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Fannie, Freddie G-fee comment deadline pushed back to Sept. 8

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WASHINGTON (7/30/14)--September 8 is the new deadline for comments on the Federal Housing Finance Agency's (FHFA) proposed increases to guarantee fees (g-fees) that Fannie Mae and Freddie Mac charge lenders.
 
The previous deadline to submit input to the FHFA was August 4.
 
Fannie Mae and Freddie Mac charge g-fees to cover costs associated with providing a credit guarantee to ensure the timely payment of principal and interest to investors in mortgage-backed securities if a borrower fails to pay.  
 
The Credit Union National Association opposes increases in the g-fees.
 
Use the News Now resource link to access the FHFA's request for comment.

Colfax Capital Corp. required to give $92M in debt relief

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WASHINGTON (7/30/14)--The Consumer Financial Protection Bureau (CFPB) and attorneys general from 13 states have obtained approximately $92 million in debt relief on behalf of 17,000 consumers harmed by predatory lenders. Colfax Capital Corporation and Culver Capital, LLC, also collectively known as Rome Finance made false claims to the nature of its loans, masked finance charges with artificially inflated prices, withheld information and illegally collected on voided loans, according to the CFPB.

"Rome Finance lured servicemembers in with the promise of instant financing on expensive electronics, then masked the finance charges with inflated prices in marketing materials and later withheld key information on monthly bills," said CFPB Director Richard Cordray, who added that its business model was built on "fleecing" servicemembers.

The companies offered credit for purchasing products with the promise of instant financing with no money down. Rome Finance has been the subject of previous state and federal enforcement actions and Colfax is currently in Chapter 7 bankruptcy.

The CFPB's consent order requires Rome Finance to provide approximately $92 million in debt relief. All efforts to collect on any of the outstanding Rome Finance financing agreements must cease. Rome Finance still has approximately $60 million in contracts owed by about 12,000 consumers that it will no longer seek to collect.

Separately, a liquidating trust created as part of Colfax's bankruptcy plan will stop collections on approximately $32 million owed by more than 5,000 consumers for Rome Finance's financing agreements. Servicemembers may keep the merchandise they purchased, according to the CFPB.

The targeting of servicemembers for predatory loans has been a recent topic of discussion around the financial industry. Investigative journalism site ProPublica recently published an article detailing practices from a retailer, USA Discounters, that has filed 13,470 lawsuits against servicemembers since 2006.

The article alleges that USA Discounters offers easy credit and is located near many military installations, but that its loan contracts can be misleading, resulting in servicemembers being sued while on deployments, paycheck garnishing and other consequences.

The CFPB's blog features an in-depth look at the Colfax case, and what it means for consumers in the future.

Use the resource links below for more information.

Julian Castro sworn in as 16th HUD secretary

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WASHINGTON (7/30/14)--Julian Castro was sworn in as the 16th secretary of the U.S. Department of Housing and Urban development Monday. The 39-year-old former mayor of San Antonio will oversee more than 8,000 employees and a budget of $46 billion to carry out the department's mission of "creating opportunity for all Americans through strong, sustainable, inclusive communities and affordable homes."
 
"I know that together with the dedicated professionals at HUD, Julian will help build on the progress we've made battling back from the Great Recession--rebuilding our housing market, reducing homelessness among veterans and connecting neighborhoods with good schools and good jobs that help our citizens succeed," said President Barack Obama of his new appointee.
 
Castro has said his focus is to ensure the department is an effective champion for the people it serves.  He has charged the department with one goal: giving every person, regardless of their station in life, new opportunities to thrive, according to a HUD press release. 
 
In March 2010, Castro was named to the World Economic Forum's list of Young Global Leaders. Time placed him on its "40 under 40" list of rising stars in American politics the same year.

House panel members pledge to work for CU parity, also pass reg. relief bill

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WASHINGTON (7/30/14)--The House Financial Services Committee examined a number of regulatory relief bills Tuesday, and of the three supported by the Credit Union National Association, one was passed and the other two will go to a recorded vote this morning. Several representatives from both parties also vowed to work toward credit union parity going forward.

The Credit Union National Association testified before the committee earlier this month in support of these bills, and submitted a letter Monday reinforcing its support.

The Community Bank Mortgage Servicing Asset Capital Requirements Study Act (H.R. 4042) and the Access to Affordable Mortgages Act (H.R. 5148) were both requested for a recorded vote.

