ICBA: Study Finds Interchange “Exemption” Doesn’t Work
A recent Government Accountability Office study found that community banks that are supposedly exempt from government price controls on debit card interchange have nevertheless experienced a decrease in average interchange fees, ICBA and a coalition of other trade groups told Congress. In a letter to congressional leaders, the coalition cited the study’s findings that average interchange fees that merchants pay “exempt” issuers to process debit card transactions declined 5 percent since the Durbin Amendment price controls were implemented by regulators.

The study goes on to note that community banks and credit unions are struggling to maintain viable debit programs and that some have had to raise fees. Even more harm to “exempt” community banks and credit unions is likely as the marketplace evolves, the study concludes.

In addition to the decline in revenues, the coalition wrote, consumers have yet to benefit from the Durbin Amendment price controls. “Despite promises by retailers, and despite a realized $8 billion windfall by these retailers over this past year, consumers have yet to see discounts for using their debit cards at the register,” the coalition wrote.

House Approves Municipal Advisor Exemption
The House passed ICBA-advocated legislation to exempt banks and their employees from new municipal advisor registration requirements. H.R. 2827 would prevent community banks and their employees from having to register as municipal advisors with and be examined by the Securities and Exchange Commission.

ICBA recently wrote in a letter to the House Financial Services Committee that the legislation would significantly relieve regulatory burdens for the thousands of community banks that provide traditional banking services to municipalities.

“Community banks have always provided traditional banking services such as demand deposits, certificates of deposit, cash management services, loans and letters of credit to the municipal governments of the communities they serve,” ICBA wrote. “Community banks provide these services under close supervision by state and federal bank regulators.”

Cordray: CFPB Reforming Credit Restrictions for Stay-at-Home Spouses
Consumer Financial Protection Bureau Director Richard Cordray told Congress that his agency is revising regulations that are negatively affecting credit availability for stay-at-home spouses. Testifying before the House Financial Services Committee, Cordray said tens of thousands and perhaps hundreds of thousands of individuals have been denied credit because of rules, which require credit card issuers to consider a consumer’s “independent” ability to make minimum payments and disregard the consumer’s household income.

In a statement for a House Financial Services subcommittee hearing in June, ICBA wrote that it opposes the rule because it often makes stay-at-home spouses and people with low individual incomes ineligible for a credit card or subject to a more limited line of credit. Cordray told the committee that the CFPB plans to propose a new rule before lawmakers return from recess to ensure it does not shut non-working spouses out of the credit market.

Boehner: House Tackling Farm Bill After Elections
House Speaker John Boehner (R-Ohio) said last week that the House will work to advance a five-year farm bill when it returns following the November elections. As reported in The Hill, Boehner said that there are not enough votes to pass the House Agriculture Committee's version of the farm bill.

Boehner said that some members of Congress believe the committee-passed bill goes too far in reforming agricultural policy, while others believe it does not go far enough. The $900 billion bill would cut $35 billion from the deficit over 10 years, including $16 billion from food stamp programs.

The current farm bill is scheduled to expire on Sept. 30

OCC: Q2 Trading Revenue Down on JPM Loss
Commercial banks and savings associations reported trading revenue of $2 billion in the second quarter of 2012, down 69 percent from the previous quarter and 73 percent from a year ago, the Office of the Comptroller of the Currency reported. The OCC attributed the decline to JPMorgan Chase reported a $3.7 billion loss from credit trading activities. The OCC also reported that net current credit exposure, the primary metric the OCC uses to measure credit risk in derivatives activities, increased 9 percent to $410 billion in the second quarter.

FHFA Proposes State-Level G-Fee Adjustments
The Federal Housing Finance Agency proposed adjusting the guarantee fees that Fannie Mae and Freddie Mac charge on single-family mortgages in states where costs related to foreclosure practices are statistically higher than the national average.  The size of the fee adjustments are intended to reflect the disparity in costs as compared with the national average. The notice invites public input on this approach and potential future approaches to setting and adjusting state-level g-fees.

OCC Issues Reminder on Legal Holidays
The Office of the Comptroller of the Currency reminded supervised institutions of its guidance on natural disasters and other emergency conditions. The guidance notes that a written proclamation of a legal holiday provides bank management the discretion to make individual decisions to remain open or close for the duration of the event. The agency said it expects only those banks or offices directly affected by the event will close and that those banks or offices will make every effort to reopen as quickly as possible.

Freddie: Mortgage Rates Remain at Historic Lows
Freddie Mac said fixed mortgage rates remained at or near record lows last week. Rates on 30-year fixed-rate mortgages averaged 3.49 percent, down from 3.55 percent the previous week and 4.09 percent a year ago. Rates on 15-year FRMs averaged 2.77 percent, down from 2.85 percent the previous week and 3.29 percent last year.

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