DEBIT BILL SPONSORS SEE PAC MONEY BEGIN TO FLOW IN
WASHINGTON-With the toughest campaign of his career on tap, Montana Senator Jon Tester collected tens of thousands of dollars in campaign contributions from credit unions, banks and other interests before the Senate Banking Committee, just days before Tester lent his name as co-sponsor of the bill to delay the controversial rule cutting debit fees.
CUNA, which had contributed $1,000 to the freshman Democrat in January, gave another $2,500 Feb. 25-two weeks before the introduction of the bill; and NAFCU contributed $2,500 to Tester on Feb. 8, according to records submitted to the Federal Election Commission recently. Tester, the bill's chief sponsor, also received contributions from MasterCard ($2,000); Discover Financial ($1,000) American Express ($1,000) and US Bancorp ($500), among others.
Tester, who faces a tough reelection versus Republican Denny Rehberg in this overwhelmingly Republican state, was among several key bill sponsors in the Senate and House to benefit from their support of the debit rule delay. The Tester race, in the country's least populous state, is expected to be one of the highest profile contests in the country as control of the Senate lies in the balance. The first-term Senator acknowledged as much in a speech last week to Democratic supporters. "It's going to be tough. It's going to be expensive," Tester told about 500 attendees at the state Democratic Party's annual dinner and fundraiser.
Delaware Sen. Tom Carper, another main sponsor, received major contributions from the American Bankers Association, the Independent Community Bankers Association, American Express, Discover Financial, HSBC and others. Tennessee Sen. Bob Corker, another co-sponsor, received financial support from CUNA ($1,000), US Bancorp and others with interest in the bill.
And Rep. Shelley Moore Capito, chief sponsor of the House bill to delay the interchange rule, received PAC contributions from the Financial Services Roundtable, the ABA, ICBA, CitiGroup, Bank of America, Visa and Discover Financial, the FEC records show.
These financial interests are among the biggest campaign contributors in Congress. Both the ABA and CUNA are among the top 15 contributors.
But perhaps the biggest recipients of financial services PAC contributions in recent weeks was an obscure leadership PAC, known as the Growth and Prosperity PAC, which is operated by Alabama Rep. Spencer Bachus, chairman of the House Financial Services Committee, which will not only arbitrate the House bill on interchange, but also other efforts alleviate provisions of last year's Wall Street reform bill, known as Dodd-Frank, as well efforts to end mortgage foreclosure programs, reform Fannie Mae and Freddie Mac and oversee the new Consumer Financial Protection Bureau. Bachus' PAC, which is separate from his personal campaign PAC, received contributions in recent weeks from CUNA ($5,000); the ABA ($5,000); the ICBA ($5,000); Citigroup ($5,000); Financial Services Roundtable ($5,000), AmericanExpress ($5,000) and others.
AGENCY RESUMES SALE OF NCUA-GUARNATEED NOTES
WALL STREET-NCUA was expected to hit the Street late last week with an offering of $1.5 billion of NCUA Guaranteed Notes being used to finance the corporate credit union bailout, the first offering in three weeks.
This week's offering, the tenth since October, makes a total of more than $25 billion of the notes sold, the proceeds of which are being used to pay off credit union depositors in the five failed corporates: U.S. Central FCU, WesCorp FCU, Members United Corporate FCU, Southwest Corporate FCU and Constitution Corporate FCU. NCUA plans to offer another $3 billion of the notes as part of the program.
The notes are federally guaranteed and are backed by the cash flows on toxic mortgage-backed securities owned by the five corporate failures. The latest offering is backed by residential MBS. Barclays Capital is the lead underwriter of the offering.
GUBERNATORIAL CANDIDATE TROUBLED BAY STATE CU BOARD
BRAINTREE, Mass.-Tremont Credit Union, the subject of a state supervisory action a year ago, reported it named former Republican gubernatorial candidate Charles Baker to its volunteer board of directors last week.
Baker lost the Governor's race last year to incumbent Democrat Deval Patrick. Prior to that he worked for a decade as president of Harvard Pilgrim Health Care, turning around the money-losing health maintenance organization, and served key roles in the administrations of Republican governors William Weld and Paul Cellucci. He recently joined Cambridge-based venture capital firm General Catalyst Partners.
"Charlie's consummate blend of business skills, government experience, financial expertise, and regulatory knowledge will provide extraordinary organizational benefits," said George Hardiman, chairman of the $170-million credit union.
"I admire and appreciate the critical role the credit union industry plays in providing accessible and low-cost financial services to the people of Massachusetts," said Baker, noting the credit union continues to make changes required under last year's supervisory agreement with the Massachusetts Division of Banks.
Tremont Credit Union posted a $7.7-million net last year after losing $11.5 million in 2009 and is currently searching for a new CEO.
The interim CEO, Gary Fishlock, was brought in by regulators to lead the reorganization effort at the credit union.