April 29, 2008

AmBA Bankers' Grassroots Effort Pays Off; CU Expansion Bill Pulled From House Calendar
Thanks to an intense grassroots effort by AmBA, its state bankers association allies and bankers nationwide the House today will not consider the expansionist Credit Union Regulatory Relief Act of 2008 (H.R. 5519). "This is an important grassroots victory for the banking industry. We greatly appreciate all of the calls, e-mails and letters sent by the state association executives and bankers from across the country," Floyd Stoner, AmBA EVP for congressional relations and public policy, said last night after receiving the good news.

Stoner added that the future of the legislation is uncertain. "We have committed to work with the House Financial Services Committee to address our concerns with H.R. 5519," he said. "We believe our efforts to work in good faith with all parties will bode well in the future as we work on this bill, as well as legislation to provide much-need regulatory relief for the banking industry."

For more information, contact AmBA 's James Ballentine. 

April 24, 2008

URGENT Action Alert – Oppose H.R. 5519, the Credit Union Regulatory Relief Act
In an urgent development, ABA was informed last evening that as early as Tuesday, April 29, the full House of Representatives is likely to consider H.R. 5519, the Credit Union Regulatory Relief Act (CURRA) of 2008.  This misnamed legislation, introduced by Rep. Paul Kanjorski (D-PA) and Rep. Ed Royce (R-CA), was advertised as making very minor adjustments to current credit union law.  However, as ABA strongly testified on March 6, the language of the bill is intentionally so broadly drafted as to go well beyond what its proponents say it does.  We have been working hard for weeks to have the bill redrafted, but now the decision has suddenly been made to move the bill to the House floor as introduced.  It is critical that we tell House Members what the bill really does and that we show, once and for all, that bankers across the country will fight credit union expansion.

The credit union lobby argues that the legislation would simply allow them to serve the “underserved” when, in fact, it would permit a huge expansion of the geographic reach, commercial lending authority, and product offerings for all tax exempt credit unions.  As we pointed out in our testimony, many whole cities with no geographic or population ties to individual credit unions would become eligible for expansion by credit unions because the credit union regulator has declared them “underserved.”  Further, business loans in these 641 cities and other areas already so designated by the National Credit Union Administration (NCUA) would no longer be limited by the commercial lending cap that applies to credit unions.  

We want to make clear that this legislation is not the Credit Union Regulatory Improvements Act (CURIA), which the credit union industry has been unsuccessfully seeking for the last six years, but the vote on H.R. 5519 will serve in many ways as a test vote to measure the level of support for their efforts to expand their business lending activity and, ultimately, to get Members to support CURIA.

It is very important to the industry that we generate a massive grassroots effort on H.R. 5519.   If Members of Congress do not believe that the banking industry has grassroots muscle, some will try to push CURIA through the House of Representatives.

Action Needed

• Contact Members of the House of Representatives and urge them to oppose H.R. 5519 because it is a major expansion of the credit union charter that was never voted on in the House Financial Services Committee.
• Members of the House of Representatives can be reached through the U.S. Capitol switchboard at 202-224-3121.  Or, contact information can be found for Members on the House website (www.house.gov).

The Message
Please make these points in your communications to Congress:

• H.R. 5519 was never voted on by the House Financial Services Committee.
• This bill is not about underserved areas.  NCUA has already allowed certain credit unions to add 641 entire cities, counties, and other areas to their fields of membership, claiming they constitute “underserved” communities.  (Note:  a successful ABA lawsuit has prevented NCUA from permitting all credit unions to expand into these cities.)  These underserved approvals include the entire cities of Washington , D.C. , Houston , and Philadelphia , among others. Despite claiming to be about “underserved” areas, the language of H.R. 5519 allows all credit unions to enter these cities and permit broad areas of other cities to be made eligible for expansion as well.  This legislation would give credit unions access to these geographic areas without any oversight to determine if loans or services are, in fact, reaching low-income residents.
• This bill is not about payday lending.  H.R. 5519 authorizes credit unions to offer short-term loans to non-members, supposedly as alternatives to payday lending.  However, the language of the bill could and would be used to authorize credit unions to offer a wide array of consumer loans, such as credit cards, to non-members.
• This bill is not about small and minority lending in underserved areas.  Despite rhetoric about expanding lending in underserved areas, in reality this legislation vastly expands credit unions’ commercial lending authority by exempting from the commercial lending cap loans any business operating within these areas designated as underserved.  For example, if a national retailer operates a store in Washington , D.C. , as many do, credit unions may lend to that retailer without having such a loan counted under their commercial lending cap. 

If you or your staff has any questions regarding H.R. 5519, contact Floyd at 202-663-5339 or fstoner@aba.com, or James at 202-663-5359 or jballent@aba.com. 

April 18, 2008

Yingling: Treasury Blueprint Demonstrates Accurate Understanding of CU Industry Changes
Credit Union National Association President and CEO Dan Mica was off the mark when he argued in a April 9 letter to Treasury Secretary Henry Paulson that the Treasury -- in proposing its regulatory reform blueprint -- didn't understand the differences between banks and credit unions, AmBA President and CEO Ed Yingling said.

"[T]o the contrary, the blueprint demonstrates a very accurate understanding of changes in the credit union industry," Yingling said in a letter to Paulson. Treasury's plan "correctly points out that a credit union with a profile indistinguishable from ... a bank should be subject to the same tax and regulatory structure as FDIC-insured institutions." He emphasized that taxpayers deserve to know that tax-exempt institutions are focusing on the mandate for which they received the tax-privileged status.

