Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

NCUA settles initial NGN offering

 Permanent link
ALEXANDRIA, Va. (10/29/10)--The National Credit Union Administration (NCUA) on Thursday reported that the initial offering of its NCUA Guaranteed Notes (NGN) have been settled. The NCUA’s Senior Series I-A notes are comprised of $3.28 billion of assets and are mainly backed by senior floating rate securities. The notes will pay a floating-rate coupon of one-month London Interbank Offered Rate (LIBOR) plus .45% per annum, subject to a maximum note interest rate cap equal to 7.00% annually, the NCUA said. The NCUA’s Senior Series II-A notes are comprised of $566.5 million in assets and are mainly backed by fixed-rate pass-through securities. Those notes will pay a fixed-rate coupon of 1.84% annually, the NCUA said. The notes, which are fully backed by the U.S> Government, “will receive monthly payments of principal and interest from cash flows of the related underlying securities,” according to the NCUA. “The transaction was met with strong investor demand and was oversubscribed,” with over 35 investors participating in the transaction, the NCUA said. Those investors included credit unions, banks, broker-dealers, insurance companies, money management funds, pension funds, and government agencies, the NCUA added. Credit unions received nearly 10% of the total allocation for both the I-A and II-A notes, according to the NCUA. For the full NCUA release, use the resource link.

CUNA warns against piecemeal Reg Z changes

 Permanent link
WASHINGTON (10/29/10)--Bill Cheney, President/CEO of the Credit Union National Association (CUNA) said that CUNA “remains very concerned” with the Federal Reserve Board’s (Fed’s) “piecemeal process” for amending Regulation Z, a process that “has imposed staggering costs and burdens on credit unions and has in many respects caused confusion for credit union members.” The letter was sent to Treasury Secretary Tim Geithner, CFPB Administrator Elizabeth Warren, and Fed Chairman Ben Bernanke. Cheney reiterated CUNA's longstanding support for reasonable consumer financial protection. However, he said confusion “will be compounded” if the Fed continues to issue new rules at the same time that the U.S. Treasury and the newly created Consumer Financial Protection Bureau (CFPB) do their own work to integrate various Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures. Overall, Cheney said, the Fed’s recent Reg Z rulemaking process has been "counterproductive and threatens the success of the current efforts to combine the TILA and RESPA disclosures.“ He added that the Fed’s current rulemaking efforts could be "inconsistent" with these and future rule changes to implement the consumer protection provisions of the Dodd-Frank Act and could prove to be “duplicative, counterproductive, and confusing for consumers.” Cheney noted that similar regulatory changes that were made in recent years have had similar impacts on credit unions, which often are forced to cope with these changes while also dealing with limited budgets and personnel issues. While CUNA supports the overall implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CUNA letter urged the agencies to support a temporary suspension of home mortgage disclosure-related rulemaking under Reg Z to better coordinate those efforts with the work on consolidation of TILA and RESPA disclosures. For the CUNA letter, use the resource link.

Housing anxiety high despite low mortgage rates

 Permanent link
WASHINGTON (10/29/10)—The national average interest rate for 30-year fixed rate mortgages rose slightly for the second week straight, lifting to 4.23%, for the week ended Oct. 28, Freddie Mac reported on Thursday. The 15-year fixed rate mortgage rate increased to 3.66% during the same week. Both the 30- and 15-year average interest rates were .02% higher than the rates reported during the previous week. While mortgage interest rates remain at or near all-time lows, the Washington Post this week reported that 53% of respondents to a recent survey said that they were either “somewhat concerned” or “very concerned” over their ability to meet their monthly mortgage or rent obligations. A similar percentage of poll respondents also said that the federal government should step in and impose a “national moratorium on foreclosures to sort out whether banks are improperly seizing the homes of struggling borrowers,” the Post said. The economic anxiety is twice as prevalent among individuals with annual household incomes below $30,000 when compared to individuals earning over $75,000 per year. “Those who are concerned about being able to make their payments are more likely to back the idea of a moratorium. Overall, 52 percent of all those surveyed back the moratorium and 34 percent oppose it,” the Post added. A total of 45% of survey respondents blamed mortgage lenders for the foreclosure mess, with 26% blaming irresponsible homeowners. The results of the Post poll were drawn from 1006 respondents contacted between Oct. 21 and 24. For Freddie Mac’s monthly numbers and the Post story, use the resource links.

