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Four banned from future FCU work

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ALEXANDRIA, Va. (1/21/11)--Four former credit union employees have been banned from future work at any federally insured financial institution under prohibition orders issued by the National Credit Union Administration (NCUA). In a Thursday announcement, the NCUA noted the following details of the enforcement orders:
* Christopher Allen, a former employee of First Service CU in Houston, Texas, was convicted of bank fraud and sentenced to 32 months imprisonment, three years of probation, and ordered to pay $31,303 in restitution; * Keona Blagburn, a former employee of Newport News Neighborhood FCU in Newport News, Va., pleaded guilty to embezzlement and obtaining money under false pretenses; * Arden Marie Rohrer, a former employee of Henrico FCU in Richmond, Va., was convicted of grand larceny. While Rohrer will pay $1,500 in restitution, a potential five-year sentence was suspended on the condition that she keep the peace and be on good behavior; and * Kelly White, a former employee of Sussex County FCU in Seaford, Del., was convicted of theft and sentenced to two years of supervised release. White will also pay $33,062 in restitution.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

CUNA to Obama CU regulators should heed reg review

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WASHINGTON (1/21/11)--The Credit Union National Association (CUNA) expressed its strongest support for a proposed review of financial and other regulations in a Thursday letter to President Barack Obama. CUNA urged the National Credit Union Administration (NCUA) and other independent agencies to consider the "principles and basic approach to regulation" reflected in that executive order when reviewing current regulations. The Obama administration in a Tuesday executive order called on federal agencies to design cost-effective, evidence-based regulations that are compatible with economic growth, job creation, and competitiveness. Specifically, the administration instructed regulators to consider approaches that maintain freedom of choice and flexibility, including disclosure of relevant information to the public, and to work to coordinate, simplify, and harmonize regulations where possible to reduce costs and promote certainty for businesses and the public. The order also instructed regulators to reduce burdens on small businesses whenever possible and called for greater transparency and accountability in regulatory compliance. The resulting regulations must also be subject to periodic review, the order said. Regulatory reform is critical for financial institutions, particularly in light of many new requirements under the Dodd-Frank Act and continual regulations from federal financial authorities, the CUNA letter adds. “At the very time when a number of credit unions are operating with reduced resources due to the economic crisis that they did not create, they are being subjected to an ever-increasing regulatory load,” CUNA President/CEO Bill Cheney wrote. “Because credit unions are financial cooperatives, their members are also burdened, since the costs of meeting regulatory demands are ultimately borne by a credit union's membership.” Cheney urged a review of the collective impact of regulation on credit unions and others which must operate under rules, directives, guidelines, and orders issued by a number of agencies, and suggested that the Consumer Financial Protection Bureau, which is currently under development, would be ideal for this role. CUNA added that working with members of Congress to reduce regulatory burdens in a meaningful way, without jeopardizing key consumer protections or important safeguards, will benefit both the economy and the nation.

CU concerns re interchange rule get press airing

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WASHINGTON (1/21/11)--During a national press call Thursday, Jim Blake, president/CEO of HarborOne CU, reiterated the credit union call to scrap the Federal Reserve Board’s plan to implement government restrictions on interchange fees. The Massachusetts credit union CEO underscored that the practical ramifications for consumers of the plan to limit interchange fees could be numerous and dire. The press teleconference was organized by the Electronic Payments Coalition (EPC). The Credit Union National Association is an EPC member, and tapped Blake to give the credit union perspective. Blake said that already, even before any implementation rule has been finalized, there is broad talk about the possibility that interchange fee limits could drive up consumers’ check costs, eliminate some card rewards programs, force limits on the number of card swipes allowed per month--or a lower limit on what size charges can be applied to debit cards. The Fed plan, which seeks to implement provisions enacted by the Dodd-Frank financial regulatory reform package, offers a dual framework for determining what the law calls "reasonable" interchange fees. One plan would provide issuers with a safe harbor of seven cents per transaction, and set a maximum interchange fee cap of 12 cents per transaction. An alternative framework would simply cap the maximum interchange fee at 12 cents per transaction. These safe harbors and/or caps would be reevaluated by the Fed every two years. CUNA has estimated that up to 67% of credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenues by 40%. Under the Dodd-Frank Act, card issuers with under $10 billion in assets would be exempt from the proposed rule changes. The exemption covers most, but not all, credit unions. However, CUNA remains concerned that a two-tiered pricing system could lead merchants to set incentives for consumers to use only big-issuers’ cards, which would have a lower per transaction cost for the merchant. In a related story, Bloomberg News reported Thursday that Rep. Barney Frank (D-Mass.) said he was ready to work with House Republicans, now in the majority, to force changes in the Fed’s interchange fee proposal. Frank, along with former Sen. Christopher Dodd (D-Conn.), were, of course the key architects of the Dodd-Frank Wall Street reform bill requiring the Fed to set the fee limits. The Fed is accepting public comment on its proposal until Feb. 22, and the agency has said that it is unlikely that a final plan would be ready by April. CUNA is asking credit unions to send their comments to the association by Feb. 1. Use the resource link to view CUNA’s Comment Call.

