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Fryzel nomination moves forward

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Click to view larger image NCUA Board nominee Michael Fryzel before his June 3 Senate Banking Committee hearing on Capitol Hill. (Photo provided by CUNA)
WASHINGTON (6/26/08)--The Senate Banking Committee Wednesday approved the nomination of Michael Fryzel for a position on the National Credit Union Administration (NCUA) board. Fryzel was with the Illinois Department of Financial Institutions from 1977 to 1989 and headed the agency from 1982 to 1989. Integral to that job, according to his resume, was the licensing and regulation of more than 700 state-chartered credit unions with assets exceeding $4.3 billion. Upon leaving that position, Fryzel founded his private law practice, the Law Offices of Michael Fryzel, which specializes in financial regulatory and real estate law. At his nomination hearing before the committee early this month, Fryzel said his priority as a federal regulator would be oversight of the safety and soundness of credit unions. He said consumers not only place their money in credit unions, they also place their trust. Fryzel also said he would work to protect the rights of consumers through such things as plain language disclosures, but underscored that credit unions "naturally gravitate toward giving consumers a fair deal." He said as NCUA chairman he would maintain a "healthy and dynamic, arms-length" relationship with the industry. There are, however, two remaining steps before Fryzel can replace JoAnn Johnson as head of the NCUA. His nomination to the NCUA board must be confirmed by the full Senate, and then President George W. Bush must designate him as chairman. Johnson’s term ended last August. Both actions may be accomplished before the end of the week.

Bush to nominate new SBA head

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WASHINGTON (6/26/08)--President George W. Bush Wednesday announced his intention to nominate a new administrator for the Small Business Administration (SBA). The President said he will nominate Santanu “Sandy” K. Baruah, who is currently assistant secretary for economic development at the U.S. Department of Commerce, for the top SBA spot. According to a White House press release, Baruah has held several positions at the Commerce Department. Prior to his current position, he served as chief of staff of the economic development administration at Commerce. Earlier he served as deputy assistant secretary for economic development there. The SBA vacancy was created when Steven Preston was tapped to become the new leader at the U.S. Department of Housing and Urban Development. Prior to being sworn in at HUD, Preston spent two years at the helm of the SBA.

Lobbying Strike while the summer is hot says Mica

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WASHINGTON (6/26/08)—Even Washington lobbyists might feel that warm-weather tug to slow down and kick back, but summer may be the best time to ramp up efforts to get one’s message across to federal lawmakers, according to Dan Mica, president/CEO of the Credit Union National Association (CUNA). In his most recent monthly K Street Insider column, Mica wrote of lobbyists, “While many of us would like to sit back and enjoy the summer (congressional) recess, the fact is we need to be mobilizing our local lobbying forces.” The CUNA leader, a former congressman, said that it is particularly true for groups with a strong grassroots constituency that they should try to get members out to every local political and public event. “As a former (House) member, I can tell you personally that representatives, senators and their staffs take special note of organizations that make constant appearances at local district events,” wrote Mica. That will be particularly true the summer of this current election year, he added, at time when federal lawmakers “They know more than ever that they want your vote.” Mica said every organization needs to have a “T-shirt message,” one that can be “passed on at every town hall meeting, barbecue or ribbon-cutting.” “ A simple ‘support our credit unions’ or ‘take care of our firefighters’ is enough to make an impact, Mica suggested, adding, “ If a lobbying group stations its members at every event during a public campaigning day, the group will get noticed.” Mica appears regularly in the Capitol Hill publication The Hill as a monthly guest columnist for its “K Street Insiders” column.

Changes to UIGEA voted down in committee

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WASHINGTON (6/26/08)—The House Financial Services Committee Wednesday rejected a bill that would have significantly revised the implementation of the controversial Unlawful Internet Gambling Enforcement Act (UIGEA). The committee voted down the Payment System Protection Act (H.R. 5767), which would have forced the U.S. Treasury Department and the Federal Reserve Board to set aside their current proposal to implement the law on Internet gambling prohibitions. The bill was introduced by Rep. Barney Frank (D-Mass.), who is chairman of the financial services panel. H.R. 5767 would have required the implementing agencies to hammer out a definition of what constitutes unlawful Internet gambling and report it to Congress. Then, if Congress had no objections to the definition, the Treasury and Fed would go ahead and draw up the implementing rules for UIGEA. A proposed amendment, which was defeated on a 32-32 vote, would have required the Treasury Department to compile and maintain a list of unlawful Internet gambling businesses, so that credit unions and other financial institutions would actually know whose transactions should be blocked. Under the Internet gambling law, financial institutions must establish and implement policies and procedures to identify and block restricted transactions, or rely on those established by the payments system. The Credit Union National Association (CUNA) has voiced concerns that the provisions of the law could swamp credit unions and other financial institutions with compliance burdens. CUNA also opposes the agencies' draft implementation of the law, saying it lacks clarity and sufficient definition of terms. "We are obviously very disappointed that the committee was unable to report this important legislation to the full House for its consideration,” said Ryan Donovan after the Wednesday voice vote. Donovan is CUNA vice president of legislative affairs. “The proposed regulations represent an impossible compliance burden for credit unions and we will continue to work with Chairman and others on the Committee to resolve this issue.”

Inside Washington (06/25/2008)

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* WASHINGTON (6/26/08)--Two bills that the Senate and House are expected to pass this week would require financial institutions to fork over hundreds of millions of dollars to help the Internal Revenue Service (IRS) collect business income tax (American Banker June 25). Financial institutions also would need to report their business customers’ credit card income--which would help the government collect $9.8 billion of revenue over 10 years. The Senate bill was expected to be approved Tuesday evening. Sen. Mike Crapo (R-Idaho) said the legislation would require credit card system upgrades and could harm small businesses ... * WASHINGTON (6/26/08)--Legislation to help banks and credit unions keep relationships with money-services businesses (MSBs), and exonerate financial institutions holding these accounts from liability, passed through the House Financial Services Committee Tuesday (American Banker June 25). The measure would allow MSBs to certify themselves as having anti-money laundering controls, based on regulations developed by the Treasury Department. Starting several years ago, financial institutions dropped many account relationships with money-services businesses because of the oversight burden imposed by Bank Secrecy Act rules. Each state except Montana requires MSBs to register, but states’ varied requirements hinder consistency in reporting information ... * WASHINGTON (6/26/08)--The Securities and Exchange Commission (SEC) will encourage investment funds to use criteria to such as risk and liquidity, instead of credit rankings, to prevent losses in securities. The agency will propose that references to credit ratings be changed to “liquidity, volatility or probability of loss” (American Banker June 25). Eliminating the credit references would require companies to undergo more due diligence to determine if assets are investment grade, said Erik Sirri, head of the SEC division of trading and markets. Sirri recently spoke at an American Enterprise Institute conference in Washington ...