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Frank assures CUs on reg reform issue

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WASHINGTON (4/3/08)--Credit unions received a welcome message from a key leader in Congress Wednesday regarding the U.S. Treasury Department's proposal for financial institution regulatory restructuring: In a paraphrase, Congress backs credit unions. House Financial Services Committee Chairman Barney Frank (D-Mass.) introduced Credit Union National Association (CUNA) witness Harriet May at Wednesday's hearing on the Internet Gambling law. (See related News Now story, "CUNA: Internet gambling law's burdens need Hill's action.") May is CEO of GECU, El Paso, Tex., and a CUNA board member. Frank then said to May, "Please tell my good friend and former colleague Mr. Mica not to worry about the Treasury proposal to eliminate credit unions. We would never do that. So please tell him not to worry about that." Frank's comments came the same day an editorial in The Hillnewspaper took note of CUNA President Dan Mica’s concern that the Paulson plan would eliminate the National Credit Union Administration (NCUA) and force consumers to pay more for less. “These are serious criticisms that Congress should meet with equal seriousness,” the editorial asserted. CUNA’s Mica received nationwide press exposure when he fired off the first question at Treasury Secretary Henry Paulson's briefing Monday on the agency's regulatory restructuring blueprint. Mica explained to Paulson that the Treasury proposal could result in the demise of credit unions as they function today. Paulson explained details in the 212-page report and the thinking behind its development. A summary of the report was leaked to the media during the weekend.

Senate tables mortgage debt forgiveness

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WASHINGTON (4/4/08)--The Senate yesterday continued debate over legislation that would reduce uncertainty for those embroiled in the current housing market turmoil. Yesterday’s action on The Foreclosure Prevention Act of 2008 included consideration of a Credit Union National Association (CUNA) supported amendment by House Majority Whip Richard Durbin (D-Ill.) to minimize foreclosures by allowing bankruptcy judges to forgive mortgage debts. During floor debate, Durbin blasted the mortgage banking industry for opposing his amendment, and said "credit unions support this amendment, because they never got into this crazy loan business." He also said the New York Times published an editorial in support of the amendment, which ultimately was tabled 58 to 36. Meanwhile, CUNA was following a provision that would have provided $200 million for housing counselors to help families facing foreclosure. As part of a compromise, the funding level for the bill’s financial counseling provisions was reduced from the level initially proposed. The final outcome of that provision is uncertain, as several groups, including CUNA and the National Credit Union Foundation have an interest in maximizing financial counseling efforts. “One of the virtues of a bi-cameral legislature is that a bill has to pass both the Senate and the House,” said Donovan. “The financial counseling component of this legislation will be important for the House to consider when it takes up this legislation, and we encourage the House to increase the funding of these provisions."

Mica in iThe Hilli Doomsayers ignore history

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WASHINGTON (4/4/08)—The country learned a lot about addressing economic woes as a result of the Great Depression that followed World War I and its aftermath and those lessons put the country in better stead each time it has faced such troubles, wrote Credit Union National Association (CUNA) President/CEO Dan Mica in his latest column for the Washington, D.C. publication The Hill . Mica, writing his now-monthly "K Street Insiders" column, advised readers to remember that “the worst almost never happens.” He said that is likely to be the case for the country’s current economic downturn. The CUNA leader acknowledged that there is cause for concern, but cautioned the Washington lobbying community not to overreact. "This is the time for thoughtful leaders in all sectors to reach out, be creative and meet needs that address concerns of our clients, customers and constituents, while meeting the test of good public policy that helps resolve the issues at hand," he said. A key to success in these times, he added, is "acting quickly when necessary, but also knowing when the problem will be solved not by legislation, but by American resilience." “(W)e need to remember that the worst of the worst almost never happens. We have had only one Great Depression since World War I, and we have learned a lot since then about not letting things get that out of hand again,” Mica said. Since 1929, he reminded, the country has seen “a dozen recessions” and in each of these recessions, most Americans kept their jobs, Congress continued its work, the stock market remained open, the production of food, clothing, consumables and daily goods did not stop, and the regulators did not cease to regulate. “There is much more reason to expect that this latest slowdown will be another recession rather than the second Great Depression. “While doomsayers talk about a catastrophic meltdown or an economic disaster about to befall our country, if not the world, those of us on K Street need to take a deep breath and take stock of reality,” Mica said. Mica appears regularly as a guest columnist for The Hill’s K Street Insiders feature. "K Street" refers to an area in Washington, D.C. known as a base for influential lobbyists, think tanks and advocacy groups stationed in the nation's capital.

