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Reed amendment seeks to shield troops from shady lending

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WASHINGTON (12/1/11)--Sen. Jack Reed (D-R.I.) has proposed legislation that would "enhance the Military Lending Act by closing loopholes that allow lenders to charge exorbitant fees" on some loans that are provided to service members and their families.

The Department of Defense (DoD) in 2007 implemented a rule that applied a 36% cap to payday loans, vehicle title loans, and tax refund anticipation loans to military service members and their dependents. The cap covers all members of the military, reserves, National Guard, and their families.

Reed in a release said the amendment would apply the DoD mandated standards to both "open-end" credit and "closed-end" credit, and would "help end the practice of charging high-cost overdraft fees." The amendment would also prevent financial service providers from reordering customer transactions from largest to smallest to maximize overdraft fees that can be charged.

The amendment has been proposed as an addition to the 2012 Defense Authorization bill.

CFPB says it will take consumer mortgage complaints

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WASHINGTON (12/1/11)—The Consumer Financial Protection Bureau (CFPB) Wednesday said it will soon begin accepting consumer complaints and inquiries regarding mortgage loans and, in fact, said that process could begin as soon as today.

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said CUNA will be urging the bureau to focus on egregious complaints against nonregulated entities in the financial marketplace.  The bureau indicated in a blog posting that it would be accepting complaints about home-secured loans, as well as mortgages.

The CFPB said it plans to work with consumers on "a majority of consumer financial product complaints and inquires by the end of 2012," the agency said.

Dunn noted that the National Credit Union Administration (NCUA) has a complaint procedure already in place that credit union members can use if there are material issues and CUNA will be making sure the CFPB is mindful of that when it moves forward with its complaint program.

The CFPB also on Wednesday released a report on consumer credit card complaints it has received since late July. Acting CFPB leader Raj Date said the complaints received by the CFPB show "there is a lot of consumer confusion about credit card terms."

CUNA will be following up with the CFPB as it has on a number of other issues already to ensure the agency is well informed about the range of consumer education credit unions provide their members, in addition to meeting regulatory disclosure requirements, Dunn noted Wednesday.

The CFPB has received more than 5,000 credit card complaints from consumers. The report does not provide a break down of the entities that are the subject of the complaints.  However, Dunn noted that only 249 appear to involve financial institutions with $10 billion and less in assets and those complaints were directed to the appropriate prudential financial regulators.

According to the CFPB report, credit card companies have resolved 3,100 of 5,000 complaints, with only 400 consumers disputing the credit companies' response.

Slightly more than over 13% of the consumer complaints were billing disputes, and nearly 11% were tied to instances of fraud, identity theft or embezzlement. Another 11% of the complaints related to annual percentage rate issues, the CFPB said.

"We will continue to work with consumers, credit card companies, government agencies, and others to improve consumer education and ensure CFPB's regulation, supervision, and enforcement efforts are effective," Date said.

The agency has proposed creating a searchable public database that would provide relevant data on each financial product complaint while avoiding the release of private personal information. A database of credit card complaints would be developed first, with databases of mortgage complaints and other complaints set to follow, the CFPB said.

The CFPB is accepting public comment on the credit card complaint database proposal through early 2012.

In addition to meeting with CFPB officials, CUNA will be working with leagues, CUNA subcommittees and credit unions to develop a response to the agency.

For the full CFPB release, use the resource link.

Cheney takes CU message to D.C. public radio

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WASHINGTON (12/1/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney joined National Credit Union Administration Chairman Debbie Matz and a pair of credit union journalists to discuss credit union history, their cooperative business structure, and the benefits that credit unions offer to their members in a Wednesday discussion on Washington, D.C.-based NPR affiliate WAMU's The Kojo Nnamdi Show.
Click to view larger image CUNA President/CEO Bill Cheney, right, appeared on host Kojo Nnamdi's radio show on Wednesday in Washington, D.C. (CUNA Photo)


Opening the show, Nnamdi, who said that he has been a longtime credit union member, noted that one in three Americans is a credit union member, and said that those that think they do not qualify for credit union membership should "think again."

Cheney followed up on this during the panel discussion, saying that "just about everyone is eligible to join a credit union, just not the same credit union." He said potential members can use CUNA's website, aSmarterchoice.org, to find a local credit union they can join.

The panel also addressed the recent move away from big banks and toward credit unions and other smaller institutions, as Cheney said the recent missteps by Bank of America and other large banks have shone a light on credit unions and let more people see that they truly are "a better deal."

CUNA has estimated that credit unions brought in around 700,000 new members and $4.5 billion in new deposits as a result of November's Bank Transfer Day, with the bulk of those members and deposits coming in the month leading up to Bank Transfer Day, Nov. 5. Cheney said credit unions have seen this growth continue as new credit union members have recognized the benefits of credit unions and told their friends about these benefits through social media and other means.

Basics such as online banking, branch access, customer service, the NCUA's account insurance coverage, and that agency's role in the credit union system, were also discussed during the interview.

Kiplinger's Personal Finance reporter Joan Goldwasser and Credit Union Times Editor-in-Chief Sarah Snell Cooke also took part in the panel discussion.

For the full hour-long discussion, use the resource link.

Survey says young more likely to act on account transfers

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WASHINGTON (12/1/11)--A youth movement away from big banks, and toward smaller institutions such as credit unions, could be catching on if a recent survey is any indication, as nearly 23% of respondents under 30 said they were planning to change their financial institution or had already done so.

That same percentage said they were aware of last month's Bank Transfer Day activities. Bank Transfer Day, which was created on Facebook and reached well in excess of 600,000 through that social media site, and even more through media coverage of the event, spoke mainly to younger adults.

Overall, American Banker reported, the survey by TNS Research found that around 12% of the 2,500 respondents questioned had already closed their big bank accounts or would do so in the future. The article also noted that while the over-60 crowd was more likely to be aware of Bank Transfer Day, the under-30 crowd was even more likely to act on it and move accounts.

Nearly 14% of so-called "wealthy" respondents, i.e. those making $75,000 or more per year, reported they would close their accounts. Around 10.2% of lower income respondents (those making less than $30,000 per year) said they planned to close their accounts.

Close to half of those that left their big bank (41%) said they would part ways with Bank of America, whose decision to charge $5 per month debit account fees led to the creation of Bank Transfer Day. Other large banks were also cited in the survey, with 13.7% of respondents saying they planned to leave JPMorgan Chase, 10% fleeing Wells Fargo, and 3.1% closing Citigroup accounts.

In a recent Fox News interview, Credit Union National Association (CUNA) Chief Economist Bill Hampel said that while Bank Transfer Day officially ended on Nov. 5, "Bank Transfer Season" has begun. Around 650,000 new members, and $4.5 billion in new deposits, flooded into credit unions in the month before Bank Transfer Day, and credit unions brought in an additional 40,000 in new members, and added $80 million in new savings account funds and $90 million in new loans, on Bank Transfer Day, according to CUNA. However, Hampel said, the real story is not asset growth, but membership growth "and the new, mostly young members that credit unions have now gained."

And, he added, Bank Transfer Day's longest lasting legacies will unfold as those new members relate their positive credit union experiences to their friends and families, creating even more new members.

Visions FCU assumes BCT FCU assets after liquidation

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ALEXANDRIA, Va. (12/1/11)--Visions FCU of Endicott, N.Y., has assumed the assets, liabilities, and member shares of Binghamton, N.Y.-based BCT FCU after the National Credit Union Administration (NCUA) liquidated BCT on Wednesday.

The NCUA said it made the decision to liquidate the 3,900 member, $41.3 million in deposits credit union "after determining the credit union was insolvent and has no prospect for restoring viable operations on its own." BCT FCU served the educational community in New York's southern tier for 67 years.

BCT FCU was placed into conservatorship by the NCUA in June. It is the 13th credit union liquidation in 2011.

Visions FCU holds $2.7 billion in assets and has approximately 127,000 members.

Inside Washington (11/30/2011)

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  • WASHINGTON (12/1/11)--A Nov. 22 letter from House Financial Services Committee Chairman Spencer Bachus (R-Ala.) requested detailed spending data from the Consumer Financial Protection Bureau (CFPB). The letter asks for an account of the CFPB's spending to date and plans for funds it has received but not yet spent (American Banker Nov. 30). The bureau has requested $28 million more from the Federal Reserve for fiscal year 2011, a 21% increase from the $142 million budget estimated by the White House, according to the letter. Among the spending details requested in the letter are transfers from the Fed; expenses listed by services, department, office and subdivision of the bureau; number of positions filled by quarter and by pay band; and  detailed salary information and organizational charts. The letter also requests a detailed construction and renovation budget for the CFPB's future offices …
  • WASHINGTON (12/1/11)--The Office of the Comptroller of the Currency (OCC) Tuesday proposed a rule to remove references to credit ratings from OCC regulations and related guidance to assist national banks and federal savings associations in meeting due-diligence requirements in assessing credit risk for portfolio investments. The Dodd-Frank Act requires regulators to remove references in rules to credit ratings, and substitute them with an alternative standard. The National Credit Union Administration (NCUA) adopted a similar proposal in February that would replace or remove references to credit ratings in NCUA regulations (News Now Feb. 18). The NCUA's proposal would affect credit rating references for investments, counterparty transactions and other uses of such references …
  • WASHINGTON (12/1/11)--Janet Yellen, vice chairman of the Federal Reserve, on Tuesday warned that if Congress does not reach an agreement on the federal budget deficit it may place the nation's economy in further peril. The ratio of debt to gross domestic product will continue to edge higher the next decade unless the Congress and the Obama administration are able to agree on a deficit reduction program that is more ambitious than last summer's Budget Control Act, said Yellen, speaking at the Federal Reserve Bank of San Francisco. "A failure to put in place a credible plan to address our long-run budget imbalance would expose the U.S. to serious economic costs and risks in the long term and possibly sooner," Yellen said. At the same time, too much fiscal tightening in the near term could harm the economic recovery, she added. "We need, and I believe we have scope for, an approach to fiscal policy that puts in place a well-timed and credible plan to bring deficits down to sustainable levels over the medium and long terms while also addressing the economy's short-term needs," Yellen said …

Inside Washington (11/29/2011)

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  • WASHINGTON (11/30/11)--A final rule released Monday by the Federal Housing Finance Agency could  create a more merger-friendly environment for Federal Home Loan Banks. Although the banks previously were allowed to merge, they lacked regulatory guidelines for conditions under which mergers would be approved (American Banker Nov. 29). The final rule did not provide some procedural details, such as what kind of voting programs would be appropriate for obtaining members' approval of a proposed merger; how those should be structured; and how to address the transition from a separate board of directors to a combined board. Regarding the size and composition of the board, directors should have input from both banks, according to the final rule. Merger approvals will be a one-step process, a decision following comments from banks that a two-step approach would be lengthy and burdensome. The rule also changed the voting rights of each member of a constituent bank to ensure fair governance. The final rule provides that each member of the bank can cast one vote for each share of bank stock the member was required to own by a certain date …
  • WASHINGTON (11/30/11)—U.S. Rep. Maxine Waters (D-Calif.) is poised to succeed Barney Frank (D-Mass.) as lead Democrat on the House Financial Services Committee, according to industry insiders. Frank on Monday announced he would not seek reelection for his House seat next November. Waters is the most senior Democrat on the committee, and she has political ties to House Speaker Nancy Pelosi (D-Calif.) (American Banker Nov. 29). Waters is African American. It would be unlikely to not appoint someone who is both senior and a minority, according to former Rep. John LaFalce, who preceded Frank as lead Democrat on the Financial Services panel. Waters is under an ethics investigation, a factor that could work against her appointment. Other possible appointees include U.S. Rep. Carolyn Maloney (D-N.Y.), U.S. Rep. Luis Gutierrez (D-Ill.) and U.S. Rep. Melvin Watt (D-N.C.) …
  • WASHINGTON (11/30/11)--The Federal Housing Finance Agency (FHFA) has announced the appointments of Richard B. Hornsby as the agency's chief operating officer and Jon Greenlee as deputy director of the division of enterprise regulation. Hornsby served at the Federal Reserve Bank of San Francisco for 26 years, most recently serving as group vice president and division head for the reserve bank's financial planning and control and corporate administration divisions. In this position, he oversaw many of the bank's support functions in nine states. Greenlee joins FHFA from KPMG LLP, where he was the managing director in the financial services regulatory advisory practice. In that role, he provided support to clients concerning the Dodd-Frank Act and Basel II and III, and credit, capital, liquidity and resolution planning issues …

Compliance Ad requirement deadline approaches

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WASHINGTON (11/30/11)--The Jan. 1 mandatory compliance date for the National Credit Union Administration's (NCUA) new share insurance advertising requirements is rapidly approaching, the Credit Union National Association (CUNA) has reminded credit unions in a recent CompBlog post.

The NCUA in May approved revisions to its advertising regulations to require radio and television ads to include a reference to National Credit Union Share Insurance Fund (NCUSIF) coverage. CUNA pressed the NCUA not to require all ads to feature this reference, and the NCUA in its final rule elected to exempt ads that are less than 15 seconds from the rule.

The final rule applies to the cover page of credit union annual reports and main internet pages.

Credit unions may choose one of three methods to provide the NCUA's official advertising statement: A longer statement saying "this credit union is federally insured by the National Credit Union Administration"; a shorter version, simply stating "federally insured by NCUA"; or a visual reproduction of the NCUA's official sign. Although the agency's advertising regulation does not dictate a specific font size for the so-called "official statement," the statement must be clearly legible and the font size must be no smaller than the smallest font size used in other portions of the advertisement, CUNA added.

CUNA said credit unions should ensure that these official statements are included in applicable radio and television ads, their annual reports, and their statements of condition required to be published by law. The statements must be placed in a "prominent position on the cover page of such documents or on the first page a reader sees if there is no cover page," according to the NCUA rule.

For CUNA's full CompBlog post, use the resource link.

Wachovia is latest big bank to see NCUA legal action

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ALEXANDRIA, Va. (11/30/11)--Wachovia becomes the latest financial institution to face the National Credit Union Administration (NCUA) in court after the agency filed suit alleging violations of federal and state securities laws and misrepresentations in the sale of securities to now-failed U.S. Central FCU and Western Corporate FCU.

The suit, which was filed in the Federal District Court for the District of Kansas, is tied to actions that North Carolina-based bank Wachovia took before it was taken over by Wells Fargo in a government-arranged sale in 2008.

U.S. Central and WesCorp in 2006 each purchased around $44 million in residential mortgage-backed securities from Wachovia, and U.S. Central bought an additional $112 million in Wachovia-underwritten securities that were originated by a third party, NovaStar Mortgage Funding Trust.

The NCUA suit claims that Wachovia as a seller and underwriter made several material misrepresentations in the offering documents, leading the corporates to believe the risk of loss associated with their investments was minimal, when in fact the risk was substantial. The mortgage-backed securities experienced dramatic, unprecedented declines in value, effectively rendering the corporates insolvent, the agency added.

The NCUA complaint adds that "NovaStar routinely and systemically disregarded its own underwriting standards and guidelines in order to generate more loan origination business, from which it reaped enormous profits."

U.S Central, WesCorp, and several other corporates bought substantial amounts of highly rated mortgage-backed and asset-backed securities before 2009. These securities were severely devalued as a result of the turmoil in the overall mortgage market. Credit unions continue to pay for the losses that these investments brought upon the credit union system.

NCUA Chairman Debbie Matz said the agency "continues to do everything within [its] authority to seek maximum recoveries and ensure that those who caused the problems in wholesale credit unions pay for the losses incurred by retail credit unions."

The NCUA is currently attempting to reclaim billions in securities-related corporate credit union losses from other Wall Street firms, and has requested nearly $2 billion in combined damages from Goldman Sachs, RBS Securities and J.P. Morgan.

Citigroup and Deutsche Bank Securities earlier this month elected to avoid legal proceedings and settle with the agency, with Deutsche Bank agreeing to pay the agency $145 million, and Citigroup will pay $20.5 million, under the terms of the separate settlements.

Neither Citigroup nor Deutsche Bank Securities admitted any fault in the settlements.

The agency may take between four and nine additional legal actions.

CFPB asks for input on streamlining existing regs

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WASHINGTON (11/30/11)--The Consumer Financial Protection Bureau (CFPB) on Tuesday announced it would accept public input on how to best streamline over one dozen rules that it will soon inherit from seven federal agencies "to make it easier for banks, credit unions and others to follow the rules."

De facto CFPB leader Raj Date in a release said the agency is asking the public to help identify and prioritize concrete ways that the CFPB can streamline regulations to ensure that they work better for consumers and the firms that serve them.

Under the Dodd-Frank Act, rulewriting authority for more than 12 consumer protection laws was transferred from the National Credit Union Administration, the Federal Reserve, the Department of Housing and Urban Development, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the Office of Comptroller of the Currency and the Office of Thrift Supervision.

Overall, the CFPB said it plans to "consider practical measures to make it easier for firms, especially smaller ones, to comply with the inherited regulations," the release added. The CFPB added it would consider simplifying some regulations, standardizing some common terms across regulations, updating outdated or unneeded regulations, and removing unnecessary restrictions on consumer choice or business innovation as it reviews these regulations.

The Credit Union National Association was among those that took part in a Tuesday call on this CFPB endeavor.

The request for comment is expected to be published in the Federal Register soon. The public will then have a 90 day public comment period, followed by an additional 30 day period to respond to other comments, the CFPB said.

Home prices up in 3Q FHFA says

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WASHINGTON (11/30/11)--U.S. home prices increased by 0.2% between the second and third quarters of 2011, reversing a trend that saw home prices fall over the past five quarters, the Federal Housing Finance Agency (FHFA) reported.

The 0.2% increase is based on the FHFAs seasonally adjusted purchase-only house price index (HPI), which the FHFA said is calculated from home sales price information from Fannie Mae- and Freddie Mac-acquired mortgages.

FHFA Principal Economist Andrew Leventis said third-quarter home values were relatively stable in many parts of the county, "even in some areas that experienced sharp price declines in preceding quarters." Leventis added: "While most housing markets still face stiff headwinds, the fact that some beleaguered states—such as Idaho, Florida and Utah—saw quarterly price increases is a positive development."

Home prices increased by 0.7%, on an adjusted basis, during the quarter, but seasonally adjusted home prices fell 3.7 percent from the third quarter of 2010 to the third quarter of 2011, the FHFA said.

Home prices increased by 4% in the Warren-Troy-Farmington Hills, Michigan, metropolitan area during the quarter. The FHFA added that home prices were more stable in States and counties with significant mining and oil extraction industries. Home prices in the West North Central census division, which includes Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota, increased by 1.5% during the quarter, the FHFA said.

For the full release, use the resource link.

NEW Wachovia is latest big bank to see NCUA legal action

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ALEXANDRIA, Va. (UPDATED: 4:15 P.M. ET, 11/29/11)--Wachovia could become the latest financial institution to face the National Credit Union Administration in court after the agency filed suit alleging violations of federal and state securities laws and misrepresentations in the sale of securities to now-failed U.S. Central FCU and Western Corporate FCU.

The suit, which was filed in the Federal District Court for the District of Kansas, is tied to actions that North Carolina-based bank Wachovia took before it was taken over by Wells Fargo in a government-arranged sale in 2008.

U.S. Central and WesCorp in 2006 each purchased around $44 million in residential mortgage-backed securities from Wachovia, and U.S. Central bought an additional $112 million in Wachovia-underwritten securities that were originated by a third party, NovaStar Mortgage Funding Trust.

