The Fair Labor Standards Act (FLSA) is depression-born legislation that was enacted in 1938 to protect the rights of workers, many of whom were working in sweatshops for long hours at low wages. In fact, in sending this legislation to Congress, President Roosevelt’s message was that America should give “all our able-bodied working men and women a fair day’s pay for a fair day’s work.”

 

While the country has come a long way since 1938 in protecting employee rights, the FLSA, a 70-year old piece of legislation, has had few changes made to it until 2004. In 2004, the act was amended to revise exempt job classifications and update the wage and duties tests and better define exemptions. While revisions were overdue, those changes still require continued interpretation. Since that time, some states have passed additional legislation to mandate penalties for non-compliance with FLSA.

 

During the past weeks, the League has presented a series of articles on the FLSA to clarify some of its requirements and mandates. To expand on those articles, the FLSA will be the subject of the next HR Network meeting at the Credit Union Center on May 13.

 

Attorney Margaret Paget from the law firm of Sherin and Lodgen, LLC will present a program on the FLSA for HR Network members. If you are not a member of the HR Network but interested in attending this workshop, please contact Beverly Purtell, vice president of human resource management at bpurtell@cucenter.org.

 

 

The National Credit Union Administration (NCUA) Board recently issued another media advisory to provide information on recent changes to the temporary Corporate Credit Union Share Guarantee Program. In its Weekly Corporate Credit Union Update, NCUA said it would permit corporate credit unions to use the capital level as reported on their November 30, 2008, NCUA 5310 Call Report to determine regulatory compliance with capital-based requirements and regulations in the corporate rule.

 

"We believe this will allow corporate credit unions to continue to meet members' needs while also ensuring corporates do not take additional undue risk," said NCUA Chairman Michael Fryzel.

 

However, the Office of Corporate Credit Unions (OCCU) director has the authority to restrict or modify this general waiver for a particular corporate credit union based on safety and soundness considerations.

 

The update states that NCUA anticipates the March 2009 call reports of "some corporate credit unions will reflect losses that will be absorbed by capital." The Credit Union National Association is working to obtain information from NCUA on this assessment.

 

The NCUA board also authorized extensions of the program through December 2012, which was set to expire December 31, 2010. "There is concern that a significant amount of shares may be scheduled to mature on the program expiration date--leading to an unintended negative impact on liquidity. Going forward, there will be a quarterly reassessment of the liquidity needs in the corporate system, and if it is determined the need exists, the program will be extended," NCUA said.

 

If the extensions are granted, the final guarantee will expire on December 31, 2014. All corporate credit unions can participate in the modified program.

 

 

The House could vote on a bill this week--H.R. 627, the Credit Cardholders' Bill of Rights Act--which aims to protect credit card holders. H.R. 627 would prohibit creditors from considering a payment as late unless the consumer is provided with reasonable time to make payments.  The bill also would require creditors to mail statements to cardholders at least 25 days before the due date.

 

The Credit Union National Association (CUNA) generally supports the bill. In its testimony, CUNA had encouraged the committee to consider a 21-day threshold because the 25-day requirement would be too close to the end of the billing cycle and create logistical problems for credit unions.  A manager's amendment was added that includes the threshold CUNA sought.

 

CUNA also encouraged the committee to extend the effective date to July 1, 2010--which also was added in an amendment.

 

H.R. 627 largely parallels rules that the National Credit Union Administration and Federal Reserve Board of Governors finalized and go into effect July 2010.

 

However, CUNA is concerned that an amendment to regulate interchange fees may be offered by Representatives. Peter Welch (D-Vt.) and Bill Schuster (R-Pa.). CUNA strongly opposes any effort to regulate interchange fees, and is hopeful that the rules committee will not make such an amendment in order.