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Washington Archive

Washington

Inside Washington (01/20/2009)

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* WASHINGTON (1/21/09)--A fraudulent e-mail seeking credit card information that purports to be from the National Credit Union Administration (NCUA) has been in circulation since Friday, Members United Corporate CU said in a statement to its members. The phishers ask e-mail recipients to click on a link to obtain a subscription from the NCUA Express Subscription Service. The recipient is then directed to a clone site that seeks credit card information. The NCUA does not charge for the service and does not solicit information over the Internet, the statement said ... * WASHINGTON (1/21/09)--The Federal Deposit Insurance Corp. (FDIC) is working to restore the Troubled Asset Relief Program (TARP) to its original purpose. The agency could issue a proposal soon that would allow financial institutions to apply for a 10-year debt guarantee if they put up collateral of recent consumer loans (American Banker Jan. 20). Currently financial institutions are guaranteed for three years. Institutions must apply before July and would agree to issue no more than 125% of their outstanding secured debt. Last week, Ben Bernanke, Federal Reserve Board chairman, suggested an aggregated bank could be created to purchase bad assets. Sheila Bair, FDIC chairman, said she supported his idea. Institutions planning to sell assets to the bank would be required to take an equity position, she said. The Treasury originally said TARP would be used to purchase troubled assets and create a market for them, but changed its focus to inject capital into banks ... * WASHINGTON (1/21/09)--The Federal Reserve Board has approved amendments to Appendix A of Regulation CC that reflect the restructuring of the Federal Reserve’s check processing operations in the Fifth and Sixth Districts. As of March 21, the Charlotte branch office of the Federal Reserve Bank of Richmond will no longer process checks. Bankers served by that office will be reassigned to the head office of the Federal Reserve Bank of Atlanta ...

Credit card bills back on Hill agenda

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WASHINGTON (1/21/09)--Sweeping credit card reforms are back in the sights of some federal lawmakers. Sen. Charles Schumer (D-N.Y.) introduced a such a bill last week and Rep. Carolyn Maloney (D-N.Y.) is expected to do so in the House, if she has not already. Last year, lawmakers in both the House and Senate sponsored bills that would have, in part, required credit card companies to give 45-days notice prior to an interest rate change and prohibited card companies from increasing rates on existing balances except under certain circumstances. Since those bills were first introduced, the Federal Reserve Board has imposed stricter rules on credit cards, but similar action by the U.S. Congress would give those prohibitions the weight of law. The Credit Union National Association (CUNA) supports federal lawmakers’ intentions to end discriminatory, predatory, deceptive and abusive lending practices, said Ryan Donovan, the group’s vice president of legislation affairs. However, he emphasized that CUNA continues its work to ensure that unintended consequences do not restrict the range of products and services that credit card issuers currently offer, thereby cutting off credit to some and raising the price of credit for all.

RESPA required use date pushed back

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WASHINGTON (1/21/09)--The U.S. Department of Housing and Urban Development (HUD) has pushed back the effective date of its revised definition of “required use” under the Real Estate Settlement Procedures Act (RESPA). The definition was set to go into effect Jan. 16, but a final rule published last week in the Federal Register changed the date to April 16. RESPA currently allows businesses to make referrals to their affiliates that provide loan services, as long as the consumer is not required to use the service. The final rule on “required use” clarifies that referrals can include incentives, as well as disincentives. However, these provisions are not intended to eliminate the use of legitimate consumer discounts if they are not tied to the use of a specific settlement provider, according to Jeffrey Bloch, senior assistant general counsel of the Credit Union National Association (CUNA). An example of improper use of an incentive, Bloch said, could be a discount to a borrower if an affiliate is used for a certain service if the affiliate charges more than other competitors or if the discount is offset by higher costs elsewhere. However, providing a package of services in which the total price is less than the sum of the prices of the individual services will be permitted, assuming the use of the package is optional and that the lower price is not offset by higher costs elsewhere, Bloch said,

CUNA in IPoliticoI on economic challenges Obama faces

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WASHINGTON (1/21/09)--Credit Union National Association (CUNA) Chief Economist Bill Hampel was quoted in Politico Monday about the economic challenges President Barack Obama will face in his term. Obama has won Senate approval to release the second half of the $700 billion Troubled Assets Relief Program, the article said. “It really doesn’t matter what they spend it on. They just need to spend it so someone gets income,” Hampel told Politico. “It would be nice if they spent it on useful things, but that doesn’t really matter. They just need to start spending money quickly.” Hampel also commented on the market’s turnaround. “The good news is that three years from now, it is almost inconceivable that the economy won’t look a whole lot better than it looks now,” he said. For the full article, use the link.

NCUA charters new CU in New Jersey

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ALEXANDRIA, Va. (1/21/09)--The National Credit Union Administration (NCUA) has approved a charter for 1st Bergen FCU, Hackensack, N.J. It is the first new credit union chartered in 2009. “The credit union will provide a cooperative alternative to low- and moderate-income members,” said NCUA Chairman Michael Fryzel. 1st Bergen was chartered Jan. 14 to serve the 884,000 people who live, work, worship, volunteer, and attend school, businesses and other legal entities in Bergen County. The credit union will open in March. It plans to offer regular shares, holiday and vacation club accounts, share certificates, personal loans, and new- and used-automobile loans. It also will provide check-cashing services, money orders, traveler’s checks and cashier’s checks. By 2012, 1st Bergen FCU plans to offer ATM services, debit and credit cards, wire transfers and small-business loans. The credit union was organized by the Bergen County Community Action Partnership Inc., Bergen County’s anti-poverty agency.