Fryzel Discusses Share Insurance In First Letter to Credit Unions

"During these uncertain times in the financial markets, it is important for credit unions to help members understand their NCUA-insured shares are backed by the full faith and credit of the United States government,'' he wrote in a letter sent to the boards of directors of all federally insured credit unions.

He mentioned the resources available on the agency's Web site, including a share insurance estimator, a general description of the share insurance program and a detailed explanation of the program with examples of account coverage.

The agency will host a Webinar on its share insurance program in the fall.

NCUSIF, which protects members against loss when a federally insured credit union fails, has an equity level of 1.24% and is expected to end the year at 1.28%.

For additional information, go to: http://www.ncua.gov/ShareInsurance/index.htm.

NAFCU Raises Concerns AboutProposed Risk-Based Pricing

ARLINGTON, Va. -- A proposed rule requiring creditors to notify consumers if they are offering them more expensive credit because of their credit history would increase costs to credit unions, NAFCU wrote the Federal Reserve Board.

The rule would require creditors to provide a risk-based pricing notice to a consumer when the creditor uses a consumer report to grant or extend credit to the consumer on "material terms" that are "significantly greater'' than the most favorable terms available.

NAFCU President/CEO Fred Becker wrote that those terms are not adequately defined and that the Federal Reserve and Federal Trade Commission should devise an "objective test,'' such as whether the rate is at least four percentage points above the APR offered to a "substantial portion'' of customers.

Becker also wrote that the provision requiring creditors to tell consumers that the terms they are being offered are less favorable does not give consumers a "useful context'' for understanding the offer and should be eliminated.

He also said that requiring creditors to give consumers even more notices and disclosures "will further overwhelm consumers and will add to consumer confusion and defeat the purpose of these actions.''

Treasury Begins Application Period
For Community Development Grants

WASHINGTON -- Credit unions that do community development work can begin applying for grants from the Treasury Department's Community Development Financial Institutions Fund.

The program provides up to $54 million in competitively awarded funds to community-based institutions that provide affordable financing and related services to communities and populations lacking access to credit, capital and financial services. Since it was created in 1994, it has awarded $564 million in grants.

The deadline is Oct. 29, but institutions not certified as a CDFI must apply for that designation by Oct. 1.

"In these turbulent times, building the capacity of CDFIs serving the nation's distressed communities is more important than ever,'' CDFI Fund Director Donna Gambrell said in a statement.

The program has posted an application workshop on line at: www.cdfifund.gov/how_to_apply/. There are also in-person workshops on Aug. 18 in Chicago, Sept. 10 in Arlington, Va., and Sept. 19 in Denver.

For additional information on the program go to www.grants.gov or

www.cdfifund.gov.

Trades Reiterate Views on Interchange

WASHINGTON -- Though Congress is gone for the August recess, that hasn't meant a break in the lobbying activities of CUNA and NAFCU. Both groups sent letters to all House members opposing bills that would cap interchange fees.

CUNA's letter was on the Gas Pump Fair Payment Act of 2008 (H.R. 6620), which seeks to reduce gasoline prices by capping the interchange rate on gasoline transactions at 1% of the cost per gallon of fuel. The bill has been introduced by Rep. Stephen Lynch (D-Mass.) and has no co-sponsors.

"While we are all feeling the effects of higher gas prices, this bill would only exacerbate the problem for consumers and upset a delicate balance in the electronic payment system that reduces the risk for both merchants and consumers,'' CUNA President/CEO Dan Mica wrote lawmakers.

NAFCU's letter reiterated its opposition to the Credit Card Fair Fee Act (H.R. 5546), which gives retailers an exemption from anti-trust laws by allowing them to work together when negotiating with credit card companies over interchange fees. The measure passed the House Judiciary Committee last month, but no vote has been scheduled by the full House.

"We do not believe that the true negative impact that the legislation will have has been fully examined and urge you to oppose any effort to bring the legislation to a vote in the House,'' NAFCU President/CEO Fred Becker wrote the lawmakers.

Mica also weighed in on that bill, suggesting that the Government Accountability Office (Congress' investigative arm) look at the impact on small card-issuing financial institutions when preparing its report on the issue at the request of Sens. Tom Harkin (D-Iowa), Olympia Snowe (R-Maine) and Ben Cardin (D-Md.). Those senators said they wanted the additional information so they could make a more informed decision on the subject.

Mica urged the GAO to address the costs of the risks to financial institutions in issuing and maintaining credit and debit cards and how those institutions could make up revenue if interchange fees were capped. Mica also suggested that the GAO determine how the current interchange fee market affects small card issuers' ability to negotiate fees with card networks.

Charles Vice, FDIC Official, Named
Kentucky's Top Financial Regulator

FRANKFORT, Ky. -- Charles A. Vice, a banking examiner with the FDIC, will run the agency that oversees credit unions in Kentucky.

Vice, who began work as Kentucky's commissioner of financial institutions on Aug. 18, was with the FDIC for 18 years. He was the expert on subprime lending and capital markets in its Lexington, Ky. office.

His agency also oversees the 28 state-chartered credit unions in Kentucky.

"Kentucky's banking industry is strong,'' said Public Protection Cabinet Secretary Robert Vance. "Under Mr. Vice's leadership, the Department of Financial Institutions will ensure that our state banks remain strong in the future.''

Vice, who last year was the FDIC Chicago region's employee of the year, earned a bachelor's degree in finance from the University of Southern Mississippi and completed the Louisiana State University's Graduate School of Banking program.

Shelley Clarke Named to NAFCU Board

WASHINGTON -- Goldenwest Federal Credit President/CEO Shelley Clarke, has been named an at-large director to the NAFCU Board.

Clarke, whose credit union is located in Ogden, Utah, replaced outgoing board member John Tippets, who stepped down when he retired as CEO of American Airlines Federal Credit Union in June. Clarke must stand for election at NAFCU's next annual business meeting next summer.

She has been president/CEO of Goldenwest FCU since 2000. She served as executive vice president from 1990 to 2000 and has been with Goldenwest for more than 25 years.

Clarke currently serves on NAFCU's Region V advisory committee, and her credit union received NAFCU's Credit Union of the Year award in 2007. She is vice chair of SunCorp Corporate Credit Union and serves on the CUNA Governmental Affairs Committee and the Filene Research Council. She also serves as chair for Network Services Inc., the Association of Union Pacific Railroad Credit Unions and the Ogden-Weber Chamber of Commerce.

--cmarx@cutimes.com