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Inside Washington (11/23/2011)

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  • WASHINGTON (11/28/11)--The Federal Reserve Board on Tuesday issued a final rule requiring U.S. bank holding companies with assets of $50 billion or more to submit annual capital plans for review. The Fed also launched its 2012 review, issuing instructions to the firms, including the macroeconomic and financial market scenarios required to support the stress testing used in their capital plans. As a part of the review, known as the comprehensive capital analysis and review (CCAR), the Fed will carry out a supervisory stress test based on the same stress scenario provided to the firms to support its analysis of the adequacy of the firms' capital. The aim of the annual capital plans is to ensure that institutions have capital planning processes that account for their risks, and to help ensure there is sufficient capital to continue operations during economic and financial stress. Institutions will be expected to have credible plans that show they have sufficient capital so they can continue to lend to households and businesses, even under adverse conditions, and are prepared to meet regulatory capital standards agreed to by the Basel Committee on Banking Supervision as they are implemented in the U.S. …

CUNA seeks CU comment on private student loan market

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WASHINGTON (11/28/11)--The Credit Union National Association (CUNA) is asking credit unions to comment on the Consumer Financial Protection Bureau's (CFPB) plans to address the private student loan market.

The CFPB earlier this month published a notice and request for information to collect data on a series of issues impacting private student loans from origination to servicing to collection. The CFPB is asking the public, students, families, the higher education community, and the student loan industry to provide information.

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Much of the information will be used to develop a comprehensive report on the private student lending market, and the CFPB is scheduled to deliver that report in the summer of 2012.

The bureau is seeking a broad swath of information, including information available to shop for private student loans; the role of schools in the marketplace; underwriting criteria; repayment terms and behavior; impact on field of study and career choice; servicing and loan modification; financial education and default avoidance.

The CUNA comment call specifically asks what other forms of non-federal debt financing options students would consider as alternatives to private student loans.

Information on the types of schools that offer their own private student loan programs, and how these schools market these loans to students, is also requested in the comment call.

Comments should be sent to CUNA by Jan. 6. The CFPB is accepting comments until Jan. 17.

For the full comment letter, use the resource link.

GAO recommends FSOC coordinate Dodd-Frank actions

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WASHINGTON (11/28/11)--The Government Accountability Office (GAO) in a recent report recommended that the Financial Stability Oversight Council (FSOC) work with its partner regulators, including the National Credit Union Administration (NCUA), to better coordinate Dodd-Frank Act-related regulatory actions.

The council is comprised of 10 voting members--nine federal financial regulators, including the NCUA, and one independent member--and five nonvoting members.

Specifically, the GAO said the FSOC should establish policies to clarify a number of issues, including when coordination should occur, the process that will be used to solicit and address comments, and what role FSOC should play in facilitating coordination.

These recommendations were spawned by the GAO's examination of Dodd-Frank Act rules that were effective as of July 21. The GAO in its report examined analyses, including cost-benefit analyses, that regulators performed to assess the potential impact of the final rules, and how regulators worked to avoid duplicative implementation of these rules or other conflicts. The GAO also assessed the overall impact of the final Dodd-Frank regulations.

A total of 10 rules were examined by the GAO. Two final rules issued by NCUA, which involved the permanent increase in standard maximum share insurance amount and other changes to the share insurance rule and appendix, were not covered in the review.

The GAO recommended that the FSOC members should also work with the Treasury's Office of Financial Research to identify and collect the data necessary to assess the impact of Dodd-Frank regulations on, among other things, the stability, efficiency, and competitiveness of the U.S. financial markets.

Credit Union National Association (CUNA) Assistant General Counsel Luke Martone said the GAO recommendations may have some limited impact on credit unions, due to the NCUA's FSOC membership. However, he added, most of the NCUA's regulations will not need to be harmonized.

Although CUNA wants the NCUA to be as efficient as possible, and to streamline many of its regulations, the additional red tape that could occur from more harmonization with other agencies would not be useful, Martone added.

For the full GAO report, use the resource link.