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Leagues voice concerns about NCUA outreach plan

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ALEXANDRIA, Va. (5/1/08)--State credit union league representatives this week raised objections with National Credit Union Administration (NCUA) Chairman JoAnn Johnson over key provisions in the agency's Outreach Task Force Report and the recent Advance Notice of Proposed Rulemaking (ANPR) on corporate governance issues. "We raised a number of concerns about the report, particularly as they relate to the recommendations to report senior executive compensation information to members, which AACUL and the Credit Union National Association (CUNA) strongly oppose," said AACUL Chairman Roshara Holub. Holub is president/CEO of the Missouri Credit Union Association. New York State Credit Union League President/CEO William Mellin and Kentucky Credit Union League President/CEO Wendell Lyons also participated in the Monday meeting at NCUA headquarters in Alexandria, Va. Among the group’s concerns:
* The agency’s use of information it collects on membership profiles, services and compensation; * The report’s timing and potential implementation during a period of economic distress; * The agency's ability to protect information it collects; and * Virtually no abuses within the credit union system exist related to compensation.
Regarding the ANPR, the group emphasized that new regulations are not needed at this time but would be willing to discuss guidance on a few key issues, such as the definition of credit union officials' "fiduciary duties." The comment period on the ANPR closes today. "We have coordinated closely with CUNA on the report and ANPR will continue to do so going forward," said Holub. "We believe that Chairman Johnson in good faith will fully consider our concerns." CUNA Deputy General Counsel Mary Dunn also attended the meeting. Along with Chairman Johnson, Director of Public and Congressional Affairs John McKechnie, Deputy Director Larry Fazio and Special Assistant to the Chairman Peter Barrett also participated. Use the resource link below for more information.

Inside Washington (04/29/2008)

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* WASHINGTON (4/30/08)--A Federal Reserve Board proposal, expected to be released Friday, would protect credit cardholders with existing debt from having their interest rates raised for any reason other than a default on the account, the Fed said this week (American Banker April 29). Credit card companies are fighting the plan, saying they would have to raise fees to regain revenue. Scott Talbott, Financial Services Roundtable lobbyist, said the plan would eliminate credit or make it more costly. The plan also could spark higher interest rates and annual fees, said Ken Clayton, director of the American Bankers Association’s Card Policy Council ... * WASHINGTON (4/30/08)--The Federal Reserve Board plans to hold a meeting today to discuss the interest rates on reserves that the Fed financial institutions to deposit. The Financial Services Regulatory Relief Act, passed in 2006, contained a provision that allows but does not require the Fed to pay financial institutions interest on the reserves. When the act was passed, the provision was identified by the Credit Union National Association as one of several that affected credit unions the most (News Now Oct. 9, 2006) ... * WASHINGTON (4/30/08)--Some taxpayers saw their economic stimulus payments deposited into their accounts as early as yesterday, the Internal Revenue Service stated in a release. The payments, $600 for individuals and $1,200 for married couples, will be distributed this spring and throughout the summer. Those who chose to receive their tax refunds via direct deposit will receive their stimulus payments faster. The payment schedule is determined by the last two digits of an individual’s Social Security number ... * ARVADA, Colo. (4/30/08)--The Credit Union Association of Colorado (CUAC) has endorsed Jeff Crank as a Republican candidate for Congress in the Fifth Congressional District. The endorsement was announced at a CUAC event in Colorado Springs. Crank also was endorsed by CUAC in 2006 ...

