NCUA Corporate Assessment Prepayment Plan Falls Short

NCUA logoNCUA announced on August 2nd that the proposed prepayment program for corporate credit union stabilization assessments failed to attract the required $500 million in pledges that NCUA set as the amount needed to proceed with the program by the July 29th deadline. However, the agency's chairman, Debbie Matz, said the board is open to reconsidering the issue in 2012.

Most industry experts worried that when the final proposal was released the program wasn’t as attractive to credit unions as the first draft and that credit unions wouldn’t participate since the benefit would have reduced assessments only 6.4 basis points. For example if NCUA had increased the minimum size and set it at $1 billion (the amount recommended by CUNA), this year's assessment could have been reduced to about 12 basis points.

Read more
 

Washington, D.C. News

NCUA Corporate Assessment Prepayment Plan Falls Short
Debt-Ceiling Talks' Impact on Credit Unions
House Approves CFPB Changes
House, Senate Hearings on CFPB and Oversight Issues
Date Tapped to Run CFPB's Daily Operations
Data Breach Bills
House, Senate to Hold 'Pro-Forma' Sessions During August Recess
How Congress Embraces Social Media
CFPB to Release Third Draft of Combined Mortgage Form
Town Hall Opportunities for Credit Union Leaders

Industry News

Senate Approves 'Year of Co-op' Resolution
Credit Union to Buy Indiana Savings Bank

State News

Special Session Approaching

News of Interest

Fed's Regional Economic Outlook Little Changed
Recession Study Finds Hispanics Hit the Hardest
History 101: Former Rhode Island Governor Dies During Financial Crisis

Public Influence News

Atlanta Business Chronicle Features Credit Unions
USA Today: Rule Change Means More Risk to FIs
CU Media Training Coming Up
USA TODAY: CUs Help Students Find Free Checking
CUs in the News
Consider This
Paying Attention
Statewide News Coverage

News of the Competition

Bank Closure Study Bill Passes House
Citigroup's New Card
PNC Bank Expanding GA Presence
New Strategy: HSBC Bank Cutting Back
Blocking Class Action Suits
Overdraft Fees

August 5, 2011

 
Project ZIP Code
 
Contact Your Legislator
 
Maximize the Power of the Media
 
State Legislative Update
 
Legislative Grids
 

Georgia Credit Union Affiliates

AMERICA'S CREDT UNIONS

Extend the Reach of Creating Influence

Stay on top of what's happening with credit union advocacy by reading Creating Influence, the Georgia Credit Union Affiliates' advocacy e-newsletter! If you’d like to be added to the distribution list, email Advocacy@gcua.org or call an Advocacy Team member – Cindy Connelly, Mike Culbertson, Anita Paul or Brandee Bickle – at 800-768-4282.

 Washington, D.C. News
 
Matz
NCUA Chairman
Debbie Matz

NCUA Corporate Assessment Prepayment Plan Falls Short

NCUA announced on August 2nd that the proposed prepayment program for corporate credit union stabilization assessments failed to attract the required $500 million in pledges that NCUA set as the amount needed to proceed with the program by the July 29th deadline. However, the agency's chairman, Debbie Matz, said the board is open to reconsidering the issue in 2012.

Most industry experts worried that when the final proposal was released the program wasn’t as attractive to credit unions as the first draft and that credit unions wouldn’t participate since the benefit would have reduced assessments only 6.4 basis points. For example if NCUA had increased the minimum size and set it at $1 billion (the amount recommended by CUNA), this year's assessment could have been reduced to about 12 basis points.

After hearing that the program did not reach the required minimum, CUNA President Bill Cheney stated, "Had that been the case, credit unions may well have found that the program would be more attractive, in which case they might have committed substantially more to the program."

The NCUA reported that of the nation's nearly 7,300 federally insured credit unions, 799 pledged $369.9 million to voluntarily prepay assessments. Having missed the $500 million trigger that would have launched the program, the NCUA noted it will not debit any voluntarily pledged amount from any credit union.

