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Inside Washington (04/22/2010)
* WASHINGTON (4/23/10)--The House Financial Services Committee passed the Rural Housing Preservation and Stabilization Act (H.R. 5017) yesterday, a bill intended to ensure that homebuyers in rural America continue to have access to affordable mortgages through the U.S. Department of Agriculture’s (USDA) guaranteed mortgage loan guarantee. The bill was approved unanimously by the committee and the affirmative vote clears the bill for consideration by the full House, perhaps as early as next week. Rep. Paul Kanjorski (D-Penn.), who introduced the bill, said H.R. 5017 is needed because “unprecedented demand” for USDA guarantees, sparked by the financial crisis, created a tripling in the number of loans made as compared with 2006 levels. ““As a result of the unprecedented demand, the program is now unfortunately running out of money. At no cost to taxpayers, my bill will preserve the access of millions of families living in America’s heartland to needed USDA loan guarantees, so that they can continue to buy homes with affordable mortgages,” Kanjorski said in a release announcing the committee vote ... * WASHINGTON (4/23/10)--Federal Reserve supervisors are telling about two dozen big banks in the U.S. that they must end pay practices that encourage risk-taking. They also are telling boards to increase their scrutiny of incentives. Fed officials have met recently with executives and boards of the banks and told them they need to submit plans to repair deficiencies in how they monitor pay. Firms in the Fed’s review include Morgan Stanley, Bank of America, Goldman Sachs, Citigroup and JPMorgan Chase and Co. In October, the Fed released guidelines to encourage big banks to tie pay to long-term performance. The Fed’s actions are similar to those efforts by lawmakers to overhaul policies created by management and corporate boards. The Fed also wants to ensure banks consider how much employees expose the firms to liquidity and reputational risks ( April 22) ... * WASHINGTON (4/23/10)--Efforts to widen Small Business Administration (SBA) programs took a step back Wednesday when the agency’s inspector general noted fraud concerns. President Obama asked Congress in February to increase caps on 7(a) and 504 loans to $5 million from $2 million, and to allow owner-occupied commercial real estate loans maturing within the year to be refinanced through the 504 program. However, Peggy Gustafson, SBA inspector general, found issues with the programs. A March audit of the 504 program indicated that lenders may not have used good practices for approved 68% of sampled loans worth $8.9 million. About 572 loans worth $254.9 million had weaknesses. For the 7(a) program, the general found an improper payment rate of 0.53%, representing $4.6 million of loans. Gustafson said to manage risk, the SBA needs to have increased oversight over SBA lenders and regular on-site reviews ... * WASHINGTON (4/23/10)—The Federal Deposit Insurance Corp. (FDIC) revised its list known as “Update to Notice of Financial Institutions for Which the Federal Deposit Insurance Corporation Has Been Appointed Either Receiver, Liquidator, or Manager” in the Federal Register. It updates the agency’s failed bank list regarding the FDIC as sole receiver, through March 19…


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