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CUNA raises CU issues with SBA administrator lawmaker

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WASHINGTON (7/15/09)— Sen. Mary Landrieu (D-La.), chairman of the Senate Small Business Committee, and Small Business Administrator Karen Mills invited lender groups, including the Credit Union National Association (CUNA) to a breakfast meeting to discuss creditors’ concerns with current SBA programs. CUNA Deputy General Counsel Mary Dunn, attending on CUNA’s behalf, emphasized that credit unions want to work closer with the SBA to make more loans to small businesses. Dunn raised several issues during the meeting including:
* Making permanent the SBA 7(a) loan 90% guarantees approved temporarily under the 2008 Housing and Economic Recovery Act; * Containing fees under all SBA programs; and * Ensuring the agency has sufficient personnel to help review loan applications, handle problems, and process guarantee payments to lenders in the case of a borrower's default.
After the meeting, Dunn followed up with Landrieu and Mills, as well as Senate and SBA staff, to emphasize how credit unions can help small businesses across the country.

Inside Washington (07/14/2009)

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* WASHINGTON (7/15/09)—The House Financial Services Committee released its witness list for today’s hearing to address “Banking Industry Perspectives on the Obama Administration’s Financial Regulatory Reform Proposals.” The hearing is one in an ongoing series of examinations of issues and perspectives being held in advance of congressional action on the administration’s plan to revamp financial services regulation. Those scheduled to testify: Steve Bartlett, president/CEO of The Financial Services Roundtable; John Courson, president/CEO of the Mortgage Bankers Association; Chris Stinebert, president/CEO of the American Financial Services Association; Steven Zeisel, vice president and senior counsel of the Consumer Bankers Association; Todd Zywicki, George Mason University Foundation professor of law and senior scholar, Mercatus Center; Denise Leonard, vice president of government affairs, National Association of Mortgage Brokers; Edward Yingling, president/CEO of the American Bankers Association; and Michael Menzies, Sr., president/CEO of Easton Bank and Trust Company, on behalf of Independent Community Bankers of America. CUNA has submitted a letter for the written hearing record… * WASHINGTON (7/15/09)—An unnamed administration official told Reuters that policymakers are pondering what can be done to help stave off foreclosures for jobless homeowners who are falling behind on their payments. The July 14 article noted that the number of failing home loans has been climbing for three years as property values have declined and the unemployment rate has soared. Such a government program to help the unemployed, the source said, would be in alignment with other administration measures to help jobless Americans struggling through the recession. However, the plan—still definitively in the construction stage—presents policy challenges and possible pitfalls. One hazard could be setting up an environment that distorts the housing market and works against its recovery… * WASHINGTON ( 7/15/09)— The Securities and Exchange Commission (SEC) has launched an effort to bolster its enforcement efforts, better protect investors, and assure market integrity—actions mostly in response to the current financial crisis and the biggest case of investment fraud in U.S. history for which Bernard Madoff has received a 150-year prison sentence. The SEC was widely criticized for its failure to detect Madoff’s massive Ponzi scheme despite the existence of warning signs that were around, critics say, for many years. New SEC Chairman Mary Schapiro has said the agency has strengthened and accelerated its enforcement efforts and installed a new enforcement director. The SEC has also recently acted to restrict short-selling in down markets, strengthened its mutual fund oversight, shored up scrutiny of investment advisers, and eased the process for shareholders to seat directors on company boards. (Associated Press July 14) Related to Ponzi schemes, named after the legendary swindler Charles Ponzi and within which investors are defrauded to repay earlier investors, Telegraph.co.uk reported the following yesterday: Madoff was moved to the same U.S. Penitentiary in Atlanta that Ponzi spent some time…

Corp CU program discussion added to NCUA agenda

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ALEXANDRIA, Va. (7/15/09)--Possible revisions to the National Credit Union Administration’s (NCUA) Temporary Corporate Credit Union Liquidity Guarantee Program (TCCULGP) will be yet another item for discussion at the NCUA’s monthly board meeting, scheduled for Thursday. The NCUA recently reported that the majority of corporate credit unions have agreed to take part in the TCCULGP. The Credit Union National Association also believes that the board could discuss the financial impact of potentially allowing credit unions to purchase their own private insurance in lieu of participation in the NCUA’s National Credit Union Share Insurance Fund. However, NCUA representatives have not confirmed that this item will be on the list of topics for discussion. The agenda for the upcoming meeting also includes scheduled discussions of final rules on credit union reporting and Truth in Savings Act disclosures, interest rate ceiling determinations under Section 107(5) of the Federal Credit Union Act, and the NCUA’s monthly Insurance Fund Report.