"The credit union tax exemption was provided to assure that credit unions served ... individuals who shared a common bond and have fewer options for financial services, i.e., people of small means," Yingling said. "There is nothing in Treasury's blueprint that would change the tax status of these institutions, and the banking industry agrees with this approach."

What Treasury clearly points out, he added, is that there is a new breed of credit unions that looks like a bank and bears little resemblance to the traditional credit union. "Treasury's blueprint states: 'Some credit unions have arguably moved away from their original mission of making credit available to people of small means, and in many cases they provide services which are difficult to distinguish from other depository institutions. While credit union size is not a perfect proxy for this trend, the increasing share of credit union assets held by larger credit unions indicates movement toward a broader focus,'" Yingling said. Read Yingling's letter. For more information, contact AmBA 's Keith Leggett. 

April 14, 2008

Treasury's Recognition of Mission Desertion Raises CUNA Honcho's Hackles
Credit Union National Association President and CEO Dan Mica sent a 1,700-word letter to Treasury Secretary Henry Paulson protesting, among other things, an assertion in Treasury's regulatory reform blueprint that some credit unions are abandoning their mission.  "Some credit unions have arguably moved away from their original mission of making credit available to people of small means, and in many cases they provide services which are difficult to distinguish from other depository institutions," the Treasury blueprint said. "While credit union size is not a perfect proxy for this trend, the increasing share of credit union assets held by larger credit unions indicates movement toward a broader focus." AmBA believes the blueprint language shows its campaign to educate lawmakers, regulators and the public about the growth of new-breed credit unions is paying dividends. Mica, however, reacted differently. "[W]e found highly disturbing ... that a number of descriptions in the report regarding credit unions are very similar to the mischaracterizations that the banking industry routinely uses," he told Paulson. "Some of the most biased statements in the report [reflect] banker rhetoric that credit unions must only serve those of modest means and must remain small institutions." http://www.aba.com/aba/documents/News/CUNAletter4908.pdf

CUs Seek Preferential Treatment in Student Lending 
The National Association of Federal Credit Unions (NAFCU) wrote the Senate Banking Committee asking that credit unions be given preferential status in making guaranteed student loans relative to for-profit lenders. Legislation enacted last September cut the federal subsidy for for-profit lenders in the guaranteed-loan program by 0.55 percentage points but cut the subsidy for most nonprofit lenders by only 0.40 percentage points.  Credit unions were subject to the larger hair-cut applied to for-profit lenders.  NAFCU in its letter contends that credit unions should be added to the definition of eligible not-for-profit lenders, thereby subject to the lower hair-curt.

April 11, 2008

Treasury's Recognition of Mission Desertion Raises CUNA Honcho's Hackles
Credit Union National Association President and CEO Dan Mica this week sent a 1,700-word letter to Treasury Secretary Henry Paulson protesting, among other things, an assertion in Treasury's regulatory reform blueprint that some credit unions are abandoning their mission.

"Some credit unions have arguably moved away from their original mission of making credit available to people of small means, and in many cases they provide services which are difficult to distinguish from other depository institutions," the Treasury blueprint said. "While credit union size is not a perfect proxy for this trend, the increasing share of credit union assets held by larger credit unions indicates movement toward a broader focus."

AmBA believes the blueprint language shows its campaign to educate lawmakers, regulators and the public about the growth of new-breed credit unions is paying dividends. Mica, however, reacted differently. "[W]e found highly disturbing ... that a number of descriptions in the report regarding credit unions are very similar to the mischaracterizations that the banking industry routinely uses," he told Paulson. "Some of the most biased statements in the report [reflect] banker rhetoric that credit unions must only serve those of modest means and must remain small institutions." Read the letter.  For more information, contact AmBA's Keith Leggett. 

April 7, 2008

Paranoid CUNA Requests Documents of Banker Involvement in Blueprint …
The Credit Union National Association submitted on April 3^rd a Freedom of Information Act (FOIA) request seeking documents and records submitted by banking trade groups in the development of the Treasury Department’s “Blueprint for a Modernized Financial Regulatory Structure.”   CUNA’s General Counsel Eric Richards wrote: “[t]he general public and nearly 90 million credit union members have a right to know if special interests have attempted to influence Treasury policy …in order to eliminate not-for-profit cooperative financial institutions, limit consumer choice in financial services, and deregulate the American depository institution sector in an unsafe and unsound manner.”

March 21, 2008
Realtors Seek Credit Union Charter
The National Association of Realtors has applied for a federal credit union charter, press reports said. The NAR, which has 1.3 million members, is reportedly seeking to offer a full range of financial services on the Internet. The National Credit Union Administration has started a 30-day review to determine whether the application to charter Realtor Federal Credit Union is complete. For more information, contact AmBA's Keith Leggett. 

March 20, 2008

REALTORS SEEK CREDIT UNION CHARTER
The National Association of Realtors has applied for a credit union charter that would offer a full range of financial services on the Internet and serve the association’s 1.3 million members, as well as their employees and families.  Press reports indicate that the National Credit Union Administration has began its initial review of the application.

March 3, 2008

AmBA Blankets Capitol Hill Newspapers with Credit Union Ad
For two weeks, AmBA is running a full-page ad in the three major Capitol Hill newspapers -- Roll Call, The Hill and Politico -- that lists the "Top 10 Questions Congress Should Consider When the Credit Union Lobby Asks for Broader Lending Authority." The ad is part of AmBA 's coordinated effort to counter the Credit Union National Association Governmental Affairs Conference, and the credit union activists who are lobbying Congress this week in support of credit union legislation. http://www.aba.com/aba/documents/News/CUad30408.pdf