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Washington Archive

Washington

Risk-based capital rule would affect fewer than 200 CUs, Metsger says

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WASHINGTON (1/14/14)--As the National Credit Union Administration works to modernize the 15-year-old credit union capital regime, board member Rick Metsger said Monday night that fewer than 200 credit unions would be required to make adjustments under a new risk-based capital proposal now being developed.
 
Speaking before the Metropolitan Credit Union Management Association (MACUMA), an organization of credit unions in the Washington, D.C. area, Metsger said the agency is working "very, very hard" on the proposal, though he gave no timetable for when the proposal would be released by the agency. The NCUA will post an agenda Thursday for its January open board meeting.
 
The current 7% leverage capital standard was set by statute in 1998. While only the U.S. Congress could change the statute, NCUA Chairman Debbie Matz said in July that the recent financial crisis and industry changes mean the agency must implement the law with a newer, more flexible, forward-looking approach.
 
The Credit Union National Association has supported net worth standard changes that reflect risk better than the present approach but that will not simply add net worth requirements to the current system. CUNA has also been urging the agency to adopt a more productive approach to rulemaking that focuses on problem areas rather than issuing rules with blanket applicability, regardless of the credit unions level of risk. CUNA's Examination and Supervision Subcommittee has met with NCUA officials on the capital ratio issue.
 
In other comments last night, with regard to cybersecurity, Metsger said that in the wake of the massive Target breach, "it is time to move to a safer system" for securing data, including to EMV, or chip-based, systems.

"You can see a changeover to EMV is going to be an expedited process," he said, with serious consideration by all participants in the payment system in the next 24 months.

Obama to nominate two, renew one for Fed board

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WASHINGTON (1/14/14)--President Barack Obama last week announced his intent to nominate two new Federal Reserve Board members and one current Fed member.

The expected nominees are:
  • Former Governor of the Bank of Israel Stanley Fischer to serve as Fed Vice Chairman and Governor. Fischer holds a B.Sc. and an M.Sc. from the London School of Economics and a Ph.D. from MIT. He has served as Citigroup Vice Chairman, International Monetary Fund Deputy Managing Director and Vice President, Development Economics and Chief Economist at the World Bank. Fischer would serve the New York, N.Y. Fed region, and serve until Jan. 31, 2020;
  • Former U.S. Department of the Treasury Under Secretary for International Affairs Lael Brainard to serve as Fed Governor. Brainard holds a B.A. from Wesleyan University and an M.A. and Ph.D. from Harvard University. She has also served as Vice President and the Founding Director of the Global Economy and Development Program at the Brookings Institution and Deputy National Economic Adviser and Deputy Assistant for International Economics for President Bill Clinton. Brainard would serve the Richmond, Va., region until Jan. 31, 2026; and
  • Current Fed Governor Jerome Powell to serve a second term as governor. Powell holds an A.B. from Princeton University and J.D. from the Georgetown University Law Center. He has also served as Assistant Secretary and an Under Secretary of the Treasury for President George H.W. Bush. Powell would serve the Philadelphia, Pa. region until Jan. 31, 2028. 
Obama said the three potential Fed nominees "have the proven experience, judgment and deep knowledge of the financial system to serve at the Federal Reserve during this important time for our economy."

The seven-member Fed board currently is down to six members, and Chairman Ben Bernanke and board member Sarah Bloom Raskin are scheduled to depart soon.

Current Fed member Janet Yellen will succeed Bernanke as chairman when his term ends on Jan. 31. Her term as chairman will end Jan. 30, 2018.

House Financial Services with have data security hearings, chairman says

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WASHINGTON (1/14/14)--Rep. Jeb Hensarling (R-Texas), who heads the House Financial Services Committee, said his panel will conduct hearings to study how government agencies and financial institutions secure data they collect, reported Politic Pro yesterday. He did not tie the hearings, however, specifically to the recent data breach at Target.

The article noted that Democrats on Hensarling's committee have asked the chairman to schedule a hearing to study the breach at Target.

The Credit Union National Association has reached out to House Financial Services and Senate Banking Committee leaders, encouraging them to "fully examine the chronic issue of merchant data breaches, their impact on consumers and financial institutions."
 
The Target data breach compromised at least 70 million debit and credit cards and included stolen encrypted PIN data. "The cost of a merchant data breach--whether it is at a large national merchant or a local merchant--can be significant for credit unions of all sizes," CUNA President/CEO Bill Cheney wrote to key lawmakers.

CUNA is urging credit unions whose members' accounts were compromised to collect data about the costs they incur in replacing cards and assisting members and to submit the information via a CUNA survey (see resource link).

The survey will help CUNA better represent credit union interests to lawmakers, regulators and the media.

