expenses may or may not be qualified. The bill (H.R. 5719) passed the committee 24 to 17. CUNA launched a significant lobbying effort against the HSA substantiation provisions prior to the committee’s vote and won a two-year delay in the implementation of the provision. Rep. Paul Ryan (R-Wisc.) offered an amendment to strike the substantiation clause from the tax bill, but lost that effort in a 25 to 15 vote. He had urged his colleagues not to let anecdotal evidence of abuses sway them to include the burdensome provision. CUNA will continue its efforts to oppose the HSA provision as the bill makes its way to the House floor for a vote. There currently is no similar bill introduced in the Senate.

NCUA low-income definition on agenda

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ALEXANDRIA, Va. (4/11/08)—The National Credit Union Administration (NCUA) Thursday posted its agenda for its April 17 open board meeting, which includes a notice of proposed rulemaking on “The Low-Income Definition.” Low-Income Definition is one of the four categories into which the 12 recommendations of the NCUA Outreach Task Force were sorted. The task force was created in November 2006 to review recommendations from the Member Service Assessment Pilot Program (MSAP) on credit unions' mission. The NCUA task force recommendation seeks to make the NCUA’s definition of the term more in line with that of the other federal financial institution regulators. No other task force recommendations are slated for NCUA board consideration at this time. Other items on the agenda include a proposed rule addressing Part 740 of NCUA’s Rules and Regulations, which governs the official sign that all federally insured credit unions must display where deposits are received. Those signs appear such places as teller windows, Internet Web pages if online banking is officered, and they carry the official advertising statement: "This credit union is federally insured by the National Credit Union Administration" or "Federally insured by NCUA." Also scheduled for consideration is the agency’s Quarterly Insurance Fund Report, which is expected to reflect the costs to the National Credit Union Share Insurance Fund of the agency’s dealings with current conservator ships. The final items:
*Proposed Rule: Part 792 of NCUA’s Rules and Regulations, Revisions for the Freedom of Information Act and Privacy Act Regulations; and *Proposed Rule: Parts 712 and 741 of NCUA’s Rules and Regulations, Credit Union Service Organizations.