Inside Washington from CUNA

Source: CUNA News Now, December 12, 2008

WASHINGTON (12/12/08)--Congress plans to reject requests to use remaining Troubled Asset Relief Program (TARP) funds if the Treasury doesn't put some of the money toward a foreclosure prevention program, Rep. Barney Frank (D-Mass.) warned at a Wednesday hearing on TARP implementation (American Banker Dec. 11). Frank and other lawmakers argued that the Treasury has used $335 billion without significant results and criticized the agency for not tracking how banks use the money. Rep. Maxine Waters (D-Calif.) told Treasury Assistant Secretary Neel Kashkari not to ask Congress for money until it adopts Federal Deposit Insurance Corp. Chairman Sheila Bair's plan for loan modifications. Kashkari defended the Treasury, saying its investments in banks prevented economic collapse, and noted that Fannie Mae and Freddie Mac recently announced a voluntary loan modification plan that could help roughly every loan. He also said the Treasury failed to support Bair's plan because it would actually cause more foreclosures. Democrats at the hearing disagreed. Waters also introduced legislation Wednesday that would require the Treasury to back servicers who modify loans ...

WASHINGTON (12/12/08)--Small Business Administration (SBA) lenders are counting on President-elect Barack Obama to win back many other small banks that have ceased SBA lending (American Banker Dec. 11). Some congressional members also are pushing to move the SBA into the Cabinet. Obama has not provided many details on his plans for the SBA, but lenders say they hope his administration will be more open to ideas for improvement. Industry representatives and lenders say that the SBA has not been treated as a priority by the Bush administration--as evidenced by a smaller budget, higher fees charged to lenders and restrictions on some loan programs. In October, the agency changed the requirements of the Community Express program and limited the loans lenders could grant per month under it. The program's dollar volume dropped 76% in October and November, compared with last year ...

WASHINGTON (12/12/08)--The Office of Thrift Supervision (OTS) is seeking nominations for members of a Mutual Savings Association Advisory Committee. The committee will study the needs of mutuals, assess the challenges they face and advise the OTS director on how to support mutual institutions. Nominations are due Jan. 8.