Back to top
 
 

Seal and CapitolDebt-Ceiling Talks' Impact on Credit Unions

Tension mounted on all fronts in the push-and-pull fight to work out the August 2nd plan to increase the nation's debt ceiling. CUNA closely monitored the developments as Congress wrestled with the funding cuts and revenue raisers, and during the debt-ceiling talks the credit union tax exemption did not factor into the discussions. Credit unions, Leagues and CUNA remain vigilant in detecting any possible developments that could threaten the federal credit union tax status … in D.C. and here in Georgia.

President Obama and federal lawmakers had until August 2nd to increase the government's statutory borrowing authority or risk defaulting on the nation's debt. Monitoring the financial markets, CUNA Chief Economist Bill Hampel pointed out that leading up to the debt ceiling’s being raised the general consensus was “that investors believe that by the last minute, something will be done to raise the debt ceiling. This is because the financial markets understand the catastrophic consequences of not raising the ceiling: a possible default on the debt, and/or having to balance the budget cold turkey on August 3rd, which would require immediately cutting federal spending by about 35 percent. Either of these would throw the economy into another recession that could make the last one look mild," Hampel says.

He added that even if policymakers had missed the debt ceiling deadline by a few days, the upset in the financial marketplace – demonstrated by falling stock values and rising interest rates – likely would force lawmakers and the administration into agreement quickly if they had not done so already. "The effects would—one can hope—be so short-lived that credit union members would unlikely have much time to react. However, within the context of an extended crisis savings rates could drop, loan rates could rise – and consumers could shift funds around. "The best bet for credit unions would be to stay liquid," Hampel added.

Back to top
 
 

House Approves CFPB Changes

Legislation that would increase leadership of the Consumer Financial Protection Bureau (CFPB) from a single director to a five-member commission, reform some operational rules, and make other key CFPB changes passed the House of Representatives by a 241-173 vote. This legislation still must pass the Senate and then be signed by the President before it becomes law. The legislation (H.R. 1315) would also adjust the voting threshold needed for the Financial Stability Oversight Council to set aside or stay a CFPB-issued rule to a simple majority, expand the FSOC's review authority of CFPB rules, and require the CFPB leader to be confirmed by Congress before any regulatory responsibilities could be transferred o that agency.

The credit union industry's role in the larger financial reform debate was noted by legislators on both sides of the vote. House Financial Services Committee ranking member Barney Frank (D-Mass.), who opposed H.R. 1315, said that many of the problems that led to the CFPB's creation "came from the unregulated, not from the financial institutions. And one of the things we do (in the Dodd-Frank bill), which is supported by CUNA, is to cover the unregulated so that community banks and credit unions which did not cause this problem are protected from the pressures of unfair competition by the unregulated." H.R. 1315 chief sponsor Sean Duffy (R-Wis.) said that his bill has "Main Street" not "Wall Street" appeal. He said that in addition to community banker support, "We go a step further," and went on to cite Wisconsin CU League and CUNA backing for the provision that could reduce credit union burdens. Duffy called credit unions "all people who didn't have any role in this financial crisis, all people in our communities who are looking out for consumers ... ."

CUNA has supported part of H.R. 1315 that would make it easier for the FSOC to stay or set aside potentially burdensome CFPB rules, saying that that change would balance consumer protection with safety and soundness concerns. Although H.R. 1315 passed on a bipartisan House vote, the Senate prospects for the legislation are in doubt.

Back to top
 
 

Capitol by nightHouse, Senate Hearings on CFPB and Oversight Issues

The House and Senate moved forward with hearings related to the Consumer Financial Protection Bureau (CFPB) and other oversight issues, all to the back drop of the Obama administration's and U.S. Congress' work in hammering out a plan to raise the debt ceiling limit.

The House Small Business subcommittee on investigations, oversight and regulation examined the impact of the CFPB on small business in a hearing on July 28th. Dan Sokolov, CFPB deputy associate director for research, markets and regulations; Terry Jones, chairman of the Colorado Mortgage Lenders Association's Legislative and Regulatory Affairs Committee, and Jess Sharp, executive director of the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness, provided testimony to the committee. The CFPB officially opened for business on July 21st, marking the one-year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The House considered the North American-Made Energy Act (H.R 2587), the Protecting Jobs from Government Interference Act and of course the legislation related to the debt ceiling and the budget. The Senate schedule included judicial nominations as well as debt ceiling legislation. Also of interest:

Back to top
 
 