Fights not over for CU relief

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WASHINGTON (4/30/08)—The Credit Union National Association (CUNA) said Tuesday that the fight on Capitol Hill for credit unions and their members will continue, despite banker attempts to derail the Credit Union Regulatory Relief Act (CURRA, H.R. 5519) this week. "This is not over. We will continue to push for passage of CURRA,” CUNA President/CEO Dan Mica said Tuesday. CUNA’s lobbying team was on Capitol Hill early Tuesday morning after learning that a much-anticipated action on CURRA was pulled from the day’s House voting schedule. CURRA's noncontroversial status changed when the bankers disregarded House leadership wishes and objected to the credit union bill. House leaders had planned to pair the credit union measure with a regulatory relief bill for banks. “From our perspective, the bankers thumbed their noses at House and committee leadership by violating an agreement for each of our industries to get relatively modest regulatory relief legislation now and work on broader elements later,” Mica said, adding that he had talked to the bill’s key sponsors, Reps. Paul Kanjorski (D-Penn.) and Ed Royce (R-Calif.). “They are determined to bring CURRA back to the House floor for a vote as soon as possible either on suspension or under regular order,” Mica said. He noted that in coming days, CUNA will be holding private discussions with the two congressmen, as well as with Chairman Barney Frank (D-Mass.) of the House Financial Services Committee, to assess strategy and options. Mica also said that had the bankers stuck by the agreement and not interfered with credit union legislation, the bill likely would have been approved easily in the House. “By our whip count, we had at least 80% of the House with us yesterday had a vote been allowed to proceed. So we feel we go into these discussions in a strong position," Mica told credit unions. CURRA proposes, among other things, to permit federal credit unions to add service to underserved areas regardless of original field of membership. It would also omit member business loans to underserved areas from counting toward the current cap. CUNA and the leagues support CURRA, but emphasize that credit unions need additional regulatory relief measures that are included in the provisions of the broader credit union bill, the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). CURIA would address the overall member business lending cap and approve a risk-based capital system for credit unions.

CUNA Thursday Webinar Economics issues for CUs

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WASHINGTON (4/30/08)—The Credit Union National Association (CUNA) is offering a May 1 webinar on current economic issues facing credit unions. CUNA senior economists, along with National Credit Union Administration (NCUA) board member Gigi Hyland and NCUA Director of the Office of Examination and Insurance Dave Marquis, will address the current downturn in the U.S. economy and its impact on credit unions from a regulatory compliance standpoint. The Webinar will address such areas as:
* Forecasted economic growth rate for 2008 and 2009; * The profile of the average current consumer; * Effects the current economy is having on credit unions ; and * Suggested responses credit unions should take.
Participants will have an opportunity to ask questions and raise concerns with the panelists. Use the resource link below for more information or to register for the session.

Treasury launches plan for unbanked

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WASHINGTON (4/30/08)—The U.S. Treasury Department Tuesday launched an initiative to improve financial education efforts and increase access to credit union and bank accounts for Americans “currently outside of the financial mainstream.” The Community Financial Access Pilot will provide low- and moderate-income people in selected communities with needed access to financial services. The initiative was recommended by the President's Advisory Council on Financial Literacy. "Through this pilot, Treasury will work with banks, credit unions, community leaders, and educational providers to target the nearly 10% of American households estimated to fall outside the financial mainstream," said Dan Iannicola, Jr., Treasury deputy assistant secretary for financial education. Iannicola announced the initiative in Jacksonville, Fla., one of eight communities participating in the new pilot program. The other participating communities include Brownsville, Texas; Cowlitz County, Wash.; Eastern Kentucky; Mississippi Delta, Miss.; Fresno, Calif.; Philadelphia, Pa.; and St. Louis, Mo. "Having a bank account is a critical part of being able to participate in our vibrant economic system," said Charles Schwab, chairman of the President's Advisory Council on Financial Literacy. "This pilot will target the low-income families who need access to basic financial services, so they can stop paying outrageous fees just to cash a check or pay a bill. It will also give low-income families access to basic financial education so that they can begin to build a better future." The number of families using alternative financial service providers is estimated to be as high as 50 million, according to Treasury. The Credit Union National Association (CUNA), leagues and credit unions also support financial literacy efforts for all Americans. CUNA earlier this week announced new features to its financial literacy clearinghouse: The clearinghouse provides information for anyone in the credit union movement looking for statistics, methods, and materials to improve the ability of members and potential members to manage their money wisely using credit union services. Among the most recent additions to
* Evidence and ideology in assessing the effectiveness of financial literacy education. (Research analysis from Lauren E. Willis, University of Pennsylvania Law School.); * A look at the financial state of Gen X and Gen Y." (A new study from the American Savings Education Council and AARP.) * A 2008 parents and money survey.(The views, behavior, and knowledge of spending, saving, borrowing, and earning money of American teenagers between the ages of 13-18, as seen through the eyes of their parents, from the Charles Schwab Corp.) * "Here's your chance to tell the government what to do;" an online soapbox for comments for the President's Advisory Council on Financial Literacy—requires free registration/login. * Federal Deposit Insurance Corp. statement on financial literacy and education. (Congressional testimony from the FDIC's Robert W. Mooney.)
"We hope that financial literacy advocates throughout the credit union movement will use as a jumping-off point for their efforts to help people of all ages and economic means make better use of their income and build wealth," Mark Condon, senior vice president of CUNA's Research & Advisory Services, said recently.