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Washington Archive

Washington

Reg M burdens should be minimized CUNA says

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WASHINGTON (2/2/11)--A recent Federal Reserve proposal that would increase the threshold for Regulation M consumer lease disclosures to $50,000 is consistent with the new statutory requirement imposed by the Dodd-Frank Act, the Credit Union National Association (CUNA) has said in a Tuesday letter to the Fed. Regulation M generally applies to consumer leases for the use of personal property, such as automobiles, where the contractual obligation has a term of more than four months. Under the recent Dodd-Frank Act changes, the $50,000 threshold will come into effect on July 21. The amount of the applicable thresholds will be adjusted annually to reflect any increase in the Consumer Price Index. CUNA in its comment letter to the Fed said that the regulator should work to minimize the regulatory burdens associated with the proposal, particularly for small credit unions. CUNA has made similar requests related to proposed Regulation Z changes. (See related story: CUNA comments on Reg Z changes) One such burden is the requirement that lessors retain evidence of compliance for 24 months. CUNA urged the Fed to clarify which types of records must be maintained, and to remain mindful of the costs that regulated entities must bear to provide and maintain these records. The extra time needed to maintain and provide these records should also be noted by the Fed, and should be reduced, if possible, CUNA added. For the full comment letter, use the resource link.

CUNA comments on Reg Z changes

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WASHINGTON (2/2/11)--The Credit Union National Association (CUNA) in a comment letter to the Federal Reserve said it does not support certain Regulation Z changes that go beyond the scope of a new $50,000 threshold for consumer credit disclosures. Specifically, CUNA said that changes beyond the scope of the $50,000 threshold increase would impose additional compliance and continuous monitoring costs. Consumer credit transactions of up to $25,000 are currently subject to several disclosure requirements under the Truth in Lending Act (TILA) and Regulation Z. Private education loans and loans secured by real property, such as mortgages, are subject to TILA regardless of the amount of the loan. Regulation Z implements the Home Ownership and Equity Protection Act (HOEPA) by adjusting the thresholds used to determine which loans are covered under HOEPA. CUNA urged the Fed not to adopt language that would require an initial extension of credit to be advanced at account opening. CUNA also supported Fed clarifications that would specify that closed-end loans would qualify for exemptions based on either credit extensions or a loan commitment at consummation in excess of the threshold, regardless of subsequent changes in the threshold or account balance. Under the Reg Z changes, lenders are required to retain evidence of compliance for 24 months. CUNA urged the Fed to clarify which types of records must be maintained. A similar request has been made in relation to the Fed’s Regulation M proposal. (See related story: Reg M burdens should be minimized, CUNA says) For the full CUNA comment letter, use the resource link.

Fed ends development of three Reg Z mortgage rule changes

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WASHINGTON (2/2/11)--The Federal Reserve Tuesday announced that it would halt work toward finalizing three pending mortgage rulemakings under Regulation Z. Credit Union National Association (CUNA) President/CEO Bill Cheney had asked the Fed to drop these proposals and impose a moratorium on any further rulemakings on issues that will be under the authority of the Consumer Financial Protection Bureau as of July 21, 2011. Although portions of the Fed proposals would not be affected by the CFPB's work, the Fed said that altering its regulations in a piecemeal fashion “would be of limited benefit, and the issuance of multiple rules with different implementation periods would create compliance difficulties.” A key provision in one of the now-dropped Reg Z proposals would have seriously jeopardized credit protection products, such as credit life, disability and related products. The other proposals addressed closed-end mortgage loans and home equity lines of credit under the Truth in Lending Act (TILA). CUNA worked closely with CUNA Mutual Group and its in its advocacy efforts with the Fed, particularly regarding the credit protection products. Also, about 4,000 comment letters were generated to the Fed through Operation Comment and the leagues. CUNA’s Cheney noted that CUNA had worked hard to pursue this result and also commended credit unions, the leagues and CUNA Mutual CEO Jeff Post for their efforts. “We’re gratified the Federal Reserve listened to the voices of credit unions, Leagues and CUNA,” Cheney said. Because the CFPB will assume rulemaking authority under Reg Z and 17 other consumer protection rules in July, these issues could resurface there. CUNA will be closely monitoring developments at the CFPB on these and all other issues affecting credit unions. Use the resource link below for more information from the Fed.

House Majority Whip Kevin McCarthy joins GAC lineup

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WASHINGTON (2/2/11)--House Majority Whip Kevin McCarthy (R-Calif.) is the latest of many big name speakers that are set to appear at the Credit Union National Association's (CUNA) 2011 Governmental Affairs Conference (GAC) in Washington. McCarthy was recently elected to serve his third term in the House of Representatives, and is a member of the House Financial Services Committee. House Speaker Rep. John Boehner (R-Ohio), House Financial Services Committee Chairman Rep. Spencer Bachus (R-Ala.), finance committee member Rep. Ed Royce (R-Calif.) and Senate Banking Committee member Sen. Jon Tester (D-Mont.) are also among the long list of luminaries on the GAC lineup. Rep. Shelley Moore Capito (R-W.Va.), Sen. Roy Blunt (R-Mo.), Sen. Mike Crapo (R-Idaho), and Reps. Barney Frank (D-Mass.), Debbie Wasserman Schultz (D-Fla.), Sen. Mark Udall (D-Colo.) and Steve Stivers (R-Ohio) are also set to speak at the GAC, which will begin on Feb. 27 and end on March 3. Consumer Financial Protection Bureau architect Elizabeth Warren and co-authors of The New York Times No. 1 best-seller "Game Change" Mark Halperin and John Heilemann are also scheduled to address GAC attendees. The GAC will also feature keynote speeches from actor and Children's Miracle Network Hospitals co-founder John Schneider and "Miracle on the Hudson" pilot Captain Chesley B. "Sully" Sullenberger III. To register for the 2011 GAC, use the resource link.

Inside Washington (02/01/2011)

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Inside Washington
* WASHINGTON (2/2/11)--The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the November edition of the Obama Administration’s Housing Scorecard, a comprehensive report on the nation’s housing market. The latest housing figures show continued signs of stabilization in house prices and high home affordability due in part to record low mortgage interest rates. One million families refinanced their mortgages in the last quarter, taking advantage of the lowest rates in history on 30-year fixed mortgages. Since April 2009, record low interest rates have helped more than 8.3 million homeowners to refinance, resulting in more stable home prices and $15.2 billion in annual borrower savings. As expected with the expiration of the Homebuyer Tax Credit, new and existing-home sales have remained below levels seen in the first half of 2010. At the same time, home prices remained level in the past year after 33 straight months of decline. Homeowners added $95 billion in home equity in the second quarter. More than 3.73 million modification arrangements were started between April 2009 and the end of August 2010--more than double the number of foreclosure completions during that time …