The NCUA suit claims that Wachovia as a seller and underwriter made several material misrepresentations in the offering documents, leading the corporates to believe the risk of loss associated with their investments was minimal, when in fact the risk was substantial. The mortgage-backed securities experienced dramatic, unprecedented declines in value, effectively rendering the corporates insolvent, the agency added.

The NCUA complaint adds that "NovaStar routinely and systemically disregarded its own underwriting standards and guidelines in order to generate more loan origination business, from which it reaped enormous profits."

U.S Central, WesCorp, and several other corporates bought substantial amounts of highly rated mortgage-backed and asset-backed securities before 2009. These securities were severely devalued as a result of the turmoil in the overall mortgage market. Credit unions continue to pay for the losses that these investments brought upon the credit union system.

NCUA Chairman Debbie Matz said the agency "continues to do everything within [its] authority to seek maximum recoveries and ensure that those who caused the problems in wholesale credit unions pay for the losses incurred by retail credit unions."

The NCUA is currently attempting to reclaim billions in securities-related corporate credit union losses from other Wall Street firms, and has requested nearly $2 billion in combined damages from Goldman Sachs, RBS Securities and J.P. Morgan.

Citigroup and Deutsche Bank Securities earlier this month elected to avoid legal proceedings and settle with the agency, with Deutsche Bank agreeing to pay the agency $145 million, and Citigroup will pay $20.5 million, under the terms of the separate settlements.

Neither Citigroup nor Deutsche Bank Securities admitted any fault in the settlements.

The agency may take between four and nine additional legal actions.

Congress returns to busy week

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WASHINGTON (11/29/11)--Credit unions will want to keep an eye on hearings and, potentially, floor votes this week as Congress returns from the Thanksgiving break.

The key bills for credit unions this week are H.R. 3010, the Regulatory Accountability Act, and possibly H.R. 527, the Regulatory Flexibility Improvements Act, and H.R. 10, the Regulations from the Executive In Need of Scrutiny Act (REINS Act). The Credit Union National Association (CUNA) recently spoke out in support of H.R. 3010, saying it would "give credit unions and others new tools and procedures that would help protect against arbitrary regulatory burdens" and "would significantly enhance the interaction between industry and federal administrative agencies."

The Regulatory Accountability Act would revise the Administrative Procedure Act to require agencies to consider the costs and benefits of new rules and other regulatory actions, and would require federal regulators to conduct public hearings for most rules estimated to have an aggregate impact on industry of over $1 billion. The legislation also sets new data quality standards for agency fact finding in the rulemaking process.

Portions of the bill that add cost benefit analysis and information reporting requirements "would be far more effective than the closest existing parts of the Administrative Procedure Act, the Regulatory Flexibility Act and the Paperwork Reduction Act," CUNA said.

The first hearing of this week will take place later today when the House Financial Services Committee marks up H.R. 3213, the Small Company Job Growth and Regulatory Relief Act of 2011, H.R. 2682, the Business Risk Mitigation and Price Stabilization Act of 2011, H.R. 2779, to exempt inter-affiliate swaps from certain regulatory requirements put in place by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and H.R. 2586, the Swap Execution Facility Clarification Act.

That committee's subcommittee on oversight and investigations will on Wednesday hold a hearing on Federal Housing Finance Agency oversight, and the Senate Banking Committee on Wednesday will cover legislation related to capital formation.

CUNA Retiring Rep. Frank a CU friend

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WASHINGTON (11/29/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney said Rep. Barney Frank (D-Mass.), who on Monday announced he would not seek reelection for his House seat next November, "has been a friend to credit unions throughout his career" and "has always understood and appreciated the credit union difference, and the important role that credit unions play in the lives of their members."
Frequent credit union supporter Rep. Barney Frank (D-Mass.) on Monday announced he would not seek reelection next November after serving nearly 30 years in the U.S. House. (CUNA Photo) 


Frank is a 16-term member of Congress, and is the former chair and current ranking member of the powerful House Financial Services Committee. As chairman of the Financial Services Committee, he was one of the architects of the Dodd-Frank Financial Regulatory Reform Act, which was the most sweeping financial reform package in decades.  He ensured that language that exempted small institutions from Consumer Financial Protection Bureau oversight was included in this bill.

Massachusetts Credit Union League President/CEO Dan Egan said the Dodd-Frank Act "stands as a testament to Barney's commitment to the rights of consumers and his recognition of the fact that credit unions, as consumer-owned nonprofit cooperatives, are unique in the way that they provide for working class families in the U.S."

Frank was also instrumental in the enactment of the Temporary Corporate Credit Union Stabilization Act, the CARD Act fix, and also recently worked to address credit union concerns regarding interchange regulations, warning earlier this year that the implementation of those regulations, if not properly crafted, may have unintended consequences for credit unions and consumers.

"He used his position during the most difficult economic times in generations to ensure that credit unions were not adversely affected by the reforms aimed at the large for-profit financial companies that caused the financial crisis," Cheney added.

Frank noted several times before credit union audiences at CUNA's annual Governmental Affairs Conference and other events that if all financial entities had acted like credit unions act, the financial crisis might have been avoided.

The Massachusetts Credit Union League noted that the league, and credit unions, have supported Frank since he made his first run for Congress in 1982.

The 71-year-old legislator in a Monday press conference said he had long planned to retire around this time. His district, the 4th district of Massachusetts, has also been redesigned, excising portions of the state that had long supported him and adding more conservative areas near his home base of Newton, Mass.

Inside Washington (11/28/2011)

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  • WASHINGTON (11/29/11)--The Department of Housing and Urban Development (HUD) has offered to release banks from some loss-mitigation liability on delinquent Federal Housing Authority (FHA)-insured loans under settlement negotiations with the largest mortgage servicers. The settlement talks among state attorneys general, federal officials and mortgage servicers are focused on illicit foreclosure-related practices, including so-called robo-signing of foreclosure documents (American Banker Nov. 28). The parties to the talks hope to complete the settlement by Christmas, according to the Banker. The government sued Deutsche Bank in May for $1.2 billion, claiming underwriting and quality-control violations. The suit left open the possibility of similar action against Bank of America Corp., Wells Fargo & Co., Citigroup Inc. and JPMorgan Chase & Co., which hold billions of dollars each of delinquent FHA-insured loans. If a bank files an FHA mortgage-insurance claim, and HUD finds evidence that it improperly serviced the underlying mortgage, a bank may be held liable for triple damages, or fined three times the sum of the original. Under the settlement, HUD would release banks from that liability and not seek the fine …
  • WASHINGTON (11/29/11)--Citigroup and the Securities Exchange Commission (SEC)will prepare for trial after a federal judge rejected a proposed settlement plan between the two parties. Citigroup had agreed to pay $285 million to settle charges that it misled investors about an investment tied to the deteriorating housing market in 2007 (Washington Post Nov. 28). Betting against the housing market, Citigroup made $160 million in profit, while investors lost more than $700 million. But U.S. District Court Judge Jed S. Rakoff rebuked the SEC for charging Citigroup with negligence instead of fraud as part of the settlement. Rakoff also criticized the agency for following its standard practice of allowing defendants to settle charges without admitting or denying any wrongdoing …

NEW CUNA lauds retiring Rep. Frank as CU friend

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WASHINGTON (UPDATED: 2:45 P.M. ET, 11/28/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney today said Rep. Barney Frank (D-Mass.), who earlier this afternoon announced he would not seek reelection for his House seat next November, "has been a friend to credit unions throughout his career" and "has always understood and appreciated the credit union difference, and the important role that credit unions play in the lives of their members."

Frank is a 16-term member of Congress, and is the former chair and current ranking member of the powerful House Financial Services Committee. As chairman of the Financial Services Committee, he was one of the architects of the Dodd-Frank Financial Regulatory Reform Act, which was the most sweeping financial reform package in decades.  He ensured that language that exempted small institutions from Consumer Financial Protection Bureau oversight was included in this bill.

Massachusetts Credit Union League President/CEO Dan Egan said the Dodd-Frank Act "stands as a testament to Barney's commitment to the rights of consumers and his recognition of the fact that credit unions, as consumer-owned nonprofit cooperatives, are unique in the way that they provide for working class families in the U.S." 

Frank was also instrumental in the enactment of the Temporary Corporate Credit Union Stabilization Act, the CARD Act fix, and also recently worked to address credit union concerns regarding interchange regulations, warning earlier this year that the implementation of those regulations, if not properly crafted, may have unintended consequences for credit unions and consumers.

"He used his position during the most difficult economic times in generations to ensure that credit unions were not adversely affected by the reforms aimed at the large for-profit financial companies that caused the financial crisis," Cheney added.

Frank noted several times before credit union audiences at CUNA's annual Governmental Affairs Conference and other events that if all financial entities had acted like credit unions act, the financial crisis might have been avoided.

The 71-year-old legislator in a Monday press conference said he had long planned to retire around this time. His district, the 4th district of Massachusetts, has also been redesigned, excising portions of the state that had long supported him and adding more conservative areas near his home base of Newton, Mass.

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.

Retailers charge interchange rule ignores cap intent

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WASHINGTON (11/23/11)— Retailers have filed suit against the Federal Reserve, alleging that its final debit interchange rule ignores the direction of the statute that requires a cap and fails to set standards to assess that a fee is "reasonable and proportional" to costs incurred to the issuer.

The lawsuit said the Fed's early proposal to set a cap closer to 12 cents per transaction "largely followed" the intent of the law. The suit has been brought against the Fed in U.S. District Court for the District of Columbia by the National Association of Convenience Stores, the National Retail Federation, the Food Marketing Institute, Miller Oil Co., Inc., and Boscov's Department Store, LLC.

In the complaint, the merchants claim the Fed's final rule, which was released after the agency received input from both merchants and financial services groups, represents "an unreasonable construction' of Durbin's legislation.

The Fed's initial interchange proposal, which was prompted by legislation authored by Sen. Richard Durbin (D-Ill.), would have set a cap of 12 cents per transaction. However, the Federal Reserve's final debit interchange rule, which became effective last month, caps debit interchange fees for issuers with assets of $10 billion or more at 21 cents. The regulation also allows card issuers to charge an additional five basis points of the value of the transaction to cover fraud losses. An extra penny may also be charged by financial institutions that are in compliance with the Fed's fraud-prevention standards. 

The complaint also takes issue with the Fed's decision to consider many costs related to debit card use, such as network connectivity, hardware, software, and labor costs, as well as costs related to network processing and transaction monitoring, in the calculation of the final debit card interchange cap. The merchants in the complaint claimed the Fed "vastly expanded the categories of recoverable costs" when it developed the final rule.

The Credit Union National Association (CUNA) fought to ensure that these costs were included in the final debit interchange fee cap determination.

CUNA General Counsel Eric Richard said CUNA is carefully watching this suit and will do whatever is necessary to protect the interests of credit unions in this litigation.

"Given the merchants' reaction to the final rule, this litigation is not surprising. However, while we can't predict the outcome of the litigation, it is clear that the Federal Reserve did not focus on the desires of the merchants, as the retailers urged it to do, but took into account factors identified by Congress in setting the cap on interchange fees," CUNA Deputy General Counsel Mary Dunn added.

For more on the merchant interchange action, use the resource link.

FHFA Most maximum loan limits will remain at 2011 levels in 2012

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WASHINGTON (11/23/11)—The maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2012 will remain at 2011 levels in all counties but one, the Federal Housing Finance Agency (FHFA) announced on Tuesday.

The lone loan limit exception for 2012 will be Fairfield County, Conn., where the maximum loan limit for single-family properties will increase to $601,450. The maximum loan limit for single-unit properties in that county was $575,000 in 2011, the FHFA said.

The Housing and Economic Recovery Act (HERA) of 2008 requires that Congress set maximum conforming loan limits each year. The maximum conforming loan limits are generally $417,000 but can be as much as $729,750 in certain high cost areas in the contiguous United States. The $729,750 maximum limit fell to $625,500 on Oct. 1 when a loan limit extension could not be agreed to by Congress. However, legislation that would return the maximum limit to $729,750, or 125% of local median prices for single family homes, through Dec. 31, 2013 was signed into law late last week.

For the FHFA release, use the resource link.

Average October mortgage rate is 4.17 FHFA reports

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WASHINGTON (11/23/11)--The average combined rate of both fixed- and adjustable-rate mortgages stood at 4.17% in October, a drop from the 4.36% average reported last month, the Federal Housing Finance Agency (FHFA) reported on Tuesday.

The agency said that initial fees and charges pushed this average to an effective rate of 4.29% for October. That rate represents a 20 basis point drop from September's total of 4.49%.
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The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders was 4.19% last month, a 0.19% drop from September's total, and conventional, 30-year, fixed-rate mortgage loans of $417,000 or less averaged an interest rate of 4.36% in October, a 20 bp drop from the previous month's total, the FHFA said.

October's average loan-to-price ratio 78.4%, and the average loan amount was $218,500 during that month. Both of these numbers were consistent with the previous month's results.

The FHFA also reported the following:

  • Initial fees and charges accounted for 0.83% of loan balances in October; and
  • 28% of purchase-money mortgage loans originated in October were "no-point" mortgages.
For the full FHFA release, use the resource link.

Bipartisan backing for MBL increase grows

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WASHINGTON (11/23/11)--Legislation that would increase the member business lending (MBL) cap for credit unions continues to have broad bipartisan appeal, with Rep. Maxine Waters (D-Calif.) and Sen. Rand Paul (R-Ky.), two legislators on distant ends of the ideological spectrum, signing on as cosponsors in recent weeks.

Waters became one of 104 cosponsors of H.R. 1418, the Small Business Lending Enhancement Act of 2011, when she signed on to support the bill on Nov. 18. The legislator in a House Financial Services subcommittee on financial institutions hearing on community banking said she is "very much involved" in the MBL issue, and added that she wants to work with Republicans "to do something" for credit unions and other small institutions. Waters also urged credit unions and community banks to work out their differences during the hearing.

Credit Union National Association (CUNA) President/CEO Bill Cheney testified during the hearing, suggesting that legislators add MBL cap increase language to a separate community bank regulatory relief measure, creating 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. (See related Nov. 17 story: Cheney urges less CU reg burden at bank hearing)

Paul recently became the 21st cosponsor of Sen. Mark Udall's (D-Colo.) own MBL legislation, S. 509. Paul, who was supported by the Credit Union Legislative Action Council (CULAC) and the Kentucky Credit Union League, and also touted the support of over 700,000 Kentucky credit union members on his website, during his 2010 Senate campaign, is halfway through his first Congress.

Both the House and Senate bills would increase the current 12.25% of assets MBL cap to 27.5% of a credit union's total assets. CUNA has estimated that increasing the MBL cap would have a number of beneficial effects on the ailing economy, including infusing $13 billion in new credit for small businesses and adding 140,000 new jobs within the first year of enactment--all at no cost to the American taxpayer.

CUNA continues to fight to increase these cosponsor totals, and move MBL legislation on to President Barack Obama's desk, and 23,000 separate contacts have been made since late spring as credit union advocates have reached out to members of the House and Senate, as well as the Obama administration, to seek their support for the MBL legislation.

Credit union supporters have also reached out to members of Congress and their Capitol Hill staffers during CUNA's 2011 Hike the Hill efforts, with the New Jersey Credit Union League, the Credit Union Association of the Dakotas, and the New Hampshire, Massachusetts, and Rhode Island leagues making the most recent trips to Washington. A total of 32 Hike the Hill visits have been made this year.

Inside Washington (11/22/2011)

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  • WASHINGTON (11/23/11)--The financial services industry must learn new ways to work and communicate with seniors, Hubert "Skip" Humphrey, the head of the Consumer Financial Protection Bureau's Office for Older Americans said in an interview with American Banker (Nov. 22). Financial institutions have the capacity to know about and see the patterns of abuse and fraud, Humphrey said. In his first three weeks in office, Humphrey has traveled to San Diego, Los Angeles, Florida and Massachusetts. The former Minnesota attorney general spoke with seniors, local leaders and experts about elder abuse and exploitation, and the need for improved coordination among federal and state agencies, and other nonprofit groups. The CFPC's role is to bring together the numerous public and private organizations that work with seniors to create a coordinated federal presence, Humphrey said. The CFPB has begun work on a study about reverse mortgages and is focusing on issues such as identity theft, online scams and certification requirements for people who hold themselves out as financial experts or advisers …
  • WASHINGTON (11/23/11)--The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) has shut down online mortgage modification scams that prey on homeowners through Web banners and other Web advertisements on Yahoo! and Bing. Last week, SIGTARP announced it had shut down similar online mortgage modification scams advertised on Google. Among the areas SIGTARP investigates are mortgage modification schemes in which companies charge struggling homeowners a fee in exchange for false promises of lowering their mortgage through TARP's housing program, the Home Affordable Modification Program. In the past week, SIGTARP has shut down 125 of the alleged scams advertised on Yahoo!, Bing, and Google. Microsoft, which founded Bing and whose technology powers Yahoo! Search, has suspended advertising relationships with more than 400 Internet advertisers and agents associated with the schemes and related deceptive advertising and has blocked all future advertising associated with the 125 scams identified by SIGTARP. Google has also suspended advertising relationships with more than 500 Internet advertisers and agents associated with 85 of the alleged online mortgage fraud schemes and related deceptive advertising …

Holiday spending survey draws broad press attention

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WASHINGTON (11/22/11)—Major national media outlets covered the Credit Union National Association's (CUNA) and Consumer Federation of America's (CFA) 12th annual projection of consumers' holiday spending plans, which was unveiled during a Monday event at the National Press Club in Washington, D.C.

CUNA Chief Economist Bill Hampel is interviewed by a CNN reporter following Monday's release of the 2011 CUNA/CFA holiday spending survey (CUNA Photo) 
The survey of just more than 1,000 adult Americans indicated that overall holiday spending could remain steady in 2011, with only 8% of respondents saying they planned to increase their spending on gifts and other holiday-related items. The spending survey was developed from calls made to consumers between Nov. 10 and 13.

CUNA and CFA also pair the results with advice to help consumers keep holiday debt under control.  CUNA Chief Economist Bill Hampel and CFA Executive Director Stephen Brobeck presented the findings at yesterday's press conference, timed just ahead of Black Friday and the official start of the holiday shopping season.

Mark Wolff, CUNA senior vice president of communications, noted that CUNA "has been doing this joint press event with CFA for 12 years now as another way to reinforce that credit unions are a trusted resource for consumers." This year's press conference is "a particularly timely reminder," since it comes so soon after all the media and consumer interest in credit unions that surrounded Bank Transfer Day on Nov. 5, Wolff added.

Among the television, cable and radio networks, and newspaper groups that attended or covered the press conference:
  • ABC News;
  • CNN;
  • Bloomberg Radio
  • CBS Radio
  • Cox Broadcasting;
  • FOX News;
  • CNBC;
  • Reuters
  • Business News Americas; and
  • Xinhua.
Radio, television and print reporters also reached out to CUNA for further information after the event.  Today, for example, CUNA's Hampel is scheduled to do a live interview about the holiday spending survey results and consumer advice on KPCC, a prominent radio station in Los Angeles.  The live segment is scheduled for 10:30 a.m. PT.

House Financial Services schedule includes examination issues

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WASHINGTON (11/22/11)—The House Financial Services Committee has announced its schedule for the two weeks following the upcoming Thanksgiving break.

The most relevant hearings for credit unions will take place in the first full week of December, as the full Financial Services Committee discusses how new regulations are impacting financial institutions, small businesses and consumers in a Chicago-based Dec. 5 field hearing.