Date Tapped to Run CFPB's Daily Operations

CPFB logoRaj Date, an associate director at the Consumer Financial Protection Bureau, replaced Elizabeth Warren on August 1st as the Obama administration's lead adviser in charge of running the bureau’s daily operations, according to the Treasury Department. Warren will return to her position as a Harvard Law School professor. Date, who serves as the CFPB’s associate director of research, markets and regulations, is a former Wall Street executive who has worked at Deutsche Bank Securities and Capital One Financial Corp. President Obama on July 18th nominated former Ohio Attorney General Richard Cordray, who leads the CFPB’s enforcement division, to serve as the bureau’s director. The Senate will hold a confirmation-hearing for him on September 6th. Read more.

Back to top
 
 

Lock keyData Breach Bills

On July 28th, Sens. Tom Carper (D-Del.) and Roy Blunt (R-Mo.) re-introduced a data breach bill would require consumers to be notified about data breaches that are likely to be misused in a manner causing "substantial harm or inconvenience." Under the legislation, financial institutions and holding-company affiliates that apply Gramm-Leach-Bliley Act data protection and notice requirements would be deemed in compliance.

The Data Security Act of 2011 would require entities such as financial establishments, retailers and federal agencies to safeguard sensitive information, investigate security breaches and notify consumers when there is a substantial risk of identity theft or account fraud. These new requirements would apply to retailers who take credit card information, data brokers who compile private information and government agencies that possess nonpublic personal information. The bill also better protects consumers by replacing the current patchwork of state laws and establishing one set of national requirements.

Sen. Mark Pryor (D-Ark.) (S. 1207), Sen. Pat Leahy (D-Vt.) (S. 1151), Rep. Mary Bono Mack (R-Calif.) (H.R. 2577) and the Obama administration also have offered data-breach proposals. There are now five plans for possible fixes to data security regulations. Read about the Carper-Blunt bill.

Back to top
 
 

House, Senate to Hold 'Pro Forma' Sessions During August Recess

After passing the debt-limit legislation on Monday, August 1st, House leaders announced before adjourning that they would hold pro forma sessions through August, a procedural move that forced the Senate to follow suit. The Constitution requires that for either chamber to take more than a three-day break, the other chamber must give its approval.

These "pro forma" sessions during the next month prevent President Obama from making any recess appointments while the chambers are away. That means the president won’t be able to appoint Richard Cordray as director of the Consumer Financial Protection Agency during the August recess.

Back to top
 
 

How Congress Embraces Social Media

The Washington Post on July 25th highlighted a study by the Congressional Management Foundation, a nonprofit group that studies and works to improve the way congressional offices operate. The report, titled “#SocialCongress: Perceptions and Use of Social Media on Capitol Hill,” offers the results of a survey of Hill staffers about how they and their bosses use – or don’t use – these tools. “While congressional offices may lag behind some leading private-sector organizations in their use of Facebook, Twitter and YouTube,” the report says, “the legislative branch has adopted social media much more quickly than it adopted other technologies, such as fax machines, email and websites.” Brad Fitch, president and chief executive of CMF, recalled that the Senate’s first website – that of the late Edward M. Kennedy (D-Mass.) – was hosted by MIT when it launched in 1993, because the Senate hadn’t created senate.gov yet.

Facebook and Twitter“Contrast that with now, where you have institutional offices openly supporting members using social media … even offering guidance. That’s a real sort of institutional shift [in the] culture,” Fitch said. Yet it turns out that on Capitol Hill, the Brave New World of social media is not quite as new or as brave as advertised. Facebook is useful, staffers say, but it’s no substitute for a firm handshake or kissing a baby. Senior managers and social media managers, according to the report, “say they rely most on the more tangible and verifiable forms of interaction with constituents, such as attending events in the district or state, receiving personalized messages from constituents, and holding town hall meetings. However, it is clear that congressional offices are taking members’ Facebook friends seriously.” Some findings:

Fifty-six percent of those aides called Facebook a “somewhat important” tool for communicating with constituents, just 8 percent called it “very important.” For Twitter, the numbers were 38 percent and 4 percent; for YouTube, 30 percent and 4 percent. By contrast, 77 percent considered attending events in their districts or states “very important,” while 70 percent said the same of personalized messages from constituents, such as e-mail, regular mail, faxes and phone calls.

