Congress Urged to Exert Patience On Regulatory Changes

This is a new twist on legislative activity! I commend Rep. Paul Kanjorski. So often bad legislation is enacted due to reactive decisions.

Kanjorski: Congress should take time with reg reforms

CUNA NEWS, WASHINGTON (7/2/09)--Congress should "step back" and take time to "analyze the implications and the effects" of the laws and regulations that are being debated before it begins the process of legislating financial regulatory reforms, Rep. Paul Kanjorski (D-Pa.) said in a Wednesday appearance on CNBC.

Commenting on the apparent rush to regulation that is currently being led by some members of Congress, Kanjorski, who chairs the House subcommittee on capital markets, insurance, and government-sponsored enterprises, said that acting in a more deliberate fashion should ultimately "create better standards and a better performance rate.

"If it takes six more months, what does it matter?" Kanjorski asked.

Both Congress and the Obama administration have moved swiftly to begin the regulatory reform process, with the Treasury delivering on Tuesday draft legislation for the creation of the Consumer Financial Protection Agency.

Rep. Barney Frank (D-Mass.), who serves as chair of the House Financial Services Committee, has held several hearings on financial regulatory reforms in recent days, and his committee will continue to discuss this issue once Congress has returned from the Independence Day district work period on Monday. Frank recently suggested that his committee could begin marking up financial regulatory reform legislation late this month, and a full House vote could take place as soon as August.

Overall, Kanjorski said, Congress "will craft the best legislation," but the quality of that legislation does not matter if those tasked with enforcing that regulation are not "properly stimulated to implement good practices."

The U.S.credit union system has been buffetted by the banking crisis this year. Today, the strength and soundness of credit unions was formally recognized by U.S.Treasury officials. Life has been interesting in credit union land this year.

WASHINGTON (6/18/09)—The U.S. Treasury's report on financial regulatory reform, released to the public on Wednesday, would allow the National Credit Union Administration (NCUA) to maintain its safety and soundness authority over credit unions.

Noting that the ongoing economic uncertainty provides an "opportunity for restructuring that will genuinely produce improved regulation," NCUA Chair Michael Fryzel said that the Obama administration's proposal "merits serious consideration." The continued independence of the NCUA and the proposal's plan to create a consumer protection council will "serve to ultimately improve the safe and sound operations of the U.S. financial system," he added.

CUNA Sr VP of Legislative Affairs John Magill said that the report's lack of recommendation for substantive changes in the safety and soundness of regulations for credit unions affirms that "credit unions were not the cause of nor a contributor to the financial crisis."

"I am not sure they could be clearer in their intent that NCUA remain an independent regulator than to say at least twice in the document," Magill said. But he also advised credit unions that the administration's proposal would not be "the last word on regulatory restructuring."

Magill noted, "Congress is going to have its say over the next weeks and months, and we will continue to monitor this very closely."

Ryan Donovan, VP of Legislative Affairs for CUNA, said that the potential consolidation of some existing regulations could reduce costs and lessen the regulatory complexity faced by many credit unions.

To help launch what is sure to be a thorough vetting of the plan's intricacies, the Senate Banking Committee and the House Financial Services Committee have scheduled Treasury Secretary Timothy Geithner to appear before them in separate hearings today to discuss the Obama plan.

American Banker: CUs are 'the mouse that roared'

CUNA NEWS; MADISON, Wis. (6/3/09)--Credit unions' market share for the home loan origination market has grown to the extent that they could be called the industry's "mouse that roared," American Banker said Tuesday.

With the reputation of large financial institutions hurt by aggressive loans that backfired during the real estate market's boom, credit unions have gained more members, the publication said.

Also, credit unions tend to have a better reputation than many lenders in the residential real estate finance business, and--for the most part--follow low-risk strategies, American Banker said.

"People are looking for people they can trust to originate a mortgage," Les Parker, president of Parker & Co., a mortgage advisory firm with clients that include credit unions, told the publication.

Credit unions have some constraints on the their home loan growth such as regulatory and business culture changes they would need to implement to become bigger player in the mortgage business, and because of the nature of their membership paradigm, American Banker said.

