Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

Washington Archive

Washington

Inside Washington (05/04/2010)

 Permanent link
* WASHINGTON (5/5/10)--The Office of the Comptroller of the Currency (OCC) and financial institutions will likely face an uphill battle with Congress over federal preemption. The Senate regulatory reform bill--slated for debate this week--does not eliminate preemption, but requires the OCC to complete several legal steps before exempting national banks from complying with state law. One step includes proving that an existing federal rule addresses the issue a state aims to rectify (American Banker May 4). The Senate bill would revive the Barnett Supreme Court standard, which allowed the OCC to preempt state laws case-by-case. State regulators are pushing to revise the bill so that its language says state laws cannot be preempted unless they interfere with a national bank’s operations. Sen. Tom Carper (D-Del.) is working on an amendment to address the industry’s concerns about preemption. Financial observers also note that because community banks and other financial institutions have more pressing lobbying priorities, the OCC may be alone in its fight against federal preemption ...

Bank lending remains restrained Fed reports

 Permanent link
WASHINGTON (5/5/10)--The Federal Reserve’s survey of lending practices found that while “most banks kept their lending standards unchanged in the first quarter,” a number of banks “further tightened many terms on loans to businesses and households.” “For almost all loan categories for which the survey indicated a further net tightening of credit standards, the fraction of banks that reported having done so edged down and in a few categories banks eased standards, on net,” the Fed reported. “Modest net fractions” of banks “continued to tighten standards and terms on credit card loans,” the Fed continued. However, the Fed did find that many of the banks that reported easing their lending standards were larger banks, with those banks mainly easing their loan terms for “commercial and industrial loans to large and middle-market firms.” The Credit Union National Association (CUNA) has repeatedly promoted lifting the current cap on credit union member business lending to 25% of a credit union’s assets. According to CUNA estimates, such a lift would result in $10 billion in new capital for small businesses and create as many as 100,000 new jobs at no cost to American taxpayers. While the amount of small business loans would double to a total of 10% if the MBL cap is raised, the banking industry would still dominate the business loan market, with 90% of the total share of loans, CUNA has said. In a recent letter to their colleagues, a number of legislators said that "any future jobs-creation legislation that the House considers" should include MBL legislation. For the Fed release, use the resource link.

CUNA urges CU action against interchange amendments

 Permanent link
WASHINGTON (5/5/10)--The Credit Union National Association (CUNA) on Tuesday urged credit union advocates to contact their U.S. Senators and ask them to oppose amendments to financial regulatory reform legislation that would affect the debit and credit card system, Specifically, Sen. Richard Durbin (D-Ill.) filed a number of amendments on Monday, two of which are opposed by credit unions. The first amendment would permit merchants to set a minimum or maximum transaction amount for payment by card, offer discounts for use of cash, check, debit card or stored-value card and offer discounts to customers to use a competing card network. That amendment is co-sponsored by Sens. Patrick Leahy (D-Vt.) and Mary Landrieu (D-La.). A separate amendment would direct the Federal Reserve to issue regulations to govern interchange fees charged for debit card transactions, to assure they are what the proposed language terms "reasonable and proportional" to the cost incurred in processing the transaction. According to CUNA, these amendments “are intended to disrupt the card payment system, with the goal of reducing the merchants’ financial responsibility for the benefits received from the card payment system.” In a release, CUNA said that it generally opposes “any amendment which would expand the scope of S. 3217, including new regulation of the card payment systems.” CUNA has provided a sample letter that can be sent to Senators, and hopes that this grassroots action will lead to at least 150 separate contacts with each Senator. (See related story: Reid pushes up timeline for reg reform vote.) For more on the CUNA action alert, use the resource link.

Reid pushes up timeline for reg reform vote

 Permanent link
WASHINGTON (5/5/10)--Sen. Harry Reid (D-Nev.) on Tuesday said that the U.S. Senate would finish the debate on financial regulatory reform by the end of next week, “one way or the other.” In opening statements delivered before the Senate on Tuesday, Reid also said that he would encourage his Senate Democratic colleagues to support a simple majority vote on the pending legislation, rather than requiring the 60 vote threshold that has become more common in the Senate. Under simple majority rules, legislation or amendments would only need 50 or more votes to count as passed. S. 3217, the Restoring American Financial Stability Act, would affect the credit union system by limiting the National Credit Union Administration's (NCUA) regulatory authority to credit unions with under $10 billion in assets. The regulatory reform package would also address many issues facing the broader financial services industry. Debate on a number of amendments began yesterday, and that debate should continue today. Among the amendments introduced for debate on the floor yesterday was a CUNA-supported amendment offered by Senator Olympia Snowe (R-Maine) which would eliminate a section of the bill requiring the collection of deposit account data. Other amendments which may be debated in the coming days include amendments that would establish a national usury ceiling, further regulate payday lending, and eliminate a payday loan alternative program from the bill. CUNA is also watching for a potential amendment that would add the NCUA to a proposed Financial Stability Oversight Council and give members of the Council greater ability to review regulations issued by the new consumer bureau. Amendments that would address interchange fees and exempt auto dealers from the scope of the consumer bureau regulation and enforcement may also be filed, and additional amendments could be filed as the debate continues to move forward. (See related story: CUNA urges CU action against interchange amendments.)

Compliance Internet gambling rules take effect June 1

 Permanent link
WASHINGTON (5/5/10)--The Credit Union National Association has confirmed with Federal Reserve Board staff that the Unlawful Internet Gambling Enforcement Act (UIGEA) regulations are on track for mandatory compliance on June 1. The Fed and the U.S. Treasury pushed back the compliance date from Dec. 1, 2009 to June 1, 2010 just days before credit unions were originally scheduled to comply with the new requirements. However, no additional delays are on the horizon. The rules require credit unions and other financial institutions to establish and implement policies and procedures to identify and block restricted internet gambling transactions, or rely on those procedures established by the payments system. “Generally speaking, credit unions must have policies and procedures in place that demonstrate that they are exercising enhanced due diligence when opening business accounts to prevent illegal Internet gambling operations from setting up accounts at the credit union,” says CUNA director of compliance information Valerie Moss. “Credit unions must also have policies and procedures to prevent credit/debit card transactions from being made to unlawful Internet gambling operations – this applies to all accounts, not just business account owners,“ she added. The regulations designate payment systems that could be used in connection with a restricted Internet gambling transaction: automated clearing house (ACH) systems, card systems, check collection systems, money transmitting businesses, and wire transfer systems. Participants in card systems and money transfer business operators are covered by the rule. Many participants in ACH systems, check collection and wire transfer systems are exempt from the rule. However, the exemptions are complicated and contain a number of exceptions. Therefore, most credit unions are impacted by the rules to some extent, said Moss. For CUNA’s e-Guide to the internet gambling rules, use the resource link.