Inside Washington (04/03/2008)

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* WASHINGTON (4/4/08)--The Federal Deposit Insurance Corp. (FDIC) will likely supervise state-chartered banks, predicted FDIC Chairman Sheila Bair (American Banker April 3). The Treasury has released a plan calling for one agency to supervise the banks, and Bair told her staff in an e-mail that the FDIC would likely be assigned the responsibility ... * WASHINGTON (4/4/08)--The Treasury Department’s plan to revise financial regulation would allow commercial firms to own and run federally insured depository institutions, or FIDIs, and has sparked debate among bankers. Camden R. Fine, president/CEO of the Community Bankers of America, said the plan would put taxpayer dollars at risk (American Banker April 3). Fine's group has fought against combining banking with commerce and attempts by large retailers to own industrial loan companies (ILCs). Others see the plan as progressive. Former Utah Banking Commissioner George Sutton, who has represented companies trying to earn ILCs, said separating commerce and banking is an outdated idea. Dan Mica, president/CEO of the Credit Union National Association, garnered press earlier this week when he questioned the Treasury plan, stating that it would result in the demise of credit unions as they function today (News Now April 3) ...

Rep. Waters offers two anti-foreclosure plans

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WASHINGTON (4/3/08)—Rep. Maxine Waters (D-Calif.), chairwoman of a House Financial Services subcommittee, this week introduced two bills intended to respond to the nation’s growing foreclosure crisis. The bills are The Foreclosure Prevention and Sound Mortgage Servicing Act (H.R. 5679) and The Neighborhood Rescue and Stabilization Act (NRSA, H.R. 5678). H.R. 5679 would create a legal duty for mortgage servicers to engage in reasonable loss mitigation activities before foreclosing. Waters, in a release, said she held off introducing the measure after a November 2007 hearing by her subcommittee on housing and community opportunity. The subcommittee heard complaints of homeowners, homeownership counselors, Legal Aid attorneys, and local government officials about the difficulties encountered in getting “prompt, reasonable action” by mortgage servicers. “At that time, however, I was still prepared to withhold final judgment on industry efforts,” Waters said, “I wanted to confirm whether the industry—as it repeatedly claimed—was still in the ramping-up phase of far more decisive and collective voluntary action by the mortgage servicers, especially through the much publicized and Bush Administration-endorsed HOPE NOW Alliance.” However, she called the results of those efforts “unimpressive.” Waters’ second bill, NRSA, would give states and large cities the resources to save devastated neighborhoods by purchasing, rehabilitating, and reselling/re-renting foreclosed and abandoned properties. Use the resource link below for more bill details.

CU volunteers blanket Cherry Blossom Run

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WASHINGTON (4/4/08)—Credit Union National Association (CUNA) volunteers will be pulling together as a team this weekend to help approximately 12,000 runners stow and retrieve their valuables during the Credit Union Cherry Blossom 10-Mile Run on Sunday, April 6. Credit Union Miracle Day, Inc. (CUMD), sponsor of the 36th annual Credit Union Cherry Blossom Ten Mile Run, has exceeded its 2008 goal of raising $1 million to benefit Children’s Miracle Network and its 170 affiliated children’s hospitals nationwide. Of the 12,000 runners this weekend, hundreds are congressional staffers expected at the event, which is featured as part of the National Cherry Blossom Festival. Also, 4,800 credit union members are signed up to run. CUNA will staff the "gear check" tent before, during and after the run. In addition, 50 credit unions are sending nearly 700 volunteers to help with the race. Also providing volunteer services at the meet will be staff members from the National Credit Union Foundation, the American Association of Credit Union Leagues, and the Association of Corporate Credit Unions. With this year’s donation, CUMC will have contributed a total of $3.6 million to children’s hospitals since its inception in 2001. “We are very pleased with these results which clearly demonstrate our commitment to helping children who need it most to get quality medical treatment,” said Juri Valdov, chairman of CUMD. “It reconfirms the credit union philosophy of people helping people and the credit union cooperative spirit. Through our 130 partnering credit unions and business partners in 30 states, we were able to hit this mark,” Valdov added. He is CEO of Northwest FCU, Herndon, Va.

FOIA request seeks bankers role in Blueprint

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WASHINGTON (4/4/08)—The Credit Union National Association (CUNA) is seeking written information on what role bank trade associations may have attempted to take to influence the U.S. Treasury Department’s recently unveiled Blueprint for a Modernized Financial Regulatory System. Specifically, CUNA has filed a request under the Freedom of Information Act (FOIA) asking Treasury to disclose bankers’ attempts to affect the Treasury’s plan in ways intended to put credit unions out of business. The request was submitted on behalf of Credit Union Magazine, which intends to publish a story based on its findings. The CUNA request covers but is not limited to information concerning the American Bankers Association, the Independent Community Bankers of America, and America’s Community Bankers, which has now merged with the ABA. “There can be no question that the information sought would contribute to the public’s understanding of government operations and activities, permit the public to better petition the government to redress grievances, and is in the public interest,” says the FOIA request. “The Treasury’s release of the Blueprint has been the subject of widespread reporting in the media, subject to widespread public outrage, and also subject to speculation regarding whether special interests influenced its development and writing,” it adds. The letter goes on to note the extensive media coverage of the impact that the Blueprint would have on America’s credit unions and on speculation concerning special interest group influence on the Blueprint’s formulation. The list includes: Wall Street Journal, The New York Times, the Associated Press, the Boston Globe,the Philadelphia Inquirer, Forbes, The Washington Post, Politico, Congress Daily, PBS’s Nightly Business Report, and Bloomberg Television.