The survey suggests that social media are more useful for getting the word out on basic issues – for one-way, rather than two-way, communications. Facebook, YouTube and Twitter scored well for communicating lawmakers’ “views and activities.” One member noted that delivering a speech on the House floor reached a certain number of people just via C-SPAN, “but take that video, put it on your YouTube site or put it on Twitter, put it on Facebook and then you’re getting that multiplier effect.”

Not surprisingly, the survey found that “early adopters” of social media saw them as a more useful tool than those offices that waited. In offices that were late to the party, 77 percent of aides said social media “caused staff to worry more about information being leaked prematurely or taken out of context.” And here’s more proof that Congress really can move fast: Just since the CMF survey ended in December, Fitch noted, the number of senators using Twitter has roughly doubled.

Back to top
 
 

CFPB to Release Third Draft of Combined Mortgage Form

The third draft of the Consumer Financial Protection Bureau's combined form for Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures will be released soon, the CFPB said on July 28th. The combined form is required under the Dodd-Frank Act and is intended to reduce mortgage lender regulatory burden and make mortgage disclosures less confusing to consumers. The CFPB has released and collected comment on two separate drafts of a simplified mortgage disclosure form. The agency said it has received more than 18,000 comments since the first draft of the combined form was released in May.

The CFPB previewed some of the issues it will look at more closely in this third draft of its new mortgage form. Those issues include:

  • Rephrasing the way that borrowers are warned of potential issues with interest rates and monthly loan payments.
  • Determining "the appropriate level of detail of fee disclosures for consumers." The CFPB said that commenters "were divided over the benefits of greater itemization of fees versus a simpler, more concise format" on the second page of the form.
  • Moving the "important dates" section of the form onto the front page, and putting sections of the form addressing mortgage points "on its own subject line for better clarity."

Credit unions, Leagues and CUNA have worked with the CFPB on this project. CUNA in May met with the CFPB to discuss the first stage of the streamlining process and additional meetings are in the works, and has urged the CFPB to continue to reach out to stakeholders as it moves forward with this and other projects. The CFPB, in blog posts and official reports, has said it is "committed to remaining attentive" to the concerns of credit unions and other small financial institutions, and looks forward to addressing the concerns of credit unions and community banks throughout the development of CFPB priorities.

Back to top
 
 

Town Hall Opportunities for Credit Union Leaders

With Congress on the August recess, many federal legislators are holding town hall meetings in their respective districts. These public, free meetings provide an excellent opportunity for credit union leaders to reach out to their elected officials and build a positive relationship for the entire industry. Watch for these town hall meetings in your home town! Announcing his schedule on August 3rd was Congressman Tom Graves of the 9th District, details below:

Catoosa County:
Monday, August 8th
2:30pm
Lakeview-Fort Oglethorpe High School
1850 Battlefield Parkway
Fort Oglethorpe, GA 30742

Whitfield County:
Tuesday, August 9th
6:00pm
Dalton Freight Depot
305 S. Depot Street
Dalton, GA 30720

Pickens County:
Monday, August 15th
1:00pm
Pickens County Chamber of Commerce
5000 Stegall Drive
Jasper, GA 30143

Murray County:
Tuesday, August 16th
6:00pm
Murray County Senior Center
820 GI Maddox Parkway
Chatsworth, GA 30705

Back to top
 
 
Industry News
 

IYC logoSenate Approves 'Year of Co-op' Resolution

On Friday, July 22nd, the U.S. Senate officially joined the United Nations in observing 2012 as the International Year of Cooperatives (IYC) by passing a resolution. The resolution was introduced earlier this year by Sens. Tim Johnson (D-S.D.) and Thad Cochran (R-Miss). Earlier this year CUNA wrote to all senators seeking their support for the resolution, which promotes the establishment of a 2012 International Year of Cooperatives committee and generally highlights the benefits that cooperative businesses provide to the nation.

The IYC will officially begin on October 31, 2011 when the U.N. Secretary General gives a speech before the United Nations General Assembly. Recognition events will then extend throughout the remainder of 2011 and into 2012. The theme for the international year is "Cooperative Enterprises Build a Better World." CUNA and the World Council of Credit Unions have already dovetailed that theme with this year's International Credit Union Day on October 18th, whose theme is "Credit Unions Build a Better World."

