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NEW: Obama Sends McWatters NCUA Nom to Senate

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WASHINGTON (1/8/14, UPDATED: 9:45 A.M. ET)--Mark McWatters' nomination to serve on the National Credit Union Administration board has been sent to the U.S. Senate by President Barack Obama.

"This is a pro forma step in the process that formally puts the nomination in the hands of the Senate. Now, the Banking Committee will begin their vetting process in advance of an eventual hearing," Credit Union National Association Senior Vice President of Legislative Affairs Ryan Donovan said.

Obama announced his intent to nominate McWatters in mid-December. McWatters' nomination is subject to a nomination hearing by the U.S. Senate Banking Committee and a confirmation vote by the Senate.

If confirmed, McWatters would replace board member Michael Fryzel, whose term ended Aug. 2, 2013, but he is allowed to continue serving until another board member is confirmed.

430 CUs Already Respond to Breach Survey: CUNA Wants More

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WASHINGTON (1/8/14)--The Credit Union National Association has already received 430 submissions to its recently released data breach impact survey, and CUNA continues to encourage credit unions to forward on their own information as it comes in.

Questions in the 14-item survey on the effects of the Target data breach include when credit unions were notified of the breach, how many of their cards were impacted by the breach, whether or not any of the affected cards were EMV cards, how much call volume has been affected by members asking about the Target breach, and whether credit unions have had to increase staffing as a result of the breach.

There is no deadline for responses, but CUNA encourages credit unions to respond as soon as the information is available. "CUNA recognizes that many credit unions have not yet incurred all of the costs. Those that have a handle on the costs should report right away. The rest should complete the survey as soon as the data is available," CUNA Chief Economist Bill Hampel added.

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

Senate Banking Committee Chairman Tim Johnson (D-S.D.) said Monday that he is considering conducting a hearing to study the recent data breach at Target, and CUNA has reached out to Senate Banking and House Financial Services Committee leaders to encourage them to "fully examine the chronic issue of merchant data breaches, their impact on consumers and financial institutions."

Three Senate Banking panel member--Bob Menendez (D-N. J.), Chuck Schumer (D-N.Y.), and Mark Warner (D-Va.)--have also called on Johnson to hold such a hearing (News Now Jan. 3).

CU Priorities Need Funding in 2014: CUNA, World Council

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WASHINGTON (1/8/14)--Credit union priorities such as the Community Development Financial Institutions (CDFI) Fund, Community Development Revolving Loan Fund (CDRLF), and Cooperative Development Program (CDP), as well as microenterprise and microfinance development must be considered as appropriations bills are developed, the Credit Union National Association said in Tuesday letters to legislators.

In letters to U.S. House and Senate Appropriations financial services subcommittee leaders, CUNA asked Congress to restore funding to the CDFI Fund and the CDRLF Fund at levels set in 2012. The suggested funding levels were $221 million for the CDFI Fund and $1.25 million for the CDRLF.

The CDFI Fund helps locally based financial institutions--including credit unions--offer small business, consumer and home loans in communities and populations that lack access to affordable credit. The CDRLF provides loans and technical assistance to federal and state credit unions that are designated as low-income credit unions, as defined by NCUA regulations.

In another pair of separate letters, CUNA and the World Council of Credit Unions also advocated for funding the CDP and microenterprise and microfinance development, all of which "play a critical role in increasing access to safe and affordable financial services to people in developing countries." Such programs need adequate funding to "continue to help credit unions provide credit, investment capital, and financial services to distressed communities worldwide," CUNA President/CEO Bill Cheney and World Council President/CEO Brian Branch wrote.

CUNA and the World Council urged Congress to maintain the current funding levels of $10 million for the CDP and $265 million for microenterprise and microfinance development.

The CDP accelerates economic growth, enhances the understanding and use of democratic principles, and improves stability in some of the world's most impoverished countries, enabling individuals in those countries "to access high quality, reasonably priced financial services by building networks, creating enabling regulatory environments, and providing training to credit union leaders and staff," Cheney and Branch wrote.

Cheney and Branch also noted that the microenterprise and microfinance development program has allowed the World Council to expand financial access to nearly 100,000 farmers and other credit union members in Afghanistan who previously did not have access to financial services.

For the CUNA/World Council letters, use the resource links.

Improved Share Insurance Estimator Tool Unveiled by NCUA

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ALEXANDRIA, Va. (1/8/14)--It should be easier now for credit union members to get answers to questions about their share insurance and to keep track of their coverage with a new, improved Share Insurance Estimator just unveiled on the National Credit Union Administration website.

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The estimator "makes it easy for consumers to calculate share insurance coverage and receive immediate answers to questions about share insurance," NCUA Chairman Debbie Matz said. Users can choose from personal, business and government accounts, and enter the amounts held in those accounts and other related information to determine how much of their total credit union funds are insured by NCUA.

The agency said Tuesday that improvements to the tool will allow users to type in information while simultaneously using important reference materials and will provide users with additional guidance for using the Share Insurance Estimator.

The Share Insurance Estimator was formerly known as the E-Calculator. The tool will also tell members what they can do if their account is not 100% protected.

For more, use the resource link.

NCUA Offers Jan. 22 Exam Modernization Webinar

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ALEXANDRIA, Va. (1/8/14)--Credit unions of all asset sizes may participate in a free, Jan. 22 National Credit Union Administration webinar designed to give participants a better understanding of new procedures related to Documents of Resolution and examination reports. The NCUA recently made changes to streamline and improve the consistency of the examination report process.
 
The changes, effective Jan. 1, are intended to improve the overall exam process by setting clearer expectations for credit unions and examiners, and were introduced in October in the agency's Letter to Credit Unions (13-CU-09). The Credit Union National Association has long sought the kind of changes provided in the NCUA letter, Deputy General Counsel Mary Dunn said at the time.

