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SAN DIMAS, Calif. -During what was billed as the first ever “Credit Union Summit” on Feb. 23, CURIA and capital were the big newsmakers (See page 3 of CU Times March 3 issue), but there were also some other interesting news nuggets concerning business lending, credit unions converting to banks and the Utah resolution. The Credit Union Summit featured Congressman Ed Royce, NCUA Chairman JoAnn Johnson, California/Nevada Credit Union League President and Chief Executive Officer David L. Chatfield, and WesCorp President and CEO Bob Siravo. The event, which attracted an estimated 100 credit union leaders, was sponsored by WesCorp and the league. Its focus was on reforming laws that affect credit union capital Johnson, who unveiled an NCUA draft proposal for Prompt Corrective Action (PCA) reform at the session, said that while she favored no cap at all on member business lending she would go along with the 20% limit contained in CURIA. “Credit unions were originally started for business lending purposes and.in my opinion there shouldn’t be any cap,” Johnson said. “You’re tying the hands of the credit unions meeting the needs of those small businesses in their pursuit of capital. I strongly support raising that at least to a minimum of 20%. That at least would be a start.” Johnson admitted that few credit unions were bumping up against the cap but attributed that to the fact that many institutions were leery of getting into business lending because of the limit. “The number of credit unions that are actually bumping up against the cap isn’t that great, but I fully believe part of the reason for that is knowing that you could reach that cap in a short period of time. A lot of credit unions just haven’t gotten into business lending, not wanting that expense, bringing the expertise in or going that direction knowing that they could bump up against that cap,” she said. “We’re doing everything we can to try to allow more flexibility there.” Johnson said that passage of CURIA would help modernize credit unions and would be “comparable to what other banking institutions have.” “There’s no reason why credit unions should be held back,” she said. “It’s time to modernize.” Royce and Johnson agreed that Congress should revisit legislation dealing with conversions of credit unions to mutual savings banks. Legislation such as CURIA will make the credit union charter more attractive and “is going to prevent the perceived need for conversion,” Johnson said. “I think it’s questionable what the need for conversion truly is.” “We should revisit this issue legislatively,” Royce said, adding that while such conversions were allowed by law, they should not be encouraged. He also said that if there was more “transparency” in the conversion process, making more information available to those affected, “I think that would discourage some of impulse to push this approach.” Royce said a request by the Utah Legislature to have Congress look at the tax exemption issue for credit unions in that state was more than likely dead on arrival. “We probably are directed at least once a week by the state legislature of various states to take different actions,” he said. “I hate to report this to you, but I don’t think any of those reached the desks of members of Congress.” -

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