CUNA last month approved its own recognition resolution, pledging to "lead efforts to engage the credit union community in the promotion of International Year of Cooperative Activities." In addition, on behalf of credit unions CUNA is taking part in a National Cooperative Business Association-led steering committee that will work to raise the profile of cooperatives, improve access to cooperative business, and reach out to government officials and the youth of the world to educate them on cooperative business. The 7,400 U.S.-based credit unions represent the largest segment of the more than 29,000 American cooperative businesses, holding nearly $1 trillion in assets and serving more than 92 million consumers.

Back to top
 
 

Credit Union to Buy Indiana Savings Bank

On July 27th, St. Joseph, Mich.-based United Federal Credit Union said that it has agreed to buy Griffith Savings Bank in Griffith, Ind. The $1.3 billion-asset United FCU will purchase all of the $88.5 million-asset Griffith's "loans, investments, real estate, accrued interest receivables, and other banking-related assets, with an estimated value of approximately $81 million, after a discount to the loan portfolio agreed to by the parties," the credit union said in a press release. It also "will assume all deposits, Federal Home Loan Bank advances, and accrued interest payable of approximately $81 million."

Griffith will retain certain assets that will be used to fund accrued liabilities relating to its employee benefit plans. The acquisition, which is subject to regulatory approval, is expected to be completed in the third quarter, United said. Read the press release.

Back to top
 
 
State News
 

MapSpecial Session Approaching

The Georgia General Assembly reconvenes on August 15th for the task of redistricting (drawing new Congressional, state Senate and state House district maps), and the parties and interest groups are staking out their positions. In the months leading up to this special session, legislators on both sides of the aisle have privately shared with the Government Influence Team that redistricting will be the only topic on the agenda, and that tax reform will not enter into the discussion. This point was confirmed publicly when Gov. Nathan Deal reiterated to the press that any unfinished business from this year’s regular session will not be up for discussion in the special session.

Georgia is gaining one additional Congressional district in the process, and many legislators and interest groups are pushing for their preferences for this new seat for Georgia in Washington, D.C., as well as protecting or carving up existing districts (depending upon one’s viewpoints). It is currently unknown precisely how the district lines will fall, but based on census data it appears that the new Congressional district will be north of Atlanta, and that there are several state-level seats that will be lost in the south of the state and gained in the north of the state. When they reconvene, political ambitions, personal preferences and the possibility of losing one’s post will weigh heavy in the redistricting process, and that is prior to any outside influences weighing into the discussions. The special session will likely be chaotic – stay tuned!

Back to top
 
 
News of Interest
 

Beige bookFed's Regional Economic Outlook Little Changed

The Federal Reserve's latest Beige Book report on economic conditions shows little change from June through early July for the Sixth District, which includes Georgia. Retail sales grew somewhat, and tourism reported strong results. Real estate remains weak, although Florida reported growth in home sales. Credit availability for entrepreneurs and real estate developers remained tight, although loan availability for some commercial projects increased. The report noted that bank contacts said credit is available but finding qualified borrowers remains difficult. Several cited increased competition for qualified loans. The employment outlook is for modest improvement. See the full report here.

Back to top
 
 

Stick peopleRecession Study Finds Hispanics Hit the Hardest

The New York Times reported on July 26th that Hispanic families accounted for the largest single decline in wealth in any ethnic and racial group in the country during the recession, according to a study published by the Pew Foundation. The study, which used data collected by the Census Bureau, found that the median wealth from 2005 to 2009 fell:

  • Hispanic households by 66 percent
  • Asian households by 54 percent
  • African American households by 53 percent
  • Caucasian households by 16 percent

Household wealth is made up of assets, such as house, car and savings, minus debts such as loans and credit cards. To read more please click here.

Back to top
 
 

History 101: Former Rhode Island Governor Dies During Financial Crisis

Former Rhode Island Gov. Bruce Sundlun, whose first acts of office in 1991 included shutting down 45 credit unions and banks after the collapse of their private deposit insurance company, passed away at the age of 91. Sundlun died Thursday, July 21st, at his home in Jamestown, RI. He served as governor from 1991 to 1995 during one of the state's deepest recessions and the worst banking collapse in the state's history (newsblog.projo.com July 21).

