WASHINGTON (12/18/13, UPDATED 5:04 p.m. ET)--The National Credit Union Administration will not be expecting "compliance perfection" with new mortgage rules as soon as they go into effect, according to the Credit Union National Association's CompBlog
CUNA asked the NCUA during its webinar this afternoon whether credit unions will have reasonable time after a Jan. 10 effective date to come into full compliance with the Consumer Financial Protection Bureau's new mortgage rules.
Gail Laster, director of the NCUA's Office of Consumer Protection, responded that CFPB Director Richard Cordray and others understand the compliance challenges sparked by the new rules. "We are not expecting compliance perfection" right away, she said.
Examiners will be looking for good-faith compliance efforts first, and then "substantial compliance" in due time, Laster told CUNA.
In today's webinar--the second part of a series on the new mortgage rules--NCUA staff provided a high-level overview of the upcoming CFPB mortgage rules. Specific topics covered this afternoon included: ability-to-repay and Qualified Mortgages, high-cost mortgage and home ownership counseling, loan originator compensation and ECOA appraisals and valuations.
An archived version of this free webinar, as well as written Qs-and-As, will be available on the agency website in the next couple of weeks.
WASHINGTON, D.C. (12/18/13, UPDATED 2:45 p.m. ET)--In its last meeting of the year, the Federal Open Market Committee voted to "modestly reduce the pace" of its monthly asset-bond purchases to $75 billion per month from $85 billion, beginning in January.
The Federal Reserve monetary policymaking group announced today that it would begin to taper what has been known as its quantitative easing program.
In a 9-1 vote, the committee also reaffirmed the low target rate of the federal funds rate at 0% to 0.25%, as long as the unemployment rate remains about 6.5% and taking into consideration projected inflation of less than 2%.
In its statement released after today's meeting, the committee said its "sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative." In turn, this should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with FOMC's dual mandate, it added.
The FOMC said it saw improvement in economic activity and labor market conditions that are consistent with growing underlying strength in the broader economy. These conditions led the committee to modestly reduce the pace of its asset purchases. Beginning in January, it will add $35 billion per month of agency mortgage-backed securities to its holdings, down from $40 billion. Additionally, long-term Treasury securities will drop to $40 billion per month, down from $45 billion.
Economists predicted earlier this week that the Fed would not reduce quantitative easing until January, with some pushing the stimulus taper as far as March 2014.
Risks to the economic and labor outlook have become "more nearly balanced," the committee said, noting that an inflation rate of less than 2% could pose risks to economic performance. It will continue to monitor inflation for movement toward the Fed's 2% objective.
Inflation remains low, showing only a 1.2% increase in November compared with a year ago, the Labor Department reported Tuesday.
It was expected that the moderate improvements in the unemployment rate--November's number was 7%--might not meet Fed Chairman Ben Bernanke's threshold of 5.5% to tip the scales in favor of raising the short-term interest rates (The Wall Street Journal
For the full statement, use the link.
WASHINGTON (12/18/13, UPDATED 9:25 A.M. ET)--Mark McWatters will be President Barack Obama's pick to fill a National Credit Union Administration board seat when it is vacated by board member Michael Fryzel, whose term ended Aug. 2 this year.
The president announced his intent to nominate McWatters today. To achieve the NCUA slot, McWatters will go through a process that includes a nomination hearing by the Senate Banking Committee and a confirmation vote by the full U.S. Senate.
McWatters was a member of the TARP Congressional Oversight Panel in Washington, D.C. from December 2009 to April 2011. TARP--or the Troubled Asset Relief Program--refers to the $700 billion fund established in 2008 to help stabilize the economy after the downturn caused by a burst housing market bubble. The supervision panel was charged with overseeing the investment of TARP funds in an array of systemically significant and other institutions including megabanks like Citigroup, Bank of America, Wells Fargo, Goldman Sachs, AIG, GM, GMAC, Chrysler as well as approximately 700 additional financial institutions.
McWatters served in 2009 as counsel for Rep. Jeb Hensarling (R-Texas), who has been the chairman of the House Financial Services Committee since January 2013. McWatters is currently dean for graduate programs at Southern Methodist University's School of Law in Dallas, Texas.
The NCUA has a three-member board and no more than two members can be from the same political party. The political party occupying the White House generally dominates the board's makeup, although existing NCUA board members are often left in place even after a transition in the Oval Office.
McWatters would fill Fryzel's Republican slot on the board. Fryzel was confirmed for NCUA board member in July 2008 and served as chairman until August 2009. The other members of the regulatory panel are NCUA Chairman Debbie Matz and board member Richard Metsger, confirmed this year.
WASHINGTON (12/18/13)--Demand letters from "patent trolls" represent a great and growing threat to credit unions and other end-users of technology, John Dwyer, president/CEO of New England FCU, Williston, Vt., told the Senate Judiciary Committee this morning.
