April 6, 2011
Congressman Frank wants to revisit interchange
Representative Barney Frank of Massachusetts, the ranking minority member of the House Financial Services Committee as well as a key author for the Dodd-Frank Wall Street Reform Act, announced Tuesday that he would support legislative action to postpone the deadline for the Federal Reserve (Fed) to issue a rule on debit card interchange fees.
In his statement of support, Frank noted a recent announcement by the Fed that it would not be able to meet a statutory deadline of April 21 to propose a final rule on debit interchange fees. The Dodd-Frank Act requires the Fed to meet that deadline to propose a rule to set a ceiling on what debit card issuers may charge retailers who use that payment system.
"The Federal Reserve's announcement that they cannot meet the deadline on interchange fees confirms my view that this is the only part of the financial reform bill that needs to be amended. For this reason, I support legislative action to postpone the deadline so that we can revisit it," Frank said. He did not address a July 21 effective date that is also set by the law.
Congressman Frank will be the featured speaker at the Association’s Great New England Credit Union Show on Thursday, April 21 at the Holiday Inn in Boxborough.
The Great New England Credit Union Show April 21!
Only two weeks until The Great New England Credit Union Show pulls into town. Join your credit union peers for a full day of education and networking. Over 75 companies that serve credit unions will be on hand to demonstrate how they can help you better serve your members.
Don’t miss The Great New England Credit Union Show. It will be held on Thursday, April 21 at the Holiday Inn in Boxborough, MA. Click here to register.
CUNA: Credit union savings to stay steady, loans to rise
As the economy grows, credit unions' saving balances are expected to stay steady and their loan balances are expected to rise during the next two years, according to Credit Union National Association (CUNA) economists, who met recently to update their outlook for economic conditions and credit union operating results.
"In short, we now believe that the U.S. economy will grow above trend in 2011 and slow to 3.25% in 2012," said Senior Economist Steve Rick in his summary for CUNA's U.S. Credit Union Profile: Year-End 2010 Summary of Credit Union Operating Results.
"Expansionary monetary and fiscal policy along with the natural dynamics of the business cycle will support economic growth in 2011. Economic growth will slow in 2012 as government stimulus programs are withdrawn," said Rick. "At the same time, core inflation will remain below the Federal Reserve's implicit target of 2% through 2012" and "labor markets will continue to improve but only slowly."
That means the federal funds targeted interest rate "will not begin an upward path until the end of 2011. We expect a 25 basis-point interest rate move at the end of 2011 followed by a two-percentage-point increase in 2012. Thus, the Treasury yield curve should flatten in 2012," he added.
He noted that with this backdrop, credit union savings balance growth is expected to remain at 5% for the next two years. "Despite rising disposable incomes, savings balance growth will remain below its five-year average of 6.3%, as members begin to spend again to relieve some pent up demand and deleveraging continues. Currently, members are paying off debt rather than saving any additional surplus funds due to the large interest rate differential between loan and deposit interest rates."
A Cat’s Paw in the Courtroom?
An important Supreme Court ruling in Staub v. Proctor invokes a legal principle which takes its name from a fable written by a 17th Century French poet, Jean de La Fontaine. The 8 – 0 decision was handed down on March 1 and favored the Plaintiff Staub who was employed by Proctor Hospital in Illinois.
The Case: Vincent Staub was an angiography technician at Proctor Hospital in Illinois. He had successfully combined his career with his service in the Army Reserves for 10 years—until Janice Mulally became his scheduler. Staub was required to perform Reserves duties for one weekend each month and two weeks each summer. Mulally told him the Reserves were a waste of his time, and of hers, and of taxpayers’ money. She also told her boss, Michael Korenchuk, that she wanted to get rid of Staub, because his Reserves schedule was a nuisance.
Maybe she knew her audience, because Korenchuk also disapproved of Reservists. Mulally deliberately scheduled Staub to work weekends and forced him to take vacation time for his Reserves duties. Finally, she demanded that he remain in his work area at all times, even when he had no patients. He received a written warning, and about two months later went to tell Korenchuk he was going to the cafeteria for lunch. But Korenchuk wasn’t in his office, so Staub left him a voice mail message. Staub returned 30 minutes later, only to find that the decision to fire him had already been made. He and Korenchuk went to the human resource vice president’s office, where she handed him his termination notice.
The Fable: In the fable, a clever monkey convinces a cat to reach into the fire and retrieve the roasting chestnuts so that the two can share them. The cat burns its paws, and the monkey takes all the chestnuts. The meaning for the law is that a cat’s paw is a tool—“one used by another to accomplish his purposes.”
Korenchuk and Mulally were biased against Staub because of his military service—an illegal bias under the Uniformed Services Employment and Reemployment Rights Act, USERRA. Because they couldn’t fire him themselves, they used the human resource vice president as a cat’s paw, convincing her to fire him. When Staub sued, a jury found in his favor. But the 7th Circuit Court of Appeals (IL, IN, WI) reversed, reasoning that the human resource vice president must have had other reasons to fire him.
Staub appealed to the Supreme Court. He claimed the warning letter and subsequent discipline had been based on false premises—manufactured excuses to fire him. When 8 of the 9 justices heard the case (Justice Kagan recused herself), they ruled unanimously for Staub, finding the human resource vice president had been a tool used by the supervisors. The key to the case, they held, was that the supervisors intended to get Staub fired by persuading the unbiased human resource vice president to do it. And, they clarified the matter for all courts, some of which had ruled that in order for an employer to be liable for discrimination, the biased boss must be the termination decision maker.
The source of the above article is BLR (Business and Legal Resources). It is an especially important article to share since it reinforces the source of the majority of discrimination cases in 2010: retaliation. If you have any questions on the above, please contact Beverly Purtell, vice president-human resource management, at email@example.com.