6 Cliff Hangers That Will Shape Credit Unions This Fall

August 6, 2013 at 7:39 am Leave a comment

imagesIt’s early August and unfortunately there’s a hint of fall in the air, which has gotten me thinking of all those annoying cliff hangers.  Here are the questions, the answer to which will shape the credit union policy landscape in the coming months.

  • Will the Federal Reserve appeal the recent ruling striking down its debit card interchange fee regulations?  If it doesn’t, then the next few months will be consumed with another round of rulemaking.  This is going to hurt, the only question is how much?
  • What will the final Dodd-Frank regulations look like?  We still don’t have a definitive answer from our good friends at the CFPB about which fees are to be included in calculating qualified mortgage restrictions.  In addition, we still dont’ know what the new combined disclosures will look like.  In other words, some of the biggest changes are yet to be announced as you put the finishing touches on your new mortgage policies and procedures.  By the way, if you weren’t working on those yet, you should be.
  • Who will the new chairman of the Federal Reserve be?  Chairman Bernanke’s term doesn’t expire until January, but there is speculation that the President could make his nomination as early as September.  Let’s face it, with Congress and the President unlikely to come to grips on any major structural reforms this year, the person with the most direct and immediate control over the economy is the FED Chairman.  The two leading contenders are Janet Yellen and Larry Summers.  Yesterday, the wonderfully outspoken head of the Dallas Federal Reserve Bank, Richard Fisher, commented that they were both well qualified candidates.  He also noted that the next chair should not be a prima dona, which would seem to disqualify Summers, who doesn’t exactly have a reputation for playing well with others.  Whoever gets the nod will have an impact over how long the FED maintains its bond buying program.
  • What to do about housing?  Later today, the President continues his series of speeches outlining what needs to be done to improve the economy he’s been presiding over for five years now with his speech detailing his approach to housing reform.  I’ll probably be commenting on this speech tomorrow (I’m sure you can’t wait).  With the President entering the housing fray, and the House Financial Services Committee having voted out its proposal to end Fannie and Freddie, all the major players will have staked out base-line positions to begin serious housing reform.  Strip away the rhetoric and there is actually more common ground here than meets the eye.  The question is will partisanship make compromise on an issue that is both complicated and easy to demagogue impossible to achieve?
  • Speaking of impossible to achieve, what will the President and Congress be able to agree on to avoid another government shut down?  On the bright side, unless he or she is considering a run for President, no one thinks shutting down the Government is a good idea.   The exceptions are Senators Marco Rubio and Ted Cruz, who are likely to seek the Republican nomination for President and therefore cannot be seen as being sensible.  Whatever momentum the economy has gained could be undone by a week or two of legislative brinksmanship if Congress is willing to hold the full faith and credit of the country hostage to deficit reduction.
  • Even if a sequester battle is averted, it would be nice to see Congress actually pass a budget this year that replaces some of the across-the-board cuts mandated by Sequester.  But my one prediction is that Alex Rodriguez will be serving a suspension for using performance-enhancing drugs long before Congress and the President actually agree to a spending plan.

Entry filed under: Economy, General, Political, Regulatory. Tags: , , , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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