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Inside Washington (01/25/2010)

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* WASHINGTON (1/26/10)--National Credit Union Administration (NCUA) Chairman Debbie Matz plans to continue discussion of credit union issues at a Town Hall meeting Feb. 4 in Lake Buena Vista, Fla. On Thursday, Matz held a similar meeting in Dallas, with more than 200 attendees participating. The session touched on NCUA’s plans to revamp the corporate credit union system, including concerns about legacy assets. The Feb. 4 meeting’s agenda includes more discussion about NCUA’s proposed changes to the corporates and changes to streamline field of membership applications. To register, use the link. Pictured are NCUA Board Member Michael Fryzel and Matz at the Dallas meeting. (Photo provided by the National Credit Union Administration) ... * WASHINGTON (1/26/10)--The Securities and Exchange Commission (SEC) said it plans to more closely scrutinize this year’s proxy statements to see how companies’ board directors and senior executives are paid and how performance targets are used (American Banker Jan. 25). Shelley Parratt, deputy director of SEC’s division of corporate finance, said at a Northwestern University law conference Friday that companies should disclose their performance targets for board directors, even if the benchmarks are met or ignored by compensation committees ... * WASHINGTON (1/26/10)--Under the Federal Housing Administration (FHA)-Hamp Making Home Affordable program, mortgage servicers will have a little more breathing room to assist struggling borrowers with financial hardships, but who have not yet missed a payment. Under a new policy, servicers can reduce payments or offer borrowers forbearance. Previously, borrowers could not access these options until they missed several monthly payments. The options will help borrowers from becoming delinquent and thus enable them retain their homes, said FHA Commissioner David Stevens (American Banker Jan. 25) ... * WASHINGTON (1/26/10)--The Federal Deposit Insurance Corp. (FDIC) and the Bank of England are improving cooperation for cleanups of international banks. The two announced a memorandum of understanding (MOU) Friday signaling their commitment. They will share information and consult with each other regarding the resolution of bank failures in the U.S. and United Kingdom. “The recent financial crisis demonstrates that greater international coordination among resolution authorities as well as resolution processes capable of resolving the largest, most complex financial institutions are necessary to protect the public,” said FDIC Chairman Sheila Bair. “This MOU is an invaluable step forward toward implementing the recommendations of the Basel Committee’s Cross Border Resolution Group, which the FDIC co-chaired. It is also a further step in support of the continuing work of the Financial Stability Board’s Crisis Management Working Group, chaired by Paul Tucker of the Bank of England” ...

FOM mergers focus of CUNA working groups

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WASHINGTON (1/26/10)--The Credit Union National Association (CUNA) has formed a pair of working groups to examine the National Credit Union Administration’s (NCUA) merger practices and recent proposals to alter charter application and field of membership expansion rules for community federal credit unions. The two working groups are still in the process of being assembled and will be comprised of members of existing CUNA committees or subcommittees. The NCUA’s field of membership proposal, which was released at the Dec. board meeting and is out for comment until March 1, would set objective and quantifiable criteria to determine the existence of a well-defined local community (WDLC) for areas that encompass multiple group areas. A new, objective definition for rural districts has also been proposed. The field of membership working group will examine proposed changes to how the NCUA defines the term community for multiple jurisdictional criteria and will also scrutinize the NCUA’s proposed redefinition of what constitutes a so-called “rural area.” The task force, composed of members of CUNA's Community Credit Union Committee and Federal Credit Union Subcommittee, will also review NCUA’s criteria for determining underserved areas. A number of credit unions have raised concerns about the regulatory process for voluntary and involuntary mergers, and the CUNA merger working group will examine those concerns and develop recommendations for improvements to those processes. The working group is drawn from CUNA's Examination and Supervision Subcommittee.The field of membership group will hold conference calls both later this month and in Feb. CUNA will accept credit union comment on the NCUA’s field of membership proposal until Feb. 10.

Info on variable rate rules coming Fed tells CUNA

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WASHINGTON (1/26/10)--A Federal Reserve representative recently informed the Credit Union National Association (CUNA) that the Fed is formulating its thoughts on recently introduced variable rate credit restrictions, and expects to provide CUNA with further guidance by the end of this week. Under provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act), which will be effective as of Feb. 22, card issuers will only be able to raise their credit card rates under specific circumstances. One of these is when there is a variable rate and the increase is based on a change in a publicly-available index that is not under the card issuer's control. However, the Fed indicated that the ability to raise rates under these circumstances will not apply if the issuer imposes a floor that will not permit the rate to decrease at all times in a manner consistent with reductions in the index. Credit unions that use floors for their variable rate cards have expressed significant concerns as to impact of these new provisions and that the public did not have an opportunity to comment on this new restriction during the rulemaking process. CUNA and representatives from leagues and credit unions discussed this issue in a conference call with Fed officials held last week. Fed staff and CUNA will also address this issue and other provisions of the final rule, via an audio conference call on Feb. 2nd at 2 pm ET.

Congress this week Focus on Fed chair nomination

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WASHINGTON (1/26/10)--The legislative front will remain quiet for credit unions this week, but committee action will again take place on the Hill, and the confirmation hearing for current Federal Reserve Chairman Ben Bernanke will also take center stage. The House Financial Services Committee will be busy on Wednesday, with its Subcommittee on International Monetary Policy and Trade holding a hearing entitled "The State of Global Microfinance: How Public and Private Funds Can Effectively Promote Financial Inclusion for All." President Barack Obama will also deliver his State of the Union address before a joint session of Congress on Wednesday, and the House will not be in business on Thursday or Friday due to the Republican Issues Conference. While the House Rules Committee had planned to discuss Rep. John Tierney’s (D-Mass.) H.R. 4300, the Restoring America's Commitment to Consumers Act of 2009, on Wednesday, that hearing has been postponed indefinitely. The bill, which would cap credit card interest rates at 16%, has also been referred to the House Financial Services Committee., and has 70 mostly democratic co-sponsors. The bill is opposed by the Credit Union National Association.

BSA advisory group soliciting nominees

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VIENNA, Va. (1/26/10)—The Bank Secrecy Act Advisory Group (BSAAG), which ultimately makes BSA policy recommendations to the U.S. Treasury Secretary, is seeking nominations for new members. The advisory panel operates under the auspices of Treasury’s Financial Crimes Enforcement Network (FinCEN) and is chaired by the FinCEN director. It was created by the 1992 Annunzio-Wylie Anti-Money Laundering Act. FinCEN is inviting the public to nominate financial institutions and trade groups for membership by Feb. 24. New members will be selected for three-year membership terms. The Credit Union National Association is a current member whose term continues to Feb. 28, 2012. Nominations may be mailed Regulatory Policy and Programs Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183 or e-mailed Use the resource link below for more information.