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CUs eligible for iGo Directi recognition from Treasury

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WASHINGTON (9/23/10)--With the “big guy” awards behind them, the U.S. Treasury Department’s Go Direct campaign is now turning its attention to recognizing the efforts of smaller credit unions and banks to get consumers to sign on for direct deposit of federal benefits checks. Registration is now open for the Go Direct Community Ambassadors Program. That program recognizes the efforts of small- and medium-sized financial institutions that “go the extra mile in promoting direct deposit to senior citizens, people with disabilities, veterans and others who receive federal benefits.” Financial institutions with fewer than 100 branches are eligible to register. To be recognized as a Community Ambassador, a financial institution must complete at least two of the activities listed below between October 2010 and March 2011. That participation must be reported using a simple check-box form that will be distributed via email throughout the program period. Activities include:
* Posting a web banner on your financial institution's website; * Including a statement message or insert in statements to customers or members; * Ordering and distributing in-lobby materials; * Communicating with tellers or distributing a Go Direct campaign communication kit to staff; and * Creating and implementing a teller or branch incentive program or competition.
The Go Direct campaign offers free materials for participants to spur ideas for how to share information about the benefits of direct deposit with their members or customers. (Use resource link.) Credit unions and banks that successfully participate in the Community Ambassadors Program will receive a letter of recognition and a certificate from the Treasury Department. In addition, they also will receive a web banner and suggested newsletter copy they can use to announce their recognition as a 2010/2011 Go Direct Community Ambassador. Also recently, State Employees' CU, Raleigh, N.C., was among six financial institutions named by Treasury as 2010 Go Direct Champions--an enrollment recognition program for larger institutions. The six champions beat out 13 other competitors. (News Now Sept. 16) The Credit Union National Association is a national partner with Treasury for its Go Direct campaign and was on hand when the government launched the campaign on the National Mall in September 2005.

Cheney backs CU issues on Bloomberg Radio

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WASHINGTON (9/23/10)—In a Wednesday appearance on Bloomberg Radio’s Taking Stock with Pimm Fox, Credit Union National Association President/CEO Bill Cheney said that America’s credit unions continue to seek the opportunity to put their combined $800 billion in assets to good use for small businesses. One way that credit unions can put these assets into action is through lending to their business-owning members, and Cheney took the broadcast opportunity to support legislation that would lift the cap on member business lending (MBL) from the current 12.25% limit to 27.5% of a credit union’s assets. Cheney added that while the amount of business loans that are provided by banks continues to diminish, the number of credit unions bumping up against the arbitrary MBL cap continues to rise, as they seek to help their small business owning members deal with economic struggles and drying up credit from banks. Lifting the cap would result in $10 billion in new loans to small businesses--in just the first year that new authority was granted--creating over 100,000 new jobs, Cheney said. “We all know we need more jobs, and this is a great way to do it,” he added. CUNA underscores that this boost to small businesses comes at not cost to credit unions. Cheney noted that the MBL cap increase has the support of the Obama administration and many members of the U.S. Congress. He added that the only opposition seems to be bankers who do not want the competition. Bloomberg's Fox observed that it seems that banks don't want the competition--but they don't want to make the loans themselves. Cheney concurred. Cheney also underscored during the 30 minute interview that until 10 years ago, there was no ceiling on credit union MBLs.

Senate votes to extend flood insurance into 2011

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WASHINGTON (9/23/10)—The Senate on Tuesday night approved legislation that would extend the National Flood Insurance Plan (NFIP) until Sept. 30, 2011. The legislation must now pass the House before it can move on to be signed by President Barack Obama. The NFIP lapsed for a period of time, beginning on June 1, but was restored in early July when H.R. 5569 was signed into law. The NFIP is now set to expire on Sept. 30. Legislation that would reauthorize the NFIP program until Sept. 30, 2015, and improve the program by adding a Flood Insurance Advocate and raising the maximum coverage limits, passed the House in July. A Senate vote has not been scheduled. The NFIP is important to credit unions because the mortgages they write for properties in a floodplain are required to have flood insurance.

