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House panel to investigate foreclosure issues

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WASHINGTON (10/21/10)--Potentially “improper and illegal foreclosures” will be investigated by the House Subcommittee on Housing and Community Opportunity on Nov. 18, Chairwoman Maxine Waters (D-Calif.) said this week. In a release, Waters said that federal regulators should “initiate a full review of Bank of America, GMAC and other servicers because we cannot leave it to the banks to review and police themselves.” A witness list for the hearing had not been released at press time. “In America, every family at risk of losing its home deserves fair consideration of the facts as well as an opportunity for alternative action,” she added. Waters this week also spoke in favor H.R. 3451, the Foreclosure Prevention and Sound Mortgage Servicing Act, a bill that would prohibit banks from initiating foreclosure proceedings without offering loss mitigation options to homeowners. That bill was introduced by Waters in July of 2009. A number of larger mortgage lenders have curtailed foreclosures or evictions in several states, and state officials nationwide are investigating claims of false mortgage documentation and verification that may have been used to justify hundreds of thousands of foreclosures. Credit Union National Association Chief Economist Bill Hampel said that this temporary stall in foreclosure processing may aid credit unions by allowing them to get their own foreclosures off of their books quicker. Although credit unions have seen some increases in foreclosure-related activity due to the overall decline in the economy, the majority of credit unions were much more careful in their lending activities, and did not originate toxic mortgages nor engage in the subprime mortgage market.

RegFlex merger registry are focus of NCUA meeting

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ALEXANDRIA, Va. (10/21/10)—The National Credit Union Administration (NCUA) will follow up on its recent interim final rules on regulatory flexibility (RegFlex) and fixed assets during its monthly meeting, set for later today. The NCUA will also release its national merger registry, which would provide the names of potential credit union merger partners, during the meeting, and will discuss an interim final rule that addresses the low risk asset definition in Section 702 during the meeting. Briefings on the NCUA’s credit union insurance fund and the agency’s recent pro-credit union publicity blitz will also take place. The merger recommendations were developed by CUNA's Mergers Task Force and presented to NCUA in the Task Force's May report. CUNA has encouraged the NCUA to address due diligence and loss-sharing incentives as it develops its approach to the merger process and asked the agency to revise or to simply not adopt proposed changes to its RegFlex program.

NCUA releases 2011 meeting schedule

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ALEXANDRIA, Va. (10/21/10)--The National Credit Union Administration (NCUA) on Wednesday released the monthly board meeting schedule for 2011. The specific dates for the NCUA’s 2011 board meetings are:
* January 13; * February 17; * March 17; * April 21; * May 19; * June 16; * July 21; * September 15; * October 27; * November 17; and * December 15.
The NCUA does not hold a board meeting during August. The 2011 board meeting schedule is subject to change.

Inside Washington (10/20/2010)

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* WASHINGTON (10/21/10)--The Conference of State Bank Supervisors (CSBS) has issued a corrected address for submitting comments on its proposed fees for the National Mortgage Licensing System & Registry (NMLS). Comments should be submitted to comments@stateregulatoryregister.org by Nov. 12. The National Credit Union Administration (NCUA) and the federal banking agencies have contracted with the CSBS's State Regulatory Registry to modify the NMLS to accommodate registrations by credit unions and banks as required by the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) … * WASHINGTON (10/21/10)--The Federal Deposit Insurance Corp. (FDIC) has proposed a comprehensive, long-term plan for managing the Deposit Insurance Fund (DIF). The FDIC outlines the plan in a financial institution letter (http://www.fdic.gov/news/news/financial/2010/fil10068.html). Goals include maintaining a positive DIF balance even when large fund losses occur and keeping assessment rates steady during economic and credit cycles… * WASHINGTON (10/21/10)--Two-thirds of institutional investors are critical of proposals to expand the use of fair value accounting for banks, according to a study released by Keefe, Bruyette & Woods and Greenwich Associates. Just 20% of survey respondents favored the fair value accounting change recommended by the Financial Accounting Standards Board Yet many investors also reject current practices, with 70% supporting an alternative proposal requiring banks to include enhanced disclosures about fair value in quarterly and annual regulatory filings but not on the balance sheet. As many as 45% of investors would reduce the amount of their investments in U.S. banks if the proposal was enacted(American Banker Oct. 20). The Credit Union National Association (CUNA), earlier this month at a roundtable meeting again made the case that FASB’s proposed update to financial instrument accounting standards would provide no benefit to credit unions while substantially increasing their compliance costs. CUNA also continued to oppose the proposed application of fair value accounting rules to loans and other credit union products…

Payment protection disclosures cast bad light CUNA

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WASHINGTON (10/21/10)--Credit Union National Association (CUNA) President/CEO Bill Cheney this week said that CUNA and CUNA Mutual will be working with credit unions to oppose proposed changes to the Federal Reserve’s Regulation Z that would require new disclosures for credit life, credit disability, debt cancellation and debt suspension. CUNA in a Wednesday letter to credit unions said that the Fed proposal goes “well beyond ensuring the consumer is informed and makes a reasoned decision – the proposed regulatory language casts the products in a strictly negative light and strongly discourages the purchase of these products.” “The proposed disclosures misrepresent the purpose and value of payment protection products to credit union members,” and will likely “have a significant negative impact on members who would benefit from these products and on credit unions’ non-interest income and loan portfolio risk profile,” the letter added. Comments on the Fed proposal are due by Dec. 23, and CUNA is working to compile credit union commentary ahead of that date. CUNA has also engaged the National Credit Union Administration (NCUA) to discuss concerns related to the NCUA’s methodology for setting the Overhead Transfer Rate (OTR), which is the proportion of NCUA’s insurance and supervisory costs that may be paid for the NCUSIF. Cheney said he is “encouraged that NCUA is using an outside party to review the OTR.” Cheney in his weekly CUNA regulatory advocacy report also noted that the National Credit Union Administration’s final rule on corporate credit unions, which was released last month, will come into effect on Jan. 18. However, many portions of the bill, including new capital requirements for the corporates, will phase-in at later dates.