H.R. 4042 would direct federal banking agencies to conduct a study of appropriate capital requirements for mortgage servicing assets for nonsystemic banking institutions.

CUNA expressed support for a possible manager's amendment to include the National Credit Union Administration in the study and delay the agency's proposed risk-based capital rule, but Rep. Blaine Luetkemeyer (R-Mo.), sponsor of the bill, opted to delay offering the amendment in order to work with his colleagues to include the credit union provision in the bill before a full House vote is taken.

NCUA Chair Debbie Matz sent a letter Monday to the committee chair. Rep. Jeb Hensarling (R-Texas), and its ranking member, Rep. Maxine Waters (D-Calif.), requesting the committee refrain from considering amendments related to the agency's risk-based capital proposal.

"My decision [not to offer the amendment] is not in any way based on Chairman Matz's unprecedented request that this committee refrain from conducting its work; rather there are issues on which I'm working with my Democratic colleagues," Luetkemeyer said. "I will continue to work with them to ensure credit unions are given parity before H.R. 4042 reaches the House floor."

Hensarling, who said he is a supporter of the credit union movement, echoed Luetkemeyer's thoughts on emphasizing credit union parity in the bill, and pledged to work with Waters and other Democrats before the bill heads to the House floor. Rep. Denny Heck (D-Wash.) volunteered to work on behalf of his party to ensure credit union parity as well.

The Regulation D Study Act (H.R. 3240) passed the committee by a voice vote. The act would direct the Government Accountability Office (GAO) to study the impact of the Federal Reserve Board's monetary reserve requirements. Regulation D restricts the number of automatic withdrawals from a member's savings account to six per month, which can lead to a member overdrafting their checking account if the limit has been reached.

"The issue of having only six transfers per month in accounts hasn't been reviewed in decades. With new technological advancements, especially online banking, we owe it to the American public to revisit this regulation," said Rep. Robert Pittenger (R-N.C.), who sponsored the bill. CUNA strongly supports the measure.

The bill also directs the GAO to consult with credit unions as part of the study. Rep. Sean Duffy (R-Wis.) said the committee is working to "lift the regulatory burden" from credit unions and community banks to help the flow of capital to small businesses and families.

CUNA has advocated for the cap to be increased, if not eliminated altogether, and called the proposed GAO study a "first step toward possible change."

Watch News Now Thursday for news of the votes on The Community Bank Mortgage Servicing Asset Capital Requirements Study Act (H.R. 4042) and the Access to Affordable Mortgages Act (H.R. 5148).

CUNA to NCUA: Reg reduction for CUs is urgent

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WASHINGTON (7/30/14)--Significant reduction in credit unions' regulatory requirements is urgently needed, Credit Union National Association interim President/CEO Bill Hampel said in a letter to National Credit Union Administration Chair Debbie Matz yesterday in advance of the agency's board meeting Thursday.

The NCUA should work with other agencies on regulatory relief measures for credit unions, CUNA urged. The letter expresses support for the NCUA's fixed-asset proposal, which is on the agency's meeting agenda, and for regulatory relief in general.

The NCUA has proposed to eliminate the 5% fixed asset cap -- which CUNA has strongly supported -- and will discuss the proposal at the monthly meeting. CUNA said it is "encouraged" by the agency's review.

"This move will allow credit unions to update facilities, upgrade technologies and make purchases that do not impact safety and soundness without having to seek permission or waivers from NCUA," the letter reads. "NCUA should not micromanage individual business decisions, and this represents a useful step in simplifying and modernizing procedures for credit unions."

CUNA is also urging the agency to maintain its practice over the last several years of reducing the mid-year budget. The agenda includes a mid-year analysis of the NCUA's operating budget.

"We strongly support efforts that will minimize agency expenditures that are borne by credit unions. We urge the agency to exercise fiscal restraint, and hope that Thursday's meeting will provide another opportunity for needed relief in this area," the letter reads.

CUNA also emphasized its willingness to work with the agency for much-needed regulatory relief for credit unions, and noting that the NCUA's "commitment to modernize member business lending, advertising, appraisal provisions and other rules is an encouraging development, and we will continue to work with the NCUA Board and staff to produce really meaningful changes."

The NCUA's board meeting will be Thursday at the agency's Alexandria, Va. headquarters, starting at 10 a.m. (ET).

Use the resource link below for more information.