Corp. CU plan will prohibit MBS purchases says Matz

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WASHINGTON (9/23/10)--The purchase of private-label mortgage-backed securities or subordinated securities will be prohibited by the National Credit Union Administration's (NCUA) upcoming corporate credit union rule, NCUA Chairman Debbie Matz said earlier this week. Private label mortgage-backed securities make up the majority of troubled legacy assets that are still held by U.S. Central Federal Credit Union and Western Corporate Federal Credit Union (WesCorp), as well as other corporate credit unions. These troubled legacy assets resulted in corporate credit unions recognizing billions in losses, with U.S. Central and WesCorp losing a combined $9 billion to $11 billion, according to Credit Union National Association estimates. The NCUA, as it develops its legacy asset plan, is attempting to deal with as much as $50 billion in long-term assets. The legacy asset plan is also expected to be reviewed this Friday. Matz revealed some additional details of both the pending corporate rule and the legacy asset review in a speech delivered before the National Association of Federal Credit Union's annual conference on Tuesday. Discussing the corporate rule, Matz said that corporate credit unions would be subject to leverage capital requirements, and would need to adhere to Basel I standards in the future. The corporates would also be subject to the same Prompt Corrective Action requirements as all other federally-backed financial institutions, going forward. The NCUA will also limit the amount of funds that a corporate credit union may receive from any credit union to 15% of the corporates total assets. The agency will also impose some limitations on corporate credit union leadership by raising “standards for corporate board member qualifications” in an attempt to “elevate each director’s level of experience and expertise.” Matz added that one of the NCUA’s core goals as they devise their legacy assets plan is “to devise a way to safely deal with the legacy assets at the lowest possible cost consistent with sound public policy.” “A comprehensive plan must isolate the riskiest legacy assets from the corporate system, allowing the whole credit union system to move forward unburdened by the impaired assets,” she said. For the full speech, use the resource link.

Inside Washington (09/22/2010)

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* WASHINGTON (9/23/10)--House Financial Services Committee Chairman Barney Frank (D-Mass.), center, recently met with New Jersey Credit Union League President/CEO Paul Gentile, left, and Director of Governmental Affairs Chris Abeel at a recent reception at Credit Union House in Washington, D.C. Frank said that a new bill aimed at making Community Reinvestment Act (CRA) requirements more rigid will not include credit unions. Frank also said he would work to address credit unions’ concerns with interchange regulations (The Daily Exchange Sept. 22). Frank said he opposed the interchange language and that he worked to make changes that should benefit credit unions, such as the addition of language to prohibit discrimination against credit unions and other smaller card issuers that are not covered by the interchange provisions. (Photo provided by the New Jersey Credit Union League) ... * WASHINGTON (9/23/10)--Democrats on the House Financial Services Committee are looking to expand the Community Reinvestment Act (CRA). However, the potential changes will not affect credit unions, according to a recent message Chairman Barney Frank (D-Mass.) gave credit unions at a Hike the Hill event. The bill will likely target investment banks, mortgage brokers and insurers (American Banker Sept. 22). Consumer groups are encouraging stricter oversight on CRA requirements for banks, including more detailed ratings and more penalties for failure. Financial observers said it’s unlikely the bill will be approved this year. With upcoming elections in November, Republicans--who are favored to win more seats in the Senate--may try and scale back the CRA law next year, said Mark Calabria, former Senate aide and director of the Cato Institute ... * WASHINGTON (9/23/10)--The Federal Housing Finance Agency (FHFA) on Wednesday reported that U.S. home prices fell 0.5% between June and July. The FHFA recorded a 3.3% home sale price decline from July 2009 until July 2010, with the total U.S. home price index falling to 13.8% below the April 2007 index ... * WASHINGTON (9/23/10)--The Federal Housing Administration’s David H. Stevens, who is assistant secretary of housing, testified Wednesday before the House Financial Services Committee on progress the housing agency has made toward strengthening its financial condition. Noting that last year the FHA informed the U.S. Congress of an independent actuary’s findings that FHA’s secondary reserves had fallen below the required level, Stevens said that now, 10 months later, the FHA is on a path “that will put the agency in a stronger financial position for the future.” In written testimony Stevens said, “Of course, we remain cautious, and the job is not yet done. With home prices uncertain, our continued vigilance in strengthening both loan quality and performance for future loans is particularly important" ...