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Fannie Mae to offer webinars on HARP changes

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WASHINGTON (11/17/11)--Fannie Mae today will hold the first of four webinars to update mortgage servicers on recent changes that aim to help more underwater borrowers who could benefit from refinancing their home mortgages to participate in the Home Affordable Refinance Program (HARP).

The hourlong webinars are entitled "Updates to DU Refi Plus and Refi Plus" and will give attendees a chance to discuss the changes with Fannie Mae experts. Additional webinars are scheduled for November 22, 28 and 30. The Nov. 17 and Nov. 22 webinars were full at press time, but registration for the Nov. 28 and Nov. 30 webinars remained open.

The webinars will address HARP changes that were unveiled late last month by President Barack Obama. Those changes include:
  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
  • Removing the 125% loan-to-value ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
  • Waiving certain representations and warranties made by lenders on loans owned or guaranteed by Fannie Mae and Freddie Mac;
  • Eliminating the need for a new property appraisal where there is a reliable automated valuation model estimate provided; and
  • Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to Fannie and Freddie on or before May 31, 2009.
HARP was launched in 2009 to let troubled homeowners bypass a requirement that they have at least 20% equity in their home to be able to refinance their mortgages at lower rates.

To register for the webinars and see Fannie Mae/Freddie Mac guidance on the changes, use the resource links.

CUNA seeks comment on FTC child protection changes

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WASHINGTON (11/17/11)--The Credit Union National Association (CUNA) has asked credit unions to comment on recently proposed Federal Trade Commission (FTC) changes to requirements regarding the collection, use, and/or disclosure of personal information for children under 13 years old by websites and other online services, including credit unions that have websites and/or mobile banking applications.

CUNA has noted that credit unions will likely need to change their methods of obtaining "parental consent" to collect online child personal information if the FTC finalizes the rule as proposed. A previous consent method, known as "email pus," would no longer be valid under the new rule.  

The FTC rule change, which has been proposed under the Child Online Privacy Protection Act of 1998 (COPPA), would require credit unions to have a child's parent confirm that they consented to the credit union collecting their child's personal information by making a phone call to the credit union's toll-free number. Parents would also be able to confirm their identity by making a credit card transaction, by holding a brief videoconference with credit union personnel, by providing a government-issued form of identification to the credit union to prove the parent's identity, or by using a consent form the parent returns to the credit union by postal mail, fax, or scanned copy.

CUNA is accepting comments until Nov. 23. For the full comment call, use the resource link.

Cheney urges less CU reg burden at bank hearing

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WASHINGTON (11/17/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney encouraged Congress to take a balanced approach to regulatory relief that would aid both credit unions and community banks, and called on them to combine credit union member business lending (MBL) legislation with community bank regulatory relief legislation during a Wednesday hearing before the House Financial Services subcommittee on financial institutions.

Cheney (pictured testifying to the left) said CUNA supports portions of the Communities First Act (H.R. 1697), which would loosen some community bank regulations, but added that credit unions will not let any regulatory relief legislation for banks move forward absent similar relief for credit unions.

He suggested that adding provisions of H.R. 1418, which would lift the credit union MBL cap to 27.5% of total assets, to provisions of H.R. 1697 would result in a bill that could "be embraced by all who serve businesses on Main Street." Rep. Ed Royce (R-Calif.), who is a main sponsor of H.R. 1418, also supported combining portions of the two bills. 

Some in Congress have recently questioned the need for a credit union member business lending cap increase, citing a lack of demand, but Cheney in Wednesday's hearing said he has heard first hand of the demand for these types of loans. He also noted that the original mission of credit unions was to lend to small businesses, and added that restricting small business lending is harming overall economic growth.

Cheney also called for greater regulatory flexibility for credit unions and community banks, and encouraged legislators to craft language that specifically addresses issues faced by smaller institutions. One-size-fits-all regulations create problems for smaller institutions, and limiting these types of regulations would help small institutions and allow them to spend more time working within their communities, Cheney said.

Credit unions and community banks should work together to pursue regulatory relief, but, Cheney said, any potential efforts are harmed when legislation that would reduce the credit union regulatory burden is "almost always reflexively opposed" by community banks that "mislead Congress with misinformation regarding the credit union charter and mission" and attempt to "leverage the credit union tax status to prevent new credit union powers."

