Farm Bill Negotiators Say They Have an Agreement
House and Senate negotiators on the Farm Bill said last night that they have reached an agreement on the final legislation and will discuss its details today at an afternoon press conference. The agreement reportedly moved Congress closer to President Bush on the amount of government subsidies that wealthy farmers could receive, an issue that has been a sticking point. ABA has continued to monitor negotiations closely to ensure that the final legislation does not include provisions expanding Farm Credit System's lending authority. Meanwhile, the White House said yesterday that it is unlikely Congress will pass a Farm Bill that President Bush can sign, according to press reports. The president is concerned that negotiators have not come close enough to his positions on the legislation, and he may ask Congress to pass a one-year extension of the 2002 Farm Bill. u   

President Bush Signs Student Loan Legislation
President Bush yesterday signed a bill (H.R. 5715) aimed at stabilizing the student loan market. The legislation, among other things, will empower the Education Department until mid-2009 to buy federally guaranteed loans that lenders are unable to sell as securitized debt, and also enable it to funnel loan capital to state guaranty agencies under a lender-of-last-resort program. Other provisions will increase annual loan limits on federal college loans for all students by $2,000, and raise the aggregate loan limits to $31,000 for dependent undergraduates and to $57,500 for independent undergraduates. Read a bill summary. u   
 

Fed Issues Proposed Rules
to Reform Credit Card, Overdraft Practices
The Federal Reserve Board last week -- along with the Office of Thrift Supervision and National Credit Union Administration -- proposed rules intended to prohibit unfair credit card and overdraft protection practices. The proposed rules, among other things, would prohibit double-cycle billing, restrict a bank's ability to raise interest rates on pre-existing balances and prohibit the use of certain payment allocation methods. The proposal also requires institutions to provide consumers with notice and an opportunity to opt out of the payment of overdrafts, before any overdraft fees or charges are imposed on consumers' accounts.

"The proposed rules are not the right policy response to concerns over the ability of consumers to understand the terms of their credit cards," ABA President and CEO Ed Yingling said. "For example, the proposal would greatly restrict the ability of card companies to charge interest rates that reflect the risks of different consumers, similar to how insurance companies charge different rates depending on drivers' records. If card companies cannot fully reflect risk, then millions of consumers with good credit histories will end up with higher rates." Yingling added that the proposal could end zero- or low- interest balance transfer options.

There will be a 75-day comment period on the Fed's proposal to amend Regulation AA (Unfair or Deceptive Acts or Practices under the Federal Trade Commission Act) and a 60-day comment period on complementary proposals to amend Reg Z (Truth in Lending Act) and Reg DD (Truth in Savings Act). Read more. Read Yingling's statement. u 

Fed Survey Finds Tightening Lending Standards
The percentage of banks tightening lending standards during the past three months was near historic highs in nearly all loan categories, according to the Federal Reserve's April survey of senior loan officers released this week. Some 80 percent of U.S. banks said they tightened standards for making commercial real estate loans, and about 60 percent said they tightened lending standards on prime mortgages. Those tougher standards also extended to other types of consumer debt. For example, 70 percent of U.S. banks stiffened standards for approving home equity lines of credit, the survey found. About 40 percent of banks that make student loans said they expect their commitments to provide such loans this fall will decrease compared with last year. Read more. Read the survey. u

Still Time to Register for SDBA's IRA Essentials
The IRA Essentials Seminar provides attendees with the knowledge they need to work effectively with traditional and Roth IRAs, including the procedures that financial organizations must follow to operate a compliant IRA department. The SDBA is offering the course on Tuesday, May 13, at the SDBA Office in Pierre; Wednesday, May 14, at the Ramkota Inn in Sioux Falls; and Thursday, May 15, at the Ramkota Inn in Aberdeen. This course is designed for individuals who are new to IRAs and for those looking for a general IRA refresher. Program highlights include Roth and traditional IRA plan establishment, contributions, asset portability, Roth and traditional IRA distributions and required reporting. To register, visit the SDBA’s online Calendar of Events. u