The full committee will also meet at 10:00 a.m. ET on Dec. 6 to discuss the STOCK Act (H.R. 1148). Dec. 6 will also feature a 2:00 p.m. ET House financial institutions subcommittee hearing on H.R. 3461, a bill that would allow financial institutions to appeal examination reports from federal financial regulators and provide further clarity to those regulators.

CUNA has backed this bill, saying it is "recognition that Congress is taking the concerns that we and others have raised regarding examinations seriously." (See related story: CUNA backs examination improvement bill)

The committee also announced the following on Monday:
  • A Tuesday, Nov. 29 House insurance, housing and community opportunity subcommittee field hearing on the manufactured housing industry;
  • A Wednesday, Nov. 30 full committee markup session on H.R. 3213, the Small Company Job Growth and Regulatory Relief Act of 2011; H.R. 2682, the Business Risk Mitigation and Price Stabilization Act of 2011; H.R. 2779, to exempt inter-affiliate swaps from certain regulatory requirements put in place by the Dodd-Frank Act; and H.R. 2586, the Swap Execution Facility Clarification Act;
  • A Thursday, Dec. 1 full committee hearing on the Federal Housing Administration's Single Family Insurance Fund and a separate oversight and investigations subcommittee hearing on the Federal Housing Finance Agency's performance as conservator of Fannie Mae and Freddie Mac;
  • A Wednesday, Dec. 7 capital markets subcommittee hearing on the "Private Mortgage Market Investment Act;" and
  • A Thursday, Dec. 8 House insurance, housing and community opportunity subcommittee markup session of bills related to the Real Estate Settlement Procedures Act, the Dodd-Frank Act, and housing issues.

Cheney Tax status remains top priority post-supercommittee (11/21/2011)

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WASHINGTON (11/22/11)--As the Congressional Joint Select Committee on Deficit Reduction on Monday announced its inability to reach a deal to address the spiraling national debt, concerns that the credit union tax status could be one of many moves made to eliminate tax expenditures receded.

Credit Union National Association (CUNA) President/CEO Bill Cheney said CUNA's concern had been the possibility that the credit union tax status might somehow get in the mix of possible deficit reduction measures, and although CUNA assessed this threat as "low, but not zero," it "took this threat very seriously because of the unprecedented nature of the process by which Congress was attempting to deal with deficit reduction."

The so-called supercommittee, which was created by the Budget Control Act in August, was tasked by Congress to produce legislation to reduce the deficit by $1.2 trillion over the next ten years. The supercommittee was co-chaired by Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas) Democratic Sens. Max Baucus (Mont.) and John Kerry (Mass.), Republican Sens. John Kyl (Ariz.), Rob Portman (Ohio), and Pat Toomey (Penn.), House Democrats, Reps. Xavier Becerra (Calif.), Jim Clyburn (S.C.), and Chris Van Hollen (Md.), and House Republicans Fred Upton and Dave Camp, both of Michigan, also served on the panel.

The deficit reduction committee was required to vote on a final reduction plan by Nov. 23. A predetermined set of cuts to defense and domestic spending will come into effect in 2013 if other spending cuts are not agreed to.

Murray and Hensarling in a joint release said they were "deeply disappointed" that the committee was "unable to come to a bipartisan deficit reduction agreement," and President Barack Obama urged Congress to work on new measures to reduce the deficit.

CUNA closely followed developments surrounding the supercommittee, and repeatedly emphasized the positive impact that the credit unions have on the members and communities that they serve. Cheney added that CUNA will continue to monitor for any threats to the tax status that could develop should Congress engage in comprehensive tax reform efforts in 2012 or 2013.

CUNA backs examination improvement bill

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WASHINGTON (11/22/11)--The Credit Union National Association (CUNA) has welcomed H.R. 3461, which would allow financial institutions to appeal examination reports from federal financial regulators and provide further clarity to those regulators, saying the bill is "recognition that Congress is taking the concerns that we and others have raised regarding examinations seriously."

·    Portions of the bill that would establish a new Office of Examination Ombudsman to investigate complaints about examinations and look at examination quality assurance;

·    Language that would require regulatory agencies to list any information that was used to support a certain regulatory action or request;

·    Language that would allow financial institutions to appeal any material supervisory determination in an exam report to an independent administration law judge.

"There are also areas where CUNA will ask the sponsors to improve the bill, and we want to work with Congress to find solutions to improve the examination process in these challenging economic times," Donovan added.

A hearing on the bill is scheduled to take place in the House financial institutions subcommittee on Dec. 6 at 2:00 p.m. ET.

For more on the bill, use the resource link.

Cheney Tax status remains top priority post-supercommittee

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WASHINGTON (11/22/11)--As the Congressional Joint Select Committee on Deficit Reduction on Monday announced itsr inability to reach a deal to address the spiraling national debt, concerns that the credit union tax status could be one of many moves made to eliminate tax expenditures receded.

Credit Union National Association (CUNA) President/CEO Bill Cheney said CUNA's concern had been the possibility that the credit union tax status might somehow get in the mix of possible deficit reduction measures, and although CUNA assessed this threat as "low, but not zero," it "took this threat very seriously because of the unprecedented nature of the process by which Congress was attempting to deal with deficit reduction."

The so-called supercommittee, which was created by the Budget Control Act in August, was tasked by Congress to produce legislation to reduce the deficit by $1.2 trillion over the next ten years. The supercommittee was co-chaired by Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas) Democratic Sens. Max Baucus (Mont.) and John Kerry (Mass.), Republican Sens. John Kyl (Ariz.), Rob Portman (Ohio), and Pat Toomey (Penn.), House Democrats, Reps. Xavier Becerra (Calif.), Jim Clyburn (S.C.), and Chris Van Hollen (Md.), and House Republicans Fred Upton and Dave Camp, both of Michigan, also served on the panel.

The deficit reduction committee was required to vote on a final reduction plan by Nov. 23. A predetermined set of cuts to defense and domestic spending will come into effect in 2013 if other spending cuts are not agreed to.

Murray and Hensarling in a joint release said they were "deeply disappointed" that the committee was "unable to come to a bipartisan deficit reduction agreement," and President Barack Obama urged Congress to work on new measures to reduce the deficit.

CUNA closely followed developments surrounding the supercommittee, and repeatedly emphasized the positive impact that the credit unions have on the members and communities that they serve. Cheney added that CUNA will continue to monitor for any threats to the tax status that could develop should Congress engage in comprehensive tax reform efforts in 2012 or 2013.

AACUL announces 2012 executive board

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PALM BEACH, Fla. (11/22/11)--Bill Mellin, president/CEO of the Credit Union Association of New York, was elected the new chairman of the American Association of Credit Union Leagues (AACUL) Executive Board at the AACUL annual business meeting Nov. 19.   Mellin leads a newly elected AACUL Executive Board that also includes:

  • First vice chairman--Wendell Lyons, CEO of the Kentucky Credit Union League;
  • Second vice chairman--Tracie Kenyon, CEO of the Montana Credit Union Network;
  • Treasurer--John Radebaugh, CEO of the North Carolina Credit Union League; and 
  • Secretary--Mark Cummins, CEO of the Minnesota Credit Union Network.
Mellin has served on the AACUL Board since 2004, most recently as first vice chairman.  He has also served as the chairman of CULAC, the  political action committee of the Credit Union National Association (CUNA).  As chairman of AACUL, Mellin will be an ex-officio member of the CUNA Board of Directors as well as the CUNA Executive Committee, and will participate in a leadership role with other credit union system organizations.  

"The AACUL Board has been at the forefront of key industry issues and, with the support of leagues, has been integral in developing new initiatives to help the credit union system grow and thrive," said Mellin. "I look forward to working with my colleagues on the AACUL Executive Board to build on these accomplishments."

Key AACUL initiatives of the past year include the development and launch of a new website, aSmarterChoice.org, to help consumers learn about credit unions and find one they are eligible to join; development of a new "Plan to Win" political and grassroots mobilization strategy; and the establishment of a new AACUL Regulatory Advocacy Advisory Committee to address regulatory burden issues and bring together best practices between CUNA and the leagues.

AACUL was founded in 1942 as the International Association of Managing Directors and is comprised of state credit union associations representing all 50 states and the District of Columbia.  AACUL's mission is based on the premise that the vitality of the credit union community is enhanced by a strong three-tiered system that has advocacy as its primary focus.

Inside Washington (11/21/2011)

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  • WASHINGTON (11/22/11)--As special adviser to the secretary of the Treasury, Raj Date is currently filling two roles at the Consumer Financial Protection Bureau (CFPB): one left by the departure of Elizabeth Warren, the former Harvard professor who shaped CFPB, and the one created by the stalled nomination of Richard Cordray, President Barack Obama's nomination as the agency's director (The Hill Nov. 21). Date also was instrumental in forming the bureau, serving as one of Warren's top deputies, alongside Cordray. So far, the CFPB has hired 750 employees, including 50 during a two-week span in November. Senate Republicans have pledged to block the Cordray's appointment until the CFPB is subject to additional oversight. Republicans say the bureau holds too much oversight for a single regulator and should be replaced with a multi-member commission. But Date told The Hill there are plenty of people in the financial industry who, like him, want consumer finance to work better for consumers …

CFACUNA Consumer holiday spending predictions still lag pre-recession years

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WASHINGTON (11/22/11)—The 2011 Consumer Federation of America (CFA)/Credit Union National Association (CUNA) holiday spending survey has found that spending continues to improve following the great recession, but "spending plans are still considerably below where they were before the recession," CUNA Chief Economist Bill Hampel said on Monday.
Click for slide show Credit Union National Association (CUNA) Chief Economist Bill Hampel (left) and Consumer Federation of America (CFA) Executive Director Stephen Brobeck announce the results of their 12th annual joint survey on consumer holiday spending expectations. CUNA Senior Vice President of Communications Mark Wolff noted the annual joint effort is "another way to reinforce that credit unions are a trusted resource for consumers," adding, "And this year it is a particularly timely reminder coming so soon after Bank Transfer Day." (CUNA Photo)
This year's survey has found that 8% of respondents plan to spend more on gifts and holiday items, with 41% of respondents saying they would spend less this holiday season. These results are nearly identical to last year's consumer predictions, when the CFA and CUNA survey found that one in ten consumers would up their holiday spending, and 41% at that time saying they would curtail their holiday spending. In 2008, the peak of the recession, 55% of respondents said they intended to cut their holiday spending, which was well above the 40% or less, on average, who said they'd cut their spending between 2000 and 2007. The survey, which was presented during a Monday event at The National Press Club in Washington, D.C., was executed between Nov. 10 and 13 and questioned 1011 adults. This is the 12th consecutive year that CUNA and the CFA have partnered to conduct the survey and offer consumer advice on managing holiday debt. The 2011 survey showed a direct link between financial condition and planned spending, with 33% of those that said they would spend more this year saying their financial condition had improved since 2010. Just over half (55%) of those who said they were planning to spend less said their financial status was worse than last year. Overall, 35% of households with $100,000 or more in yearly income reported that their financial condition improved, while 50% of households with annual incomes below $25,000 said their financial situation had worsened over the past year. The CFA and CUNA suggested that consumers that are looking to spend less this holiday season stick to a predetermined budget for gifts, holiday foods, party clothes, holiday decor and postage. Consumers will also benefit financially from comparison shopping and can plan for future holidays by shopping post-holiday sales for next years' gifts. Starting a holiday savings account, or curbing spending by finding low- or no-cost ways to celebrate the holidays, are also options, CFA Executive Director Stephen Brobeck said.

NCUA employees say agency is a great place to work

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ALEXANDRIA, Va. (11/22/11)--The National Credit Union Administration (NCUA) was ranked as the best small federal government agency workplace for workers under age 40, and the fourth-best workplace for women, according to a recent survey of government employees.

Overall, the NCUA ranked 16th out of 35 small federal agencies. The NCUA finished 23rd in this ranking last year.

NCUA Chairman Debbie Matz said the board is "proud of the growing recognition that NCUA is one of the best places to work," and added that they are "especially gratified that women and young professionals, including many of our newest employees, view NCUA as a workplace where their careers can flourish."

The survey, which was compiled by the nonprofit Partnership for Public Service, asked federal workers from 308 federal agencies and subcomponents to rank their workplace based on several criteria. Those criteria included:

  • Employee skills/mission match;
  • Teamwork;
  • Fairness;
  • Training and development;
  • Pay; and
  • Support for diversity.
More than 276,000 workers responded to the survey.

For the full survey, use the resource link.

NEW CFACUNA Reports 2011 Holiday Spending Survey Results

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WASHINGTON (UPDATED: 1:15 P.M. ET, 11/21/11)—The 2011 Consumer Federation of America (CFA)/Credit Union National Association (CUNA) holiday spending survey has found that spending continues to improve following the great recession, but "spending plans are still considerably below where they were before the recession," CUNA Chief Economist Bill Hampel said.

This year's survey has found that 8% of respondents plan to spend more on gifts and holiday items, with 41% of respondents saying they would spend less this holiday season. These results are nearly identical to last year's consumer predictions, when the CFA and CUNA survey found that one in ten consumers would up their holiday spending, and 41% at that time saying they would curtail their holiday spending. In 2008, the peak of the recession, 55% of respondents said they intended to cut their holiday spending, which was well above the 40% or less, on average, who said they'd cut their spending between 2000 nd 2007.

The survey, which was presented during a Monday event at The National Press Club in Washington, D.C., was executed between Nov. 10 and 13 and questioned 1011 adults. This is the 12th consecutive year that CUNA and the CFA have partnered to conduct the survey and offer consumer advice on managing holiday debt.

The 2011 survey showed a direct link between financial condition and planned spending, with 33% of those that said they would spend more this year saying their financial condition had improved since 2010. Just over half (55%) of those who said they were planning to spend less said their financial status was worse than last year. Overall, 35% of households with $100,000 or more in yearly income reported that their financial condition improved, while 50% of households with annual incomes below $25,000 said their financial situation had worsened over the past year.

The CFA and CUNA suggested that consumers that are looking to spend less this holiday season stick to a predetermined budget for gifts, holiday foods, party clothes, holiday decor and postage. Consumers will also benefit financially from comparison shopping and can plan for future holidays by shopping post-holiday sales for next years' gifts. Starting a holiday savings account, or curbing spending by finding low- or no-cost ways to celebrate the holidays, are also options, CFA Executive Director Stephen Brobeck said.

Info security needs improvements NCUA IG says

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ALEXANDRIA, Va. (11/21/11)--The National Credit Union Administration (NCUA) has improved its overall data security and privacy programs, but there is still room to strengthen its overall personal information privacy program, security authorization packages, contingency planning program, intrusion detection policies and procedures, and remote access controls, according to the agency's Office of the Inspector General (OIG).

The OIG engaged an outside firm to examine the agency's information security and privacy management policies and procedures, and to determine the NCUA's level of compliance with federal information security standards.

In the report, the OIG recommended that the NCUA work to reduce the "use, collection and retention" of personally sensitive identifying information such as employee social security numbers.

Reviewing and potentially reducing the use of social security numbers and other sensitive information "will reduce the risk of exposing [the NCUA's] sensitive data to a breach of confidentiality by an authorized or unauthorized entity" and "could prevent public embarrassment for the agency and a loss of trust by the public," the report said.

The OIG also recommended that the NCUA improve its contingency planning program for its Federal Information Security Management Act (FISMA) systems in its review of the NCUAs information systems, security program and controls for compliance with FISMA.

The report noted that the NCUA has improved its server and desktop computer security configurations, its automated information security processes, its contingency planning for FISMA systems, and its continuing education requirements for its own information technology employees.

The OIG in last year's review credited the NCUA with improving its overall IT security program by enhancing its policies and procedures, completing e-Authentication risk assessments for its two e-Authentication systems, and completing security control assessments for five of its six FISMA systems.

For the full report, use the resource link.

NFIP FHA language passed with minibus spending bill

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WASHINGTON (11/21/11)--Congress extended the National Flood Insurance Program (NFIP) and returned Federal Housing Administration (FHA) loan guarantee limits to their previous ceiling when a minibus spending bill that would continue to fund the government was approved late last week.

The NFIP will continue to function until Dec. 16. Separate pieces of legislation that would extend coverage for another five years have been approved by both the Senate and the House, but there are differences between those two bills.

Language that was attached to the minibus spending bill allows the FHA to guarantee mortgages up to $729,750, or 125% of local median prices for single family homes, through Dec. 31, 2013.

The maximum conforming loan limit fell to $625,500 on Oct. 1 when a loan limit extension could not be agreed to by Congress. The Housing and Economic Recovery Act (HERA) of 2008 requires that Congress set maximum conforming loan limits each year.

The Credit Union National Association supported the NFIP extension and the FHA guarantee limit increase.

The NFIP and FHA related language was added to H.R. 2112, an appropriations bill for the Departments of Agriculture, Commerce, Justice, Transportation and Housing and Urban Development that also funds the government until December 16.

CUNA Fin ed efforts must be part of any aid to unbanked

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WASHINGTON (11/21/11)--The Credit Union National Association (CUNA) in a recent comment letter encouraged the U.S. Treasury to promote a variety of initiatives aimed at increasing financial access for all consumers, and added that any initiative focused on financial access "should include the concept of financial education as a core component."

The Treasury's Office of Financial Education and Financial Access is in the process of developing a multiyear program of grants, cooperative agreements, financial agency agreements, and other efforts in a bid to aid unbanked and underbanked Americans. Specifically, the Treasury has been tasked with increasing low- and moderate-income individuals' access to financial services from federally insured depository institutions.

This effort was prompted by Section 1204 of the Dodd-Frank Wall Street Reform Act.

CUNA encouraged the Treasury to consider financial institutions of all asset sizes as it assesses how it will distribute awards and grants and develop agreements.

Participating institutions should also have the option to offer economically appropriate products, such as free or low-cost checking and savings accounts with no minimum balance requirements, to increase access to financial services, CUNA added.

Classroom- and workplace-based education, as well as rewards programs, should be considered as viable ways to enhance consumer knowledge of basic and more complex financial concepts, CUNA said. The Treasury should also feature credit unions and banks equally in any promotional or educational material it produces as part of this endeavor, CUNA added.

For the full comment letter, use the resource link.

Inside Washington (11/18/2011)

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  • WASHINGTON (11/21/11)--Both Republicans and Democrats had high praise for Thomas Hoenig, President Barack Obama's nomination for Federal Deposit Insurance Corp. vice chairman, during Hoenig's Senate confirmation hearing Thursday. U.S. Sen. Richard Shelby (R-Ala.), the leading Republican on the Senate Banking Committee, indicated support for moving as a package of nominations Hoenig; Martin Gruenberg, nominee for  FDIC chair; and Thomas Curry, nominee for comptroller of the currency, to the Senate floor for a vote (American Banker Nov. 18). Such a move would leave room for the Senate to debate the confirmation of Richard Cordray as director of the Consumer Financial Protection Bureau, and who would also hold an FDIC seat. Carla Leon Decker,  president/CEO of the $47 million District Government Employees FCU, Washington, D.C., awaits a hearing on her nomination as a National Credit Union Administration board member …
  • WASHINGTON (11/21/11)--Committees in both the House and Senate are working to schedule hearings on a bill that would prevent members of Congress from profiting from their inside knowledge. The bill's sudden momentum comes in the wake of a Nov. 13 60 Minutes report about congressional representatives from both political parties making trades after receiving non-public information (American Banker Nov. 18). Before the 60 Minutes report, the House version of the bill, which would prohibit trading of stocks and other investment vehicles based on non-public information about future legislative action, had 10 co-sponsors. By Thursday, the bill had 47 co-sponsors. Four senators--Scott Brown (R-Mass.), Debbie Stabenow (D-Mich.), Jon Tester (D-Mont.) and Kirsten Gillibrand (D-N.Y.)--announced they would also introduce versions of the House bill. All four are up for re-election next year …
  • WASHINGTON (11/21/11)--In a joint letter released Thursday, 33 Democrats urged Senate Minority Leader Mitch McConnell (R-Ky.) to allow a vote on the Senate floor for the confirmation of Richard Cordray as the director for the Consumer Financial Protection Bureau (CFPB). Cordray's nomination was approved by the Senate Banking Committee last month (American Banker Nov. 18).  He currently serves as CFPB enforcement chief. Cordray, the former attorney general of Ohio, was nominated by President Barack Obama in July. Without a director, the CFPB lacks full authority, the letter said, leaving consumers such as military families and seniors susceptible to unfair or deceptive financial practices …

Community charter remittance compensation changes OKed by NCUA

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ALEXANDRIA, Va. (11/18/11)--The National Credit Union Administration (NCUA) on Thursday approved an expanded community credit union charter, and separate final rules that correct its golden parachute and indemnification rule and add remittance transfers to the list of international electronic funds transfers that may be offered by federal credit unions.