According to a Politico Pro "whiteboard"--or quick news burst--last week, Senate Banking Committee Chairman Tim Johnson (D-S.D.) said that he is considering conducting a hearing to study the recent data breach at Target,

New CUNA tool spotlights 2014 legislative outlook

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WASHINGTON (1/14/14)--Credit unions are watching as the U.S. House and Senate begin their work for 2014, and the latest edition of the Credit Union National Association's Legislative Update Webinar breaks down vital information on these congressional concerns into an easy to access and understand format.

Topics tackled in this month's edition include:
  • Data security;
  • Patent reform;
  • Housing finance reform;
  • Regulatory relief; and
  • Tax reform.
CUNA Senior Vice President of Legislative Affairs Ryan Donovan, in the webinar, updates participants on last year's top happenings regarding these topics, and the 2014 prospects for possible legislation to address these issues.

"The legislative process is a marathon, not a sprint," Donovan emphasizes in the webinar.

The monthly webinars are 15 to 20 minutes in length, and focus on current Capitol Hill events and how CUNA is working on the biggest issues for credit unions.

CUNA staff is also preparing a special edition of the update to prepare credit unions for the upcoming CUNA Governmental Affairs Conference. The GAC edition will include an overview of the issues that CUNA will be discussing during the conference, and key message points to deliver to members of Congress during Capitol Hill meetings.

The special edition pre-GAC webinar is scheduled to be posted in early February.

Donovan has also provided a brief preview of this week's legislative outlook in the CUNA Legislative Update.

For the Legislative Update Webinar and the CUNA Legislative Update, use the resource links.

Registration still open for NCUA webinar on underserved markets

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ALEXANDRIA, Va. (1/14/14)--Credit union still have time to register for the National Credit Union Administration's Jan. 15, free webinar on "Profiling Products and Services for Underserved Members."  It's at 2 p.m. (ET).
 
In a reminder sent out by the agency Monday, the NCUA said this session is good for credit unions seeking to improve service to low-income members and those who are underserved. It is a follow-up to a webinar offered a year ago entitled, "Strategic Uses of the Low-Income Designation."
 
Participants of Wednesday's session will hear from three credit unions at different stages of developing products and services to better reach underserved markets, who will share how they developed unique offerings.
 
Use the resource link to register.
 

 
 
 
 

CUNA: Bill would back CU cybersecurity efforts

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WASHINGTON (1/14/14)--Noting that the financial services sector continues to collaborate and invest in the infrastructure needed to combat cyber threats, the Credit Union National Association and others on Monday thanked House Committee on Homeland Security leaders for introducing the National Cybersecurity and Critical Infrastructure Protection Act (H.R. 3696).

"We welcome your leadership in this crucial fight against cyber threats and your work in forging this commonsense, bipartisan legislation," the cosignors said. The letter was sent to committee Chairman Michael McCaul (R-Texas), Ranking Democrat Bennie Thompson (D-Miss.) and other committee members.

According to the joint trade letter, H.R. 3696 would:
  • Strengthen existing mechanisms such as the Financial Services Sector Coordinating Council and the Financial Services Information Sharing and Analysis Center that help identify threats, respond to cyber incidents and coordinate with government partners;
  • Improve the provisioning of security clearances for those involved in cybersecurity information sharing; and
  • Expand the existing Support Anti-Terrorism by Fostering Effective Technologies (SAFETY) Act to provide important legal liability protections for providers and users of certified cybersecurity technology in the event of a qualified cybersecurity incident.
The expanded SAFETY Act provisions, if approved, must be implemented "in a manner that does not duplicate or conflict with existing regulatory requirements, mandatory standards, or the evolving voluntary National Institute for Standards and Technology Cybersecurity Framework," the letter said. Further, an expansion of the program must be coupled with additional funding to enable the Dept. of Homeland Security to handle the increased scope of program and subsequent increase in applicants, the letter added.

The letter was cosigned by the American Bankers Association, The Clearing House, Consumer Bankers Association, Electronic Funds Transfer Association, Financial Services - Information Sharing and Analysis Center, Financial Services Roundtable, Independent Community Bankers Association, Investment Company Institute, NACHA-The Electronic Payments Association, National Association of Federal Credit Unions and Securities Industry and Financial Markets Association.

CUs can comment on Fed plan to define emergency lending program

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WASHINGTON (1/14/14)--Credit unions can pass along their views on the Federal Reserve Board's proposed emergency lending rule through a Credit Union National Association regulatory call to action.

The Fed's proposed Regulation A changes are designed to ensure that any emergency lending program or facility is for the purpose of providing liquidity to the financial system, and not to aid an individual failing financial company.

CUNA has clarified that this proposed rule is not intended to affect the Fed's discount window lending to depository institutions.

CUNA is accepting comments until Feb. 24. The Fed has also released its own notice is accepting comments until March 7.

The CUNA call to action is one of many items featured in this week's CUNA Regulatory Advocacy Report. For the CUNA call to action and the Report, use the resource link.