The crisis occurred after Heritage Loan and Investment Bank President Joseph Mollicone and $13 million disappeared in 1990. The bank collapsed, causing a run on other banks and credit unions insured by the Rhode Island Share and Deposit Indemnity Corp. (RISDIC). That led to RISDIC's collapse. On January 1, 1991, Sundlun as governor shut down the 45 institutions. The closures and the struggle to find a method to pay off depositors dominated his first 18 months of office. Depositors got their money back through a $700 million bailout plan financed by state sales tax revenues. The events also changed the share insurance landscape for credit unions. Today, only one private share insurer remains.

Back to top
 
 
Public Influence News
 
Atlanta Business Chronicle logoAtlanta Business Chronicle Features Credit Unions

The July 22nd issue of the Atlanta Business Chronicle featured a special section on credit unions. About 18 credit union spokespersons participated in various stories on topics ranging from mergers to regulatory burdens and interchange.

Here are a few of the stories that appeared in the ABC:

Mergers add services, help with regulations
Demand lower for a CU staple: new car loans
CUs coping with onslaught on new regulations
Debit card fraud grows with increased usage
Georgia credit unions gaining a stream of new members who are tired of banks
Montgomery comes full circle at new position

To read more stories from this issue, click here.

Back to top
 
 
USA Today: Rule Change Means More Risk to FIs

A provision of the Dodd-Frank financial reform law that took effect on July 21st will double the amount of money financial institutions make available to customers after they deposit a check. That could create more risk for financial institutions, including credit unions, CUNA said in July 21st’s USA TODAY. "The provision requires banks and credit unions to make a minimum of $200 available to depositors in one business day, up from the current minimum of $100," wrote USA TODAY financial columnist Sandra Block in an article titled, "Credit score is free if you're rejected for a loan."

Exceptions to the provision include allowing financial institutions to hold on to funds for a longer time period if the check is in excess of $5,000 or if the customer has repeatedly overdrawn the account, the newspaper said. Most banks already exceed the new requirement, Nessa Feddis, senior counsel for the American Bankers Association, told the paper. "I don't think many consumers are going to notice [the change]," she added. However, some financial institutions are worried that the rule change will make it harder for them to spot fraudulent checks, Block wrote. "There's going to be more of a risk exposure to financial institutions in general as a result of this [rule change]," Mary Dunn, CUNA deputy general counsel, told the paper.

Back to top
 
 
CU Media Training Coming Up

Mark your calendar for the annual GCUA Media Relations Workshop on Thursday, September 15th in Duluth. The League’s PR firm, Weber Shandwick, will share tips on effective media relations and how credit unions can maximize media exposure. Also, attendees will hear from a panel of journalists speaking about what they look for in a good news story, how to pitch stories to them, and the general workings of their day-to-day activities. Details and registration information will be coming your way soon. We hope you will be able to attend.

Back to top
 
 
USA TODAY: CUs Help Students Find Free Checking

Credit unions are a good place for cash-strapped college students to find free checking, according to a Tuesday USA TODAY article.

"Most big colleges and universities, along with many smaller ones, have their own credit unions," wrote Sandra Block, USA TODAY personal finance reporter, in an article about free checking for students. "Most offer free checking with low minimum-balance requirements."

College students can withdraw their cash from more than 28,000 ATMs, including 5,500 ATMs at 7-Eleven convenience stores, if their credit union belongs to the CO-OP Network, the article said.

Click here to read the story.

Back to top
 
 

CUs in the News

TIC Celebrates Christmas in July
WRBL-TV

Get the latest in local CU coverage, click here.

Back to top
 
 

Consider This

TalkGwinnett.com included information from this edition of Consider This in a recent issue.

View archives of this monthly e-news brief sent to journalists, click here.

Back to top
 
 

Paying Attention

View the current issue as well as archives of this quarterly report, click here.

Back to top
 
 

Statewide News Coverage

Get the latest in statewide news coverage, click here.