Both of these final rules were unchanged from the interim rules that came into effect earlier this year.

The remittance transfer rule final rule strictly adheres to Dodd-Frank Act's statutory language and allows federal credit unions to offer all variations of remittance transfers to their members and those within their fields of membership, subject to consumer protections.

The Golden Parachute and Indemnification Rule correction finalizes the interim final rule's changes to portions of the NCUA's original regulation that "did not accurately reflect the Board's intent regarding certain deferred compensation plans," the NCUA said.

The NCUA in a release added that the technical correction provides an exception to the definition of golden parachute payments pertaining to plans offered under section 457 of the Internal Revenue Code, and clarifies that 457(b) plans are excluded from the golden parachute definitions. The rule will exclude 457(f) plans from the golden parachute definition if they meet certain criteria, the NCUA added.

The NCUA also unanimously approved Indianapolis, Indiana-based Finance Center FCU's application to expand its community charter. That $419 million in asset, 44,000-member credit union will now be able to draw membership from citizens that live, work, worship, or attend school in the greater Indianapolis area, including the surrounding counties of Boone, Brown, Hamilton, Hancock, Hendricks, Johnson, Morgan, Putnam and Shelby. The credit union currently draws membership from Marion County.

The Credit Union National Association urged the NCUA to make the correction to the golden parachute rule and was also actively involved in the remittance transfer issues.

For more on the NCUA board meeting, use the resource link.

Feds clarify financial supervisory enforcement responsibilities

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WASHINGTON (11/18/11)--The National Credit Union Administration (NCUA) and other regulators that comprise the Federal Financial Institutions Examination Council (FFIEC) have released guidance addressing "how the total assets of an insured bank, thrift or credit union will be measured for purposes of determining supervisory and enforcement responsibilities" under the Dodd-Frank Wall Street Reform Act.

The FFIEC is comprised of the leaders of the NCUA, the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision, the Federal Deposit Insurance Corp. (FDIC) and the Consumer Financial Protection Bureau. NCUA Chairman Debbie Matz is in the first year of a two-year stint at the FFIEC helm.

The FFIEC release notes that the CFPB "has exclusive authority to examine for compliance with federal consumer financial laws and primary authority to enforce those laws for institutions with total assets of more than $10 billion, and their affiliates." The Fed, FDIC, NCUA, and OCC "will retain supervisory and enforcement authority for other institutions," the release adds.

Three credit unions would come under the purview of the CFPB under these terms.

Quarterly call reports will be used as "a common measure of the asset size of an insured depository institution," the release adds. The size of financial institutions will not be changed for regulatory purposes "unless four consecutive quarterly reports indicate that a change in supervisor is warranted," the FFIEC said.

Allowing institutions to frequently switch between financial regulators "could both impose increased burden on institutions and interfere with the orderly implementation of the agencies' responsibilities with respect to the federal consumer financial laws," according to the release.

CUNA to push for cuts as NCUA unveils 2012 budget

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ALEXANDRIA, Va. (11/18/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney said the National Credit Union Administration's 2012 budget, which, at $236.9 million, represents a 5.1% increase over 2011's total, "is considerably lower than what we had feared it would be," but the CEO added that CUNA "will still push the agency to contain all costs going forward."

NCUA Chairman Debbie Matz during Thursday's open board meeting noted the 5.1% increase is less than half of the 12% to 13% budget growth rates that the agency has seen over the past three years. Matz said the NCUA budget is a valuable investment in the safety and soundness of credit unions, adding that "budget investments that credit unions have made in NCUA these past few years are paying off."

Click to view larger image The NCUA board approved a series of agenda items, including the  2012 agency budget with a 5.1% increase over the prior year,  in a quick Thursday open meeting. (CUNA photo)


The 2012 budget adds 33 new positions, including 15 specialists in the areas of lending, capital markets, information systems, supervision and troubled institutions, eight examiners and three supervisory examiners, to the NCUA payroll. Just over $7 million of the $11.5 million budget increase is tied to the extension of health, dental and vision benefits to all NCUA employees. However, the NCUA said this increase is more than offset by the $7.9 million savings resulting from applying a pay freeze to all staff for 2012.

The budget also contains a $2.6 million increase in travel expenses and a combined $1.1 million in contracted services and rent, communications and utilities payments.

CUNA is reviewing the new budget in detail and will be following up to get more answers for credit unions on specific numbers and assumptions.

The agency also announced that its 2012 overhead transfer rate (OTR) would increase to 59.3%, and said 2012's operating fee rate for federal credit unions would decline by .90%. CUNA will review the OTR change.

The 2012 Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessment will likely be between 8 and 11 basis points (bp), the NCUA said, and the agency added that will not charge a National Credit Union Share Insurance Fund (NCUSIF) premium in 2011. Matz added that the NCUA would prefer not to charge an NCUSIF premium in 2012, but added that an assessment, if charged, would be between 0 and 6 bp.

CUNA has many concerns about the increases in the agency's budget, in light of the fact that costs in other federal regulatory agencies are being contained. Credit unions deserve to have more information about the need for these increases, Cheney said.

The agency also reported on the status of the NCUSIF and TCCUSF during the meeting, noting that the NCUSIF's equity ratio was 1.32% as of October 31. The NCUSIF holds $872 million in reserves. There are currently 394 CAMEL 4 and 5 credit unions, which represent 3.89% of insured shares, or approximately $30 billion in assets. NCUA staff also noted that there are 1,761 CAMEL 3 credit unions, which represent 15.87% of insured shares, or $124 billion in assets. Combined, insured shares in CAMEL 3, 4, and 5 credit unions represent approximately 20% of total insured shares, the NCUA said.

For more on Thursday's NCUA Board Meeting, use the resource link.

Inside Washington (11/17/2011)

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  • WASHINGTON (11/18/11)--Corporate credit unions will no longer be required to execute 314a Bank Secrecy Act searches, according to guidance offered in a letter released by the National Credit Union Administration. Financial Crimes Enforcement Network (FinCEN) established the 314(a) program through the issuance of a rule established in 2002. As amended, its requirements are now published in 31 CFR Part 1010.520. The 314(a) program requires certain financial institutions to search their records and identify if they have responsive information with respect to the particular investigative subject when they receive such requests from FinCen. After consultation with FinCEN, NCUA determined that the searches would no longer be necessary because corporate credit unions do not service accounts for natural person members and provide services only to member credit unions and other such entities …
  • WASHINGTON (11/18/11)--The Consumer Financial Protection Bureau (CFPB) is seeking information from stakeholders in the private student loan market. The CFPB 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 voluntarily. 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 …
  • WASHINGTON (11/18/11)--The chief executives at Fannie Mae and Freddie Mac on Wednesday defended $12.8 million in bonuses and deferred salary paid last year to 10 top executives at the government-sponsored enterprises (American Banker Nov. 17). Freddie Mac CEO Charles Haldeman Jr. and Fannie Mae presdent/CEO Michael Williams, appearing before the House Oversight Committee, said the pay packages were necessary to attract and retain the talent required to manage trillions of dollars in assets and annual new business. Haldeman said he understood the outrage, but he noted that overall spending at Freddie Mac has been drastically reduced. Freddie Mac leadership tried to cut spending in a way that did not risk disrupting the functioning of the company, he said. Employee attrition at Fannie Mae this year is double its historical rate, Williams said …

CUNACFA holiday spending predictions coming Monday

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WASHINGTON (11/18/11)--On Monday, Nov. 21, at 10:00 a.m. (ET), the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA) will release the results of their 12th annual survey on consumers' holiday spending plans and their concerns about debt levels.

The CFA/CUNA survey, conducted Nov. 10-13, provides fresh findings on consumer attitudes towards their financial condition and holiday spending plans just before Black Friday kicks off the holiday shopping season. 

This year's survey documents consumers' concerns about spending amid persistent high unemployment and a weak economic recovery.

The survey again asks those who expressed their intent to spend less why they plan to do so.  And, in this uncertain economic environment, the survey benchmarks whether consumers feel their financial situation has gotten better or worse compared to a year ago.

CFA and CUNA representatives will discuss their complete survey findings, including:

  • The latest look at consumers' holiday spending plans.
  • Consumer concern about credit cards and paying off the full monthly balance.
  • How the findings compare to consumer attitudes last year and two years ago at this time.
  • How consumer attitudes have changed over the past twelve years.
  • Helpful advice for managing holiday spending.
 

The information will be released during a press conference at the National Press Club. Stephen Brobeck, CFA executive director, and Bill Hampel, CUNA's chief economist, will present the results and answer questions.

Philly CDCU subject of cease and desist order

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ALEXANDRIA, Va. (11/18/11)--People for People Community Development CU of Philadelphia was the subject of an Order to Cease and Desist issued by the National Credit Union this week.

The order requires the credit union to take the following actions:

  • Complete a financial statement audit;
  • Charge off uncollectible loans;
  • Properly fund the Allowance for Loan and Lease Losses;
  • Collect on delinquent loans guaranteed by a third party;
  • Reconcile general ledger accounts monthly; and
  • Establish and maintain a Bank Secrecy Act compliance program.
 

The credit union's officials have agreed to the terms of the order, which is effective as of Nov. 1. People for People has 1,500 members and was chartered in 1999.

Use the resource link to read the cease and desist documents.

NCUA enforcement orders also can be inspected Monday through Friday at NCUA's Office of General Counsel from 9 a.m. to 4 p.m. (ET).  Copies may also be ordered by mail from NCUA at 1775 Duke Street, Alexandria, VA 22314-3428.

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.

Fed interchange surveys must not impose burden CUNA

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WASHINGTON (11/16/11)--The Federal Reserve should ensure that its interchange market surveys, which are still under development, collect the data needed to accurately reflect all costs associated with debit card programs and debit card transactions while limiting the reporting burden for the financial institutions, the Credit Union National Association and other finance industry trades said in a recent letter to the Fed.

The Fed earlier this year released for public comment separate sample surveys to collect information on costs, debit card usage, and interchange fees: One survey is for debit card issuers, and another is for payment card networks.

Issuers and payment card network representatives will be required to respond to these surveys. Issuers will also be required to respond to a separate survey that requests information on the use of general-use prepaid cards in federal, state, and local government-administered payment programs and the interchange and cardholder fees charged when these cards are used.

The Fed surveys are intended to compile aggregate or summary information concerning the costs incurred, and interchange transaction fees charged or received by issuers or payment card networks in connection with debit card transactions.

The Fed would then use this information to generally monitor the interchange rule's impact on markets and, more specifically, to monitor the effectiveness of the interchange fee limitation exemption for small issuers.

Revising these surveys would benefit the Fed, debit card issuers, payment card networks, and the debit card marketplace, the letter said.

CUNA, the American Bankers Association, the Consumer Bankers Association, the Financial Services Roundtable, the Independent Community Bankers of America, the National Association of Federal Credit Unions, the Midsize Bank Coalition of America, the Clearing House Association, and the Clearing House Payments Company cosigned the letter to the Fed.

In the letter, the trades recommended that the Fed ensure that the surveys are drafted "with sufficient specificity and direction to elicit complete and accurate information reporting" while also allowing for cost accounting differences across issuers.

The letter also encouraged the Fed to ensure that the reporting burden "falls on the proper party, particularly with respect to government-administered, general-use prepaid cards."

The letter also suggested that financial institutions that are exempt from the interchange rule still be allowed to respond to the interchange issuer survey.

Doing so would help the Fed "collect information that will allow it to make well-informed decisions based on a robust understanding of the debit card marketplace," the letter added.

For the full letter, use the resource link.

Higher loan limit stabilizes housing market CUNA

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WASHINGTON (11/16/11)--The Credit Union National Association (CUNA) stressed that restoring the Federal Housing Administration loan limits "will provide consumers in all markets access to safe, affordable mortgage financing," and will stabilize the mortgage market as private investors re-enter the market, in a letter to members of Congress.
 
CUNA in the letter urged Congress to restore FHA mortgage loan limits by supporting H.R. 2112, the minibus conference report. The letter was cosigned by the National Association of Realtors, the Mortgage Bankers of America, the National Association of Homebuilders, and other groups.
 
Language that would return the FHA's insurance limit for single-family home loans to $729,750 is attached to the minibus spending bill.
 
The mortgage legislation, known as the Homeownership Affordability Act of 2011, was introduced earlier this year by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.), and co-sponsored by Sen. Dianne Feinstein (D-Calif.). The legislation would allow the FHA to guarantee mortgages up to $729,750, or 125% of local median prices for single family homes, through Dec. 31, 2013.
 
The maximum conforming loan limit was previously set at $729,750, but fell to $625,500 on Oct. 1 when a loan limit extension could not be agreed to by Congress. The Housing and Economic Recovery Act (HERA) of 2008 requires that Congress set maximum conforming loan limits each year.

CUNA testifies today on community bank bill

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WASHINGTON (11/16/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney will tell members the House Financial Services subcommittee on financial institutions today that community-based institutions need to be able to "spend more time and resources serving their members or customers, and less time complying with burdensome regulations that have been the result of negligence and misdeeds perpetrated by the largest banks or unregulated financial services providers."

Cheney is scheduled to testify on the Communities First Act (H.R. 1697), which would loosen some community bank regulations and expand the ability of certain banks to incorporate under Subchapter S of the Internal Revenue Code.

In prepared testimony, Cheney notes that the same bank representatives that are aggressively lobbying to increase the bank tax advantages under Subchapter S also are working to impose additional taxes on credit unions, arguing that credit unions' federal tax status provides a competitive advantage and that imposing additional taxes on credit unions would "level the playing field."

This type of banker opposition to credit union priorities, which often comes in the form of banker testimony at credit union hearings, helps bank shareholders, but ultimately harms consumers and small businesses, according to CUNA  testimony.

Further, banker opposition to credit union legislation to raise the credit union member business lending cap "has meant that hundreds of thousands of jobs that could have been created through additional credit union business lending have gone uncreated," Cheney is expected to tell the subcommittee.

Cheney is also expected to call for greater credit union access to supplemental forms of capital.

The CUNA CEO is scheduled to appear before the subcommittee at 2 p.m. (ET). Other scheduled witnesses include National Association of Federal Credit Unions CEO Fred Becker, academics, and bank trade group representatives.

Election analyst Charlie Cook to speak at 2012 GAC

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WASHINGTON (11/16/11)--One of Washington, D.C.'s most-trusted voices on all-things political, Charlie Cook, is scheduled to address the Credit Union National Association's (CUNA) 2012 Governmental Affairs Conference (GAC), which will be held here March 18-22 at the Washington Convention Center.

Cook, with an encyclopedic knowledge of the political landscape and a keen eye for the broad implications of the latest political changes, has also made a name for himself as a political journalist. Known for penning a twice-weekly column for Roll Call, Capitol Hill's renowned newspaper, before joining the National Journal Group in 1998, Cook currently writes a weekly column for both the National Journal magazine and the Washington Quarterly.

Cook serves as editor and publisher of the Cook Political Report, providing premier, non-partisan political analysis on elections and campaigns for the U.S. House of Representatives, U.S. Senate, state governors and the president of the United States.

Cook also is regularly featured as a political expert on national media outlets including: ABC, CBS, Good Morning America, The Today Show, Nightline, Meet the Press, This Week, CNBC, MSNBC, C-Span, and National Public Radio. Cook has also served as an election night analyst for CBS News, NBC News and CNN.

In his March 20, 11 a.m. (ET) GAC address, Cook will discuss today's political environment, the balance of power on Capitol Hill, and how it all could be affected by the coming November elections. He will use poll numbers, economic indicators and historical data to forecast the fortunes of each party in a balanced, non-partisan manner and provide attendees with the concrete information they need to prepare for 2012 and beyond.

Cook will join former Secretary of State Condoleezza Rice and journalistic duo, Bob Woodward and Carl Bernstein, as keynote speakers for the 2012 GAC.  Registration and housing information can be found using the resource link below.

CUNA's GAC is the credit union movement's premier political event and its largest national conference, each year providing more than 4,000 credit union executives and board members an opportunity to hear influential leaders from Congress, the Administration and the federal regulatory agencies.

Capitol Hill visits, when attendees meet face-to-face with their members of Congress and staff to discuss issues that concern the credit union movement, will take place the afternoon of Wednesday, March 21, and the morning of Thursday, March 22.

Recognized as the key conference to attend for political impact, credit union networking and industry updates, the GAC also offers a wide array of educational breakout sessions, the industry's largest exhibitor showcase, guest/family programs to tour Washington's sights, and special entertainment including an opening concert and the closing Gala Reception and Dance. And this year, the whole event will be kicked off by American Idol star Taylor Hicks, who will perform at the opening concert, sponsored by the CUNA Councils.

Hicks and his band will take the stage on Sunday night, March 18, at 8:30 p.m. (ET), after the grand opening of the Exhibit Hall.  Hicks, the fifth-season winner of American Idol in 2006, is known for his gritty, soulful, southern vocals and engaging live performances.

Additional speakers and session topics will be announced in the weeks to come.

Use the resource link for more information.

