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Treasury to increase mortgage servicing monitoring

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WASHINGTON (12/1/09)--The U.S. Treasury Department announced on Monday that it will require that mortgage lenders report their plans for increasing the number of successful modifications of troubled home loans and will increase its monitoring of mortgage servicing companies. The Treasury plan would seek to increase the number of troubled mortgages that are converted into new home loans with reduced monthly payments, and would not pay proposed cash incentives to participating mortgage companies until their loan modifications, which are intended to lower costs for homeowners, are made permanent. The Treasury will increase its monitoring of banks and mortgage companies through daily reports on the progress of individual mortgage lenders. Under the plan, the Treasury will also impose monetary penalties and sanctions on lenders and servicers that do not meet their obligations to mortgage holders. The Obama administration has also extended the period for trial modifications that began on or before Sept. 1. The Treasury will also streamline the mortgage modification application and submission process and will provide additional resources for borrowers, including housing counselors, through the makinghomeaffordable.gov web site and an 888 hotline. The Treasury’s foreclosure prevention plan has over 650,000 participants at this time, and the Treasury estimated that 375,000 of these participants will have converted from trial modifications to permanent modifications by the end of 2009. The exact number of permanent modifications will be reported later this month. Phyliss Caldwell, who will lead the conversion efforts as chief of the Treasury’s Homeownership Preservation Office, said that her office must “refocus” its efforts to “ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones.”

Inside Washington (11/30/2009)

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* WASHINGTON (12/1/09)--The Federal Reserve Board has revised its policy governing eligibility, qualifications, and rotations for directors of Federal Reserve Banks and their branches. The revisions address situations where affiliations and stockholdings that were previously permissible may become impermissible for Class B and C directors. The revised policy provides that if a Class B or C director is affiliated with a company that becomes a financial affiliation company during his or her term, the director must resign from the impermissible affiliation company or resign from the bank board within 60 days of learning of the prohibited affiliation. The policy also addresses Class C directors’ indirect holdings in financial stock issuers and the eligibility rules that apply to directors of Reserve Bank branches ... * WASHINGTON (12/1/09)--While Federal Reserve Board Chairman Ben Bernanke is expected to be confirmed Thursday by the Senate to continue in his role as head of the central bank, financial observers said Bernanke may face some of the toughest questions of any Fed chairman at a confirmation hearing (American Banker Nov. 30). Bernanke likely will be questioned on the Fed’s bank supervision responsibilities, liquidity programs, and bailouts of firms such as American International Group. Mark Calabria, Cato Institute director of financial regulation studies, said the votes against Bernanke may reach “double digits.” People will be upset about the bailouts, the Bank of America deal with Merrill Lynch, and how the Fed can regulate institutions “at arm’s length,” he said ...

Dates set for corp CU info-gathering sessions

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ALEXANDRIA, Va. (12/1/09)—The dates have been set for a new round of information- gathering sessions on corporate credit unions as the National Credit Union Administration (NCUA) announced Town Hall meetings Jan. 22 in Dallas, Texas and Feb. 4 in Orlando, Fla. The sessions will be similar to those held this fall, and are a part of the agency’s effort to prompt stakeholders to be involved through comment in the corporate credit union rulemaking process, as well as other issues. The meetings are being conducted during the 90-day period provided for public comment on the NCUA’s recently proposed rule to adjust the current corporate regulatory scheme. (Use resource link below for more information.) NCUA Chairman Debbie Matz said of the new session, "The first round of Town Halls provided invaluable insight and dialogue as we formulated the proposed corporate regulation. These next meetings will build on that foundation." She encouraged all interested parties to add their voices to this process." The sessions will begin at 9:00 a.m. and end at noon. A webinar will follow in February. To register, use the resource link.

