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Inside Washington (11/30/2008)

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* ALEXANDRIA, Va. (12/1/08)--National Credit Union Administration (NCUA) Chairman Michael Fryzel said last week that the most important step taken by his agency to deal with financial market dislocations may its adoption of a 12-month examination program. The NCUA Board voted unanimously to approve the accelerated exam schedule at its Nov. 20 open meeting. Fryzel was addressing more than 50 Illinois credit union executives at a luncheon following a tour of Baxter CU in Vernon Hills, Ill. The chairman said the new program equips NCUA with additional and essential tools to oversee the safety and soundness of the credit union movement. Pictured from left are Baxter CU representatives: Jeff Johnson, senior vice president and chief information officer; John Bratsakis, senior vice president-Business Development; Bob McKay, senior vice president-chief operating officer; NCUA Chairman Fryzel; Carl Presto, vice president-Finance; Mike Valentine, president/CEO; and Baxter board member Bob Benziger … * WASHINGTON (12/1/08)--U.S. Small Business Administration (SBA)Acting Administrator Sandy Baruah said last week that the plan by the Treasury and the Federal Reserve to improve market conditions for asset-backed securities--including those composed of SBA-backed small business loans--should be welcome news to credit-hungry small businesses across the country. The Treasury-Fed plan establishes the Term Asset-Backed Securities Loan Facility, or TALF, to make loans to investors who purchase asset-backed securities made up of small business loans guaranteed by SBA, auto loans, student loans, or credit card loans. As a result, Baruah said, lenders will find it easier to sell the loans they make and use the proceeds of those sales to make new loans. The SBA said about $4 billion in securities backed by SBA-guaranteed loans are bought and sold in the secondary market each year, with the total outstanding amounting to about $15 billion. At present, a share of the current year’s volume of loans securitized by lenders--estimated at up to $3 billion--is essentially frozen. The resulting lack of liquidity hampers the ability of some of SBA’s lending partners to make new SBA-backed loans …

FHFA director plan may boost CU reps says CUNA

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WASHINGTON (11/26/08) -- The Credit Union National Association (CUNA) welcomes any opportunity to enhance credit union representation on the Federal Home Loan Bank (FHLB) boards of directors and said a new Federal Housing Finance Agency (FHFA) interim final rule could help with that goal. The Housing and Economic Recovery Act enacted this year changed current rules that said the FHLB boards were to be comprised of elected directors and those who were appointed by the Federal Housing Finance Board, the predecessor to the FHFA. The new law authorized members of the FHLBs to elect these independent directors, and the FHFA interim final rule outlines the process for nominating and conducting the election of these directors. “Although not directly related to the issues addressed in the interim final rule, CUNA’s greatest concern with regard to the selection of FHLB directors is that the current process makes it very difficult for credit unions to be represented on these boards,” CUNA wrote in its comment letter. CUNA said that there are nearly 900 credit unions that are members of the twelve district FHLBs, but noted this represents only about 11% of the 8,100 financial institutions members. “Credit unions, as well as other groups that comprise a minority of the FHLB’s membership, deserve representation on these boards,” CUNA said. The letter noted that the rule requires a certain number of the independent directors, known as “public interest” directors, to have at least four years of personal experience in representing consumer or community interests in banking services, credit needs, housing, or consumer financial protections. “We believe credit union representatives would make ideal candidates for these positions, as credit unions are not-for-profit financial cooperatives whose mission is to serve their members by providing affordable financial services.” CUNA pointed out. Use the resource link below to read the CUNA’s complete comments.

CUNA New leave categories for servicemembers

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WASHINGTON (12/1/08)—Under statutory changes that go into effect Jan. 16, credit unions and other employers must provide two new forms of military family leave. The National Defense Authorization Act of 2008, signed into law by President George W. Bush in January, established the following additional family leave policies for military servicemembers:
* "Qualifying exigency leave," which provides 12 work-weeks of leave under certain circumstances, such as short-notice deployments, military events or activities, and post deployment activities; and * “Military caregiver leave," which provides 26 work-weeks of leave to care for a covered servicemember with a serious injury or illness who is the employee's spouse, child, parent or next of kin.
The Department of Labor, in issuing a final rule to implement the 2008 rule changes, also updated the 1993 Family and Medical Leave Act (FMLA) employee notice provisions . The new rule covers standard posted notices, as well as individual notifications to an employee regarding such things as leave eligibility and conditions of leave. The rule also updates the medical certification requirements for FMLA leave, such as allowing an employer representative to contact, with limitations, an employee's health care provider directly about certification and clarifying the process for handling incomplete or insufficient certifications. Credit unions should consult their human resources counsel for a detailed analysis of how this new rule will impact their institutions, advises the Credit Union National Association compliance department, However, it can be assumed that credit unions will need to review and update their FMLA policies and procedures and FMLA-related forms/resources to reflect these changes. Also, CUNA notes, credit union must be prepared to provide adequate training on the updated rule to management and supervisors where appropriate.

NCUA to hold unscheduled closed meeting Tuesday

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ALEXANDRIA, Va. (12/1/08)--The National Credit Union Administration (NCUA) Board will convene at 10 a.m. ET Tuesday for a closed board meeting to consider "supervisory activities." The agency announced the meeting in a press statement Wednesday. No other information was available. The agency last held such a special session on Oct. 31. CUNA News Now will provide any available details. Follow News Now LiveWire for instantaneous alerts to your desktop or mobile device.