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NCUA attends first consumer protection group meeting

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WASHINGTON (2/15/12)--The National Credit Union Administration (NCUA) joined U.S. Attorney General Eric Holder, representatives from the U.S. Treasury Department, the Federal Bureau of Investigation, the Financial Crimes Enforcement Network, a trio of state attorneys general, and other financial and federal groups at the recent first meeting of the Financial Fraud Enforcement Task Force's (FFETF) Consumer Protection Working Group.

The Consumer Protection Working Group unites federal law enforcement agencies and regulators with state and local partners "to strengthen efforts to address consumer-related fraud, including schemes targeting vulnerable populations, such as the unemployed, those in need of payday loans, and those suffering from the burden of high credit card and other debt," the U.S. Department of Justice said in a release.

The group also will focus on scams that exploit prospective students, active-duty military personnel, and veterans, including payday lending practices, telemarketing or online marketing scams, business opportunity schemes, for-profit schools that engage in fraud or misrepresentation, and fraudulent third-party payment processors that facilitate payments on behalf of other fraudsters without the permission of the customer, the release said.

In its meeting Monday, the group set priorities and discussed ways they could work together to fight fraud and educate consumers. The group soon will establish a best-practices tool kit, legislative, regulatory and policy initiatives, and an information sharing structure, the release said.

Holder, in remarks delivered to kick off the inaugural meeting, said the schemes the group is combating "are as diverse as the imaginations of those who perpetrate them, and as sophisticated as modern technology will permit," but added the group is "tackling financial fraud, in all its forms, head on."

The Consumer Financial Protection Bureau is also a member of the working group, but a CFPB representative did not attend this meeting.

For more on the meeting, use the resource link.

CU Cherry Blossom Race attracts 162 lawmakers backing

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WASHINGTON (2/15/12)--Speaker of the House John Boehner (R-Ohio), Democratic Whip Steny Hoyer (D-Md.), Assistant Democratic Leader James Clyburn (D-S.C.) and Democratic Caucus Chairman John Larson (D-Conn.) will join 158 other members of the U.S. Congress and District of Columbia Mayor Vincent Gray as honorary chairs on this year's Credit Union Cherry Blossom Run, the annual 10 mile run and 5k run/walk event that raises funds for Children's Miracle Network Hospitals.

Click to view larger image Kicking off the 2011 Credit Union Cherry Blossom Run, CUNA President/CEO Bill Cheney tells attendees at a press conference held at Washington Children's Hospital that the credit union movement is the third largest corporate sponsor of CMNHospitals, following only WalMart and Costco. The Cherry Blossom run is one of the events that make this success possible, Cheney said, noting that it has raised more than $5 million in the 10 years credit unions have sponsored the race. (CUNA photo)
Congressional FCU President/CEO Charles Mallon in a release said, "The response from the 162 members of Congress and Mayor Gray is outstanding and very helpful to the collaborative efforts of credit unions to raise funds for hospitalized children." Mallon serves on the board of the race's title sponsor, Credit Union Miracle Day Inc. Credit Union Miracle Day Inc. has raised millions for the Children's Miracle Network in its 11 years of race sponsorship, and the group is slated to sponsor the race through 2016.

The Credit Union National Association (CUNA), the National Association of Federal Credit Unions and the two credit unions that serve members and employees of the House and Senate, Congressional FCU and Senate FCU, also support a separate "Capitol Hill Competition," a race-within-a-race for runners from congressional offices.

CUNA staff also volunteer at the race bag check tent, and this will be the 11th straight year that CUNA has worked in support of credit union involvement in the race.

The 40th running of the Credit Union Cherry Blossom run will take place on April 1. This year's event takes place on the second weekend of the National Cherry Blossom Festival, a five-week celebration of sporting and cultural events that commemorates the blossoming of the trees donated to the U.S. by Japan in the early 20th century.

The race staging area will be on the Washington Monument grounds, and the course will trace its traditional route past Washington's cherry blossom trees. The race headquarters hotel is located at the Westin Washington D.C. City Center Hotel.

Around 30,000 runners applied for spots in last year's race. A lottery for entry slots in this year's race took place in December. Runners who raised $500 or more for the Children's Miracle Network Hospitals via Credit Unions for Kids, the official event charity, were given guaranteed spots on the starting line.

Reg burden a concern as CFPB adds rules CUNA

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WASHINGTON (2/15/12)--As the Consumer Financial Protection Bureau (CFPB) continues to assume authority over consumer and finance-related regulations from other agencies, the Credit Union National Association (CUNA) has strongly urged the CFPB to thoroughly analyze new rules as well as existing rules transferred to the agency and consider how they could be amended to ease the regulatory burden faced by credit unions.

CUNA on Tuesday filed a trio of comment letters addressing the Fair Debt Collection Practices Act (Regulation F), disclosure requirements for non-federally insured financial institutions (Regulation I), and mortgage advertising practices and mortgage relief assistance services (Regulations N and O, respectively). CUNA in all these letters called on the CFPB to examine its existing and new regulatory authorities carefully, with the objective of providing meaningful regulatory relief--and that same message will be emphasized when CUNA files additional comment letters with the CFPB later this week.