NCUA mortgage loan amendments open for comment

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WASHINGTON (7/15/09)--The Credit Union National Association (CUNA) has issued a regulatory comment call on an interim National Credit Union Administration (NCUA) rule that would allow federal credit unions that take part in the U.S. Treasury’s home loan modification program to modify second mortgage loans to match the terms of modified first mortgages. Under the final rule, credit unions will be able to modify a second mortgage to match the term of a modified first mortgage--even if it is extended beyond 20 years. The NCUA currently allows credit unions to extend first mortgage loans to as long as 40 years. CUNA is looking to generally gauge public sentiment on the proposed rule, and is specifically asking if the interim rule should apply to all mortgage modifications. CUNA is also seeking industry input on whether or not the current maturity limit on second mortgages should be permanently removed. The rule is effective as of June 24, 2009. The NCUA will accept comments on the rule until August 24, and the NCUA has previously said that the final rule could be amended, if necessary. Comments are due to CUNA by August 12. For more information, use the link.

CUNA supports CFPA creation with caveats

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WASHINGTON (7/15/09)--In a Tuesday letter sent to House Financial Services Committee Chairman Barney Frank (D-Mass.), the Credit Union National Association (CUNA) said that while it supports the creation of the proposed Consumer Financial Protection Agency (CFPA), “examination, supervision and enforcement” of the consumer protection rules should be left “to each credit union’s prudential regulator.” The CFPA should have “full authority to write the rules for consumer protection,” the letter added. The letter followed a Tuesday briefing for Democratic members of the House Financial Services Committee by CUNA and other industry groups. Consumer groups briefed the members following CUNA's session. The briefing was scheduled in advance of House hearings on the government's proposals to revamp the financial services regulatory structure. Additional House hearings on regulatory restructuring are scheduled for later in the week. In the letter and its remarks to House members, CUNA also expressed credit union concerns over proposed mandates that would require credit unions to “first offer a member a ‘standard’ financial product” before they can offer that member a product that may be better suited to his or her financial needs. CUNA also urged legislators to ensure that the regulatory streamlining and modernization promised by the CFPA proposal “becomes a reality” and to address the issue of federal preemption of state consumer laws so that there is one set of rules consumers can become knowledgeable about and financial institutions need to comply with. CUNA made clear its intent that it was not dismissing the proposed agency out of hand as most other groups have done, but that it wants to participate in the policy dialogue to protect credit unions' interests. CUNA also spoke in favor of enlarging the proposed CFPA governance board beyond the planned five members, saying that the board should include space for “industry representatives, a state or federal credit union regulator,” and, potentially, a state consumer agency representative. CUNA’s commentary was also sent to other House Financial Services Committee members as well as Senate Banking Committee Chairman Christopher Dodd (D-Conn.), Treasury Secretary Timothy Geithner, and Treasury Assistant Secretary Michael Barr. Barr in prepared testimony delivered before the Senate Banking Committee on Tuesday said that “a new agency with a focused mission, comprehensive jurisdiction, and broad authorities” would be the only way to ensure that both “consumers and providers” benefit from “high and consistent standards and a level playing field across the whole marketplace.” The CFPA will also “consolidate existing regulators and authorities” rather than simply creating a “new layer of regulation,” Barr added. One such consolidation would be a single federal mortgage disclosure, Barr said. Barr has recently indicated that all financial institutions would receive the same treatment under the CFPA, regardless of their composition or charter. Noting that credit unions played little to no role in the genesis of the current financial crisis, Dodd during the Senate committee hearing indicated that there could be a lack of “willingness” for treating all financial institutions in the same manner.