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Inside Washington (06/09/2008)

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* WASHINGTON (6/10/08)--The Office of Federal Housing Enterprise Housing Oversight (OFHEO) announced the first quarter minimum and risk-based capital classification for Fannie Mae and Freddie Mac yesterday. Fannie’s core capital of $42.7 billion exceeded the OFHEO’s capital requirement by $5.1 billion. Freddie Mac’s core capital of $38.3 billion exceeded OFHEO’s capital requirement by $6 billion. Fannie Mae’s risk-based capital of $47.7 billion exceeded the requirement by $24.6 billion. Freddie Mac’s risk-based capital of $42.2 exceeded the requirement by $16.1 billion. All figures were as of March 31. The OFHEO-directed capital requirement is the amount of capital the enterprise is required to maintain to compensate for increased operational risks ... * WASHINGTON (6/10/08)--Federal bank and thrift regulatory agencies announced the agenda and keynote speaker for the 2008 Interagency Minority Depository Institutions (MDI) National Conference July 16-18 in Chicago. The theme for this year will be “Know Your Business, Grow Your Business.” The speaker will be Robert L. Johnson, founder and chairman of the RLJ Companies. During the conference, representatives from the Federal Deposit Insurance Corp., the Federal Reserve Board, the Office of the Comptroller of the Currency and the Office of Thrift Supervision will address issues MDIs face ... * WASHINGTON (6/10/08)--Eleven credit union professionals and volunteers from Minnesota traveled to Washington, D.C., June 3-5 to meet with their federal representatives to discuss credit union issues and concerns. During a hill briefing at the Credit Union National Association (CUNA), Dan Mica, CUNA president/CEO, thanked attendees for making the trip and emphasized the importance of constituent contact with elected officials. The hill visits included meetings with Minnesota Rep. John Kline, Sen. Amy Klobuchar, Rep. Betty McCollum, Rep. Jim Oberstar, Rep. Collin Peterson, and Rep. Tim Walz. From left are: Kline; a member of Kline’s staff; Jeff Schwalen, president, Hiway FCU, St. Paul; and Harry Wobschall, board chairman, First Alliance CU, Rochester. (Photo provided by the Minnesota Credit Union Network). Georgia and Michigan leagues will hike Capitol Hill this week also, focusing on the Credit Union Regulatory Improvement Act (CURIA) and an interchange bill ... * WASHINGTON (6/10/08)--Federal Reserve Bank of New York President Timothy Geithner Monday called for more central bank authority over financial institutions in markets (The Wall Street Journal June 9). Today’s risk-management framework focuses too much on an individual firm’s mistakes, instead of mistakes correlated from a group of firms, he said. The current regulatory structure leaves opportunities for arbitrage and evasion, and creates risk of gaps in authority and knowledge, he added. Regulatory policy should be broadened beyond supervision of firms and oversight should be extended beyond banks, Geithner said ...

NCUA details data collection plans for CUNA

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WASHINGTON (6/10/08)—The Credit Union National Association (CUNA) and its relevant committees engaged in an information session with the National Credit Union Administration (NCUA) on the data collection initiative the agency adopted at its last open board meeting. For more than an hour, NCUA Executive Director Len Skiles and NCUA Senior Attorney Tonya Green discussed the details behind the creation of the plan, as well as how the information will and will not be used. Skiles indicated that the NCUA has been involved with the underlying issue of how it can adequately and authoritatively respond to requests for information from Congress and the Government Accountability Office as far back as 1991. He noted that when the agency only produced anecdotal examples of requested information and provided limited membership increases in underserved areas, some members of Congress, their staff, and the GAO were critical of NCUA’s failure to provide statistically valid information on who credit unions serve. Arguably, Skiles indicated, NCUA, as the regulator of federal credit unions, from a regulatory standpoint should provide the information if considered important and helpful to Congress, the NCUA and federal credit unions and if the collection of the information is feasible. The NCUA officials reiterated that the agency will only publish aggregated data, data will be collected only from federal credit unions, and that the information will have no role in credit union examinations. The data collection will not begin until January 2009 and not be completed for 24 months. NCUA’s Skiles and Green also addressed concerns regarding the regulatory burden of the information gathering process for credit unions. The audio conference was hosted by CUNA’s Federal Credit Union Subcommittee and its Chairman, Marc Schaefer. Joining the call were members of the CUNA Governmental Affairs Committee, Small Credit Union Committee, Community Credit Union Committee, and the Examination and Supervision Subcommittee. Contact CUNA Deputy General Counsel Mary Dunn at with questions regarding the NCUA data collection plan. For more on all aspects of the agency’s plan, use the resource link below to read a complete summary of the audio conference.

