Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

Inside Washington (10/14/2010)

 Permanent link
* WASHINGTON (10/14/10)--Mark Pearce, the chief deputy commissioner of banks in North Carolina since 2009, has been appointed as director of a new division devoted to consumer compliance at the Federal Deposit Insurance Corp. (FDIC), said American Banker (Oct.14). The creation of the division of depositor and consumer protection, announced in August by FDIC, will focus on consumer rules in the wake of the sweeping Dodd-Frank legislation. Although the law created the new Consumer Financial Protection Bureau to write new rules, the FDIC will still enforce compliance for the banks it supervises. In addition, the new division is responsible for promoting the public’s knowledge about deposit insurance. Pearce previously spent over 10 years at the Center for Responsible Lending... * WASHINGTON (10/14/10)--Richard Nelman, superintendent of New York State banks, Wednesday called on state and federal regulators to work together to implement the Dodd-Frank financial reform legislation, particularly for non-depository supervision. (American Banker, Oct. 14). Speaking before the Exchequer Club here, Nelman said Dodd-Frank reaffirmed the need for state and federal regulators to partner, particularly on consumer protection issues for banks and nondepository supervision and enforcement. Nelam said the U.S. Congress confirmed that the state role is critical--providing checks and balances, calling it "more cops on the beat in enforcement," and serving as a proving ground for new laws. He also encouraged the Consumer Financial Protection Bureau to coordinate with existing state efforts as it designs a system to regulate nonbank institutions. Nelman suggested expanding the licensing system to include other nondepository lenders such as money transmitters and payday lenders.

First-round CMF awards provides 80 M for affordable housing

 Permanent link
WASHINGTON (10/15/10)--Twenty-three community development financial institutions (CDFIs) and other nonprofits were awarded $80 million to attract private funds for affordable housing under the U.S. Treasury Department’s new Capital Magnet Fund (CMF). The CMF is a competitive grant program for CDFIs and other nonprofits to attract private capital for development, preservation, rehabilitation, and purchase of affordable housing for low-income families. It is also meant to stir economic development activities or community service, which in conjunction with affordable housing activities may implement a concerted strategy to stabilize or revitalize a low-income area or underserved rural area. The awards were announced Thursday at St. Joseph’s Senior and Family Housing in Oakland, Calif., a site chosen because it is currently having a transformation to affordable housing units due to CDFI financing. “I am thrilled to be announcing these awards under the first-ever round of the Capital Magnet Fund…where CDFIs continue to have a tremendous positive impact on the development of affordable housing,” said the director of Treasury’s CDFI Fund, Donna Gambrell. "The Capital Magnet Fund awards will enable our partners to leverage up to $1.6 billion for the financing of affordable housing within underserved communities and help put under-served neighborhoods on the path to recovery and revitalization.” The CMF awards went to organization in 38 states. There were 230 applications from organizations serving 49 states, the District of Columbia, and Puerto Rico requesting over $1 billion in grants under the FY 2010 round of the CMF. On average, according to the announcement, applicants proposed leveraging their awards by a factor of over 20 times their award request, exceeding the target set by the U.S. Congress of leveraging by a factor of 10.

Compliance CUNA lays out timeline for ADA-ATM compliance

 Permanent link
WASHINGTON (10/15/10)--By now, most credit unions have heard about the Department of Justice’s (DOJ) update to the accessibility standards governing the construction and alteration of facilities covered by the American with Disabilities Act (ADA). The new ADA regulations were issued in late July. The DOJ’s 2010 Standards for Accessible Design consist of the DOJ’s revised regulations and the U.S. Access Board’s accessibility guidelines that were issued in 2004. New standards for ATMs are the most relevant changes for credit unions. The 2010 ADA standards address both physical access and communication-related elements to make ATMs usable by individuals who are visually impaired as well as those who have mobility challenges. “There has been a great deal of confusion regarding the effective date versus the compliance date for the 2010 accessibility standards,” said Credit Union National Association director of compliance information Valerie Moss. According to the DOJ, compliance with most of the regulation’s provisions is required on March 15, 2011. However, the mandatory compliance date for the 2010 accessibility standards is March 15, 2012. Any ATMs that are newly installed or altered on or after March 15, 2012 will be required to comply with the 2010 accessibility standards. However, there is a safe harbor for ATMs that are in compliance with the original 1991 ADA accessibility standards. These ATMs will not need to be modified unless they are altered on or after March 15, 2012. ATMs that do not comply with the 1991 standards must be modified to comply with either the 1991 or 2010 standards before March 15, 2012. The 1991 standards required that instructions and all information for use be made “accessible to and independently usable by persons with vision impairments.” So, practically speaking, most ATMs will still need to be speech enabled in order to meet either the 1991 or 2010 standard for independent usage, added Moss. Credit unions should review Section 707 of the Access Board’s Accessibility Guidelines and consult with their ATM service providers to determine what changes will need to be made to their ATMs.