Dwyer testified on behalf of the Credit Union National Association and his own credit union at a
John Dwyer, president/CEO of New England FCU, Williston, Vt., tells the Senate Judiciary Committee that if left unchecked, the problem of "patent troll" demand letters will deter institutions like his from using new technologies, including ATMs, online and mobile banking, remote check capture, and check processing. (CUNA Photo)
hearing entitled "Protecting Small Businesses and Promoting Innovation by Limiting Patent Troll Abuse." Dwyer was the only financial services representative to speak at the hearing.
In his testimony, the credit union CEO said his credit union is now in the middle of expensive discovery in a patent infringement case related to 23 ATM machines it provides for members. "The case has been a costly and distracting headache," he said.
The case began, he explained, with an "ill-researched, vague demand letter" that referred to his credit union as a bank, did not specify which of his credit union's ATM machines allegedly infringed a patent, and contained absolutely no information as to why the entity believed the credit union infringed. The letter only provided a simple list of patent numbers, he said. Attempts to clarify claims made in the letter were met with similar form letters from the patent trolls, and Dwyer said "the troll has recently turned up the heat in its rhetoric."
He described another patent troll letter offering a financial institutuion 'a special one-time limited time offer for smaller Banks such as yours to receive a fully paid up sub-license' for $2,000 per ATM, and eventually upped this demand to $5,000 per ATM. "Frankly, this language sounds a bit more like a late-night infomercial than a serious attempt at dispute resolution," Dwyer said.
If left unchecked, Dwyer said, the problem of demand letters will deter institutions like his from
using new technologies at all, including ATMs, online and mobile banking, remote check capture, and check processing.
To help prevent future instances of patent trolling, Dwyer, in written testimony, said CUNA supports:
Giving the Federal Trade Commission enforcement and rulemaking authority over patent trolls that operate in unfair or deceptive ways;
Developing minimum disclosure standards that would help ensure that only demand letters trulyasserting a potentially valid claim of infringement are sent; and
Requiring an entity that sends more than 10 demand letters in a single calendar year to enter all letters into a registry that would be publicly available and maintained by a federal agency.
Use the resource link to read more of CUNA's testimony
WASHINGTON (12/18/13)--Credit unions may have a great story to tell--but they've got to get out there and tell it, and use examples from their real-life members whenever practicable, a veteran ABC News
consumer correspondent said in the latest "Inside Exchange" episode.
consumer correspondent Elisabeth Leamy told Credit Union National Association Executive Vice President of Communications Paul Gentile that credit unions have an "unprecedented opportunity" to tell their story because there lingers considerable animosity toward banks--particularly among younger people.
WASHINGTON (12/18/13)--The Consumer Financial Protection Bureau called on financial institutions to be more transparent about commercial deals with colleges and universities.
The request, which focuses on debit and prepaid cards and accounts marketed toward students, came on the heels of an annual report to Congress about similar arrangements over credit cards.
"Students and their families should know if their school, whether well-intentioned or not, is being compensated to encourage students to use a specific account or card product," said CFPB Director Richard Cordray. "When financial institutions secretly give kickbacks to schools, they are engaging in risky practices."
The CFPB concluded in September that details about college and university-sponsored accounts are often difficult to obtain. Consumers wanting details about these deals may only find them after filing requests under state open records laws.
The agency's annual report on arrangements between credit card issuers and higher learning institutions found that such deals have declined since 2009, when Congress mandated the disclosure of details surrounding them. In 2009, there were 1,045 agreements that saw universities and colleges take in more than $84 million for over two million accounts. In 2012, there were 617 agreements worth over $50 million for over one million accounts.
The CFPB said that financial institutions "have shifted" to student checking and debit and prepaid card products, and that these agreements now "outnumber college credit card agreements."
WASHINGTON (12/14/13)--The Credit Union National Association will let neither rain nor snow nor holiday dishes nor the late timing of a credit union's 2013 state or federal regulatory examination stand in the way of a credit union's desire to participate in the latest survey on experiences and impressions of the examination process. CUNA and the state credit union associations have extended the deadline for completion to Jan. 10.
"We are responding to credit union requests by pushing the deadline into the new year," said CUNA Chief Economist Bill Hampel Tuesday. "Credit unions want to tell their examinations stories via our survey, but some have not yet had their 2013 visit from examiners. They want to include their most recent experience in their survey responses--and that is information CUNA finds worth waiting for." Credit union responses may be completely anonymous.
Hampel said the survey--CUNA's second on the examination topic--has already generated a lot of attention from credit unions--but not yet the more-than 1,500 responses drawn by the last survey. "We want to hear from as many credit unions as possible to assure our ongoing advocacy efforts on behalf of credit unions are fully informed with the latest information. The more responses we receive from each state, the more useful the results will be."
The survey addresses such topics as:
*The length of on-site exam;
* How satisfied the credit union was with the exam and results; and,
* What problem areas, if any, were noted by the examiner.
It includes a series of questions to gauge how the credit union felt about the examiner's performance and the exam process, and asks what are the biggest issues credit unions would like CUNA and their leagues to focus on to reduce regulatory compliance burdens.
And, for the first time, CUNA has provided a section--optional, of course--through which credit unions can identify and rate individual examiners.