Inside Washington (11/15/2011)

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  • WASHINGTON (11/16/11)--Due to a scheduled power outage, the National Credit Union Administration's website will be unavailable from 10 a.m. to 5.p.m. (ET) on Saturday …
  • WASHINGTON (11/16/11)--Although it remains to be determined, Wal-Mart may be subject to supervision by the Consumer Financial Protection Bureau (CFPB). The giant retailer offers multiple card products through third-party institutions and check-cashing, remittance and wire transfer services. Whether Wal-Mart is subject to CFPB examination depends in part on the agency ruling that will define the scope of its nonbank supervision (American Banker Nov. 15). It is also contingent upon the confirmation of a director for the new agency. The CFPB is limited in its enforcement of financial institutions without a Senate-confirmed director. The Dodd-Frank Act authorizes the CFPB to oversee several nonbank financial service providers for compliance with consumer protection laws, including nonbank mortgage companies, payday lenders and private student-loan providers. The bureau also is allowed to examine so-called "larger participants" in other sectors, determine which markets it monitors and define "larger participants." In June, the agency issued a request for comment on which nonbank sectors it could examine. Among the sectors the bureau requested comment on were money transmitters and prepaid card providers. Wal-Mart offers both services …
  • WASHINGTON (11/16/11)--U.S. Sen. Scott Brown (D-Mass.) on Monday endorsed the nomination of Richard Cordray to lead the new Consumer Financial Protection Bureau (CFPB). He is the first Republican to back Cordray's nomination (American Banker Nov. 15). Elizabeth Warren, the CFPB's chief architect and the former special adviser to the Treasury secretary in charge of getting the agency off the ground in its first year, is challenging Brown in his bid for re-election. This summer, 44 Republicans sent a letter threatening to filibuster the nomination of any director unless the new bureau is overhauled and Congress is granted more oversight. Brown was one of three Republicans who did not sign the letter …
  • WASHINGTON (11/16/11)--The Treasury Department's Community Development Financial Institutions Fund (CDFI Fund) has opened the fiscal year (FY) 2012 funding round of the Native American CDFI Assistance Program (NACA Program). This funding round makes available roughly $12 million, subject to final congressional appropriations, in awards to Native Community Development Financial Institutions (CDFIs), and entities proposing to become or create Native CDFIs that primarily serve Native American, Alaskan Native or Native Hawaiian communities. Application information and materials can be found on the CDFI Fund website

Citigroup Deutsche Bank settle with NCUA on corporate losses

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ALEXANDRIA, Va. (11/15/11)—The National Credit Union Administration (NCUA) will bring in $165.5 million in funds to help cover corporate credit union stabilization costs after Citigroup and Deutsche Bank Securities elected to settle with the agency, the NCUA announced on Monday. After legal and other costs are deducted, this will represent more than $100 million in net funds that will be applied to the 2012 stabilization fund assessment, which is roughly a 1 basis point reduction from what it would be otherwise. The agency is also seeking to recover $2 billion total from the Royal Bank of Scotland, RBS Securities, JP Morgan Securities, and Goldman Sachs in suits it has filed against these entities. There may be additional recoveries from other firms that sold residential mortgage-backed securities to corporate credit unions that contributed to their losses.

"I applaud the agency's efforts to pursue recoveries from these firms," CUNA's President and CEO Bill Cheney said this afternoon. "NCUA has appropriately taken a leading role in pursuing these entities and the agency's efforts will help reduce the corporate credit union stabilization costs that credit unions would have otherwise had to pay." "The actions announced by the agency were the result of out-of-court settlements," CUNA"s General Counsel Eric Richard explained. "Settlements of this type always involve judgment calls about the uncertainty of how litigation will turn out versus compromising the full extent of the claim. While the settlement did not result in admission of guilt from the banks, it has resulted in recoveries that will help contain credit union costs," he added.

Both Citigroup and Deutsche Bank Securities agreed to pay the NCUA to avoid litigation regarding potential claims relating to the sale of residential mortgage-backed securities to five failed wholesale credit unions. Neither Citigroup nor Deutsche Bank Securities admitted any fault in the settlements.

Deutsche Bank will pay the agency $145 million, and Citigroup will pay $20.5 million, under the terms of the separate settlements.

NCUA Chairman Debbie Matz said the settlements further the NCUA's goal "to minimize losses and thereby reduce the assessments that all credit unions will have to pay," and added that the agency is fulfilling its statutory responsibility "to secure maximum recoveries for credit unions and ensure that consumers remain protected."

Citigroup and Deutsche Bank Securities are among the first major underwriters to come forward with settlement proposals, and Matz said the agency appreciates their efforts to resolve potential claims and avoid the expense and delay of litigation.

The agency has brought four lawsuits and said earlier this year that it expects to take an additional five to 10 actions.

Three ex-CU employees prohibited by NCUA

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ALEXANDRIA, Va. (11/15/11)--The National Credit Union Administration (NCUA) on Monday blocked former San Antonio FCU employees Melissa Barajas and Donna Gonzalez, and former Southern CU employee Cheryl Watson, from participating in the affairs of any federally insured financial institution.

Barajas and Gonzalez, who worked for the San Antonio-based credit union, were both convicted on embezzlement charges. Barajas will serve 12 months and one day in prison and five years of supervised probation, and will pay $56,423 in restitution. Gonzalez has been sentenced to 15 months in prison and three years of supervised probation, and will pay $56,826.36 in restitution, the NCUA added.

Watson, who served as a bookkeeper with Chattanooga, Tenn.-based Southern CU, consented to an NCUA prohibition order, without admitting or denying fault.

Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. Use the resource link to access all NCUA prohibition orders.

For the full NCUA release, use the resource link.

CUNA testimony hearings highlight busy week in D.C.

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WASHINGTON (11/15/11)--Business on Capitol Hill will pick up this week ahead of the upcoming Thanksgiving constituent work week, with hearings and a number of votes scheduled.

One of the biggest events this week for credit unions will come on Wednesday as Credit Union National Association (CUNA) President/CEO Bill Cheney joins academics and financial services industry insiders to testify on community bank regulatory relief measure H.R. 1697, the Communities First Act.That hearing will take place before the House financial institutions subcommittee.

Other hearings held this week include a Tuesday Senate Banking Committee oversight hearing on the Federal Housing Finance Agency (FHFA). FHFA Acting Director Edward DeMarco is expected to testify during that hearing. The Senate Banking Committee financial institutions subcommittee will also hold a hearing today, as Consumer Financial Protection Bureau Office of Financial Protection for Older Americans Assistant Director Hubert "Skip" Humphrey III testifies on the financial security issues faced by older Americans.

The House Oversight and Government Reform Committee financial services subcommittee will also discuss job creation today, and the House Financial Services Committee today also is scheduled to mark up H.R. 1221, the "Equity in Government Compensation Act of 2011," which would suspend the current compensation packages for the senior executives of Fannie Mae and Freddie Mac and impose a new pay structure on Fannie and Freddie employees.

This week will also feature the following hearings:

  • A Wednesday House Oversight and Government Reform Committee hearing on Fannie Mae and Freddie Mac executive compensation;
  • A Wednesday House Rules Committee mark-up of H.R. 10, the "Regulations From the Executive in Need of Scrutiny (REINS) Act," a bill to require congressional approval of certain agency rulemaking;
  • A Wednesday Joint Economic Committee hearing on the impact of infrastructure investment on job creation;
  • A Thursday Senate Banking Committee nomination hearing, which will include the nomination of Thomas Hoenig to join the Federal Deposit Insurance Corp. board of directors; and
  • A Thursday Joint Economic Committee tax-reform related hearing.



The Joint Select Committee on Deficit Reduction is expected to meet, but will not hold any public meetings this week.

The House and Senate floors will also see action this week.

A minibus spending bill and Medicare-related Senate amendments are set to be considered by the House on Tuesday, and minibus spending legislation is scheduled to be taken up by the Senate this week. H.R. 2112, an appropriations bill for the Departments of Agriculture, Commerce, Justice, Transportation and Housing and Urban Development that would also fund the government until mid-December, could also be approved this week.

NCUA says it meets or exceeds Obama reg review order

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ALEXANDRIA, Va. (11/15/11)--The Credit Union National Association (CUNA) is reviewing the National Credit Union Administration's (NCUA) claim that it "already meets or exceeds the key principles" of an Obama administration executive order that called on federal agencies to review their existing regulations and ensure they are compatible with economic growth, job creation, and competitiveness.

The NCUA in a letter responded to Executive Order 13579, which was released earlier this year.

To meet the terms of this executive order, Chairman Debbie Matz said, the NCUA regularly reviews all of its regulations in a three-year-long process, and modernizes its existing rules and develops new rules to minimize compliance costs.

The agency also holds public meetings, town halls, and webinars, and releases videos and other communications to inform the public of regulatory initiatives, and integrates publicly available financial data to support regulation and rule changes, the NCUA said. The agency's release also noted that it frequently coordinates its rulemaking with other federal financial regulators and state credit union supervisors.

Matz added that the NCUA "strongly supports a balanced regulatory approach," and "will continue to protect the safety and soundness of credit unions as new risks emerge" while also providing relief from regulatory burdens.

While CUNA supports and encourages such regulatory relief, CUNA wants to ensure that all efforts that can be done to minimize credit unions' regulatory burdens are undertaken by NCUA and other regulators, including the Consumer Financial Protection Bureau.

CUNA's Examination and Supervision Subcommittee discussed regulatory burdens, the agency's budget, examination concerns, and the agency's credit union service organization (CUSO)- and interest rate risk-related proposals in meetings with Matz and other NCUA officials last week.

Subcommittee chair and Ohio Credit Union League CEO Paul Mercer, CUNA Federal Credit Union Subcommittee Chairman Marshall Boutwell, and other subcommittee members urged the agency to make every effort to help relieve credit unions' regulatory burdens. The subcommittees recommended that the agency tailor its regulations to impact only areas of particular concern, and said the NCUA should allow credit unions that are well-managed and performing well to not be encumbered by new rules that seek to eliminate their risks.

CUNAs Hampel tells IFoxI Bank Transfer Season has begun

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WASHINGTON (11/15/11)--The 700,000 in new members and $4.5 billion in new deposits that credit unions brought in the past month are "phenomenal," and this success, and the continued attention paid to credit unions, could signal a "Bank Transfer Season" that will last beyond Nov. 5's Bank Transfer Day, Credit Union National Association (CUNA) Chief Economist Bill Hampel said in a recent FoxNews.com online interview.



Credit unions brought in 40,000 in new members, and added $80 million in new savings account funds and $90 million in new loans, on Bank Transfer Day. Overall, a CUNA survey of 1,100 credit unions found that around 80% of larger credit unions said they signed up new members on Bank Transfer Day.

Larger states with more credit unions have picked up the most new members, with membership totals seeing larger increases in larger, urban areas, Hampel said.

Hampel during the interview also highlighted the main difference between credit unions and banks: the non-profit structure that requires credit unions to think of their members first rather than be beholden to shareholders. Credit unions tend to offer better deals and lower fees than banks, and fewer hidden fees, Hampel added. Hampel did the Fox interview late last week.

Meanwhile, in interviews that aired over the weekend on Bloomberg radio and CBS radio, including Washington-based WTOP, CUNA President/CEO Bill Cheney also noted that "momentum is in credit unions' favor." The "special efforts" that many credit unions have taken to tap into the surge in interest was also covered in a recent Huffington Post item, with Cheney noting that many credit unions have made individual and collaborative efforts to welcome new members and advertise their credit unions.

Inside Washington (11/14/2011)

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  • WASHINGTON (11/15/11)--The Federal Reserve will soon issue a package of proposed rules implementing the Dodd-Frank Act, Federal Vice Chairman Janet Yellen said Friday. The central bank will release for comment its proposed rule on enhanced prudential standards that would apply to large bank holding companies and systemically important nonbank financial firms, Yellen said at a conference hosted by the Federal Reserve Bank of Chicago (American Banker Nov. 14). The rules, considered by many to be the core of Dodd-Frank, affect some of the biggest issues in financial services, such as risk-based capital requirements, leverage, resolution planning and concentration limits. The Fed issued its proposed rule for designating nonbank financial firms in October …
  • WASHINGTON (11/15/11)--The Supreme Court's decision to consider a housing case could help banks that have been negatively impacted by fair lending laws. The case is not directly related to lending, but it does focus on legal theory used to prosecute and pursue banks for discrimination (American Banker Nov. 14). Magner v. Gallagher centers on a conflict between landlords and the city of St. Paul, Minn. In the majority of previous cases, courts have found lenders liable if their practices have a "disparate impact" on minorities, even though the lender's policies are not intentionally discriminatory. Banks, which have faced scrutiny for their lending from the Justice Department since the nation's financial crisis, could find relief if the Supreme Court eliminates or restricts the legal standard …

NEW Citigroup Deutsche Bank settle with NCUA on Corp CU losses

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ALEXANDRIA, Va. (UPDATED: 2:45 P.M. ET, 11/15/11)—The National Credit Union Administration (NCUA) will bring in $165.5 million in funds to help cover corporate credit union stabilization costs after Citigroup and Deutsche Bank Securities elected to settle with the agency, the NCUA announced today.

Both Citigroup and Deutsche Bank Securities agreed to pay the NCUA to avoid potential litigation regarding potential claims relating to the sale of residential mortgage-backed securities to five failed wholesale credit unions. Neither Citigroup nor Deutsche Bank Securities admitted any fault in the settlements.

Deutsche Bank will pay the agency $145 million, and Citigroup will pay $20.5 million, under the terms of the separate settlements.

NCUA Chairman Debbie Matz said the settlements further the NCUA's goal "to minimize losses and thereby reduce the assessments that all credit unions will have to pay," and added that the agency is fulfilling its statutory responsibility "to secure maximum recoveries for credit unions and ensure that consumers remain protected."

Citigroup and Deutsche Bank Securities are among the first major underwriters to come forward with settlement proposals, and Matz said the agency appreciates their efforts to resolve potential claims and avoid the expense and delay of litigation.

The NCUA is also attempting to reclaim billions in securities-related corporate credit union losses from other Wall Street firms, and has requested nearly $2 billion in combined damages from Goldman Sachs, RBS Securities and J.P. Morgan. The agency has brought four lawsuits and said earlier this year that it expects to take an additional five to 10 actions. Credit Union National Association (CUNA) General Counsel Eric Richard said that these Wall Street firms have the potential to provide significant reimbursement of the credit union system's losses, but reclaiming these losses may be a long, difficult process for the NCUA.

CUNAs Cheney to testify in House bank bill hearing

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WASHINGTON (11/14/11)--In an unprecedented development, a credit union representative will be testifying on a community bank regulatory relief measure when Credit Union National Association (CUNA) President/CEO Bill Cheney appears before a Nov. 16 House financial institutions subcommittee hearing on the Communities First Act (H.R. 1697). The hearing is set to begin at 2 p.m. H.R. 1697, which was introduced by Rep. Blaine Luetkemeyer (R-Mo.) this spring, would loosen some community-bank related regulations. CUNA Senior Vice President of Legislative Affairs Ryan Donovan noted CUNA in recent years has frequently been asked to comment on many issues that impact the larger financial services market, including the Dodd-Frank Act, mortgage market reforms, and internet gambling legislation. National Association of Federal Credit Unions CEO Fred Becker, academics and financial services industry insiders are also expected to testify.

Senate bill would let states set credit rates

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WASHINGTON (11/14/11)--The Empowering States' Rights to Protect Consumers Act, introduced by Sen. Sheldon Whitehouse (D-R.I.) late last week, would allow states to set their own limits on credit card and other consumer loan interest rates.

The bill intends to return a right states had before a key 1978 Supreme Court decision found that national banks were only subject to the lending laws of their home-base state. Whitehouse's legislation is cosponsored by Sens. Carl Levin (D-Mich.), Dick Durbin (D-Ill.), Jack Reed (D-R.I.), Bernie Sanders (D-Vt.), Mark Begich (D-Alaska), Jeff Merkley (D-Ore.) and Al Franken (D-Minn.)

Whitehouse introduced similar legislation in 2009, and the bill was considered in 2010 as a possible amendment to the Dodd-Frank Act but was ultimately defeated.

Credit Union National Association (CUNA) Executive Vice President for Government Affairs John Magill said the chances of Whitehouse's legislation moving forward are slim.

Corker adds new GSE bill to Fannie Freddie discussion

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WASHINGTON (11/14/11)--Sen. Bob Corker (R-Tenn.) became the latest member of Congress to take on the future of the U.S. mortgage market when he introduced the Residential Mortgage Market Privatization and Standardization Act late last week.

Corker in a release said the legislation would responsibly unwind government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and end dependence on the government for housing finance.

The bill would accomplish this by reducing the percentage of newly issued mortgage-backed securities' (MBS) principal that is guaranteed by the GSEs each year, with the goal of completely removing Fannie and Freddie from this practice within 10 years. It would also create an industry-financed, and publicly available, performance and origination database and would force the GSEs transfer technology and home price indices to be sold to private investors.

The bill would also impose 5% minimum down payment and full documentation requirements on new mortgages.

Corker said he introduced the bill "to lay down a marker and get a conversation going that Washington has put off for far too long," and called his legislation "sensible steps that can earn back private capital and ultimately get America's housing market back to fundamentals and away from undue government involvement."

Rep. Scott Garrett (R-N.J.) last month also introduced mortgage market-targeted legislation, known as the Private Mortgage Market Investment Act. Garrett's bill would require the Federal Housing Finance Agency (FHFA) to develop underwriting standards and securitization agreements and abolish the risk retention standards set forth by the Dodd-Frank Act, and would also provide new disclosures for mortgage investors and securities purchasers.

Garrett's bill was discussed at a Nov. 3 House Financial Services subcommittee on capital markets hearing. FHFA Acting Director Edward DeMarco testified during the hearing, saying while there is agreement that the GSE model of the past "did not work," there will likely "always be some portion of the housing or mortgage market that will be assisted by government programs, either through direct funding or through guarantees."

The Credit Union National Association (CUNA) has said that Garrett's bill, if enacted, could create a secondary mortgage market made up exclusively of the largest banks in the country, and could result in credit unions being excluded from that market.

The Obama administration is still considering a range of options for mortgage market reform, including almost completely privatizing the housing finance system, limiting the government's intervention in the mortgage market to times of financial distress, and using a system of reinsurance to backstop private mortgage guarantors to a targeted range of mortgages. Administration officials have said that each of these proposals would shrink the government's role in the mortgage market.

The Senate is not likely to take up comprehensive housing finance reform legislation before the end of the Congress, CUNA Senior Vice President of Legislative Affairs Ryan Donovan said.

For more on Corker's bill and prior coverage of the letter to the administration, use the resource links.

Inside Washington (11/10/2011)

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  • WASHINGTON (11/14/11)--U.S. Sens. Kay R. Hagan (D-N.C.) and Bob Corker (R-Tenn.) were joined by Senate co-sponsors Chuck Schumer (D-N.Y.) and Mike Crapo (R-Idaho) in introducing legislation Wednesday to support the development of a U.S. covered bond market. The Hagan-Corker "United States Covered Bond Act of 2011" creates a legislative framework that expands funding options for U.S. financial institutions. Covered bonds provide U.S. financial institutions a new tool for obtaining long-term financing from private capital markets. Financial institutions in 30 countries--including Germany, the United Kingdom and Canada--issue covered bonds. This year, foreign banks have issued $32 billion of covered bonds to U.S. dollar investors. The funding that covered bonds provide would allow U.S. financial institutions to provide stable long-term credit to consumers, small businesses, and governments. In June, similar legislation introduced by U.S. Reps. Scott Garrett (R-N.J.) and Carolyn Maloney (D-N.Y.) passed through the House Financial Services Committee with bipartisan support …
  • WASHINGTON (11/14/11)--Three years after the government put Fannie Mae and Freddie Mac into conservatorship, the two government-sponsored enterprises (GSEs) are still reporting billions of dollars of losses every quarter, and receiving aid from Treasury Department. Fannie Mae and Freddie Mac took a combined $14 billion in bailout funds during the third quarter (American Banker Nov. 10). Fannie and Freddie still hold numerous real estate-owned properties valued at par. The properties are expected to force the GSEs to report losses well into the future. Fannie on Tuesday reported a third-quarter loss of $5.1 billion, compared with a loss of $1.3 billion for the third quarter in 2010. This year's loss was created by credit expenses on losses from legacy loans originated before 2009, and losses on risk management derivatives from a decline in swap interest rates, the agency said …

NEW CUNAs Cheney to testify in House bank bill hearing

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WASHINGTON (UPDATED: 5:30 p.m. ET, 11/10/11)-- In an unprecedented twist, a credit union representative will be testifying on a community bank regulatory relief measure when Credit Union National Association (CUNA) President/CEO Bill Cheney appears before a Nov. 16 House financial institutions subcommittee hearing on the Communities First Act (H.R. 1697).