Information is key to disclosure integration, CUNA tells CFPB

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WASHINGTON (7/30/14)--In a stakeholders' check-in meeting on a rule to integrate separate mortgage disclosures rules into a single, more consumer-friendly document, the Credit Union National Association urged the Consumer Financial Protection Bureau to consider three things with respect to its regulatory implementation.
 
The CFPB's rule to integrate Truth-in-Lending Act and Real Estate Settlement Procedures Act (TILA/RESPA) disclosures will go into effect on Aug. 1, 2015. The new disclosures, mandated by the Dodd-Frank Act, are intended to better help consumers understand the mortgage loan process and make better-informed borrowing decisions.
 
CUNA Associate General Counsel Jared Ihrig, attending the CFPB roundtable discussion, urged the bureau to consider:
  • Making public announcements when it updates guides and other implementation aids on its website, which reflect clarifications or amendments to previously finalized rules. Credit unions rely on these resources, such as the Small-Entity Compliance Guides, and a public announcement would help to ensure they are working with the latest and most reliable guidance concerning the CFPB's rules, Ihrig informed the bureau.
  • Providing detailed guidance on the requirements surrounding the effective date of the rule to provide credit unions with as much information as possible to ease the implementation process. Ihrig told the CFPB that many credit unions have voiced their confusion related to the types of transactions and the appropriate disclosures that must be used before, on and after the rule's effective date.
Ihrig also urged the CFPB on CUNA's behalf to perform extensive outreach to forms providers, document preparation companies and technology vendors immediately so that programming and any implementation difficulties can be identified and resolved well prior to the effective date.
 
As credit unions heavily rely on these vendors for compliance with regulatory requirements, Ihrig explained, it is important to begin this process sooner rather than later to assist credit unions with the implementation of the rule's requirements.
 
The Tuesday meeting, held with financial institution trade association representatives, was the first of a planned series of four in which the CFPB will meet with mortgage industry participants to gauge progress with implementation efforts.
 
A second meeting was also held Tuesday and involved real estate settlement and title service providers. A third meeting is scheduled for Aug. 12 with technology vendors and representatives. The date for a final meeting, to be held with creditors, has not yet been announced.
 
In April, the CFPB issued a guide with an overview of the TILA/RESPA integrated disclosure rule, as well as details on "issues that small creditors, and those that work with them, might find helpful to consider when implementing the rule."
 
In the guidance, the CFPB notes that financial institutions may want to review their processes, software, contracts with service providers, or other aspects of business operations in order to identify any changes needed to comply with the rule. Use the resource link to access the guidance.

SAFE Act, cybersecurity bill to see House floor votes

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WASHINGTON (7/29/14)--Several matters of interest are on the schedule this week before members of teh U.S. Congress leave for their August recess.

Two Credit Union National Association-supported bills will he heard on the House floor this week. The SAFE Act Confidentiality and Privilege Enhancement Act (H.R. 4626) would amend the SAFE Mortgaging Licensing Act of 2008 to allow state and federal regulatory officials with financial oversight authority access to any information given to the Nationwide Mortgage Licensing System and Registry without loss of privilege or confidentiality protections.

Currently the bill only allows officials with mortgage oversight authority to access the database.

The National Cybersecurity and Critical Infrastructure Protection Act of 2014 (H.R. 3696) would amend 2002's Homeland Security Act to require the Secretary of Homeland Security to conduct cybersecurity activities, including shared situational awareness among federal entities.

Both bills are expected to be heard on the House floor this week under suspension of the rules.

Today, the House Financial Services Committee will being markup of a series of regulatory bills, including two that have strong support from the Credit Union National Association. CUNA has testified in favor of the Regulation D Study Act (H.R. 3240) and the Access to Affordable Mortgages Act of 2014 (H.R. 5148), and plans to send a letter of support to the committee this week. (See related story:  CUNA supports House panel markup of CU relief bill.)

On Wednesday, the House Ways and Means subcommittee on select revenue measures will conduct a hearing to on dynamic analysis of the discussion draft of the Tax Reform Act of 2014, which was released in February. The hearing will begin at 10 a.m. (ET).

On Thursday, the  Senate Banking Committee full committee hearing, titled "Financial Products for Students: Issues and Challenges." Witnesses will include representatives from education policy groups, financial aid administrators and financial institution trade organizations. The hearing is scheduled to being at 10 a.m. (ET).