Use the resource link to access the CUNA survey and remember to participate by Jan. 10.
MADISON, Wis. (12/18/13)--When security breaches lead to card fraud, credit unions' No. 1 method of defense is education--of their members, other credit unions and the community at large.
Most recently, a payment-processing system breach in the Inland Northwest led to credit unions and other financial institutions to put restrictions and holds on card purchases. This--in addition to notifying card holders of the fraud and issuing new cards--helps reduce or even prevent fraudulent transactions from going through.
Credit unions in the Spokane, Wash., area began receiving increased reports of card fraud from their members in September. The common point of purchase: grocery stores that use URM Stores Inc. for their payment processing (The Spokesman-Review
Dec. 15). Rosauers, Harvest Foods, Huckleberry's Natural Market, Yoke's Fresh Market and Super 1 Foods are among the grocers that use the network.
The exposed credit card data were sold on the black market and ended up on counterfeit cards. Fraudulent purchases have been reported globally.
The losses are mounting into the thousands, and it's not merchants or member/customers who cover the loss.
"Almost 100% of the time, it's the financial institution," said Debra Keesee, CEO, Spokane (Wash.) Media FCU.
Credit unions have fraud insurance, but because the losses must meet certain deductibles, the credit unions often are still on the hook for the losses.
A similar fraud scenario occurred in Indiana. A credit union's card company and its core processor identified a common point of purchase relating to compromised card information (Herald-Times
Dec. 3). Indiana University CU, Bloomington, had to re-issue roughly 4,000 debit cards with new numbers. To protect the members, the credit union put the cards into a fraud-monitoring program that blocks signature-based "swipes" at the point of sale. Reissuing the cards is an inconvenience, said Bryan Price, president/CEO of the $761 million-asset credit union, but it is a practical way to control the fraud.
Another way for credit unions to protect each other and members is to share information about other types of fraud. Internet Archive FCU, New Brunswick, N.J., said it had been presented with a fraudulent official check that had been drawn off HEB FCU. On its website, the San Antonio-based HEB FCU urged that people call the credit union to verify official checks.
Last week, debit-card holders in Vermont received automated telephone calls that attempted to collect account numbers (Newsline Express
Dec. 13). The Association of Vermont Credit Unions advised credit unions to be alert and educate members about the calls. Credit unions should emphasize that they would never request an account number by phone, text or email because they already have that information.
These educational reminders--as well as collaboration with law enforcement divisions and other financial institutions--support credit unions' work to mitigate the impact of fraud.
ALBANY, N.Y. (12/18/13)--The Credit Union Association of New York noted that the state's credit unions continue to surpass national numbers in growth of membership and shares.
Annual membership growth clocked in at 3.3%, compared with 2.1% on the national stage, according to the analysis of third-quarter numbers.
Where share balances increased an average of 4.1% nationally, New York credit unions experienced 5.3% growth. As of Sept. 30, their total shares outstanding totaled $55.8 billion, the association said.
The average New York credit union branch originated more loans ($13.2 million) than the national credit union average of $12.9 million, and member business lending continued to strengthen. Just over 14% of the state's loans are classified as business loans--more than double the national average of 6.2%. A September-to-September comparison showed a 13% increase in member business loans.
"Credit unions across New York and the nation are continuing to build on the momentum they've gained since the recession," said CUANY President/CEO William J. Mellin.
New York's second-quarter numbers also were higher than the national averages, according to the association.
Other states with notable third-quarter growth include Iowa, Missouri, Minnesota, Idaho, and Cornerstone Credit Union League's members--Arkansas, Oklahoma and Texas (News Now
ALEXANDRIA, Va. (12/18/13)--Credit unions can still register for today's National Credit Union Administration free webinar on Dodd-Frank Act mortgage lending rules. In fact, they can sign up right up to the 2 p.m. (ET) starting time.
Staff from the agency's Office of Consumer Protection is prepared to offer a high-level overview of the new rules that address such issues as:
A borrower's ability-to-repay a mortgage loan and the definition of a "Qualified Mortgage";
High-cost mortgage rules and home ownership counseling;
Loan originator compensation; and,
Equal Credit Opportunity Act appraisals and valuations.
Use the resource link for information registering.
MADISON, Wis. (12/18/13)--The Crash the GAC program is just shy of its goal of 51 attendees for the 2014 Credit Union National Association's Governmental Affairs Conference (GAC). To reach that objective, the application deadline has been moved to Friday.
"The response to the 2014 Crash the GAC has been amazing," said Meghann Dawson, instructional design manager, CUNA. "We're down to just a few more states before we reach our goal of having every state represented." She noted that CUNA is partnering with The Cooperative Trust and state credit union leagues to support the system-wide initiative.
Now in its fifth year, Crash the GAC's goal is to have one "crasher" from each state and the District of Columbia attend CUNA's signature conference Feb. 23-27 in Washington, D.C.
Crash the GAC is supported by The Cooperative Trust, CUNA, CUNA Mutual Group, state credit union leagues and other credit union associations.
Use the link or email firstname.lastname@example.org
for more information about applying or about available sponsorships.