The NCUA noted it considered feedback from credit union industry officials as it developed these changes. The agency also incorporated recommendations from the U.S. Government Accountability Office and the NCUA's Office of Inspector General.

One specific change adopted by the agency is separating the Document of Resolution and Examiner's Findings sections of the examination reports into stand-alone documents.

"Separating the DOR and Examiner's Findings documents--and providing descriptive definitions of each document's purpose--will help credit union officials clearly differentiate between major and minor problems in order to prioritize corrective actions," the agency wrote.
 
Presenters at the NCUA's 2 p.m. (ET) webinar include Dominic Carullo, an economic development specialist with the Office of Small Credit Union Initiatives; Amanda Parkhill, a loss and risk analyst with the Office of Examination and Insurance; and Clarence Jones, an NCUA national training specialist.
 
Use the resource link below for registration information. Participants may submit questions to the agency in advance of the session at WebinarQuestions@ncua.gov. The subject line of the email should read "Examination Modernization Webinar." Participants with technical questions about accessing the webinar may email audience.support@on24.com.
 

 
 

CUs Must Review 2014 HOEPA Requirements: NCUA Alert

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ALEXANDRIA, Va. (1/8/14)--Credit unions that have not made any high-cost mortgages in the past must still verify whether their new mortgages are exempt from the new "high-cost" thresholds in the Consumer Financial Protection Bureau's amended Home Ownership and Equity Protection Act (HOEPA) rule, the National Credit Union Administration said in a new Regulatory Alert (14-RA-02).

And, the agency added, even if a credit union does not make any high-cost mortgages under the new coverage thresholds, there are still homeownership counseling elements of the HOEPA rule with which it must comply.

The NCUA alert noted that:
  • Credit unions that make any federally related mortgage loan must provide a written list of homeownership counseling organizations to applicants within three days of the application;
  • Credit unions that make mortgage loans to first-time borrowers that permit negative amortization must confirm that the first-time borrowers have received homeownership counseling before consummation; and
  • Credit unions that make high-cost mortgages or open-end credit secured by a consumer's principal dwelling must comply with new HOEPA consumer protections and homeownership counseling requirements.
The alert also reminded credit unions of the upcoming Jan. 10 HOEPA rule compliance date, and credit union responsibilities under the new rule.

For the full NCUA alert, use the resource link.

CFPB Readies Consumers, Servicers for New Mortgage Regs

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WASHINGTON (1/8/14)--As the Jan. 10 effective date for new mortgage regulations approaches, the Consumer Financial Protection Bureau continues to release resources to prepare consumers and servicers alike for the regulatory changes.

New resources include sample letters and a fact sheet that takes on some of the myths surrounding the new Ability-to-Repay and Qualified Mortgage regulations.

The sample letters can be used to help consumers find solutions to various problems with their mortgage servicers, the CFPB said. The CFPB has provided:
  • A letter template that details what information consumers should include as they attempt to correct a servicer error; and
  • A letter template consumers can use if they need information from their mortgage servicer.
Separately, a brief CFPB document has also been released to help dispel some of the most common misconceptions about what the new Ability-to-Repay and Qualified Mortgage rule means for consumers.

So-called "fictions" that are addressed in the document include:
  • The belief that the CFPB's Ability-to-Repay Rule will cut off consumers' access to credit by requiring all loans to be QMs;
  • The claim that the financial institutions aren't going to make any loans that are not QMs; and
  • The rumor that the new rule requires 20% or 30% down payments for new mortgages, which will price many borrowers out of the market.
Mortgage tips, a list of frequently asked questions and related answers, a tool to help consumers find local housing counseling agencies, and fact sheets on the new mortgage rules are also still available, the CFPB said.

For the CFPB resources, use the links.

BSA Invoked in JPMorgan Chase $1.7B to Madoff Ponzi Victims

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WASHINGTON (1/8/14)--JPMorgan Chase & Co. has entered into a deferred prosecution agreement with the U.S. Attorney's Office for the Southern District of New York and agreed to forfeit $1.7 billion to the U.S. government to resolve claims that it had a role in enabling Bernard Madoff's infamous and extensive Ponzi scheme, the Office of the Comptroller of the Currency noted in a release Tuesday.
 
The OCC said the $1.7 billion is concurrent with its own assessed $350 million civil money penalty against JPMorgan Chase, N.A., JPMorgan Bank and Trust Company, N.A., and Chase Bank USA, N.A., for Bank Secrecy Act (BSA) violations.
 
The agency added it also is concurrent with a Financial Crimes Enforcement Network assessed $461 million civil money penalty that is also "deemed satisfied" by the forfeiture to the U.S. government.

The OCC said its penalty follows a January 2013 cease and desist order in which the agency directed the three affiliated banks to correct deficiencies in their compliance programs.

The OCC said it found "critical and widespread deficiencies in the banks' BSA and anti-money laundering compliance programs with respect to suspicious activity reporting, monitoring of transactions for suspicious activity, the conduct of customer due diligence and risk assessments, and internal controls and independent testing."

Although the OCC release said the penalty is based in part on JPMorgan Chase's failure to report suspicions about Bernard L. Madoff Investment Securities, LLC, to U.S. law enforcement and regulators--despite having alerted United Kingdom authorities in the months prior to Madoff's arrest--the banks also "failed to detect and report other cases of suspicious activity."
 
The bank regulator said it continues to monitor JPMorgan Chase's efforts to correct weaknesses identified by the agency as well as the bank's ongoing work and commitment to remedy the remaining deficiencies. "We will continue our oversight efforts and take further action as warranted," it noted.