Banker opposition to credit union legislation "has meant that hundreds of thousands of jobs that could have been created through additional credit union business lending have gone uncreated," has prevented many Americans from having access to affordable financial services, and "has constricted credit unions' ability to grow and better serve their members.

"When banks oppose credit union legislation, their shareholders may win, but consumers and small businesses lose," Cheney said.

Rep. Maxine Waters (D-Calif.) during the hearing urged credit unions and community banks to work out their differences, and when prompted by questioning from Rep. Brad Sherman (D-Calif.), Independent Community Bankers Association CEO Sal Marranca said he would not be opposed to allowing credit unions to raise supplemental capital if community banks were permitted to issue preferred stock for capital purposes as subchapter S banks.

For the full CUNA testimony, and more on the hearing, use the resource link.

Inside Washington (11/16/2011)

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  • ALEXANDRIA, Va. (11/17/11)--The National Credit Union Administration has rescheduled the closed board meeting originally set for Dec. 15. The meeting is now scheduled for Wednesday, Dec. 14, at 10 a.m. (ET) There are no changes to the open meeting still scheduled for Dec. 15. The revised schedule is available online…
  • WASHINGTON (11/17/11)--The House Financial Services Committee Chairman Tuesday passed a bill that would stop future bonuses at Fannie Mae and Freddie Mac. The measure passed by a 52 to 4 vote. The Equity in Government Compensation Act, ensures that executives and employees of Fannie Mae and Freddie Mac will receive compensation that is in line with pay practices at federal financial regulatory agencies. The bill does not make them Federal employees, but it aligns their compensation with that of Federal employees. The same day Edward DeMarco, the acting director of the Federal Housing Finance Agency, defended the multimillion-dollar compensation packages paid to executives at Fannie Mae and Freddie Mac, before the Senate Banking Committee. But DeMarco also blamed Congress for allowing the conservatorship of the government-sponsored enterprises (GSEs) to drag on so long. Chief executives at Fannie and Freddie receive $6 million in pay each year, even as the GSEs continue to receive millions of dollars in taxpayer support (American Banker Nov. 16). Fannie and Freddie had to pay bonuses to retain the talent required to manage $5 trillion worth of mortgage assets and $1 trillion of annual new business, Demarco said. The compensation packages are modeled after similar plans agreed to for large firms that received aid under the Troubled Asset Relief Program, he noted …
  • WASHINGTON (11/17/11)--The Government Accountability Office (GAO) on Tuesday announced that the Consumer Financial Protection Bureau's (CFPB) financial statements were "fairly presented in all material respects" and that CFPB "had effective internal control over financial reporting" during its first year of operation. GAO discovered deficiencies involving CFPB's internal controls that were less significant than a material weakness or significant deficiency. The GAO will report the weaknesses to CFPB management in a separate letter …

Allow BSA e-filing exemptions CUNA says

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WASHINGTON (11/17/11)--Credit unions with less than $50 million in assets should be exempt from the Financial Crimes Enforcement Network's  (FinCEN) new Bank Secrecy Act (BSA) electronic filing requirements, and those that that demonstrate substantial core-processing or system costs should also be allowed to waive the rules, the Credit Union National Association (CUNA) said in a comment letter.

The Credit Union National Association (CUNA) has urged the Financial Crimes Enforcement Network (FinCEN) to provide a waiver for credit unions that demonstrate substantial core processing or system costs and, in addition, exempt credit unions with under $50 million in assets, from the terms of potential new Bank Secrecy Act (BSA) electronic filing requirements.

FinCEN earlier this year said it is considering making electronic filing of all BSA reports mandatory, starting on June 30, 2012.

CUNA, in its comment letter, said it supports FinCEN's work to provide law enforcement with more useful and timely BSA data, and has encouraged credit unions to use electronic filing features. However, CUNA said, there are compliance and implementation cost concerns.

CUNA said credit unions "could incur significant costs to meet the requirements of the proposal, including upgrades to their core processing systems and training." CUNA urged FinCEN to work with the National Credit Union Administration (NCUA), state regulators, and third-party vendors "to minimize compliance costs related to the proposal."

FinCEN has said the switch to all-electronic BSA filing would improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information.

Increased BSA E-Filing would also help FinCEN provide information relevant to money laundering and terrorist financing investigations to law enforcement in the quickest manner possible, shortening the lag time between when BSA reports are filed and when they can be accessed by authorities to two days.

For the full CUNA comment letter, use the resource link.