House Democrats named to Financial Services spots

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WASHINGTON (1/21/11)--Rep. Barney Frank (D-Mass.) revealed the new and continuing Democratic financial services subcommittee ranking members, as well as the panels' general membership in a Thursday release. The announcement comes just a day after new House Financial Services Chairman Spencer Bachus (R-Ala.) released his Republican subcommittee lineup for the 112th Congress on Wednesday. (See related Jan. 20 story: Bachus names Republican members of finance subcommittees.) Rep. Maxine Waters (Calif.) will serve as ranking minority member for the House Financial Services subcommittee on capital markets and government-sponsored enterprises. Reps. Gary Ackerman (N.Y.), Brad Sherman (Calif.), Ruben Hinojosa (Texas), Stephen Lynch (Mass.), Brad Miller (N.C.), Carolyn Maloney (N.Y.), Gwen Moore (Wis.), Ed Perlmutter (Colo.), Joe Donnelly (Ind.), Andre Carson (Ind.), Jim Himes (Conn.), Gary Peters (Mich.), Al Green (Texas) and Keith Ellison (Minn.) were also named by Frank to serve on that subcommittee. The ranking Democrat on the domestic monetary policy and technology subcommittee will be Rep. William Lacy Clay (Mo.). Rep. Carolyn Maloney is the leading Democrat on the financial institutions and consumer credit subcommittee, and Rep. Luis Gutierrez (Ill.) will be the senior minority member of the insurance, housing and community opportunity subcommittee. Rep. Carolyn McCarthy of New York will be ranking minority member of subcommittee on international monetary policy and trade. She will be joined on that panel by fellow Democrats Perlmutter, Donnelly, Moore, Carson, and Rep. David Scott (Ga.). Rep. Michael Capuano (Mass.) will serve as the ranking Democratic member of the subcommittee on oversight and investigations.

Inside Washington (01/20/2011)

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* ALEXANDRIA, Va. (1/21/11)--“It's that time again!” says a National Credit Union Administration announcement of a free Credit Union Workshop scheduled for March 26 in Los Angeles. The agenda includes discussion of a wide range of topics, including such things as examination issues, what the agency’s new office of consumer protection means to credit unions, federal credit union directors’ fiduciary duties, and basic financial literacy requirements. The Los Angeles session follows three other scheduled workshops: one in Phoenix, Ariz., on March 5, one in Richmond, Va. on March 10, and another in Philadelphia on March 17 … * WASHINGTON (1/21/11)--Bank regulators are at odds over how best to launch national standards for servicing mortgage loans, although they appeared to be in accord that such standards should be established. The Federal Deposit Insurance Corp. (FDIC) backs the idea of tucking the standards into an existing Dodd-Frank Act risk-retention proposal, but the Office of the Comptroller of the Currency (OCC) does not (American Banker Jan. 20). FDIC Chairman Sheila Bair said in a speech this week that it is “imperative” that the risk-retention rule include provisions that improve loan servicing because of the effect it would have on preserving value for investors and preventing systemic instability. However, John Walsh, acting head of the OCC, countered that it would be “inappropriate” to include servicing standards in the Dodd-Frank qualified-residential-mortgages rule, and may not even fit legally. Also, Walsh said the OCC would rather see a broader set of standards, ones that could be applied across the system and enforced by federal regulators …