House to vote on CUNA-backed CU resolution today

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WASHINGTON (6/10/08)—The Credit Union National Association (CUNA) strongly endorses a House resolution honoring the 100th anniversary of the founding of the first state-chartered credit union, St. Mary's Cooperative Credit Association of Manchester, N.H. Calling the establishment of St. Mary’s “the birth of the American credit union,” the House resolution notes the following among the contributions of the credit union system:
* “Whereas St. Mary's Cooperative Credit Association and other credit unions created as a result of the passage of the Federal Credit Union Act played an instrumental role in helping hard-working Americans recover after the Great Depression; * "Whereas credit unions have consistently carried on the traditions set by St. Mary's and exemplified the American values of thrift, self-help, and volunteers, carving out a special place for themselves among the Nation's financial institutions; * "Whereas America's Credit Union Museum, located on the site of America's first credit union, maintains a mission of `educating present and future generations on the benefits of cooperative self-help efforts to promote thrift and sensible use of credit' and preserves the history and tradition of America's credit unions; * "Whereas credit unions operate with the credo, `Not for profit, not for charity-but for service' and have consistently reflected this philosophical tradition and the cooperative spirit of `people helping people' that gave birth to the Federal Credit Union Act…”
The House commendation (H.RES.1145) goes on to say the House resolves that it recognizes the 100th anniversary of the founding of St. Mary's Cooperative Credit Association, the `Bank of the People', and the birth of the American credit union.

Preston sworn in as HUD chief

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WASHINGTON (6/10/08)—Steven C. Preston was sworn in Monday as secretary of the U.S. Department of Housing and Urban Development (HUD). At the ceremony, President George W. Bush praised Preston’s understanding of financial markets and management skills, and White House Chief of Staff Josh Bolten administered the oath of office. The Credit Union National Association (CUNA) has called Preston, who headed the U.S. Small Business Administration for two years prior to the HUD assignment, an "effective and fair administrator" and welcomed news of his confirmation as HUD leader last week. Attending the ceremony on behalf of the National Credit Union Administration (NCUA), Vice Chairman Hood congratulated Preston on his appointment and noted the important role HUD plays in the credit union community. According to an agency release, Hood further recognized Preston’s focus on initiatives aimed at meeting the affordable housing needs of underserved urban and rural markets – the cornerstone of the credit union community.

Green incentives for lenders hearing this week

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WASHINGTON (6/10/08)—There is a hearing scheduled this week on a bill that would provide incentives to lenders and financial institutions to provide lower interest loans and other benefits to consumers who build, buy, or remodel their homes and businesses to improve their energy efficiency. The House Financial Services Committee hearing is Wednesday and a witness list will be available later this week. Its focus is H.R. 6078, the Green Resources for Energy Efficient Neighborhoods Act of 2008. That bill was introduced May 15 by Rep. Ed Perlmutter (D-Co.) and sports 22 co-sponsors, including Rep. Barney Frank (D-Mass.), the chairman of the committee. Perlmutter, in a release, has said of his bill, “This legislation proves that it is easy to be green. This bill helps revitalize our economy by making energy efficiency practices more affordable, accessible and achievable by consumers, businesses and government entities.” The only other hearing of particular note to credit unions scheduled in the House this week is on H.R. 5840, the Insurance Information Act of 2008. That bill would create a federal Office of Insurance Information within the Department of the Treasury to provide advice and expertise on insurance policy to the Administration and to Congress. The hearing will be conducted by the House Financial Services subcommittee on capital markets, insurance, and government-sponsored enterprises. It was introduced in April by the subcommittee chairman, Rep. Paul Kanjorski (D-Pa.) and has four co-sponsors. A witness list had not been released as of Monday. Kanjorski, along with Rep. Ed Royce (R-Calif.), is also author of the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537), intended to modernize the regulatory structure of credit unions.