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 (07/31/2008)

 Permanent link
* WASHINGTON (8/1/08)--The Federal Housing Finance Agency (FHFA), the new agency that will regulate Fannie Mae, Freddie Mac and the Federal Home Loan Banks, has been established as a result of a housing bill President Bush signed into law this week. Aside from watching over the government-sponsored enterprises, the agency has to create standards to govern internal audit systems, internal controls, interest-rate-risk management, market risk management and liquidity adequacy (American Banker July 31). The Office of Federal Housing Enterprise Oversight (OFHEO), which is currently Fannie and Freddie’s regulator, will continue for one year with limited capacity. OFHEO and the Finance Board will transfer their employees to the FHFA. James Lockhart, former OFHEO director, will head the FHFA ... * WASHINGTON (8/1/08)--The Securities and Exchange Commission extended the restrictions on short sales for 17 Wall Street firms late Tuesday (American Banker July 31). The restrictions will continue through Aug. 12, giving staff 10 days to review data on the restrictions’ effect. The agency said the order will not be extended after Aug. 12 ... * WASHINGTON (8/1/08)--The Federal Deposit Insurance Corp. (FDIC) has issued a financial institution letter with final guidance on the Supervisory Review Process of Capital Adequacy (Pillar 2) under the Basel II Advanced Capital Framework. The guidance takes effect Sept. 2 ...

CUNA-sought changes included in student lending bill

 Permanent link
WASHINGTON (8/1/08)—Two changes sought by the Credit Union National Association (CUNA) to a federal higher education bill were included in a Conference Report prepared for a final vote in Congress. The changes involve provisions in the original bill that could adversely affect university-sponsored credit unions. The bill, the Higher Education Opportunity Act, reauthorizes the Higher Education Act of 1965 for the first time since 1998, making significant amendments to the law that governs federal higher education programs, including financial assistance for students. The House and Senate have previously approved slightly different versions of the bill and a conference committee prepared a compromise “conference report” version of the legislation. The House approved the compromise Thursday and the Senate was expected to do the same as soon as last evening. The bill requires lenders and colleges to adopt strict codes of conduct for their student lending programs. A concern was expressed that the bill, as originally passed by the House, would prohibit a lender from using the name of the educational institution in marketing the lender’s private educational loans. “If enacted, this may have presented university-sponsored credit unions with a dilemma,” explained Ryan Donovan, CUNA vice president of legislative affairs, Thursday. “We sought and received language that should provide credit unions that are named for a university sufficient latitude to market their student loans-- provided that they do not imply that the loan is made by the university and not the financial institution,” he said. Also, CUNA won for credit unions an exemption to a 50% rule that the act granted national and state-chartered banks. Specifically, the bill imposes a 50% limitation stating that an eligible lender cannot have as its primary credit function the making or holding of federal student loans. Under the House-approved version of the bill, Federal Family Education Loan Program (FFELP) loans may not represent more than 50% of a lender’s consumer credit loan portfolio, including home mortgages. The bill provided an exemption for national banks with assets under $1 billion and CUNA secured that exemption for credit unions. The House approved the compromise bill Thursday by a 380 to 49 vote. The Senate was expected to consider the conference report on Thursday evening.

The Mica Minute CUs Are Safe and Sound

 Permanent link
WASHINGTON (8/31/08)--The safety, soundness and strength of credit unions--backed by federal insurance--is outlined in Dan Mica’s latest “Mica Minute” video, posted on the Internet, as well as on the Credit Union National Association (CUNA) website. In the video, Mica explains how recent news reports on the failure of banks urged consumers to be sure to save their money in “banks insured by the FDIC.” Mica points out that those reports left out the fact that virtually all credit unions are also backed by federal insurance. Click on the image above to view the YouTube video. Those unable to access YouTube can watch the video using the link below.

Bankers FOM resolution plan due Aug. 20

 Permanent link
WASHINGTON (8/1/08)— The American Bankers Association and other banker plaintiffs have until Aug. 20 to file their brief addressing recommendations to the court for a resolution to the recently decided field-of-membership lawsuit in Pennsylvania. The National Credit Union Administration (NCUA) and the credit union defendants have 15 days after the bankers respond to file their reply brief. The U.S. District Court, Middle District of Pennsylvania ruled against the NCUA in July in a bankers’ lawsuit against the agency’s decision granting a six-county area community credit union field-of-membership expansion in Pennsylvania. That approval involved Harrisburg, Pa.-based Members 1st FCU's and was later used as basis to authorize two other charter requests, one from New Cumberland FCU and the other from AmeriChoice FCU. The case did not challenge NCUA's community charter regulations. It was a fact-specific challenge and involved only the credit unions named. The court concluded, in the case known as American Bankers Association v. National Credit Union Administration, that “under all the circumstances, the decision of the NCUA is arbitrary and capricious and must be set aside." The court determined that "after a careful review of the record, that the NCUA's analysis is insufficient in this case..." The court directed the parties to file briefs regarding the proper resolution of the case, "Inasmuch as the briefs have not addressed the applicability and scope of available remedies," the court said. After the court’s decision, the Credit Union National Association (CUNA) pledged to work with the credit unions and the Pennsylvania CU Association (PCUA) to help the credit unions deal with the judge's order. Rick Wargo, PCUA executive vice president and general counsel, concurred: "We note Judge Kane did not prescribe a remedy. We will work with the three credit unions and NCUA on the remedy phase of the case in an effort to mitigate the decision."

CDFI director attends Tenn. HOPE CU opening

 Permanent link
WASHINGTON (8/1/08)—A U.S. Treasury Department official, Donna Gambrell, will be on hand in Memphis today to attend an event celebrating the opening of the first Tennessee branch of Hope Community CU (HOPE). Gambrell, who is director of Treasury’s Community Development Financial Institutions (CDFI) Fund, will deliver remarks and participate in a ribbon-cutting ceremony. Hope Community CU was founded in 1995, in part, to provide an alternative to the high-cost, payday lenders. It currently operates in Mississippi, Alabama, and Louisiana. It offers such services and products as basic checking and savings accounts, online banking, bill pay services and member small business loans. The credit union describes its mission as one to “strengthen communities, build assets and change lives in economically distressed areas…” Its website reports that since inception, HOPE and its sponsor, Enterprise Corporation of the Delta, have generated over $300 million in financing and brought economic opportunities to more than 30,000 people in economically distressed areas. In 2005, HOPE was recognized as the fastest growing credit union in the nation for building deposit. A 2007 survey ranked HOPE for the fifth largest increase in membership growth in the country during 2005 and 2006. The Treasury’s CDFI program administers community development grants. It uses small amounts of federal dollars to leverage significant amounts of private and non-federal dollars to support the CDFI industry. According to Treasury, since its creation, the CDFI Fund has awarded $864 million to community development organizations and financial institutions; it has awarded allocations of New Markets Tax Credits which will attract private-sector investments totaling $16 billion, including $1 billion of special allocation authority to be used for the recovery and redevelopment of the Gulf Opportunity Zone. Use the resource link below for more information on applying for CDFI grants.