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Inside Washington (12/28/2009)

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* WASHINGTON (12/29/09)--Several top executives from the nation’s biggest banks will testify before the Financial Crisis Inquiry Commission next month about their roles during the economic crisis (American Banker Dec. 28). Scheduled to testify include Jamie Dimon, chairman/CEO of JPMorgan Chase and Co.; John Mack, chairman of Morgan Stanley; and Lloyd Blankfein, chairman/CEO of Goldman Sachs. Brian Moynihan, who will become CEO of Bank of America Jan. 1, has not confirmed his appearance. The commission was formed to determine the causes of the nation’s financial crisis and will hold several hearings throughout 2010 ... * WASHINGTON (12/29/09)--The Federal Housing Finance Agency Thursday announced that it is curbing executive compensation at Fannie Mae and Freddie Mac. Average pay at the enterprises will be 40% less than before Fannie and Freddie entered into conservatorship, the agency said. Beginning Jan. 1, base salary for executive officers will not exceed $500,000 a year, except for five positions including the enterprises’ CEOs and chief financial officers plus the chief operating officer of Freddie Mac. Before the enterprises were placed into conservatorship, 16 employees had salaries above $500,000 ...

2010 HMDA exemption remains the same

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WASHINGTON (12/29/09)--The Federal Reserve Board published its annual notice and final rule of the asset-size exemption threshold for depository institutions under Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The asset-size exemption for depository institutions will remain at $39 million, which was the level set for 2009. The threshold is based on the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW) for the twelve-month period that ended in November. The CPIW for that period decreased by 0.98%, but this change was too small to warrant any reduction in the exemption threshold, the Fed said in a Federal Register document. An institution's exemption from collecting data in 2010 does not affect its responsibility to report the data it was required to collect in 2009, the Credit Union National Association (CUNA) reminds credit unions. HMDA and the Fed's Regulation C require most depository institutions and certain for-profit, nondepository institutions to collect, report and disclose data about applications for, and originations and purchases of, home mortgage loans, home improvement loans and refinancings. Data reported include the type, purpose, and amount of the loan; the race, ethnicity, sex and income of the loan applicant; and the location of the property. The purposes of HMDA include helping to determine whether financial institutions are serving the housing needs of their communities and assisting in fair lending enforcement. Use the link below to access the Fed's notice.

A crisis upside for CUs Mica explains

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WASHINGTON (12/29/09)—As the financial crisis and pursuant economic turmoil have sparked consumer ire with banking organizations, more Americans are discovering the cooperative difference that credit unions offer, Credit Union National Association (CUNA) President/CEO Dan Mica said in a recent column. Writing for the Cooperative Business Journal produced by the National Cooperative Business Association, Mica noted that CUNA data shows credit union membership grew 1.8% during the 12-month period ending June 2009. That figure equals twice the growth rate for the overall U.S. population and was the largest membership growth figure since 2003. Traditionally, Mica said, CUNA research shows that credit union members are not very interested in the credit union’s cooperative structure. But the crisis has pushed consumers—angry at banks—to look for local and consumer-focused alternatives and “more are discovering the cooperative difference that credit unions offer.” “(W)hile consumers may not appreciate the underpinnings of credit unions’ ownership structure, they respond warmly to the natural effects of cooperative ownership: trust and value,” Mica wrote. The CUNA leader also called upon all cooperative sectors to work more closely together to the benefit of all cooperatives—and ultimately consumers. “I am convinced that if credit unions and other cooperatives had a greater recognition of our shared principle and history, we would see greater interaction between these sectors,” Mica wrote, and added: “If consumers’ changing desires cause cooperatives to work together more regularly, we’ll see another silver lining in this dark economic period.”

Dodd Shelby speak of reg reform accord

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WASHINGTON (12/29/09)—The top Democrat and Republican members of the Senate Banking Committee united to say “meaningful progress” has been made in the area of financial regulatory reform. Both Chairman Christopher Dodd (D-Conn.) and ranking member Richard Shelby (R-Ala.) said they are hopeful remaining issues can be resolved before the Senate reconvenes Jan. 19. "Our country needs financial regulatory reform, and we are committed to working together," said Dodd and Shelby in their joint statement last week. They identified six areas of accord:
* Seeking to end the “Too-Big-to-Fail” problem; * Protect taxpayers from future bailouts by enhancing “our resolution regime”; * Enhancing consumer protections; * Modernizing and streamlining the country’s financial regulatory structure, while preserving the dual-banking system; * Focusing the Federal Reserve more fully on monetary policy; and * Modernize regulation and oversight of the derivatives market.

HUD issues new settlement-cost booklet

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WASHINGTON (12/29/09)—Starting Friday, Jan. 1, 2010, credit unions and other mortgage lenders must comply with the changes to the Real Estate Settlement Procedures Act (RESPA) implementing rules. These rules, finalized in November 2008 by the Department of Housing and Urban Development (HUD), require the use of revised Good Faith Estimate (GFE) forms and HUD-1 Settlement Statement forms. Last week, the U.S. Department of Housing and Urban Development (HUD) posted on its website an updated “Shopping for Your Home Loan: HUD’s Settlement Cost Booklet,” which lenders are required to give to consumers within three days of their applying for a mortgage loan. The 49-page booklet has been revised to reflect the information and format of the revised forms. HUD significantly revised the GFE requirements to ensure that the estimates provided by lenders or brokers are more accurate, and to facilitate comparison shopping among lenders. Moreover, the changes made in the HUD-1 form were designed to facilitate easier comparison by the borrower of the information provided in the GFE form and what actually is owed at settlement. Credit unions have been asking the Credit Union National Association (CUNA) about the significance of HUD’s announcement in mid-November that HUD plans “restraint in RESPA enforcement” through April 2010. Last month HUD announced that it was instructing its staff “to exercise restraint in considering an action against FHA-approved lenders who have demonstrated that they are making a good faith effort to comply with RESPA’s new requirements…” HUD has enforcement authority over credit unions for RESPA compliance, although credit union examiners check for compliance. “Ten days ago Federal Housing Administration Commissioner David Stevens made clear that HUD’s restraint in enforcement does not mean there is any flexibility in which forms can be used starting on January 1,” said Kathy Thompson, CUNA’s SVP for Compliance. “The new forms must be used. The only time beyond Thursday when the old HUD-1 form can be used is when the GFE the borrower received was issued in 2009 on an old version of the GFE form.” “Obviously, lenders are going to have to act quickly to get the updated version of the HUD booklet into borrowers’ hands starting next week – and may just have to hand out downloaded versions for the time being,” noted Thompson. “I was surprised that HUD didn’t even issue a press release about the new booklet being available, so this is obviously a case where some regulatory flexibility will need to be shown.” The link to the revised HUD booklet is provided in the resources below. Thompson also noted that HUD held some limited-access informational webinars on the new RESPA rules earlier in December, but has not yet provided a publicly accessible link to the information provided on its webinar.