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CUNA comments on Feds reimbursement revisions

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WASHINGTON (10/14/09)--An analysis of a final rule addressing amendments to the Federal Reserve's Regulation S, the Right to Financial Privacy Act, is now available on the Credit Union National Association's (CUNA) website. Regulation S establishes the rates and conditions under which a government agency must reimburse a financial institution for costs incurred in producing customer financial records under the Right to Financial Privacy Act. The Regulation S revision amends the personnel fees that may be charged for searching and processing document requests to $22 per hour for clerical or technical support, $30 per hour for specialized computer support, and $30 per hour for support from a manager or supervisor. These rates would be adjusted every three years, beginning on September 30, 2012. The Fed rules will become effective on July 1, 2010. For more detailed analysis of the new rules, use the resource link.

FinCEN extends AML outreach to sub-5B fin. inst.

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WASHINGTON (10/14/09)--The Financial Crimes Enforcement Network (FinCEN) is increasing its outreach effort to financial institutions and has announced it will begin gathering information from depository institutions with under $5 billion in assets on their efforts to implementing anti-money laundering (AML) programs. This outreach effort builds on “knowledge gained from FinCEN's previous program of meetings and informational visits with larger financial institutions,” the FinCEN release said. In remarks accompanying a Tuesday release, FinCEN Director James H. Freis, Jr. said that FinCEN’s outreach is an effort to “hear about how smaller-to-moderate size depository institutions are implementing anti-money laundering (AML) programs, the unique challenges facing these institutions, and where additional guidance from FinCEN could be helpful." According to the release, FinCEN will select no fewer than 15 institutions to examine how they comply with the four components of a Bank Secrecy Act compliance program, which include the designation of a compliance officer, staff training, proper internal controls, and independent audit. FinCEN recently completed a similar program that focused on the 15 largest depository institutions. Financial institutions that wish to participate in the program may email by November 30, 2009. According to FinCEN, the email should contain contact information for their institution, the asset size and geographic location of the institution, and the type of charter that the institution operates under. Financial institutions should also tell FinCEN whether they prefer an on-site visit from FinCEN or will visit FinCEN offices themselves. For the full FinCEN release, use the resource link.

CARD Act corrections pass House via voice vote

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WASHINGTON (10/14/09)--The House of Representatives on Tuesday approved by a voice vote H.R. 3606, the CARD Act Technical Corrections Act, which was introduced by Rep. Peter Welch (D-Vt.) last month. In a statement following the vote, Credit Union National Association (CUNA) President/CEO Dan Mica commended the legislators for their “vital action” that could "save credit unions and their consumer members both money and peace of mind.” However, Mica added that “Senate action is still urgently needed for consumers and credit unions to realize relief,” and he encouraged Senators “to take similar action as soon as possible.” While the House vote is a positive move, CUNA’s Senior Vice President for Compliance Kathy Thompson encouraged credit unions to continue with their compliance efforts on the 21-day requirement, emphasizing that there is no bill comparable to H.R. 3606 in the Senate at this point. In a letter sent earlier in the day, Mica urged members of Congress to approve H.R. 3606, which would clarify that the 21 day notification requirements of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act apply only to credit card accounts. Mica in the letter reiterated an earlier statement that credit unions are "currently reeling from an unintended consequence of the CARD Act." The legislation, if signed into law, would insert language specifying that Section 106 of the CARD Act, which prevents creditors from treating payments as being late unless the creditor adopts reasonable procedures to ensure that periodic statements are mailed or delivered to the consumer no later than 21 days before the payment due date, only applies to credit card account holders. This section currently applies to all open-end loans, including general lines of credit, lines of credit associated with share draft and checking accounts, signature loans, and other forms of loans, not just credit cards. Mica said that the CARD Act, as currently written, would prevent credit unions from granting biweekly payment plans to their members, from “sending members consolidated billing statements,” and would force them to change payment due dates for members that had previously chosen due dates based on their “specific financial situation.” Mica said that this is “particularly problematic” for Home Equity Lines of Credit (HELOC) “because the due date of a HELOC is often a contractual term.” CUNA believes the provision was originally intended to cover only credit card accounts and was inadvertently changed during the legislative process, and Mica detailed some of the increased costs and reduced services that credit union members may face if the technical corrections to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act were not made in a letter sent late last week. Following yesterday's vote Mica also acknowledged the work of the Association of Vermont Credit Unions. Prior to the bill’s introduction last month, the Vermont league worked closely with with Welch and his staff to discuss the dilemma credit unions face if the 21-day disclosure rule were to apply to all open-end credit.

Capt. Phillips hero of ship hijacking to close CUNA GAC

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WASHINGTON (10/14/09)--Captain Richard Phillips of the Maersk Alabama, a modern-day hero of the high seas, will be the closing speaker at the Credit Union National Association’s 2010 Governmental Affairs Conference this February. The Maersk Alabama became the center of an extraordinary international drama last April when the ship was hijacked by Somali pirates, the first hijacking of a U.S. ship in more than 200 years. To protect his crew, Capt. Phillips made a conscious decision to put himself in harm’s way, offering himself as a hostage. The standoff ended when Navy SEAL snipers saw one of the pirates aim his AK-47 machine gun at Phillips and concluded he was in “imminent danger.” President Obama has praised Phillips’ “selfless concern for his crew” and said the courage he displayed through the ordeal is “a model for all Americans.” At the GAC, The Maersk Alabama captain will share his compelling story and some valuable leadership lessons gleaned from the experience that are relevant to all business leaders today. Phillips joins a GAC roster that includes former Federal Reserve Board Chairman Alan Greenspan, economist Larry Kudlow of CNBC’s "The Kudlow Report," and a political point/counterpoint that pits former Vermont Governor and Democratic presidential candidate Howard Dean against MSNBC “Morning Joe” host and former Republican congressman Joe Scarborough. CUNA’s 2010 GAC is Feb. 21-25 at the Washington Convention Center in Washington, D.C. Registration and housing lines are open. Click the resource link below for more information. Use the resource link below for mor 2010 GAC information.

CUNA-NAFCU meeting on alt. capital today

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WASHINGTON (10/14/09)—The Credit Union National Association (CUNA) will meet with the National Association of Federal Credit Unions (NAFCU) today to begin a draft of the groups’ letter to the National Credit Union Administration (NCUA) on a joint proposal for reforming alternative capital rules for credit unions. “It is our understanding that we have reached an agreement with NAFCU on a proposal,” said CUNA Deputy General Counsel Mary Dunn Tuesday. CUNA is also working with the National Association of State CU Supervisors on the alternative capital plan. In the letter to NCUA, CUNA and NAFCU will propose that credit unions be allowed to accept and count as capital funding such sources as:
* Members of the credit union; * Member sponsors and select employee groups of CUs; and * Assistance provided to credit unions by NCUA under Section 208 of the FCU Act.
Additional capital would not be federally insured and could pay a higher return to members. The additional capital would also be subordinated to other claims against a credit union and the National Credit Union Share Insurance Fund. The NCUA is developing its own white paper study on alternative capital issues. First expected to be released in December, board member Gigi Hyland indicated at recent NCUA Town Hall meetings that the agency would likely advance that timing. Federal lawmakers have indicated to CUNA that agreement on an approach to alternative capital must be reached by CUNA, NAFCU, NCUA, NASCUS, and U.S. Treasury Department for a plan to become a viable topic on Capitol Hill.