Yingling Explains Interchange Fee Issue in Video,
Urges Bankers, Employees to Send Letters
ABA has released a video message in which association President and CEO Ed Yingling talks about ABA-opposed legislation introduced in both the House (H.R. 5546) and Senate (S. 3086) that would create a new federal bureaucracy to regulate the fees retail merchants pay to financial institutions for access to the credit and debit card payment systems. "Unbelievably, the merchant community wants the Congress to have the government set the fees instead of the banks. In other words, they want to turn our banks into public utilities instead of regular businesses," Yingling explains in the video. The merchants "want to lower their costs. But that will also reduce your bank's revenue and limit your ability to serve your customers and your communities."

The House Judiciary Committee is expected to consider H.R. 5546 on July 9, and ABA is asking bankers and their employees to send letters to their House members to urge them to oppose -- and refuse to co-sponsor --the bill. The association's automated online system requires only a ZIP code and a couple of minutes to send a letter. View Yingling's video message. Please send a letter. u

Guidance Issued for
Reducing or Suspending Home Equity Lines
The FDIC this week issued guidance to remind banks that if they decide to reduce or suspend home equity lines of credit for risk management purposes, they must follow certain legal requirements designed to protect consumers. For example, the agency said, Regulation Z (Truth in Lending) permits lenders to reduce credit limits or suspend further extensions of credit if the value of the dwellings securing loans declines significantly, or if consumers are unable to meet their obligations because their financial circumstances change. The FDIC also reminded banks that compliance with Regulation B and the Fair Housing Act requires them to calculate revised property values and determine borrower financial circumstances using consistently applied fact-based methods. They also must implement any resulting limitations without regard to prohibited factors. The agency urged institutions to work with borrowers, when possible, to mitigate financial hardships arising from home-equity-line-of-credit reductions or suspensions. Read more. Read the guidance. u

FDIC Also Issues Guidance on 'Other Real Estate'
Because the rise in foreclosures has increased banks' potential for holding higher levels of "other real estate" -- or ORE -- the FDIC this week also issued guidance that emphasizes the need to properly maintain such holdings. The guidance details the expenses associated with maintaining and protecting ORE from further deterioration; addresses the need to comply with requirements for obtaining initial and updated values for ORE; and summarizes ORE accounting and reporting standards for each ownership phase, including acquisition, the holding period and disposition. Read more. Read the guidance. u   

Frank Announces Hearings
on Financial Market Regulatory Restructuring
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke will testify July 10 during the first in a series of House Financial Services Committee hearings on the policy implications of changes in financial markets, including the fast growth in assets held outside the commercial banking system, panel Chairman Barney Frank (D-Mass.) said this week. The hearings will examine such issues as the regulatory implications of allowing investment banks to access the Federal Reserve's discount window; the need for enhanced capital and reserve requirements for financial firms; and whether the Fed and other agencies have adequate authority to protect taxpayers and the financial system. Read more. u

Former ABA Chair Betsy Duke Confirmed for Fed Seat
The Senate last Friday confirmed former ABA Chair Betsy Duke for a seat on the Federal Reserve Board through 2012. Senate Majority Leader Harry Reid (D-Nev.) said Duke's confirmation will ensure that the Fed can function during the current economic slowdown. Duke, 55, is the COO of TowneBank, Portsmouth, Va., and she will become the only Fed governor with commercial banking experience. "Betsy's many years as a bank CEO and her involvement in ABA over the past decade have given her a firsthand understanding of the challenges facing the financial services industry," ABA President and CEO Ed Yingling said. "As ABA chairman, she traveled the country, talking to, listening to, and working with leaders from institutions of all sizes and complexity. Betsy is a smart, results-oriented strategic thinker. She will be a terrific addition to the board." u

Cultivating Entrepreneurs Teleconference on July 15
Small businesses are the fastest growing segment of the economy and the foundation upon which rural America is built. Learn how to support economic growth by identifying and focusing resources on entrepreneurs during a free teleconference "Cultivating Entrepreneurs" Creating an Environment for Strengthening Businesses. Participate in a discussion about ways to support local entrepreneurs LIVE from the training session for the eight Dakota Rising finalists on Tuesday, July 15, 9 a.m. CDT. The teleconference will feature Mary Mathews, president, Northeast Entrepreneur Fund, Inc., and Elsie Meeks, president and CEO, First Nations Oweesta Corporation. The event is sponsored by South Dakota Rural Enterprise, East River Electric Power Cooperative, Enterprise Institute, REED Fund, Rural Learning Center, South Dakota Office of EQUIP, and the South Dakota Small Business Development Centers. Register and more information. u