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Inside Washington (01/09/2008)

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* WASHINGTON (1/10/08)--Daniel Mudd, Fannie Mae’s chief executive, expressed his concerns with how some might respond to the Bush administration’s loan modification plan, saying that it could “spook investors” (American Banker Jan. 9). In a speech Tuesday before the U.S. Chamber of Commerce, Mudd said that investors left with loan losses would not be able to re-enter the market easily, thus shrinking the credit pool. Legislation should not affect the credit markets by inflicting losses onto them, he said. Bank regulators could give financial institutions credit under the Community Reinvestment Act for helping borrowers facing foreclosure, Mudd suggested, while encouraging a unified industry approach ... * WASHINGTON (1/10/08)--The Office of the Comptroller of the Currency (OCC) announced Wednesday that John K. Hardage has been named director for congressional liaison. Hardage, who joined the agency in 1997, has served as deputy director. Hardage succeeds Carolyn Z. McFarlane, who retired last year ... * WASHINGTON (1/10/08)--Rep. Richard Baker (R-La.) could announce Friday whether he will become president of the Managed Funds Association (CongressDaily PM Jan. 8). Baker has been in talks with the group regarding a $1 million annual salary. Baker said he could resign within one month if he takes the position. His absence would result in a special election to fill his 6th District seat ...

Reg Z comments due in April

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WASHINGTON (1/10/08)—Credit unions and other interested parties have until April 8 to comment on the Federal Reserve Board’s proposed Regulation Z changes intended, in part, to address certain subprime lending practices. The proposed revisions spanned 141 pages in the Jan. 9 Federal Register, which set the deadline for public comment. The proposed rules changes are meant to better protect consumers from unfair or deceptive home mortgage lending practices and related advertising under the Truth in Lending and Home Ownership and Equity Protection Acts. The Fed’s plan would apply four protections to a newly defined category of “higher-priced mortgages,” which would include those with annual percentage rates (APRs) that exceed the yield on Treasury securities of comparable maturity by at least three percentage points for first-lien loans, or five percentage points for subordinate-lien loans. This threshold should include nearly all subprime loans. For these higher-priced mortgages:
* Creditors would be prohibited from engaging in a pattern or practice of extending credit without considering borrowers' ability to repay the loan; * Creditors would be required to verify the income and assets they rely upon in making a loan; * Prepayment penalties would only be permitted if certain conditions are met, including the condition that no penalty will apply for at least sixty days before any possible payment increase; and * Creditors would have to establish escrow accounts for taxes and insurance.
For most other mortgages, including the “higher-priced” mortgages, the proposal would:
* Prohibit lenders from paying mortgage brokers “yield spread premiums” that exceed the amount the consumer had agreed in advance that the broker would receive. A yield spread premium is the fee paid by a lender to a broker for higher-rate loans. *Prohibit certain servicing practices, such as failing to credit a payment to a consumer’s account when the servicer receives it, failing to provide a payoff statement within a reasonable period of time, failing to provide a schedule of fees upon request, and imposing late fees under certain circumstances. *Prohibit a creditor or broker from coercing or encouraging an appraiser to misrepresent the value of a home. *Prohibit seven misleading or deceptive advertising practices for closed-end loans, such as using the term “fixed” to describe a rate that is not truly fixed. It would also require that all applicable rates or payments be disclosed in advertisements with equal prominence as introductory or “teaser” rates; and * Provide Truth-in-Lending disclosures to borrowers within three days of application so it is early enough to use while shopping for a mortgage. Lenders could not charge fees until after the consumer receives the disclosures, except a fee to obtain a credit report.
The Credit Union National Association will soon issue a comment call to credit unions on the Reg Z revisions.

NCUA names Woodson new CFO

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ALEXANDRIA, Va. (1/10/08)—Mary Ann Woodson will become the chief financial officer of the National Credit Union Administration (NCUA) Jan. 14, taking the spot vacated by the retirement of Dennis Winans at the end of 2007. Woodson has served most recently as deputy CFO at the Department of Homeland Security (DHS), which includes 22 agencies that merged when DHS was established. Before joining DHS in 2004, Woodson was the budget director for the Federal Bureau of Investigation, where her federal career began in 1979. As CFO of the NCUA, Woodson will become responsible for the daily operations of the National Credit Union Share Insurance Fund (NCUSIF) and the NCUA Operating Fund, including the accounting and financial reporting functions for both funds. She will over take over agency administrative functions, such as travel policies and programs, budget preparation and management, finance and accounting functions, accounts payable, payroll, and the administration of credit union operating fees and NCUSIF capitalization deposits and operations. Winans was NCUA CFO since 1995 and had been with the agency since 1979.

Idaho league president named to Fed advisory board

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WASHINGTON (1/10/08)—The Federal Reserve Board Wednesday named 10 new members to its Consumer Advisory Council (CAC), including the head of the Idaho CU League who was nominated by the Credit Union National Association (CUNA). Alan Cameron, president/CEO of the league, will serve a three-year term on the CAC, which advises the Fed on its responsibilities under the Consumer Credit Protection Act and on other matters in the area of consumer financial services. Members are appointed by the Board of Governors to the 30-member panel to serve staggered three-year terms. The council meets three times a year in Washington, D.C. Cameron has served as chair of CUNA's Consumer Protection Subcommittee and as chair of the State Issues Advocacy Committee of the American Association of Credit Union Leagues. Previously, he was an attorney in private practice, during which he focused on the representation of credit unions in state and federal courts. Cameron has also been involved in a variety of community affairs related to consumer financial services. He serves as treasurer of the Hispanic Financial Education Coalition, a Jump$tart Coalition partner, as well as treasurer of the Consumer Information Council, an industry partnership dedicated to educating the public about identity theft and financial privacy issues. He was also on the board of the Consumer Credit Counseling Service of Idaho for more than twenty years. Also named for a three-year term is Michael Calhoun, president of the Center for Responsible Lending (CRL) in Durham, N.C. The CRL is a nonprofit, non-partisan research and policy organization focusing on consumer lending issues. CUNA Deputy General Counsel Mary Dunn said Wednesday: "It's very important for credit unions as consumer-owned co-ops to have representation on the Consumer Advisory Council because it does have the ear of the Federal Reserve Board on consumer regulatory issues. "CUNA recommended Alan Cameron and as head of our Consumer Protection Subcommittee he will do an outstanding job on the Fed's advisory council, and we also look forward to working with Michael Calhoun, who certainly knows credit unions given his association with Self Help." Faith Anderson, of American Airlines FCU in Fort Worth, Tex., completed her three-year CAC term at the end of 2007. The Fed also designated a new chair and cive chair for the advisory group: President/CEO Tony Brown of Uptown Consortium, Inc., whose term runs through December 2008, was designated chair; amd Managing Director Edna Sawady Market Innovations, Inc., whose term end December 2009, was named vice chair. Use the resource link below to see the complete list of CAC members.