The hearing is set to begin at 2 p.m.

H.R. 1697, which was introduced by Rep. Blaine Luetkemeyer (R-Mo.) this spring, would loosen some community-bank related regulations.

CUNA Senior Vice President of Legislative Affairs Ryan Donovan noted CUNA in recent years has frequently been asked to comment on many issues that impact the larger financial services market, including the Dodd-Frank Act, mortgage market reforms, and internet gambling legislation.

Academics and financial services industry insiders are also expected to testify.

Budget items lead Nov. 17 NCUA meeting

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ALEXANDRIA, Va. (11/14/11)--Remittances, technical corrections to golden parachute and indemnification payment rules, and the 2012 budget, overhead transfer rate, and operating fee scale are among the items on the National Credit Union Administration's (NCUA) packed Nov. 17 agenda.

NCUA Chairman Debbie Matz last week hinted that the 2012 budget would see an increase "in the single digits." The NCUA originally set its 2011 budget at $225 million, but reduced that amount by $2 million earlier this year. Matz during a Town Hall webinar held last week stressed that the agency has "spent a great deal of time scrubbing the [2012] budget to eliminate inefficiencies and redundancies," and argued that recent budgetary increases, which have totaled $48 million in 2010 and 2011, have ultimately avoided $1.5 billion in potential National Credit Union Share Insurance Fund (NCUSIF) losses.

The 2012 premium and assessment ranges for the NCUSIF and the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) will also be set at the meeting. NCUA staff last week said there would be no NCUSIF premium in 2011, the premium range in 2012 would be between zero and seven basis points (bp), and the 2012 TCCUSF assessment would be between eight and 11 bp.

A report on the status of those funds, and the NCUA's 2012 overhead transfer rate and operating fee scales, will also be covered during the meeting. The agency last year approved an overhead transfer rate of 58.9%, and voted to increase the asset level dividing points for the natural person federal credit union operating fee scale by 3.4% and to decrease the natural person federal credit union operating fee rates by 2.86%.

The NCUA will also respond to Indianapolis, Indiana-based Finance Center FCU's request to expand its community charter during the meeting. However, the agency last Thursday said it had removed planned discussion of a proposed rule on loan participations from the open agenda.

The closed board meeting, which typically immediately follows the open board meeting, has been rescheduled to Nov. 16.

For more on the NCUA board meeting, use the resource link.

CU-backed Bonamici wins in Oregon primary

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WASHINGTON (7/14/11)—Suzanne Bonamici (D), a Beaverton, Ore.-based state senator and frequent credit union supporter, will face Republican candidate Rob Cornilles in a Jan. 31 special election to claim the U.S. House seat of former Rep. David Wu (D).

Wu resigned earlier this year.

The Credit Union Legislative Action Council (CULAC) and the Northwest Credit Union Association (NWCUA) both backed Bonamici during her primary campaign, which ended when she defeated her main opponent Brad Akavian. Bonamici held 65% of the total vote, with Akavian finishing with 22%, according to State-published, but unofficial poll results released on Wednesday. Cornilles, who sits on a regional Umpqua Bank board, won nearly 73% of total Republican primary votes on Tuesday.

Credit Union National Association (CUNA) Vice President of Political Affairs Trey Hawkins said CUNA and CULAC "are pleased to see that Suzanne Bonamici won her nomination, and look forward to supporting her in the general election. She has been a stalwart for credit unions in the Oregon legislature."

Bonamici is expected to win the fight for Oregon's first congressional district seat. The first district extends from the greater Portland area into Yamhill, Washington, and Columbia counties, as well as the coastal county of Clatsop. It is a largely Democratic district.

NWCUA President Troy Stang said "Oregon credit unions are proud to have been a part of the team that helped Bonamici win the primary election. We know she will be a champion for credit unions in Congress and look forward to supporting her efforts over the next couple of months to become the next Congressperson from the first district."

Hawkins added that CULAC will continue to aggressively support credit union friends in next fall's election. The presidency, congressional seats, and state and local positions are all at stake in 2012.

FannieFreddie SEC on Financial Services hearing agenda

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WASHINGTON (11/10/11)--The House Financial Services Committee is planning to start next week with a discussion of legislation that would suspend pay packages for Fannie Mae and Freddie Mac executives, and will move on to Securities and Exchange Commission-related legislation.

The Fannie/Freddie related legislation, H.R. 1221, will be marked up at 10 a.m. ET on Tuesday. Aside from curbing Fannie and Freddie executive pay, that bill would also subject executives and employees of those government-sponsored enterprises to the federal pay scale.

Committee Chairman Rep. Spencer Bachus (R-Ala.) noted in a release that taxpayers have paid $170 billion to bail out the GSEs, and 10 of their top executives were recently awarded $12.79 million in bonus pay. "The fact that the top executives of these failed companies are receiving multimillion-dollar pay packages, plus millions more in bonuses, is an added insult to the taxpayers who are forced to foot the bill," Bachus said.

The Tuesday GSE-related markup will be followed by another markup session on legislation that would require the Securities and Exchange Commission to conduct cost-benefit analyses of any new proposed rules. This hearing is set to take place in the House Capital Markets and Government Sponsored Enterprises Subcommittee.

Wednesday will see a 2 p.m. House financial institutions subcommittee hearing on the Communities First Act (H.R. 1697), a bill that would loosen some community-bank related regulations. A separate subcommittee hearing on insurance industry regulation is scheduled for earlier in the day.

Finally, the financial institutions and consumer credit subcommittee will mark up the Consumer Rental Purchase Agreement Act (H.R. 1588) and the Common Sense Economic Recovery Act (H.R. 1723) at 10 a.m. ET on Thursday, Nov. 17.

Witness lists for these hearings had not been released as of Wednesday.

Matz hints NCUA 2012 budget may increase--slightly

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ALEXANDRIA, Va. (11/10/11)—The National Credit Union Administration's (NCUA) 2012 budget, which is scheduled to be unveiled at next week's November open board meeting, will likely include an increase "in the single digits," NCUA Chairman Debbie Matz said in a Wednesday webinar.

She added that she could not speculate on whether future budgets would increase or decrease, as the agency determines budgets on a year-by-year basis.

Matz stressed that the agency has "spent a great deal of time scrubbing the [2012] budget to eliminate inefficiencies and redundancies." She argued that recent budgetary increases, which have totaled $48 million in 2010 and 2011, have ultimately avoided $1.5 billion in potential National Credit Union Share Insurance Fund (NCUSIF) losses.

These increases have also allowed the agency to return to 12-month examination cycles matz said, and added there are no plans to allow healthy credit unions to fall under an 18-month examination cycle. The condition of credit unions can change dramatically over a six-month period, Matz said, adding that some of the troubles seen by now-defunct credit unions may not have been as severe if the NCUA had been on a 12-month examination cycle.

NCUA staff confirmed that there will be no National Credit Union Share Insurance Fund (NCUSIF) assessment in 2011, and said that the agency's goal was for there to be no NCUSIF assessment in 2012 either. Agency staff did, however, say a possible 2012 NCUSIF assessment could be in the range of zero to seven basis points (bp).

Matz added that the worst of the corporate credit union situation "is behind us," and said the agency plans to keep Temporary Corporate Credit Union Stabilization Fund (TCCUSF) assessments in the single digits for the rest of the time they are due.

The 2012 TCCUSF assessment would likely be between eight and 11 bp, but NCUA staff said they would need to reconsider this assessment next year before releasing the final amount to credit unions.

The remaining assessments are expected to total between $1.8 billion and $6.1 billion, the NCUA added. This estimate does include some funds that have been received through recent settlements, but does not include any funds that could be received through legal actions that have been taken against several Wall Street firms that sold mortgage-based securities to the corporates. The agency has requested nearly $2 billion in combined damages from Goldman Sachs, RBS Securities and J.P. Morgan, and said earlier this year that it expects to take an additional five to 10 actions.

Any recoveries from these legal actions would be used to reduce TCCUSF assessments, the NCUA said.

Matz added that the 2012 TCCUSF assessment would be determined at the July open board meeting, and would be mailed out to credit unions in August or September of next year.

Inside Washington (11/09/2011)

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  • WASHINGTON (11/10/11)--Within about the next 10 days Congress must decide if it will increase the maximum size of mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration. The outcome of its decision is likely to play a key role in the future of the housing finance system (American Banker Nov. 9). Lawrence Yun, chief economist at the National Association of Realtors, one of the groups lobbying for the higher limits, declined to predict whether Congress would raise loan limits. Yun said the limit increase was "dead on arrival" in the Senate earlier this year, but it passed easily. President Barack Obama and House Republicans agreed in September that the conforming loan limit be lowered to $625,000 from a temporary maximum of $729,750. Realtors and other housing groups argue that the lower limit would hurt the housing market …
  • WASHINGTON (11/10/11)--With Veterans Day approaching Friday, the Small Business Administration is highlighting programs intended to help veterans start, grow and expand small businesses. Among them is the Entrepreneurship Boot Camp for Veterans with Disabilities (EBV). This year, EBV is expanding to an eighth school, Cornell University. EBV provides training for veterans to start and grow a small business with programs targeted to service-disabled veterans who served in Iraq and Afghanistan and their family caregivers, women veterans, and National Guard and Reserve members and their families. SBA also is providing $2.6 million through a cooperative agreement over three years for two new programs supporting veteran entrepreneurs. The first, Women Veterans Igniting the Spirit of Entrepreneurship (V-WISE), focuses on training, networking and mentorship for women veterans. The three-day, off-site training program, online training and network support structures are delivered in several locations nationwide, serving up to 1,400 female veterans during a 36-month period. The second, Operation Endure and Grow, targets National Guard and Reserve Component members, their families and partners. Its goal is to mitigate the small business economic hardship of deployed members and their families. The eight-week online course focuses on the fundamentals of launching and/or growing a small business for those who will sustain the business if the service member is deployed, injured or killed. For more information, visit www.sba.gov/vets and www.sba.gov/reservists

NCUA to investigate release of DC FCU report

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ALEXANDRIA, Va. (11/9/11)--The National Credit Union Administration (NCUA) Tuesday said it would investigate the apparent leak of D.C. Government Employees FCU's credit union examination results. D.C. Government Employees FCU is currently led by Carla León-Decker. León-Decker was nominated by President Barack Obama in mid-October to become a member of the NCUA board.

The NCUA in a release said credit union examination results are confidential information and not for public release under the law.

"This trust has been violated in the case of DC Federal Credit Union," the agency added.

NCUA Chairman Debbie Matz said she is "personally confident" that the credit union's results did not leak from NCUA, but she has asked the NCUA's Office of the Inspector General "to fully investigate this issue, to determine which among the parties with access to the confidential examination information, whether NCUA or the credit union's board or management, took this illegal action."

"Once we have all the facts, we will determine what action is appropriate," Matz added.

The NCUA announcement came after a press report earlier in the day cited examination information that identified such things as DC FCU's CAMEL rating.

CFPB begins mortgage closing form revisions

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WASHINGTON (11/9/11)--The Consumer Financial Protection Bureau is continuing its process of combining the federal Truth in Lending disclosures and the required Real Estate Settlement Procedures Act (RESPA) HUD-1 Settlement statement into a single "closing" document, entering the second phase of its Know Before You Owe project relating to mortgage loans.

The model mortgage closing forms are meant to show whether the final loan terms and costs match the terms and costs quoted in the estimate provided after application, and would help determine whether the interest rate or monthly payments could change after closing, according to the CFPB.

"The goal with the new form is to provide information in a clear and simple way that consumers will find easier to use and understand and that industry will find less burdensome," the agency added.

The CFPB has released two separate forms and will ask consumers and finance industry insiders to comment on them and pick a preferred loan form layout.

The forms present the principal, interest rate, and total monthly payment amounts on the front page, and address various closing costs, taxes, fee changes, and other information on subsequent pages. Both of the proposed forms are around five pages in length, , and are "aimed at simplifying the federal disclosures consumers have to tackle at the closing table. Our goal is to help make the costs and risks clear at all stages of the mortgage process – from shopping for a mortgage to signing on the dotted line," de facto CFPB leader Raj Date said in a statement.

The CFPB said it will begin testing the mortgage closing documents this week in Des Moines, Iowa. Three more versions of the new mortgage closing forms will be revised, and then released to the public, between now and February, the CFPB said.

The combined closing form is meant to accompany the CFPB's combined Truth in Lending Act/Real Estate Settlement Procedures Act (RESPA) document. The CFPB's Know Before You Owe project, which began in May, asked for comment on several drafts of a sample combined TILA/RESPA mortgage form. The CFPB is also planning to develop new mortgage regulations once the mortgage disclosure form revision project is completed.

The CFPB said the mortgage reform efforts seek to reduce the paperwork burden faced during the mortgage process by 50%.

CUNA staff met with the CFPB this week to discuss the mortgage disclosure revision project, and CUNA continues to be actively involved in roundtable discussions and other forums with CFPB personnel and others as the drafting and testing phases of the revision process moves forward. For the CFPB release, use the resource link.

CUNAs Cheney Transfer Day Founder Christian interviewed on iFox Businessi

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WASHINGTON (11/9/11)--Consumers and media members nationwide have continued to focus on credit unions' role before, during and after last Saturday's Bank Transfer Day, and Credit Union National Association (CUNA) President/CEO Bill Cheney appeared alongside Bank Transfer Day organizer Kristen Christian to discuss the movement toward credit unions, and the value they provide to their members, in a Fox Business Channel interview earlier this week.



A CUNA survey released on Tuesday found that credit unions brought in 40,000 in new members on Bank Transfer Day, capping a month that resulted in nearly 700,000 new credit union members joining the movement. Credit unions brought in $80 million in new savings account funds and made $90 million in new loans on Saturday. (See related story: CUs add 40k new members, $80 million in savings on BTD)

"There is clearly traction here, and movement, toward credit unions," Cheney said during the interview.

Describing Bank Transfer Day as a "consumer awakening," Christian said the main motivation behind Bank Transfer Day, in her eyes, was citizens that "are tired of seeing their money used to be distributed to amongst a select group of stockholders, when those profits could easily be used to reinvest in our own communities and stimulate economic growth on the local level."

Cheney said credit unions would "build momentum" following Bank Transfer Day, and added, overall, that he sees a movement toward the nonprofit sector and cooperative businesses.

Cheney also represented the credit union view on SiriusXM Radio's Stand Up with Pete Dominick on Monday and appeared in CNN and ABC News pieces over the weekend. (See related Nov. 8 story: CUNA responds to national quest for more BTD info)

Bank Transfer Day was also covered in hundreds of national and local media outlets, from print media, to television, radio and blogs. Those outlets included MSNBC, NPR Morning Edition, Marketplace radio, The Wall Street Journal, the Los Angeles Times, The Washington Post, the New York Times, USA Today, Fox Business Network, Time, CNN.com and many others.

For more of the recent credit union/Bank Transfer Day media coverage, use the resource link.

CUNA survey 40k members 80M in savings on BTD

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WASHINGTON (11/9/11)--Credit unions brought in 40,000 in new members, and added $80 million in new savings account funds, on last Saturday's Bank Transfer Day, capping a month that resulted in nearly 700,000 new credit union members joining the movement.

A Credit Union National Association (CUNA) survey of 1,100 credit unions found that around 80% of larger credit unions said they signed up new members on Bank Transfer Day, and many credit unions opened on Saturday, or extended their usual Saturday hours, to deal with the rush of new members. Credit unions surveyed said they made $90 million in new loans on Saturday.

CUNA President/CEO Bill Cheney said the survey response indicates momentum that credit unions realized in the weeks leading up to Bank Transfer Day continued right into Nov. 5 itself, with a specific spike in membership on that day.

The build up to Bank Transfer Day saw around 650,000 people join credit unions in the last month, adding $4.5 billion in new savings into credit union coffers. The 650,000 total tops the membership total recorded in all of 2010.  "Since Sept. 29 – the day Bank of America announced its now-rescinded monthly $5 debit card fee – average estimated membership increases nationally were around 20,000 new members each day, " Cheney said. "On Saturday, consumers doubled the pace. It's clear that consumers kept up their interest in credit unions."

"Consumers should be given more credit for being smart about what to do with their money," Cheney said. "Many obviously did not wait for a specific day, but took the time to make the change to a credit union in a deliberate manner. Consumers made a smarter choice."

Cheney said the additional lending credit unions realized on Saturday was an especially encouraging sign, for credit unions and consumers. "This nation needs more economic activity to get back on its feet; credit unions are ready and willing to help gets things moving. Perhaps credit unions and their new members got things started on Nov. 5."

Inside Washington (11/08/2011)

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  • WASHINGTON (11/9/11)—Credit unions and other interested parties have until Dec. 1 to comment on new regulatory guidance on flood insurance. The National Credit Union Administration (NCUA) and federal bank regulators have made updates to the interagency questions and answers (Q&As) regarding flood insurance first issued in 2009. Specifically, the agencies have requested comment on two proposed Q&As: When should a lender send a force-placement notice (Q&A 60); and, when may a lender or servicer charge a borrower for the cost of insurance during a 45-day notice period (Q&A 62). The agencies also request comment on the requirement for forced-placement of flood insurance (Q&A 57). The new guidance also finalizes two Q&As from the 2009 guidance that address the insurable value of a building (Q&A 9) and when the lender must have flood insurance if the borrower has not obtained insurance within the 45-day notice period (Q&A 61), and withdraws a Q&A regarding exceptions to insurable value (Q&A 10). CUNA seeks comment by Nov. 25. …
  • WASHINGTON (11/9/11)—The comment deadline is set for Jan. 9, 2012 for the Financial Crimes Enforcement Network's (FinCEN's) proposed rules defining certain housing government-sponsored enterprises as financial institutions for the purpose of requiring them to establish anti-money laundering programs and to report suspicious activities pursuant to the Bank Secrecy Act. The proposal to require these organizations to establish anti-money laundering programs and report suspicious activities is intended to help prevent fraud and other financial crimes. In its Federal Register document FinCEN stated that criminal activity can arise at different times in the product cycle of residential mortgage related transactions, affecting a range of persons in the primary and secondary markets. "In the traditional money laundering sense, criminals may attempt to invest the proceeds of illegal activity in a range of assets, including real estate, such as through direct purchase or in  paying down loans. The purpose of fraud, regardless of whether in conjunction with a mortgage or other real estate related transaction, is overwhelmingly for criminal profit, and the proceeds of such fraud often are laundered through one or more transactions involving financial intermediaries. The victim of mortgage fraud might be an individual losing equity in a home, or a defrauded lender or investor. Fraud may have an impact on the securitization of mortgages, potentially affecting the availability of mortgages and the cost to borrowers," the document notes. Comment may be submitted electronically at  http://www.regulations.gov or submitted by mail to FinCEN, P.O. Box 39, Vienna, VA 22183. Include 1506-AB14 in the submission and refer to Docket Number FINCEN-2011-0004. …

CFPB may give some financial offenders early warning

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WASHINGTON (11/8/11)--The Consumer Financial Protection Bureau (CFPB) on Monday said it plans to give individuals and institutions that will be subject to potential agency action an "early warning" before legal or regulatory proceedings are taken.

The suspected offenders would be allowed to provide "any relevant legal or policy arguments and facts," in writing, within 14 days of the notice, the CFPB said.

The early warning notice process allows the subject of an investigation to respond to any potential legal violations that CFPB enforcement staff believe have been committed before the CFPB ultimately decides whether to begin legal action, the agency said in a release. Specifically, the CFPB said its Office of Enforcement would first explain to individuals or firms "that evidence gathered in a CFPB investigation indicates they have violated consumer financial protection laws."