Back to top
 
 
News of the Competition
 
Westmoreland
U.S. Rep. Lynn Westmoreland
Bank Closure Study Bill Passes House

Last month, U.S. Rep. Lynn Westmoreland introduced legislation (H.B. 2056) that would investigate whether the government’s efforts to clean up distressed and failed banks are doing more harm than good. On July 28th, the bill passed the House by voice vote. During debate about the bill earlier in the week, fellow Georgia Rep. David Scott supported the bill, noting the need to carefully examine policies, practices and procedures for resolutions. The House Financial Services subcommittee on Financial Institutions and Consumer Credit will hold a field hearing on August 16th from 9:00 am until 2:00 pm on this issue. Titled “Potential Mixed Messages: Is Guidance from Washington Being Implemented by Federal Bank Examiners?”, this hearing will be held at The Centre for Performing and Visual Arts in Coweta County in Newnan.

House Bill 2056 calls for two yearlong studies into the banking crisis. One, conducted by the inspector general of the FDIC, would, among other things, audit the resolutions of failed banks in 10 states, including Georgia, as well as regulators’ treatment of distressed institutions. A separate study also would be conducted by the Government Accountability Office, the investigative arm of Congress. Georgia leads the nation in bank failures with 67 since mid-2008. The bill now moves to the Senate.

To read the AJC article on this issue click here. From Congressman Westmoreland’s site, click here to see a chart outlining bank failures, unemployment rates, and foreclosure rates in the 10 states affected by the studies.

Back to top
 
 

Citi cardCitigroup's New Card

The Atlanta Journal-Constitution reported that Citigroup launched a credit card on July 25th that marries a trio of perks – no late fees, no penalty rate and a single interest rate for purchases, balance transfers and cash advances. The revamped Simplicity card will be marketed to those who are juggling busy schedules and want a credit card with simple terms, said Jud Linville, CEO of Citi Cards. "It lets them not have to worry that they're going to be late on a payment. It provides some flexibility," he said.

But as attractive as the card's features may sound, there are a few reasons to think twice before applying.

One of the biggest drawbacks is the card's 16.99 percent interest rate. That is higher than the average rate on the market of 14.40 percent last week, according to Bankrate.com, which tracks financial data. So if you're prompt with payments but tend to carry a balance, a low interest rate is likely a bigger priority than the perks offered by Citi's new card. The Simplicity card also doesn't offer any rewards, which can be a deal breaker for some. Or it may turn out you won't qualify for the card. Citi declined to specify what type of credit background is required. But CardHub.com, which lets consumers search and compare card offers, lists the Simplicity card for those with "excellent" scores of 720 or higher. To read more please click here.

Back to top
 
 

PNC Bank Expanding GA Presence

On July 26th, the Atlanta Business Chronicle reported that PNC Bank will acquire 27 metro Atlanta Flagstar branches. PNC had previously reported plans to buy RBC Bank as well (with 52 branches in metro Atlanta). After the close on RBC and Flagstar deals, PNC will become the 7th largest bank in the area.

Back to top
 
 

New Strategy: HSBC Bank Cutting Back

The Washington Post reported on August 1st that the British banking group HSBC will cut 30,000 jobs worldwide by 2013 and sell almost half of its retail bank branches in the U.S., part of a new strategy to focus on fast-growing emerging markets. To read more please click here.

Back to top
 
 

No complainingBlocking Class Action Suits

The Wall Street Journal reported on August 2nd that some small and regional U.S. banks are prohibiting unhappy customers from taking their complaints to court or joining class-action lawsuits, instead requiring them to resolve disputes through arbitration. The banks are emboldened by a U.S. Supreme Court ruling in April that said state laws can't supersede private contracts that require customers to present their complaints individually to an arbitrator. To read more please click here.

Back to top
 
 

Overdraft Fees

On August 4th 11alive.com reported that the country's largest banks are still charging steep overdraft fees.  A survey released by the Consumer Federation of America finds that the median overdraft fee is $35, which is unchanged from last year. The highest fees also remain $33 to $37 per overdraft.

The fees for nonsufficient funds can be triggered if customers overdraw their accounts by as little as $5. In addition, the survey found that two-thirds of banks continue piling on fees if customers fail to balance their accounts within a set time.

The report continues that the findings come a year after a new regulation required banks to obtain consent before enrolling customers in overdraft programs. Previously, it was industry practice to automatically enroll customers without giving them a way to opt out.

Back to top