Reps. Perlmutter Miller featured at CUNA breakfast

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WASHINGTON (12/1/09)--Reps. Ed Perlmutter (D-Colo.) and Brad Miller (D-N.C.) will take to the podium Thursday to discuss financial regulation reform in 2010 at the next National Journal Group policy breakfast, sponsored by the Credit Union National Association (CUNA). Both lawmakers’ names are familiar to credit unions for their recent actions supported by CUNA. Perlmutter last month offered an amendment to the House Financial Services Committee print of the Financial Stability Improvement Act (H.R. 3996), a bill that would give the systemic risk council the authority to take corrective action regarding accounting matters. The amendment would bolster government oversight of the Financial Accounting Standards Board (FASB) and CUNA maintains it would improve the accounting board's policy-making process and help minimize arbitrary rulemaking. In October, Miller, along with Rep. Dennis Moore (D-Kan.), successfully offered an amendment to Consumer Financial Protection Agency (CFPA) legislation. That amendment would limit the proposed CFPA's examination and enforcement authority to credit unions over $1.5 billion in assets and banks with more than $10 billion in assets. For institutions whose assets fall below those thresholds, enforcement authority would stay with their prudential regulator. The Thursday breakfast, moderated by John Maggs, National Journal’s economy and taxes correspondent, will begin at 8 a.m. at The Liaison Capitol Hill. The session will streamed live from Nextgenweb.org. CUNA and the National Journal Group have sponsored breakfast policy and information sessions for the last two years.

Fairfield County Ohio Federal Employees FCU closed

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ALEXANDRIA, Va. (12/1/09)--The National Credit Union Administration (NCUA) Monday announced the liquidation of $1.5 million-asset Fairfield County Ohio Federal Employees FCU of Lancaster, Ohio. This is the 14th federally insured credit union liquidation of 2009. Chartered by the NCUA in 1957 to serve employees of the U.S. government working in Fairfield County, Ohio, the credit union served 747 members at the time of its closing. The NCUA said it liquidated the credit union and discontinued its independent operations after determining it was insolvent and had no prospects for restoring viable operations. The NCUA Asset Management and Assistance Center will issue checks within one week to individuals holding verified share accounts and reminded that member accounts are insured to at least $250,000 by the National Credit Union Share Insurance Fund.

Senate considers Bernankes post before resuming regulatory debate

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WASHINGTON (12/1/09)--Regulatory reforms will take a back seat this week as the Senate Banking Committee on Thursday will hold a confirmation hearing on the nomination of Ben Bernanke to continue as Chairman of the Federal Reserve Board of Governors. Bernanke’s nomination comes at a crucial time for the Fed, as the oversight body is facing potential role changes and power reductions through possible House and Senate regulatory reform legislation. Action on the hill will include discussion of several items under suspension, and the House Financial Services Committee will resume its mark-up of H.R. 3996, the Financial Stability Improvements Act, and H.R. 2609, the Federal Insurance Office Act, on Wednesday. The House Committee will also hold hearings on H.R. 2266, the Reasonable Prudence in Regulation Act, and H.R. 2267, the Internet Gambling Regulation, Consumer Protection and Enforcement Act, on Thursday of this week. The House Financial Services Committee Michigan Credit Union League President/CEO Dave Adams on Monday testified before a House Financial Services Committee Subcommittee on Oversight and Investigation field hearing on improving responsible lending to small businesses. Legislators on the House side are expected to resume regulatory restructuring discussions including H.R. 3126, the Consumer Financial Protection Agency Act, next week. Credit Union National Association Vice President of Legislative Affairs Ryan Donovan said that while it “is not clear” when the Senate Banking Committee will resume its consideration of regulatory restructuring legislation, it may not be before Dec. 14.

New House bill would cap credit card at 16

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WASHINGTON (12/1/09)--Rep. Louise Slaughter (D-N.Y.), with the assistance of Reps. John Tierney (D-MA) and Michael Capuano (D-MA), will soon introduce legislation that would cap yearly credit card interest rates at 16%. Slaughter’s legislation, which has been referred to as the Renewing America’s Commitment to Consumers Act, would, according to a press release, seek to “prevent the kind of dramatic rate hikes consumers - even those with strong credit histories and who have paid their balances on time - have been experiencing.” The bill, as currently written, would also cap contingency fees, including late payment fees, at $15, and would limit membership fees and annual fees, but would allow temporary rate cap increases “in extraordinary circumstances and upon regulatory finding that modification maintains the goal of protecting consumers from exploitive lending practices.” The provisions of the legislation would not “supersede any state law with a lower usury cap,” according to the release. Rep. Tierney also praised the potential legislation, saying that it would fight the “exploitive practices” of some credit card issuers that are “unfairly and arbitrarily” raising interest rates “across more customer accounts than ever before.” Capuano in a statement added that the bill, which “will protect consumers by ensuring access to affordable credit,” could not “come at a more critical time."