De facto CFPB leader Raj Date said the early warning notice process "strikes a balance between the goal of fairness to those being investigated and [the CFPB's] mission to protect consumers."  The process is modeled on procedures that have been implemented at other federal agencies, the CFPB added.

The CFPB stressed that these early warning notices are discretionary in nature, are not required by law, and may not be given in all situations, adding that they may not be used in cases of ongoing fraud or in instances where the CFPB needs to act quickly.

For the full CFPB release, use the resource link.

Slow week for CUs in Washington

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WASHINGTON (11/8/11)--Members of the U.S. House have left Washington for Veteran's Day recess, and with only the Senate in town, the legislative calendar is expected to be light this week.

The most relevant action for credit unions will likely be a Thursday Senate Banking Committee hearing entitled "Opportunities and Challenges for Economic Development in Indian Country." Business, finance and community representatives will testify alongside Federal Reserve Bank of Minneapolis Community Development Advisor Sue Woodrow during that hearing, which is scheduled to begin at 10:00 a.m. ET.

H.R. 674, a bill that would amend the Internal Revenue Code of 1986 to repeal the imposition of 3% withholding on certain payments made to vendors by government entities, and would modify adjusted gross income calculations that are used to determine eligibility for some healthcare-related programs, is also expected to come up in the Senate. This legislation has passed the House. The Senate will also consider adding an amendment to boost tax credits to businesses that hire veterans.

CUNA responds to national quest for more BTD info

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WASHINGTON (11/8/11)--The media blitz showcasing credit unions as a better deal for consumers continued following Saturday's Bank Transfer Day, as Credit Union National Association (CUNA) President/CEO Bill Cheney appeared on CNN and ABC World News Tonight on Sunday.

Overall, Cheney told CNN Sunday Morning host T.J. Holmes, Bank Transfer Day "has been helpful" to credit unions, increasing the public profile of institutions that are far more focused on helping their members than spending the advertising dollars seen at firms like Bank of America.

Click for videoCUNA President/CEO Bill Cheney discussed Bank Transfer Day's impact on credit unions on ABC World News Tonight on Sunday. For video of his remarks on ABC, click the photo.
Cheney added that the build up to Bank Transfer Day saw around 650,000 people join credit unions in the last month, which tops the membership total recorded in all of 2010.  Even more joined on Saturday, and while CUNA is working to tally those final numbers, credit unions from across the country reported "lots of activity" on Bank Transfer Day, with some reporting as many as 600 new members. (See related story: Early reports show Bank Transfer Day success)

"There's definitely a movement going on," Cheney said on CNN, which aired his interview throughout the day on Sunday.

CUNA's online credit union locator tool, hosted on aSmarterChoice.org, recorded about 70,000 visitors on Friday--an all time single-day high--and another 62,000 on Saturday.

"Credit unions deserve the attention they're getting, they're a better deal," Cheney told CNN's Holmes.

He also used the Sunday morning CNN interview to dispel many common myths about credit union membership and services. Credit unions have "all the modern conveniences" of banks, offering their members access to a nationwide network of 28,000 ATMs for members of 3,000 participating credit unions, online banking, and other traditional services, he added.

Cheney also represented the credit union view on Bank Transfer Day in an ABC World News piece, which also spotlighted membership growth at Redwood CU, Santa Rosa, California, whose CEO, Brett Martinez, serves on the CUNA board.  With CUNA and state leagues' media outreach teams aggressively working the story, Bank Transfer Day was also covered in hundreds of national and local media outlets, from print media, to television, radio and blogs. Those outlets included MSNBC, NPR Morning Edition, Marketplace radioThe Wall Street Journal, the Los Angeles Times, The Washington Postthe New York TimesUSA TodayFox Business Network, Time, CNN.com and many others.

For more of the recent credit union/Bank Transfer Day media coverage, use the resource link.

Inside Washington (11/07/2011)

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  • WASHINGTON (11/8/11)--Although an international regulatory board named 29 financial firms it regards as systemically important and thereby subject to a capital surcharge, the Financial Stability Board's (FSB) announcement last week failed to provide any detail on key issues.  For instance, the board did not identify the exact size of the surcharge, which will vary across institutions.  In fact, the board said that decision would not be made until later this month (American Banker Nov. 7). Previously regulators have noted that the identified firms would have to hold between 1% to 2.5% in extra capital---the precise amount would be determined based on the bank's size, risk exposure, and interconnectedness. Then on Friday, the Basel Committee on Banking Supervision said there would be four primary levels--or "capital buckets"--into which institutions would be placed: Some firms would be required to hold an additional 1% in capital, and others required to hold 1.5%, 2% or 2.5%. If a particular firm is identified as having increased its potential threat to the world economy, there is a special fifth bucket of 3.5% for them--but regulators noted that no firm yet has been identified as being required to hold that level of extra capital. The FSB said it examined 73 firms prior to naming the 29 listed as systemically important. The board intends to update that list each November and said it would continue to keep an eye on the pool of 73. The surcharge will not be fully phased in until November 2016. …
  • WASHINGTON (11/8/11)--The Federal Reserve Board, in conjunction with other U.S. banking agencies, will be working in the coming months to make changes to the proposed global liquidity coverage ratio under the Basel III accords. Fed Governor Daniel Tarullo said in a recent speech that he anticipates the regulators will want a "recalibration of certain deposit run-off and commitment draw-down rates," as well changes that would better emphasize liquidity characteristics assets in the buffer definition.  Tarullo said regulators are also studying how best to regulate during liquidity "stress events" so to best preserve financial stability. …

Bank Transfer Day momentum sure to continue CUNA says

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WASHINGTON (11/7/11)—The official Bank Transfer Day came and went on Saturday, and by now the dust has settled and tallies have been taken of how many consumers switched from being bank customers to credit union members on the day that was so much ballyhooed in advance.

But regardless of the numbers of new accounts or increased deposits generated by "the Day," the real story for credit unions is the lasting benefits that the event has fostered.

Increased awareness of credit unions and the credit union difference is clearly one of the big benefits.

Just as big banks were experiencing what might seem like insurmountable reputational damage--when announcements of new fees were coupled with consumers' residual resentment of bailouts--credit unions were highlighted in media across the country as an important resource for consumers looking for a better way to do their banking business.

Scores of stories nationwide highlighted that credit unions are not-for-profit and owned by their members, compared to banks that have a responsibility to provide a good return to their shareholders.

More consumers than ever before heard the message that credit unions generally offer higher rates on savings, lower rates on loans, and lower fees than the megabanks.

"This gives credit unions an incredibly strong new foundation from which to launch future branding campaigns," Mark Wolff, Credit Union National Association (CUNA) senior vice president of communications, observed Saturday.

As USA Today put it "credit unions view raising fees as a last resort." Or as The Los Angeles Times noted, "Credit unions…are set up for such hands-on service at a low cost. Owned by members who are linked by jobs or geography, their core focus is on

consumer accounts, although some these days are doing more small-business lending." And these two represent dozens of such articles feature by national media.

Myth-busting is another forward-going benefit delivered by the media attention.

The extensive interviews with consumers helped identify for credit unions where confusion points exist, so going forward from Bank Transfer Day credit unions will know where they have to strengthen their message.

Membership rules were questioned, and CUNA, state leagues, and credit unions got extensive opportunity to note that with a quick visit to sites like CUNA's Smarterchoice.org, almost anyone can find a credit union to join.

When convenience was challenged, CUNA and credit unions explained how credit unions don't compete with each other as banks do and work together to benefit all members.

CO-OP Financial Services and FSCC (Financial Service Centers Cooperative Inc.)  informed media  in separate campaigns that convenience is not an issue for many credit unions. 

CO-OP Financial Services, manager of CO-OP Network, a nationwide network of 28,000 ATMs for members of 3,000 participating credit unions,  for instance launched an information campaign in mid-October that was viewed by more than 500 editors and appeared on numerous sites, including Finance.Yahoo.com, Marketwatch,

Investor and Optimum Online  as of the end of the month. At the same time, FSCC explained the convenience of shared branching networks.

Another example of myth debunking was called just that: AOL's DailyFinance.com, in an article entitled "5 Credit Union Myths Debunked."

Written by The Motley Fool columnist Matt Cropp, it acknowledged the public outcry on fees and the fact that "normally low-profile credit unions have been receiving a great deal of attention as an alternative to the big banks." This piece, and others like it, help to clear up five  misconceptions about credit unions. Instead it reported that:

•        Many credit unions have community charters and are easy to join (readers were referred to aSmarterChoice.org to locate a credit union);

•       Credit unions offer a full range of competitive products and services;

•       Credit unions through ATMs and shared service centers offer nationwide convenience;

•       Savings at credit unions are safe and sound and backed by the government; and

•       Members buy a share and "own" the credit union.

And what about the influx of deposit?

CUNA Chief Economist Bill Hampel said Bank Transfer Day could drive the credit union system over $1 trillion in total assets.

But  Hampel emphasized that the true impact of Bank Transfer Day may not be seen at first.

"The real story," he said, "is not asset growth, but membership growth and the new, mostly young members that credit unions

have now gained."

Attracting younger members has been a topic of concern for years among credit unions, but Bank Transfer Day—which reached well in  excess of 600,000 through its Facebook page alone—was in large part speaking directly to the younger adult crowd.

Around 650,000 new members transferred a total of $4.5 billion in funds into new credit union savings accounts in the month leading  up to Bank Transfer Day. An estimated 80% of credit unions saw their membership increase in October.

Since Sept. 29, California-based credit unions have seen the biggest gains, bringing in an estimated 90,000 new members and $624 million in new deposits. Texas credit unions also saw a large surge in new deposits, gaining $326 million in new deposits from 47,000 new  members. In total, 21 of 50 states and the District of Columbia have seen membership increases of 10,000 or more in the past month.

One of Bank Transfer Day's longest lasting legacies will unfold, Hampel said, as those new members relate their positive credit union experiences to their friends and families, creating even more new members, he added.

For more about Bank Transfer Day, see related article: CUs were prepared for Bank Transfer Day--and the future.

Fed releases Reg D reserve information

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WASHINGTON (10/31/11)—The Federal Reserve Board last week announced the annual indexing of the reserve requirement exemption amount and of the low reserve tranche for 2012.

Starting on Dec. 5, the amount of total reservable liabilities for depository institutions that are subject to a 0% reserve requirement in 2012 will be set at $11.5 million. The Regulation D amendment also set the amount of net transaction accounts at each depository institution that is subject to a 3% reserve requirement in 2012 at $71.0 million.

These amounts are used in the calculation of reserve requirements of depository institutions.

The Fed release also reports the annual indexing of the nonexempt deposit cutoff level and the reduced reporting limit that will be used to determine deposit reporting panels in 2012.

The Credit Union National Association (CUNA) is also currently seeking credit union comment on a separate Reg D proposal that is intended to simplify the administration of reserve requirements. The proposal would create a common two-week maintenance period for all depository institutions, create a penalty-free band around reserve balance requirements in place of carryover and routine penalty waivers, discontinue as-of adjustments related to deposit revisions, replace all other as-of adjustments with direct compensation, and eliminate the contractual clearing balance program. CUNA is accepting comment on this proposal until Nov. 23.

For the full Fed release and the CUNA comment call, use the resource links.

Market issues drop average mortgage rates

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WASHINGTON (10/31/11)--Average rates on 30- and 15-year fixed rate mortgages fell last week amid concerns over the European debt market, Freddie Mac reported.

Thirty-year mortgages averaged 4% during the week ended Nov. 3. The average rate stood at 4.1% during the previous week, and 4.24% this time last year. Fifteen-year mortgages fell to 3.31%, ending a two-week stretch during which they held at 3.38%. Those types of mortgages averaged 3.63% this time last year.

Freddie Mac Chief Economist Frank Nothaft said the U.S. economy continued a gradual recovery, but added that market concerns over the European debt market drew investors to U.S. Treasury securities, lowering bond yields and mortgage rates.

Five-year and one-year Treasury indexed hybrid adjustable-rate mortgages (ARMs) also fell last week, averaging 2.96% and 2.88%, respectively. Five-year ARMs average 3.08% last week, and one-year ARMs averaged 2.9%.

For the full release, use the resource link.

Inside Washington (11/04/2011)

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  • WASHINGTON (11/7/11)--Holly Petraeus, who leads the Consumer Financial Protection Bureau division charged with protecting military servicemembers, testified at a Senate Banking Committee hearing last week that her work is being hampered by the lack of a director at the bureau's top. Because there is no director, the CFPB cannot yet by law supervise payday lenders, private student loan companies and other non-bank lenders to prevent potential abusive practices toward the military and their families. (American Banker Nov. 4) Forty-four Republican senators have publicly vowed to block White House nominee Richard Cordray, or another nominee, to head the CFPB unless the Obama administration replaces the CFPB director spot with a five-member commission and gives federal financial regulators more veto power over the bureau's decision. Also at the hearing, Retired Navy Admiral Steve Abbot, who is president of the Navy-Marine Corps Relief Society, a non-profit charity that serves active-duty and retired members of the military, said the 2007 Military Lending Act has worked to help protect servicemembers from some abusive practices,  but added that new predatory lending practices have arisen which continue to victimize his group's  clients. …
  • WASHINGTON (11/7/11)--Senate Banking Committee Chairman Tim Johnson (D-S.D.) announced plans to investigate executive bonuses at Fannie Mae and Freddie Mac after reports circulated that 10 executives at the two government-sponsored enterprises were expecting to receive more than $12 million in perks.  (American Banker Nov. 4) The Federal Housing Finance Agency is conservator of Freddie and Fannie, and Johnson said he would call on the agency's director to testify.  The senator said his committee, the U.S. Congress and taxpayers need to be confident that controls are in place and that conservator is upholding its responsibilities. Sen. Richard Shelby (R-Ala.), who is the ranking Republican on the panel, suggested officials at the Treasury Department should also testify. …

Durbin asks CFPB for new checking disclosures

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WASHINGTON (11/4/11)--Sens. Richard Durbin (D-Ill.) and Jack Reed (D-R.I.) in a Thursday release asked the Consumer Financial Protection Bureau (CFPB) to require financial institutions to post on their websites a standardized disclosure form that lists the fees and key terms associated with checking accounts.

Durbin in a release said the one-page model disclosure listing the fees and key terms of checking accounts is intended to give consumers "clear, upfront and accurate information about the fees that they will be charged will allow consumers to shop around and make sound financial decisions."

The legislators suggested that the CFPB form could be based on a form developed by The Pew Charitable Trusts' Safe Checking in the Electronic Age Project. That sample form provides spaces for disclosures on account opening fees, monthly account fees, ATM fees, overdraft and check processing policies, and other items.

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said there is no reason for credit unions to be under any new disclosure requirements for share or checking accounts. Credit unions offer products that are member friendly, and already provide adequate disclosures, she added.

CUNA President/CEO Bill Cheney in a Bloomberg Radio interview aired earlier this week encouraged those fed up with bank fees to find a credit union they can join, and look at the options. "You will get a better deal," Cheney said. Bank customers that are interested in moving to a credit union can see which credit unions they are eligible to join on CUNA's aSmarterchoice.org, Cheney added.

The CUNA CEO in a separate Huffington Post piece advised consumers that those who join a credit union can expect to save at least $70 through lower rates, higher returns on savings and lower or no fees over a year--just as current credit union members did in the 12 months between June '10 and June '11.

CUNA CUs must have access to secondary mortgage market

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WASHINGTON (11/4/11)--Rep. Scott Garrett's (R-N.J.) Private Mortgage Market Investment Act, which was the subject of a Thursday hearing, could create a secondary mortgage market made up exclusively of the largest banks in the country, and could result in credit unions being excluded from that market, the Credit Union National Association (CUNA) has warned.

Thursday's hearing took place before the House Financial Services subcommittee on capital markets and government sponsored enterprises. Garrett's bill would require the Federal Housing Finance Agency (FHFA) to develop underwriting standards and securitization agreements and abolish the risk retention standards set forth by the Dodd-Frank Act. The legislation would also provide new disclosures for mortgage investors and securities purchasers.

FHFA Acting Director Edward DeMarco testified during the hearing, saying that "private capital markets can and should reclaim a prominent portion in providing housing finance." Garrett's proposal "broadens the discussion of how we might do that," he said.

DeMarco said "there seems to be relatively broad agreement that the government sponsored enterprise model of the past, where private sector companies were provided certain benefits and charged with achieving certain public policy goals, did not work." However, he added, there will likely "always be some portion of the housing or mortgage market that will be assisted by government programs, either through direct funding or through guarantees."

He added that any mortgage market must be able to preserve credit availability in times of stress and preserve liquidity in the market and the financial system. DeMarco suggested that governmental bodies could serve as backstops to guard against credit availability or liquidity issues. "These are just some of the issues that will have to be thought through as the process moves forward on building out this framework," he added.

The Obama administration is still considering a range of options for mortgage market reform, including almost completely privatizing the housing finance system, limiting the government's intervention in the mortgage market to times of financial distress, and using a system of reinsurance to backstop private mortgage guarantors to a targeted range of mortgages. Administration officials have said that each of these proposals would shrink the government's role in the mortgage market.

CUNA Senior Vice President of Legislative Affairs Ryan Donovan said it is possible that Garrett's bill may be marked up before the end of this year, but its prospects are unclear after that.  While a number of hearings have been held in the Senate Banking Committee, it is not clear that the Senate will take up comprehensive housing finance reform legislation before the end of the Congress.

CDFI Fund to offer 123M in funds in 2012

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WASHINGTON (11/4/11)—The U.S. Treasury Department Thursday announced the availability of $123 million in funds through its Community Development Financial Institutions (CDFI) Fund.

A total of $25 million of the CDFI Fund awards will be distributed under the Obama administrations new Healthy Food Financing Initiative (HFFI), according to the release.

CDFI Fund Director Donna J. Gambrell in a release said that the CDFI program "will greatly support CDFIs serving distressed communities across the country." These institutions "play a critically important role in these communities by promoting economic opportunities and the CDFI Program is a vital tool for expanding the capacity of these CDFIs to increase their lending activities," she added.

Applications for the CDFI funds must be received by Jan. 11.

The fund earlier this year awarded $142,302,667 to 155 institutions, including 25 credit unions, in the largest single round of monetary awards since the CDFI Fund program began in 1994. Overall, the CDFI Fund eclipsed $1 billion in total awards in 2011.

For the CDFI Fund release, use the resource link.

FinCEN proposes SAR AML reporting change GSEs

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VIENNA, Va. (11/4/11)--Government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Banks would be required to develop anti-money laundering (AML) programs and file suspicious activity reports (SARs) with the Financial Crimes Enforcement Network (FinCEN) under a plan proposed Thursday.

The GSEs currently file fraud reports with their regulator, the Federal Housing Finance Agency (FHFA), which then files SARs with FinCEN when the facts in a particular fraud report warrant a SAR under FinCEN's reporting standards

.

The new reporting regime, FinCEN said, would streamline the reporting process, provide law enforcement with quicker access to data about potential fraud, and result in the reporting of a wider range of suspected financial crimes.

"This action is another step to help restore the integrity of the mortgage market," said FinCEN Director James H. Freis, Jr. in a release.  "Providing law enforcement with quicker access to data about potential financial crimes will help them better hold illicit actors accountable for mortgage fraud and other scams."