NCUA approves big Addison Ave. First Tech CU merger

 Permanent link
ALEXANDRIA, Va. (10/15/10)--The National Credit Union Administration (NCUA) has approved the merger of Addison Avenue FCU, Palo Alto, Calif., and First Tech CU, Beaverton, Ore. The NCUA on Thursday told news Now that it officially approved the merger on Oct. 4. Both credit unions served members from high-tech companies such as Hewlett Packard, Microsoft, Agilent, Intel, and CH2M HILL. The newly merged credit union, which will operate as First Tech FCU with corporate offices in Palo Alto, Beaverton and Rocklin, Calif., will hold $4.6 billion in assets from 320,000 members. The credit union will have 38 branches total. Addison Avenue President/CEO Benson Porter earlier this year said that the partnership is a tremendous opportunity for the credit unions to create more value for their combined membership and sponsor companies.

Merger registry RegFlex on NCUA agenda

 Permanent link
ALEXANDRIA, Va. (10/15/10)—The National Credit Union Administration (NCUA) will release its national merger registry, which would provide the names of potential credit union merger partners, at next Thursday’s open board meeting. The registry was initially recommended by the Credit Union National Association (CUNA). CUNA has also urged the NCUA to address due diligence and loss-sharing incentives as it further refines its approach to the merger process, and has asked the NCUA to provide greater detail on its criteria for selecting which credit unions on the merger partner registry should serve as acquirers. The merger recommendations were developed by CUNA's Mergers Task Force and presented to NCUA in the Task Force's May report. Final rules on fixed assets and the NCUA’s regulatory flexibility (RegFlex) program will also be discussed during the meeting. CUNA earlier this year urged the NCUA to revise or to simply not adopt proposed changes to its RegFlex program. Those changes, which were announced in March, would eliminate RegFlex authority for credit unions in regard to the 5% limit on fixed asset investments, the requirement for the personal guarantees of borrowers for member business loans (MBLs), stress testing of certain investments, and discretionary control of investments. The NCUA will also release its plan for the years 2011 through 2016, and will cover the status of its insurance fund during the open portion of the meeting. Insurance appeals and supervisory activities will be discussed during the closed portion of the meeting. For the full NCUA agenda, use the resource link.

FHFA recommends 4-point foreclosure framework

 Permanent link
WASHINGTON (10/15/10)--Fannie Mae and Freddie Mac should inform authorities of potentially fraudulent activities and avoid unneeded delays when working to resolve foreclosure proceedings, Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco said this week. DeMarco also said that Fannie and Freddie should verify that all foreclosure-related documents are compliant and remediate foreclosure process deficiencies in a “timely” manner. DeMarco made these suggestions as part of a “four-point policy framework” released by the FHFA. The framework “envisions an orderly and expeditious resolution of foreclosure process issues that will provide greater certainty to homeowners, lenders, investors, and communities alike,” DeMarco said in a release. “The country’s housing finance system remains fragile and I intend to maintain our focus on addressing this issue in a manner that is fair to delinquent households, but also fair to servicers, mortgage investors, neighborhoods and most of all, is in the best interest of taxpayers and housing markets,” DeMarco added. The FHFA specifically recommended that mortgage servicers review foreclosure documents to ensure that any documentation of pre-judgment foreclosure actions, post-judgment foreclosure actions, post-foreclosure sales, or eviction actions is correct and was “completed in compliance with applicable law.” The FHFA earlier this month said that both Fannie and Freddie would work with mortgage servicers to identify and address issues in the foreclosure process. DeMarco last month said that Fannie and Freddie should "maintain their focus on mitigating credit losses and remediating internal operational weaknesses while employing prudent underwriting standards and guaranteeing proven mortgage products." Developing and offering new products should be tabled for the time being, he added. For the full FHFA release, use the resource link.

NGNs will carry 0 risk weight NCUA says

 Permanent link
ALEXANDRIA, Va. (10/15/10)--The National Credit Union Administration (NCUA) on Thursday officially announced that its NCUA Guaranteed Notes (NGNs) will carry a 0% risk weight. The NGNs are comprised of $50 billion of legacy assets held by the NCUA. Those legacy assets are primarily of private label, residential mortgage-backed securities that were significantly devalued during the turmoil in the overall mortgage market. A total of $35 billion of those assets will then be reissued as NCUA Guaranteed Notes (NGN), which will then be sold on the open market. The NCUA said that additional information about the securitization process will be made available as the process moves forward. The NCUA worked with the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision to gain clarification on the appropriate risk weight required under regulatory capital risk weighting regulations. The NGNs will be offered on the open market this week, under the ticker symbol NGN. The initial offering is one of a series of similar transactions that NCUA intends to conduct in order to affect the corporate resolution plan. "Since the NCUA Guaranteed Notes are backed by the federal government, similar to U.S. Treasury securities, these investments carry a zero risk weight and are permissible for credit unions," NCUA Chairman Debbie Matz said this week. For the full NCUA release, use the resource link.