Inside Washington (10/28/2010)

 Permanent link
* WASHINGTON (10/29/10)- -Senator Mark Warner (D-Va.) called on President Obama to set up a task force to examine the foreclosure paperwork issue that has stalled thousands of foreclosures and raised questions about their legality, said American Banker (Oct. 28). In a letter to Obama, Warner, a member of the Senate Banking Committee wrote, “I am writing to urge you to establish an independent and nonpartisan task force to make recommendations for addressing the recent and ongoing problems with the mortgage foreclosure process.”… * ALEXANDRIA Va. (10/29/10)—National Credit Union Administration
Click to view larger image Pictured from the left are Members Advantage President Frank Beachnau, NCUA board member Michael Fryzel, Members Advantage Business Development Representative Jace Smith, Members Advantage Senior Office Manager Jamie Barnett, and Members Advantage IT Manager Scott Neitzel. (Photo provided by NCUA)
board member Michael Fryzel took note of the financial education initiatives of Members Advantage CU when he recently visited the Michigan City, Ind. credit union. Credit unions overall, Fryzel noted, have responded in creative ways to continue to serve their members in current tough economic times. He went on to note specifically that Members Advantage “enacts proactive and responsive programs to meet the needs of its members,” such as its financial education promotion. The credit union provides financial counseling, credit report review, and debt management services. “They do for their members what all credit unions should,” Fryzel said in a recent release, and added that such programs can help credit unions be successful in the midst of the recession…

Compliance CUNA covers risk-based pricing Qs

 Permanent link
WASHINGTON (10/29/10)--The Credit Union National Association has advised credit unions that the Fair and Accurate Credit Transactions Act’s risk-based pricing regulations, which will become effective on Jan. 1, will require credit unions to provide risk-based pricing notices to each consumer in situations where two or more consumers are granted, extended, or otherwise provided credit. While the credit union may satisfy the requirements by providing a single notice addressed to all individuals if they live in the same residence, credit unions must provide individual alternative credit score disclosures to all individuals, whether they share an address or not, CUNA added. The same disclosure rules do not apply to individuals that act as co-signers/guarantors for another individual’s credit application. The co-signer/guarantor only supports and assumes liability for the credit granted or extended, but does not receive the credit, CUNA explains. Additionally, CUNA said that while credit unions are not specifically required to provide the risk-based pricing notices to consumers that do not accept the credit extended to them, the consumer may still ultimately receive a notice if they do not reject the credit offer within a given time period. Members will likely receive the notice when the credit union communicates the credit approval and may decline the offer at that time, CUNA added. For the full Compliance Challenge, use the resource link.

NCUA offers widget for share insurance awareness toolkit

 Permanent link
ALEXANDRIA, Va. (10/29/10)—The National Credit Union Administration (NCUA) on Thursday officially released its “Keep Your Money NCUA-safe” campaign online widget. The widget is a web-based advertisement that features clickable pictures and rotating messages about the NCUA’s share insurance. The widget may be added to websites, blogs, and social media pages. The widget, which can be installed by clicking on a “Get Widget” button on the NCUA’s homepage and following the resulting instructions, directs users to the NCUA’s “Keep your money NCUA-safe” campaign homepage. Users can then view resources related to the NCUA’s insurance fund public awareness campaign. Materials available on the site include an insurance coverage calculator and video PSAs that feature financial guru Suze Orman touting the benefits of the NCUA’s $250,000 credit union share insurance coverage. NCUA Chairman Debbie Matz said that the NCUA Share Insurance Campaign widget “is a simple yet very important way in which credit unions can get the message out about the safety of federally insured credit union deposits.” Matz also encouraged those that are “interested in consumer protection and financial education to take full advantage of this practical, easy-to-use tool.” For access to the NCUA’s online widget, click the image above.