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News Center - Credit Union Watch |
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February 26, 2010
NCUA Promises Enhanced Business-Loan Regulation if Cap Is Raised
The National Credit Union Administration this week said it would beef up its oversight if Congress passed AmBA-opposed legislation increasing credit unions’ business-lending cap.
“Let me assure you: If legislative changes increase or eliminate the current aggregate [member business-lending] cap, NCUA would promptly revise our regulation to ensure that additional capacity in the credit union system would not result in unintended safety and soundness concerns,” agency Chairman Deborah Matz said in a letter to Treasury Secretary Timothy Geithner.
She added that the NCUA would adopt a tiered approval process that would only allow credit unions to increase their business lending gradually. Read more. Read the letter. For more information, contact AmBA’s Keith Leggett.
February 25, 2010
Frank Will Not Push Credit Union Measure Unless Senate Acts First
House Financial Services Chairman Barney Frank (D-Mass.) said at the Credit Union National Association’s Governmental Affairs Conference yesterday that he would not would push AmBA-opposed legislation increasing the cap on credit union business lending, unless the Senate acts first. Frank said the reason for his position is banks’ strong opposition, and he explained AmBA’s argument that the increase is not needed because less than 1 percent of the nation’s credit unions are near the lending cap.
“Unless there is some prospect of the Senate acting, it will be very hard for me to persuade members of the House to vote on controversial issues, particularly as November approaches,” he said. Sen. Mark Udall ( D-Colo.) and Rep. Paul Kanjorski (D-Pa.) have introduced bills -- S. 2919 and H.R. 3380 -- that would increase the business lending cap from 12.25 percent of a credit union’s total assets to 25 percent, raise the business-loan de minimus level to $250,000 and exclude other loans from the cap.
CUNA had advocated -- and AmBA bankers had strongly opposed with a deluge of letters -- attaching such provisions to jobs legislation, but the jobs bill the Senate passed yesterday did not contain such language. Credit unions now reportedly are lobbying to have the business-lending cap language included in the Obama administration’s legislation to transfer $30 billion in repaid Troubled Asset Relief Program funds to a new Small Business Lending Fund that community banks would use to make more business loans.
February 8, 2010
AmBA
Disputes Claim that CU Power Would Help Farmers, Ranchers
An assertion in the Kiplinger Agriculture Letter's Jan. 29 edition that allowing credit unions to increase their business lending will somehow benefit farmers and ranchers has no basis in reality, AmBA Agricultural and Rural Bankers Committee Chairman Curt Covington said Friday in a letter to the publication's editor. "Your claim that credit unions might better accommodate farmer's credit needs just isn't supported by the facts. Through [last] September … only 121 out of almost 7800 credit unions reported originating a farm loan in 2009," said Covington, SVP of Bank the West, Fresno, Calif. Banks, however, had $126.5 billion in such loans at the end of 2009's third quarter and increased farm loans by $4.7 billion over the past 12 months despite a very difficult economy. They also boosted agricultural lending by $40.6 billion over the past five years, he said.
Covington
also offered statistics showing that banks finance more small and start-up farmers and ranchers than anyone else in the market. "In the banking industry, we understand that helping someone when times are not necessarily optimal is the best way to develop long-lasting relationships," he said.
February 1, 2010
Credit Unions That Are CDFIs Gain Access to TARP
The Treasury Department announced that it will provide $1 billion in 2 percent loans to financial institutions that are certified as community development financial institutions (CDFI) through its CDFI program. The funds will come from the Treasury’s $700 billion Troubled Asset Relief Program. CDFI credit unions can apply for subordinated debt at rates of 2 percent. These institutions may apply for up to 3.5 percent of total assets – an amount approximately equivalent to the 5 percent of risk-weighted assets available to banks and thrifts. There are 165 credit unions certified as CDFIs. NCUA will set the guidelines for credit union participation in the program.
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