FinCEN said another important benefit to the GSEs of developing an AML program and filing SARs directly with FinCEN is that the GSEs, including their directors, officers, and employees, will become subject to the Bank Secrecy Act's (BSA) "safe harbor" provisions, which are intended to encourage financial institutions to report suspicious activities without fear of liability from lawsuits by SAR subjects.

The comment period is open for 60 days from the date of publication in the Federal Register.

Inside Washington (11/03/2011)

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  • WASHINGTON (11/4/11)--Members of a House Financial Services Committee subcommittee questioned the governance structure and regulatory efforts of the Consumer Financial Protection Bureau (CFPB) during a hearing on Wednesday (American Banker Nov. 3). Grilling Raj Date, the special advisor to the Treasury secretary on the CFPB, Republicans called for a board or commission to lead the bureau in place of a single director.  Democrats, led by U.S. Rep. Barney Frank (D-Mass) disputed the notion that the bureau is not subject to congressional oversight, pointing out that the hearing was the second held by the Financial Services oversight subcommittee. Some Republicans also expressed concern that the agency place increased an regulatory burden on community banks in their districts, though they had nothing to do with subprime lending and other practices that led to the financial crisis …
  • WASHINGTON (11/4/11)--The Federal Deposit Insurance Corp.'s (FDIC) role in the bank failures is larger than the agency would like to admit, according to observers (American Banker Nov. 3). The FDIC's role in bank closings was brought into the spotlight by the Federal Reserve's historic decision to close the $1.38 billion asset Community Banks of Colorado last month. It was the first time the Federal Reserve ever closed a bank, and the FDIC was closely tied to the decision-making process. Though banks are nearly always shut down by the state regulator or the Office of the Comptroller of the Currency, depending on their charters, the FDIC has a "material influence" on the decision, according to John Bley, formerly Washington state's chief bank regulator and now chair of the financial institutions group Foster Pepper. In the case of Community Banks of Colorado, the state's banking regulator sought to give the bank more time to sell branches to raise cash. However, the Federal Reserve Board, the bank's primary federal regulator, and the FDIC agreed that the deal would only delay the failure and make it more costly in the long run. The Fed overruled the state, closing a bank for the first time ever. When a deal is in the works to raise capital, investors typically first turn to regulators to determine if the arrangement is acceptable, according to Jeffrey Taft, a partner with Mayer Brown LLP.  If the regulators aren't satisfied, the financial institutions do not attempt to go forward, Brown said …
  • WASHINGTON (11/7/11)--The U.S. Department of Housing and Urban Development (HUD) and the U.S. Treasury Department released the October edition of their "Housing Scorecard." The latest housing data reflected the turmoil that continues in housing markets. The scorecard reported mixed signals: new home sales rose compared to August, but were still slightly down from the prior year; and mortgage defaults and foreclosure sales continued a downward trend, but foreclosure completions ticked slightly upward in September after months of decline …

Joes New Story

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New story

iBloomberg HuffPoi Cheney on Bank Transfer Day topics

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WASHINGTON (11/3/11)--The movement toward credit unions, and credit union media presence, continues to grow as Saturday's Bank Transfer Day approaches, as Credit Union National Association (CUNA) President/CEO Bill Cheney highlighted the credit union difference, and the benefits that consumers would receive as credit union members, in a Bloomberg Radio interview and an editorial in the Huffington Post.

Listen to Bill Cheney

Bloomberg radio interview


Cheney on Bloomberg Radio's Taking Stock encouraged potential members to find a credit union to join on Nov. 5, but added that "it's not all about one day."

He reported that credit unions nationwide have seen an influx of new potential members coming through their doors, claiming disgust over bank fees as their main motivation. Cheney encouraged those fed up with their banks to find a credit union they can join, and look at the options. "You will get a better deal," Cheney said. Bank customers that are interested in moving to a credit union can see which credit unions they are eligible to join on CUNA's aSmarterchoice.org, Cheney added.

The CUNA CEO in his Huffington Post piece advised consumers that those who join a credit union can expect to save at least $70 through lower rates, higher returns on savings and lower or no fees over a year--just as current credit union members did in the 12 months between June '10 and June '11.

"And that's just on average; consumers who are loyal members of credit unions--utilizing them extensively--often receive financial benefits that are much greater than the average," Cheney wrote.

Perhaps the best news out of Bank Transfer Day for consumers, however, is the growing awareness regarding the benefits of credit union membership. CUNA executed a survey whose preliminary results indicated tens of thousands of consumers have shifted hundreds of millions of dollar to credit unions since Sept. 29, when Bank of America announced its $5 debit card fee.  (Final survey figures are now being tabulated.)

Although Bank of America and other megabanks have backed off from their plans to charge for debit card transactions, Cheney on Bloomberg Radio warned that "there are all sorts of other fees associated with bank accounts," and added that credit unions provide lower fees and better interest rates for their members. And, while some may consider staying with larger banks due to their broad reach, Cheney said the shared ATM and branch networks that are participated in by many credit unions provide credit union members with many of the same conveniences.

Use the resource links below to read the complete Huffington Post article.

Inside Washington (11/02/2011)

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  • WASHINGTON (11/3/11)--Sen. Richard Durbin (D-Ill.), the architect of debit interchange fee cap regulations that became effective last month, is proposing that the Federal Trade Commission report on the interchange cap's impact on small-issuer interchange fee income and whether merchants are discriminating against small issuers that are still able to charge more for debit card purchases. The original debit interchange fee cap legislation required the Federal Reserve to monitor these markets and release a report. The report is due in late 2012. Consumer Bankers Association President Richard Hunt told American Banker the Fed-to-FTC change may indicate that Durbin does not trust the Fed. Durbin's amendment to his legislation is tucked into a Financial Services General Government appropriations bill that will be added to an upcoming "minibus" spending bill …
  • WASHINGTON (11/3/11)--The Financial Crimes Enforcement Network (FinCEN) has scheduled a Nov. 9 webinar to cover the new regulatory requirements of its Prepaid Access Final Rule, its intent and purpose, and the regulatory expectations. The agency has also issued a Frequently Asked Questions document to address final rule issues …
  • WASHINGTON (11/3/11)--Filing procedures for some Bank Secrecy Act (BSA) forms will change on Dec. 1, the Financial Crimes Enforcement Network reminds. Specifically, FinCEN in a Wednesday release said filers must check the appropriate amendment or correction box and complete the form in its entirety when they correct or amend previously filed paper reports …
  • WASHINGTON (11/3/11)--A federally mandated foreclosure review process will likely cost banks hundreds of millions of dollars, and that tab, which would be paid to borrowers that may have erroneously lost their homes due to foreclosure errors, misrepresentations, or deficiencies, could grow (American Banker Nov. 2). Under recent federal enforcement actions, 14 large mortgage servicers were required to hire independent firms to examine their past mortgage processing activities, and mortgageholders that may have been wrongly foreclosed upon are being notified of their case status through the mail. Mortgage servicers have also created a website, www.independentforeclosurereview.com, a toll-free number, and an upcoming public information campaign. Independent consultants will evaluate whether borrowers suffered financial injury during the foreclosure process and determine appropriate remediation. Where a borrower suffered damages, the consent orders require remediation to be provided. Federal Housing Authority involvement in some loans, and the chance that mortgage servicers have destroyed or lost some loan modification documents, may complicate the investigation process ...
  • WASHINGTON (11/3/11)--The U.S. Small Business Administration (SBA) will join CUNA Strategic Services provider Agility Recovery Solutions to present a Nov. 15 webinar on business continuity plans. The webinar will feature comment from Agility CEO Bob Boyd. The SBA in a release said developing business continuity plans can help reduce liabilities, ensure employee and customer retention, "and may even reduce operational expenses." ...

Former CU employee banned from financial institution work

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ALEXANDRIA, Va. (11/3/11)--The National Credit Union Administration (NCUA) on Wednesday blocked former American Nickeloid Employees CU employee Angela Pena from participating in the affairs of any federally insured financial institution.

Pena is scheduled to serve a 60-day prison sentence and four years of supervised probation following her conviction on charges of financial institution fraud.

Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. Use the resource link to access all NCUA prohibition orders.

For the full NCUA release, use the resource link.

NEW iHuffPosti Cheney says Bank Transfer Day is just a start

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WASHINGTON (11/2/11 UPDATED 11 a.m. ET)—The movement toward credit unions over the last several weeks has been nothing less than phenomenal and the oncoming Bank Transfer Day—November 5—can be just the beginning for consumers who want to take steps toward financial freedom through credit union membership, Credit Union National Association (CUNA) President/CEO Bill Cheney underscores in a new Huffington Post article.

The strong response of consumers to the Bank Transfer Day goals of taking more control of your finances by moving out of big banks and into credit unions, which are financial cooperatives, is, for the credit union movement, "confirmation of our long-standing tenant that credit unions are 'people helping people,'" Cheney noted in the piece.

"But it doesn't have to end this Saturday. As Kristen Christian -- the founder of Bank Transfer Day – said (in her Oct. 27 Facebook posting): 'November 5th is merely a deadline goal."

Cheney advised consumers that those who join a credit union can expect to save at least $70 through lower rates, higher returns on savings and lower or no fees over a year—just as current credit union members did in the 12 months between June '10 and June '11.

"And that's just on average; consumers who are loyal members of credit unions -- utilizing them extensively -- often receive financial benefits that are much greater than the average," Cheney wrote.

Perhaps the best news out of Bank Transfer Day for consumers, however, is the growing awareness regarding the benefits of credit union membership. CUNA executed a quick study that found tens of thousands of consumers have shifted hundreds of millions of dollar to credit unions since Sept. 29, when Bank of America announced its $5 debit card fee. Use the resource link below to read Cheney's complete Huffington Post article.

Meanwhile, although Bank of American and other megabanks have backed off from their plans to charge for debit card transactions, CUNA—and news media—are warning consumers to stay alert to big bank fees.

As Cheney pointed out earlier this week, consumers should be watchful that banks will figure out ways to make up for the revenue it is forgoing by rescinding its debit card fee.

For instance, NBC Nightly News anchored by Brian Williams with BECU, Tukwila, Wash., said consumers should be on the lookout for "stealth fees," such as increased minimum balances to maintain "free" checking, a fee for using a teller, a fee for receiving a paper statement, and other manipulations.

NCUA enhances homepage consumer site

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ALEXANDRIA, Va. (11/2/11)—The National Credit Union Administration (NCUA) on Tuesday unveiled a newly enhanced version of its homepage, ncua.gov, as well as the second phase of its consumer  site MyCreditUnion.gov.

The agency has enhanced portions of the sites that help users find a credit union and added archived current and historical credit union regulations. The agency has also overhauled its individual board member and department pages on ncua.gov, adding content on upcoming public appearances and meetings, new photos, and other informa
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tion.

The search functions and navigation elements of each page have also been improved, the NCUA said. However, portions of the CUOnline site that help users look up call report data have not been changed, the NCUA said.

NCUA Chairman Debbie Matz said the agency "took great care to solicit feedback from current users to improve features, navigability, and ensure robust content. In an on-going effort to provide accurate and timely information to credit unions, NCUA is committed to keeping these sites fresh and updated."

And for users of its consumer website, NCUA promised "a more streamlined experience" with all consumer content moved to that online location.

Inside Washington (11/01/2011)

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  • WASHINGTON (11/2/11)--Fannie Mae's multifamily department is under investigation by the Office of Inspector General (OIG) and the Federal Housing Finance Agency, according to a report in the National Mortgage News confirmed by the government-sponsored enterprise (GSE) on Monday (The New York Times Nov. 1). Also, David Worley, Fannie Mae's chief risk officer in charge of multifamily mortgages, has left the GSE. A Fannie Mae spokeswoman would not confirm whether Worley's departure is related to the investigation. Worley's responsibilities included underwriting standards and related areas. He joined Fannie in 2005 from Senderra Capital and First City Partners …
  • WASHINGTON (11/2/11)--A report by the Government Accountability Office finds fault with the Federal Reserve Bank of New York's handling of the 2008 bailout of American International Group (AIG) (American Banker Nov. 1). In September 2008, the Board of Governors of the Federal Reserve System   approved emergency lending to AIG--the first in a series of actions that led to the Department of Treasury's authorization of $182.3 billion in federal aid to assist the company. New York Fed officials provided inconsistent explanations for their decision to pay other financial companies the full amounts they were owed by AIG, according to the report. In other cases, the government sought concessions on payments to other companies. Some of the companies indicated a willingness to accept smaller payments the report, said …
  • WASHINGTON (11/2/11)--The Office of the Comptroller of the Currency (OCC) on Tuesday began the independent foreclosure review required under the agency's enforcement actions taken in April. Under the enforcement actions by the OCC, the Federal Reserve, and Office of Thrift Supervision, 14 large mortgage servicers were required to correct deficiencies in their servicing and foreclosure processes and to get reviews from independent firms of foreclosure actions that occurred in 2009 and 2010. Independent consultants will evaluate whether borrowers suffered financial injury during the foreclosure process and determine appropriate remediation. Where a borrower suffered damages, the consent orders require remediation to be provided. The 14 mortgage servicers covered by the enforcement actions began mailing letters to eligible borrowers explaining how to request a review of their case if they believe they suffered financial injury as a result of errors, misrepresentations or other deficiencies in foreclosure proceedings related to their primary residence between Jan. 1, 2009 and Dec. 31, 2010. Borrowers also may visit www.IndependentForeclosureReview.com for more information about the review and claim process …

J.P. Morgan seeks NCUA lawsuit dismissal

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WICHITA, Kan. (11/2/11)—J.P. Morgan Securities last week asked the U.S. District Court for the District of Kansas to dismiss the National Credit Union Administration's (NCUA) securities sale-related suit, saying that the agency is "ignoring its own assessment" of what led to the corporates failures and is instead blaming JP Morgan for the corporate credit unions' losses.

The NCUA in its suit claims that J.P. Morgan sold a combined $1.5 billion of questionable residential mortgage-backed securities (RMBSs) to corporate credit unions, making numerous material misrepresentations in the offering documents. These misrepresentations caused the corporate credit unions that bought the notes to believe the risk of loss associated with the investment was minimal, when in fact the risk was substantial, the agency added. The corporates' investment in these RMBSs, and the eventual declines in value, effectively rendered the corporates insolvent, the NCUA said.

The NCUA filed the suit earlier this year as liquidating agent of U.S. Central FCU, Western Corporate FCU, Members United Corporate FCU, and Southwest Corporate FCU.

Calling the corporates "major players in the mortgage industry," J.P. Morgan in its motion to dismiss said the credit unions "were familiar with the risks associated with the mortgage loans backing their RMBS and the lending practices used to originate those loans." The J.P. Morgan response also cited a recent NCUA Office of the Inspector General report that found the corporates "should have recognized the risk exposure that [their] significant concentration in mortgage-backed securities represented earlier than 2007 and 2008" and "should have been more vigilant about investing so heavily in higher risk residential mortgage loans taken out by borrowers with the questionable ability to repay the mortgages".

"Despite warnings from the offering documents, the news media and even the Board itself, the Credit Unions made the informed decision to plunge the majority of their assets into residential mortgage-backed securities at the height of the housing bubble. That investment strategy—which even the [NCUA] has condemned as 'aggressive', 'excessive' and 'unreasonable'—backfired when the housing bubble burst," J.P. Morgan said.

The agency has requested nearly $2 billion in combined damages from Goldman Sachs, RBS Securities and J.P. Morgan. The agency has brought four lawsuits and said earlier this year that it expects to take an additional five to 10 actions. Credit Union National Association (CUNA) General Counsel Eric Richard said that these Wall Street firms have the potential to provide significant reimbursement of the credit union system's losses, but reclaiming these losses may be a long, difficult process for the NCUA.

The NCUA said any recoveries from these legal actions would reduce the total losses resulting from the failure of the five corporate credit unions and would help to reduce the amount of future corporate credit union stabilization fund assessments on credit unions. NCUA Deputy Executive Director Larry Fazio earlier this year said the agency would need to charge between $7 billion and $9 billion in future assessments to pay for the remaining losses from troubled assets at corporates, and added that he could not predict how long the NCUA would need to continue charging Temporary Corporate Credit Union Stabilization Fund assessments.

Amir-Mokri confirmed to financial institutions post at Treasury

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WASHINGTON (11/2/11)--Cyrus Amir-Mokri was confirmed by the U.S Senate this week to serve as the U.S. Treasury Departments assistant secretary for financial institutions, a post that makes him responsible for developing and coordinating the Treasury's policies on legislative and regulatory issues affecting financial institutions.

Credit Union National Association (CUNA) President/CEO Bill Cheney has requested a meeting with Amir-Mokri, who succeeds Michael Barr who left the agency in January of this year. Cheney congratulated Amir-Mokri on his confirmation and pointed out that his position is one of the most important for credit unions in terms of public policy.

President Barack Obama nominated Amir-Mokri in early September. As Assistant Secretary for Financial Institutions, Amir-Mokri will develop and coordinate Treasury's policies on legislative and regulatory issues affecting financial institutions. Treasury Secretary Timothy Geithner on Tuesday said Amir-Mokri will be a valuable asset at Treasury as the department continues to implement Dodd-Frank Act reforms and moves forward with other key initiatives.

CUNA works closely with Treasury officials in this position, pursuing issues such as increasing the credit union member business lending cap and supplemental capital. CUNA General Counsel Eric Richard said Amir-Mokri has impressive credentials, and added that one of CUNA's first objectives will be to provide Amir-Mokri with background on the importance of credit unions. "We hope to meet with him as soon as his schedule permits," said CUNA Deputy General Counsel Mary Dunn.

Amir-Mokri recently served as senior counsel to the Commodity Futures Trading Commission (CFTC) chairman and served as that agency's deputy representative to the Financial Stability Oversight Council.

The Wall St. Journal reported that Amir-Mokri helped write portions of the Dodd-Frank Wall Street Reform Act that focused on derivatives regulations. The Tehran, Iran-born Amir-Mokri has also worked in the United States Court of Appeals for the First Circuit, and received his law degree from the University of Chicago Law School. He also holds a Ph.D. in History from the University of Chicago and an A.B. in Biochemistry from Harvard College, according to an administration release.

CUNA to consumers Stay alert to big bank fees

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WASHINGTON (11/2/11)--Although Bank of America on Tuesday announced that it would cancel plans to charge a $5 per month fee to debit card account holders, Credit Union National Association (CUNA) President/CEO Bill Cheney said the damage to Bank of America has already been done, and warned consumers that the bank would figure out a way to make up for the revenue it is forgoing by rescinding its debit card fee.

More than 7,000 credit unions have reported membership application increases following Bank of America's September monthly debit fee announcement, and CUNA surveys show that eight out of 10 credit unions still offer at least one free checking account with no minimum balance requirement and no maintenance or activity fees.

The public outrage over the practices of Bank of America and other large banks has resulted in an influx of new credit union members and increased news coverage for credit unions nationwide. Cheney said this emphasis on credit unions over the last several weeks "has been phenomenal" and serves "as confirmation of our long-standing tenet that credit unions are 'people helping people,' and the best choice for American consumers.

"If nothing else, this extraordinary period has exposed more people to the value of credit unions – which we hope will translate to longer-term relationships. Indeed, by what we are hearing from our member credit unions across the nation, tens of thousands of consumers have already made the change to credit unions, bringing with them hundreds of millions of dollars of savings," Cheney added.

Consumers nationwide reportedly plan to switch from bank to credit union accounts this Saturday, Nov. 5, but Cheney said this pro-credit union march doesn't have to end this Saturday. "Any day is a good day for a consumer to become a credit union member."