Credit Union Magazine - January 2009 - (Page 18)

WASHINGTON INSIDER Key to success is the need to play effective defense. ‘Wild and Wooly Year’ Seen for Consumer Bills Mark Wolff Amid all of today’s financial turmoil, credit unions are being recognized in local press as safe havens and responsible lenders. The “Google alerts” of credit union news stories that populate my e-mail inbox daily attest to that fact (kudos to credit unions and leagues for doing a great job putting this word out). On Capitol Hill, we’ll be emphasizing the same message. The 111th Congress that begins work this month needs to understand that credit unions as Main Street financial institutions weren’t part of the subprime problem and have continued to lend and serve their members well. Having that fundamental understanding will open the door to serious consideration of greater member business lending authority, proposals for alternative capital, and new field-of-membership improvements—all at the top of the Credit Union National Association’s (CUNA) legislative priority list. Real opportunities for success lie ahead. But also key to success with the new Congress—and easier to overlook—is the need to play effective defense. This is a reflection of how priorities in the new Congress have changed. “Reregulation will be much more in vogue than deregulation with this Congress,” explains Ryan Donovan, CUNA vice president of legislative affairs. “In this new environment, we must be nimble enough to advance our priorities while at the same time responding successfully 18 to efforts we’ll see to restrict the operations of financial institutions.” Issues we’re likely to see that fall into this category include: uInterchange fees. After falling short of passing last year, supporters of legislation to regulate interchange fees are likely to make another run. CUNA staunchly opposed the legislation, which would make it harder to offer credit and debit cards to members because interchange revenue underwrites the cost of offering these services. Merchants support the measure, however, setting the Reregulation will be more in vogue with the new Congress than deregulation. stage for what could be another big battle. “This may be the most dangerous issue for us this year because many in Congress view it as a battle between small businesses and big banks,” says Donovan. “That’s a perception we need to change.” uCredit cards. Congress remains interested in legislation intended to curb what it deems abusive practices related to credit cards, such as universal default and double-cycle billing. The Federal Reserve Board also has a regulation pending in this area (it may be final by the time you read this). It’s possible Congress may let the Fed take the lead. But the legislation may gain new impetus if Congress isn’t satisfied with what comes out of the Fed. While CUNA favors efforts to end abusive practices, we’re concerned about unintended consequences that could either limit the range of services offered or increase the price of credit for everyone. uOverdraft protection. Unintended consequences also describe CUNA’s concern over legislation to restrict overdraft protection programs. House legislation stalled last year after CUNA and others opposed it. The federal regulatory agencies stepped forward with proposals to address concerns. As with credit cards, however, the overdraft protection legislation easily could resurface, especially if it draws stronger support from the expanded Democratic majority. uBankruptcy reform. With growing concern about the impact of foreclosures on borrowers and the economy, we expect a concerted and perhaps early effort this year to reopen the bankruptcy reform law. The focus may be on permitting cramdowns in first mortgages, or it could be broader—perhaps even revising the “means test” at the center of the 2005 reforms. There’s more: new usury ceilings on payday-type loans and expansion of the Community Reinvestment Act, to name two. Then, of course, we need to ensure any regulatory restructuring proposal stemming from the credit crisis doesn’t threaten the National Credit Union Administration’s independence It promises to be, as one consumer advocate put it, “a wild and wooly year.” Our challenge is to ensure credit unions—which have been doing the right thing—aren’t unfairly penalized. MARK WOLFF is senior vice president of communications for the Credit Union National Association. Contact him at 202-508-6764 or at mwolff@cuna.com. CREDIT UNION MAGAZINE uJANUARY 2009 ucuna.org http://www.cuna.org

Table of Contents Feed for the Digital Edition of Credit Union Magazine - January 2009

Credit Union Magazine - January 2009 Contents On My Way Leading Edge Spotlight President's Perspective Game Plan Washington Insider Wright Stuff Executive Suite Reverse Mortgages Come of Age Six Merger Myths Leading-Edge Lenders TwentyFour/Seven Bankruptcy Compliance Tools of the Trade Trendlines Rates & Ratios Council Corner Shoptalk System Scan Marketplace Branching Out Advertiser Index

Credit Union Magazine - January 2009

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.