The rules addressed in these three comment letters are a few of the many interim final rules that were issued by the CFPB for public comment. The interim final rules became effective on Dec. 30, and they substantially duplicate the existing text of the previously published regulations, only adding slight technical changes and transferring authority over these rules to the CFPB, as mandated by the Dodd-Frank Act.

Regulations F, I, N and O were previously handled by the Federal Trade Commission (FTC). Regulation M, which requires lessors, including credit unions, to provide consumers with uniform cost and other disclosures about consumer lease transactions, previously fell under the Federal Reserve's purview, or the FTC, in the case of state credit unions.  Regulations G and H address SAFE Mortgage Licensing Act rules addressed, and those regulations were monitored by financial institutions' prudential regulators.

Comment letters on Regulations M, G and H are due to the CFPB on Feb. 17.

For more CUNA comment letters, use the resource link.

Inside Washington (02/14/2012)

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  • VIENNA, Va. (2/15/12)--The Financial Crimes Enforcement Network (FinCEN) has issued its final rule defining non-bank residential mortgage lenders and originators (RMLO) as loan or finance companies for the purpose of requiring them to establish anti-money laundering programs (AML) and report suspicious activities (SAR) under the Bank Secrecy Act. When proposed, FinCEN noted in its Federal Register document, the rule suggested that the AML program and SAR filing regulations for RMLOs would be issued as the first step in an incremental approach to implementation of regulations for the broad loan or finance company category of financial institutions. "Thus, the definition of 'loan or finance company' would initially include only RMLOs, but would be structured to permit the addition of other types of loan and finance-related businesses and professions in future amendments." The effective date of the rule is April 16 and the compliance date is Aug. 13 …
  • WASHINGTON (2/15/12)--A proposed fee that big banks would pay for their role in the financial crisis will be more than doubled, the Obama administration announced Monday. Banks with assets of $50 billion or more, or 32 institutions, would be responsible for paying $61 billion in the course of 10 years, beginning next year, according to the Treasury Department (American Banker Feb. 13). The fee would be based on a bank's covered liabilities--its consolidated risk-weighted assets subtracted by its capital-insured deposits and certain loans to small business. Banks would be charged 17 basis points, but would be able to apply a 50% discount to more stable funding sources, such as long-term liabilities …
  • WASHINGTON (2/15/12)--The Consumer Financial Protection Bureau (CFPB) budget (CFPB) will increase 32% in fiscal year 2013, according to President Barack Obama's budget, released on Monday. The increase will account for compensation and benefits costs as CFPB continues to add employees. The CFPB's budget, which will total $448 million, comes from mandatory transfers from the Federal Reserve System (American Banker Feb. 13). The agency can request up to $597.6 million in 2013, and may ask for $200 million more in discretionary appropriations from Congress until 2014, but it does not expect to make further requests, according to yesterday's proposal. CFPB plans to hire more than 400 employees next year, increasing its staff from to about 1,359 in fiscal 2013 from about 942 in fiscal 2012 …
  • WASHINGTON (2/15/12)--The Federal Housing Administration (FHA) will announce more premium increases for home buyers in next week in an effort to improve the agency's finances and avoid a taxpayer bailout. A key FHA account, which holds reserves that exceed expected losses, will be depleted in the next year, according to the Obama administration's budget proposal, which was released Monday (American Banker Feb. 13). That account's balance has fell to $4.7 billion, which is below the requirement, established by Congress, that the fund remain above 2% of the FHA's total loan guarantees. But Shaun Donovan, secretary of the Department of Housing and Urban Development, which includes the FHA, said Monday the budget proposal does not account for an additional $900 million to $1 billion that the FHA will receive from last week's mortgage settlement with five large banks, and other possible settlements. The proposal also does not include the additional FHA premium increases that will be announced within the next week, Donovan said …
  • WASHINGTON (2/15/12)--Consumer Financial Protection Bureau (CFPB) Director and new Financial Literacy and Education Commission (FLEC) Vice Chair Richard Cordray in a Tuesday release said he is proud to work with his fellow FLEC members, adding that that group shares "a common vision of sustained financial well-being for all Americans." Cordray took part in his first FLEC meeting at the U.S. Treasury offices in Washington. 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 other governmental groups. Tuesday's meeting was the first of 2012. The FLEC meets every four months. During Tuesday's meeting, the FLEC focused on ways that third party vendors could use technology to help consumers better compare financial products. Cordray in a blog posted following the meeting said "the ability to understand and control one's finances is one of the most important life skills," and "creates a path to economic independence and mobility."...
  • WASHINGTON (2/15/12)--The Consumer Financial Protection Bureau (CFPB) this week published its semiannual report, which details the agency's plans between October 2011 and October 2012, in the Federal Register...