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Fin Lit Education Commission intros national strategy

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WASHINGTON (12/7/10)--The Financial Literacy and Education Commission (FLEC) last week introduced its 2011 National Strategy for Financial Literacy, a framework that the group hopes will “provide the foundation for an overarching financial literacy strategy.” The FLEC is comprised of representatives from the National Credit Union Administration, the U.S. Treasury, the U.S. Department of Education, the White House, and 18 other governmental groups. The 2011 strategy focuses on the need for increased financial literacy and effective financial decisionmaking and the educational efforts needed to reach these objectives. The strategy cites policy, education, practice, research and coordination as “action areas” that the FLEC stakeholders can address to reach the stated objectives. The FLEC cites increasing awareness of and access to effective financial education, determining and integrating core financial competencies, improving financial education infrastructure, and identifying, enhancing, and sharing effective practices as ways that FLEC stakeholders can also reach those objectives. The Credit Union National Association (CUNA) earlier this year came out in support of these objectives, and thanked the FLEC for avoiding references to any specific type of financial institution in its developed financial education core competencies. CUNA also recommended that the commission enhance the list of core concepts by adding information on debt reduction, credit scores, financial planning, and credit rating establishment, among other issues. For the full FLEC release, use the resource link.

111th Congress nearing its end

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WASHINGTON (12/7/10)--With the 11th Congress starting to wind down, floor agendas in both the House and Senate this week are light and subject to change. The limited action will center on a continuing resolution to fund the government and the Food Safety Act. However, the Food Safety Act is facing issues due to a Senate addition, and Senate Republicans have vowed to oppose cloture on all bills that do not seek to extend the Bush-era tax cuts. Senate leaders and the President continue to discuss a compromise agreement to move these issues and other priorities forward. The most important event for credit unions is a hearing on the state of the credit union industry. The hearing, which is set to take place before the Senate Banking Committee, was rescheduled to Thursday. Originally set to take place today, the hearing will feature testimony from National Credit Union Administration (NCUA) Chairman Debbie Matz. Matz will be the only witness at the hearing, which is the first credit union-focused Senate Banking Committee hearing in several years. CUNA expects the hearing to focus on the corporate credit union situation, and will submit a statement for the record.

Inside Washington (12/06/2010)

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* WASHINGTON (12/7/10)--The Securities and Exchange Commission Friday voted unanimously to propose joint rules with the Commodity Futures Trading Commission (CFTC) that would further define a series of terms for the security-based swaps market. The proposal originates from the Dodd-Frank Act, which established a comprehensive framework for regulating the over-the-counter swaps market American Banker Dec. 6). The new law requires the registration of swap dealers, security-based swap dealers, major swap participants and major security-based swap participants. It also subjects these entities to several statutory requirements--including capital, margin and business conduct requirements. “Today’s proposals lay out objective criteria, but they are just a first step, as we seek public comment to help us appropriately address the market impacts and potential risks posed by these entities,” said Mary Schapiro, SEC chairman. The proposals will be open for comment for 60 days … * WASHINGTON (12/7/10)--The Federal Reserve has been conducting a detailed evaluation of put-back risk at large financial institutions, Fed Governor Dan Tarullo told the Senate Banking Committee last week (American Banker Dec. 6). The Fed is asking institutions that originated large numbers of mortgages or sponsored significant mortgaged-backed securities (MBS) to assess the risk involved in those offerings. Tarullo said that as losses in MBS have escalated, investors are pursuing legal claims against the financial firms that originated or were otherwise involved in the offerings. The essence of these claims is that mortgages in the securitization pools were misrepresented when sold. Observers told the Bankerthey wonder if this will cause banking regulatory agencies to raise capital, reserve and liquidity requirements …

Congressional CU hearing moved to Thursday

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WASHINGTON (12/7/10)--A Senate Banking Committee hearing on the "State of the Credit Union Industry" has been rescheduled for Thursday. National Credit Union Administration (NCUA) Chairman Debbie Matz will be the sole witness during the hearing. The hearing was originally scheduled for 2:30 p.m. ET today. Sources said that the hearing was moved from its original Tuesday slot due to scheduling conflicts, as the impeachment trial of a federal judge and other quorum calls would likely take up much of the time. A Senate banking subcommittee had also scheduled a hearing for Wednesday, so Thursday was the best chance for the hearing to be held. The U.S. Congress has not held a credit union industry-specific oversight hearing in several years. The Thursday hearing is likely to probe the general health of natural-person credit unions, as well as the state of corporate credit unions and the NCUA's actions to restore liquidity. In the NCUA's assessment, the chairman will give a broad overview of the financial condition of the industry and NCUA's regulatory and supervisory efforts to keep credit unions safe, sound and continuing to serve consumers.