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CUNA meets with key Treasury officials on CU issues

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WASHINGTON (4/29/09)--Credit Union National Association (CUNA) President/CEO Dan Mica met with Treasury staff Monday to discuss credit union priorities, as well as President Barack Obama’s Mortgage Modification Program, of which credit unions have expressed interest. Mica met with Al Fitzpayne, deputy chief of staff; Seth Wheeler, deputy assistant secretary for Federal Finance; Fred Baldassaro, senior adviser, Office of Business and Public Liaison; and Mario Ugoletti, director, Financial Institutions. The CUNA leader presented information to the officials regarding credit unions' solid record of lending to small businesses, homeowners, and other consumers. Credit unions have continued to lend to their members and have provided tailored loan modifications to help borrowers avoid delinquency and default, Mica said. Mica also outlined for the new officials several credit union legislative priorities:
* Increased member business lending authority; * Changes to the Federal Credit Union Act, including the creation of a seven-year corporate stabilization fund to spread out the costs of assistance to corporate credit unions; * Credit unions’ opposition to House cramdown legislation; * Access to Troubled Asset Relief Program funds; and * The support of CUNA, credit union leagues and credit unions of the “Homes For Our Troops” program.
The group also discussed Obama’s homeowners’ program. On Tuesday, Obama announced new efforts--including the Second Lien Program, which will work in tandem with the first lien modifications offered under the Home Affordable Modification Program. Under the Second Lien Program, when a Home Affordable Modification is initiated on a first lien, servicers participating in the Second Lien Program will automatically reduce payments on the associated second lien according to a pre-set protocol. Alternatively, servicers will have the option to extinguish the second lien in return for a lump sum payment under a pre-set formula determined by Treasury, allowing servicers to target principal extinguishment to the borrowers where extinguishment is most appropriate. Monday’s session was a “good first meeting,” Mica said, and noted that CUNA would follow up with the Treasury on some of the issues. Other CUNA staff in attendance: Bill Hampel, chief economist; Eric Richard, general counsel; and Mary Dunn, deputy general counsel.

Budget amendment would increase NCUA borrowing

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WASHINGTON (4/29/09)--An amendment that would increase the National Credit Union Administration’s (NCUA) borrowing authority was retained in a budget resolution conference agreement scheduled to be voted on by the House Tuesday. The Senate is expected to vote on the agreement today. The amendment, by Sen. Mike Crapo (R-Idaho) and Sen. Bob Corker (R-Tenn.), would increase NCUA’s borrowing authority to $6 billion from $100 million, and establish an emergency borrowing authority of $18 billion. The amendment also would allow credit unions to spread out realizing the premium cost associated with NCUA's corporate credit union stabilization efforts over five years. A deficit neutral reserve fund for the authority was included in the conference agreement, which means that the chairman of the Committee on the Budget of the Senate can revise the budget for one or more bills, joint resolutions, amendments, motions or conference reports to increase NCUA’s borrowing authority as long as it does not increase the budget’s deficit. Crapo’s amendment, which was approved unanimously by the Senate Banking Committee, was a “significant step” toward relief for credit unions, according to the Credit Union National Association (CUNA).

Inside Washington (04/28/2009)

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* WASHINGTON (4/29/09)--Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair said Monday the FDIC should be granted the power to step in and assist a systemically significant company when it is in trouble (American Banker April 28). The FDIC has more experience than any other agency to help, she said. The Treasury Department has proposed giving the FDIC more power, but trade groups have not supported the proposal, saying that the agency does not have the expertise to handle cleaning up non banks and the workload could hurt its mission as a deposit insurer. But creating a new agency to deal with non banks, Bair argued, would be counterproductive because the new entity would have to adjust to the environment ... * WASHINGTON (4/29/09)--The Financial Crimes Enforcement Network (FinCEN) has issued guidance that highlights factors credit unions should consider when determining the appropriateness of exempting a non-listed business from Currency Transaction Report (CTR) requirements. FinCEN allows credit unions to grant Phase II exemptions from the CTR filing requirements for non-listed businesses that meet certain specified criteria. However, the exemption is not available for non-listed businesses that derive more than 50% of their annual gross revenues from ineligible business activities. FinCEN expects credit unions to gather sufficient information to make a “reasonable determination” that a member derives no more than 50% of its annual gross revenues from ineligible business activities. Credit unions should consider their understanding of the member's business, purpose of accounts, actual and anticipated activity, and look at the member’s financial statements or a self-certification statement from the member when deciding whether to grant the exemption ... * WASHINGTON (4/29/09)--National Credit Union Administration (NCUA)
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Chairman Michael Fryzel met with the Credit Union Association of New York last week. The league visited Washington, D.C., to meet with its congressional delegation, including Sen. Charles Schumer (D-N.Y.). “The activism of the New York league and member credit unions in governmental affairs is impressive,” Fryzel said. “Dialogue with both NCUA and Capitol Hill is essential, and I continue to encourage credit union involvement in the process.” From left are: Robert Nemeroff, marketing director, Melrose CU; Michael Lanotte, senior vice president and general counsel, Credit Union Association of New York; Fryzel; Paul Sonsnowski, general counsel and vice president of compliance, Polish and Slavic FCU; Amy Kramer, vice president of governmental affairs, the association; and William Mellin, president/CEO, the association. (Photo provided by the Credit Union Association of New York) ... * WASHINGTON (4/29/09)--Several briefings on the swine flu have been scheduled to take place on Capitol Hill. Sen. Tom Harkin (D-Iowa) planned an emergency hearing yesterday, and Sen. Joseph Lieberman (I-Conn.) scheduled a hearing for Wednesday. Rep. Frank Pallone Jr. (D-N.J.) planned to hold a hearing for Thursday to examine how federal, state and local health agencies will deal with the situation. The Credit Union National Association offers several resources about what to do in a pandemic situation. A webinar on the subject also will be available today ... * ALEXANDRIA, Va. (4/29/09)--National Credit Union Administration (NCUA) Chairman Michael Fryzel encouraged Ohio credit union leaders during an annual meeting in Cleveland, Ohio, to stay member-focused and involved as dialogue about NCUA’s corporate stabilization plan moves forward. “None of this is being considered in a vacuum,” he said. “We actively solicited and received significant and helpful input from almost 500 commenters, and you can rest assured that your views will be integral to whatever final product emerges. This is your corporate system, created, governed, and directed by you for over 30 years. You properly have a voice in what new, reformed corporate network emerges and I strongly encourage you to stay involved.” ...

Power Breakfast to feature Sen. Majority Leader Reid

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WASHINGTON (4/29/09)--Senate Majority Leader Harry Reid (D-Nev.) and Ronald Brownstein, Atlantic Media political director, will lead discussion during Friday’s Power Breakfast, sponsored by the Credit Union National Association (CUNA) and the National Journal Group. Reid will be the event speaker and Brownstein will serve as the moderator. They will discuss the political viability of the Senate’s agenda for the current Congress as well as the challenges that Reid will be facing in 2010 elections. Sen. Reid will also be discussing his book, “The Good Fight.” The breakfast will begin at 8 a.m. in the Reserve Marine Officers building. CUNA and the National Journal have sponsored the breakfast for the last two years.