Email Brown on this subject

The following article was published by a leading credit union advisory firm, Callahan & Associates, and written by Elliott Kashner. I appreciate the fact that Congress recognizes the importance of credit unions leading the way in lending during the credit crisis.

"The 4,900 federal credit unions and almost 3,000 federally insured state chartered credit unions in the U.S. play a vital role in our economy by providing access to credit for nearly 82 million Americans. With total credit union assets exceeding $800 billion, maintaining the stability of credit unions is vital to the economic health of the nation, and even that of the global financial system."
~Representative Luis Gutierrez (D- IL)

The Subcommittee on Financial Institutions and Consumer Credit, a subcommittee of the House Committee on Financial Services, met on Wednesday, May 20, to hold a hearing shortly after Congressional approval of H.R. 2351, the Credit Union Share Insurance Stabilization Act.

One recurring theme throughout the hearing, as articulated by Representative Gutierrez above and Representative Sherman (D- CA) below, was the role that credit unions played in providing credit. Specifically, in light of the recession, credit unions’ historically conservative lending standards have put them in an ideal position to continue to lend as others pulled back or exited the marketplace altogether.

Outstanding consumer credit growth hit 5.81% in October of 2007, the fastest growth since February of 2003, when a recovering economy met a booming housing market. In the fourth quarter of 2007, credit union net worth was at 11.1%. It was from this well-capitalized position that credit unions entered the recession and the accompanying credit crisis. Drawing on this pool of reserves, credit unions grew their loan origination volume throughout 2008, and now into 2009.

Some lenders have tightened their lending standards, others have pulled back to recapitalize, while others have simple left the market entirely. Meanwhile, credit unions remain a key source of credit in the U.S. economy.

"I look forward to credit unions being in a position to help us get out of this mess."
~Representative Brad Sherman (D- CA)

Email Brown on this subject

2009 Youth Saving Challenge smashes record

MADISON, Wis. (5/8/09)--The Credit Union National Association's (CUNA) 2009 National Youth Saving Challenge has more than doubled last year's record in deposits.

The challenge brought in more than $26 million in deposits, compared with $12 million brought in last year.

"By more than doubling the amount they saved last year, our young members have told us loud and clear that they believe in the future," said Dan Mica, CUNA president/CEO. "Their willingness to set money aside for their goals during a severe recession should inspire the rest of us to redouble our efforts to advance the credit union principles of thrift and the productive use of credit. This phenomenal vote of youthful optimism could not have come at a better time."

About 397 credit unions reported receiving deposits from 139,669 young members, including 10,006 who opened new accounts. This year's results average out to $190 deposited per child. Last year's nearly $11.8 million savings total averaged $156 deposited per child, up from $87 per child in the 2004 inaugural year.

For the first time, credit unions had the option of hosting the challenge throughout April, which was National Financial Literacy Month.

"We didn't limit it to National Credit Union Youth Week to give credit unions more flexibility," said Lin Standke, CUNA's manager of youth programs. "There is good news coming out of this economic mess we're in, and it's that youth are learning to save at their credit unions."

CUNA also selected 10 credit unions at random from those who reported their results to receive $100 each, to award to the young saver of their choice. The winning credit unions are:


PCM Employees CU, Green Bay, Wis.;
St. Pius X Church FCU, Rochester, N.Y.;
Good Shepherd CU, Lincoln Park, Mich.;
Eastmill FCU, East Millinocket, Maine;
Mountain Laurel FCU, Saint Marys, Pa.;
Service Plus CU, Riverside, Calif.;
Two Harbors (Minn.) FCU;
Service 1 FCU, Muskegon, Mich.;
Canton (Ohio) Police and Firemens CU; and
Portland (Mich.) FCU.

Next year's Youth Week will be April 18-24.

Email Brown on this subject

I have been receiving calls and solicitations to help me file my taxes fast. Fortunately, I usually know a rotten scam when I see it - too good to be true, asks for personal information, always wants a card number. Here is one of the latest.