Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive


Mica denounces interchange fee bill

 Permanent link
WASHINGTON (5/16/08)—President/CEO Dan Mica of the Credit Union National Association (CUNA) Thursday said legislation that would impose government controls over credit card interchange fees is bad for consumers, business, and the economy. Mica expressed credit union concerns as the House Judiciary Committee conducted a public hearing on the controversial bill, H.R. 5546, The Credit Card Fair Fee Act. Earlier this week, CUNA made the same points in a full page letter in a Capitol Hill journal. Joining with other financial services groups, CUNA urged members of Congress to reject the legislation. “CUNA opposes the bill because it would inject government controls into the market in the midst of economic uncertainty, and adversely affect consumers,” Mica said in the statement. “Consumers stand to lose the most if it becomes law,” he added. “No one expects merchants to lower their prices because the government-controlled interchange rate is less. And financial institutions will have to find ways to cover the cost of the payment system.” Mica said the overall result is that controls would make convenient credit more expensive for consumers, and in some cases--less available. He said the interchange regulatory bill imposes unnecessary regulation over the card transaction interchange fee process by establishing an expensive government tribunal to enforce it. Mica said the system is more appropriately regulated by the market, and that government interference will harm all participants.

CUNA urges HUD to fix RESPA rules

 Permanent link
WASHINGTON (5/16/08)—The Credit Union National Association (CUNA) believes proposed rules to streamline RESPA are likely to have the opposite effect. The changes were recommended by the Department of Housing and Urban Development (HUD). CUNA said the HUD recommendations would make the settlement process more complex and inconvenient for the mortgage buyer. It made the observation in a letter to the housing agency. The letter said CUNA was especially concerned about the proposal to increase to four pages from one page the Good Faith Estimate (GFE) form. “This will not benefit borrowers, who we feel, will be confused, overwhelmed, and possibly intimidated by the additional information,” the letter said. CUNA also stressed that whatever GFE form HUD finally adopts should include the annual percentage rate as required information. It said this would be helpful to borrowers who want to compare loan terms with other lenders. The letter also questioned the wording of a proposed rule that would require certain settlement costs on the GFE to be accurate within certain thresholds, unless there are “unforeseeable circumstances.” “CUNA requests clarification that ‘unforeseeable circumstances’ include circumstances that are unforeseeable by the lender, even if they are foreseeable by the borrower,” the letter added. Other points in the RESPA letter:
* The proposal to allow lenders to remedy violations by reimbursing borrowers for closing costs above the required threshold has merit, although we believe lenders should have 30 days, rather than the proposed 14 days, after closing to provide the reimbursement; * A requirement that lenders must ensure borrowers receive a notice of loan rejection within one day after the decision is not sufficient time to allow the lender to verify the borrower has received the notice; and * CUNA urges HUD to coordinate with the Federal Reserve Board to ensure that it is consistent with related mortgage loan regulations to be revised by the Fed.

Data collection on NCUA agenda

 Permanent link
ALEXANDRIA, Va. (5/16/08) The National Credit Union Administration’s (NCUA’s) Outreach Task Force (OTF) recommendation on data collection on credit union membership profiles is among the items on the agency’s open board meeting agenda for May 22. The issue of credit union senior executive compensation is not on the agenda as had been previously reported by News Now. However, other aspects of the task force report, including executive compensation, could be discussed. At its April open meeting, the NCUA board proposed action on the first of the recommendations of its OTF, which was to change the agency’s low-income designation to consider different income patterns in metropolitan area. Also on the May agenda:
* Board Briefing: Proposed Rule - Part 706 of NCUA’s Rules and Regulations, Unfair or Deceptive Acts or Practices; * Proposed Rule: Part 701 of NCUA’s Rules and Regulations, Interpretive Ruling and Policy Statement (IRPS) 08-2, Criteria to approve service to underserved areas; and; * Proposed Rule: Part 721 of NCUA’s Rules and Regulations, Incidental Powers.
Mary Dunn, deputy general counsel of the Credit Union National Association (CUNA), said Friday that CUNA will be closely scrutinizing NCUA’s proposed action on underserved areas.

Inside Washington (05/15/2008)

 Permanent link
* WASHINGTON (5/16/08)--An expansion of the Federal Reserve Board’s powers could threaten its independence--which is integral to the central responsibility of the Fed, said Paul Volcker, former Fed chairman, in a speech before the Joint Economic Committee Wednesday. Issues facing the troubled financial market need to be resolved through legislation, he said. The Federal Reserve Board recently expanded its “safety net” to help those strained by the problems in the market, that included providing direct support for Bear Stearns Co., which nearly collapsed last month. The Fed’s intervention was justified because of “extreme and unsettling market disturbances,” Volcker said, but he questioned how far regulation and supervision should go. He encouraged cooperation, saying “the critical pressures on our financial markets are not unique, nor can an approach to dealing with those pressures be successful in isolation.”... * WASHINGTON (5/16/08)--Changes to the Federal Reserve Board’s remittance plan, announced Tuesday, could open the door for banks to offer their corporate clients new electronic services. By 2010, the Fed plans to allow domestic transfers and will make them compatible with European standards (American Banker May 15). The changes would align the Fed with the Society for Worldwide Interbank Financial Telecommunications and the Clearing House Interbank Payments System. The Fed also plans to insert a 10,000-character data field into the format. Bankers have argued for a long time that allowing remittance details in transfers would encourage more companies to compensate each other electronically. George Doolittle, managing director at Wachovia Corp., said the changes could revamp the way transfers are used. Banks could manage the liquidity of their corporate clients and could package remittances from travelers and immigrants for a quick settlement ... * WASHINGTON (5/16/08)--Promoting thrift among consumers was the focus of Credit Union National Association General Counsel Eric Richard’s remarks during a conference this week in Washington with members of a coalition of consumer advocates, public policy groups and academics looking at the issue.
Richard’s address to the coalition, organized by the Institute for American Values, centered on a recently released 68-page report, "For a New Thrift: Confronting the Debt Culture,” which prominently featured credit unions. The report recommended combating an over-dependence on credit through credit unions, which offer lower-cost financial products. The report also backed expansion and innovation for credit unions. Organizations mounting the effort include: the Institute for American Values, the Institute for Advanced Studies in Culture, the New American Foundation, Public Agenda, the Consumer Federation of America and the National Federation of Community Development Credit Unions. The conference, “Confronting a Debt Culture: A National Conference,” concluded Tuesday. Other speakers included Rep. Jim Cooper (D-Tenn.); Kenneth W. Eiden, CEO, Prospera CU, Appleton, Wis.; and Barbara Dafoe Whitehead, co-director of the National Marriage Project at Rutgers University and author of "For a New Thrift: Confronting the Debt Culture.” (Photo provided by the Credit Union National Association) ... * WASHINGTON (5/16/08)--The nomination hearing for Steven Preston, President Bush’s top choice to lead the Department of Housing and Urban Development (HUD), has been scheduled for Tuesday with the Senate. The Credit Union National Association has said it supports Preston’s nomination for the position because he could bring several key problem-solving skills to the agency. Preston has been the head at the Small Business Administration for two years. Former HUD chief Alphonso Jackson’s resignation was effective May 9 ...