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Inside Washington (02/15/2010)

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* WASHINGTON (2/16/10)--The Obama administration will soon be challenged to fill key financial regulatory positions, according to American Banker. In August, leadership roles will be open at the Federal Housing Finance Agency (FHFA), the Office of Thrift Supervision and the Office of the Comptroller of the Currency (OCC). The OCC may be the highest priority on the administration’s list because it oversees the biggest, most systemically significant banks. Another priority will be filling the top role at the FHFA (American Banker Feb. 15). The future of Fannie Mae and Freddie Mac--which FHFA regulates--is not certain. Edward DeMarco, who took over FHFA temporarily starting in August, said in a letter to top lawmakers that it’s Congress’ and the Obama administration’s job to figure out what to do with the enterprises. Also, Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair’s term will expire in June 2011. Bair, a Republican, has made allies in both political parties, and it’s not certain who will succeed her, Banker said ... * WASHINGTON (2/16/10)--Sen. Bob Corker (R-Tenn.), top negotiator on legislation to revamp financial regulation, said he is considering taking away the Federal Reserve Board’s oversight powers. During an interview with Bloomberg Television’s “Political Capital with Al Hunt,” Corker said he does not support President Barack Obama’s proposed consumer protection action (Bloomberg Feb. 15). He also said he would not back the president’s call for mandatory limits on banks’ sizes and trading. Corker said he could be nearing an agreement with Senate Banking Committee Chairman Christopher Dodd (D-Conn.) on bank failure resolution processes. He hopes to bring other Republicans to support reform legislation, but many of them, led by Senate Minority Leader Mitch McConnell (R-Ky.) oppose Obama’s reform proposals ...

All systems even weatherGo for GAC

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WASHINGTON (2/16/10)—After expected precipitation last night, the remainder of this week calls for warmer temperatures and sunny skies as the Credit Union National Association’s (CUNA's) Governmental Affairs Conference prepares to get underway this Sunday. As of yesterday the snow was plowed, the streets were clear, airports remained open and taxi, bus, and Metro services continued in full swing. “Everything is ready to go for our Governmental Affairs Conference next week,” said CUNA President/CEO Dan Mica Monday. “Travel into and around the city is back to normal, and we have an absolutely stellar event waiting for our attendees when they arrive.” The conference runs from Sunday evening Feb. 21 through midday Thursday, Feb. 25, at the Washington Convention Center. The program features influential members of the U.S. Congress, the administration and the regulatory agencies, the largest exhibit hall in the financial services industry, a raft of on-point educational breakout sessions, top-flight entertainment, and an afternoon devoted to visits with members of Congress and their staffs on Capitol Hill. Use the resource link below for more information on the schedule of events.

Congress this week Recess returns

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WASHINGTON (2/16/10)--As Washington continues to dig out from the recent snows, the U.S. Congress remains quiet, with both the House and Senate taking their first recesses of 2010. Still, a number of issues that are of importance to credit unions, including financial regulatory reforms and member business lending, remain on the horizon. While the exact legislative vehicle has not yet been determined, the Credit Union National Association (CUNA) continues to look for legislation to carry reforms of the current MBL rules. CUNA also expects a House Financial Services Committee/House Small Business Committee joint hearing on the "Condition of Small Business and Commercial Real Estate Lending in Local Communities” to be rescheduled for late next week.

Compliance CUNA answers CARD Act credit concerns

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WASHINGTON (2/16/10)--In this month's Compliance Challenge, the Credit Union National Association (CUNA)addresses whether the Federal Reserve's recent Regulation Z final rule, which covers provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 that become effective on Feb. 22, contain any exceptions for share-secured credit card accounts with regard to determining an underage consumer's "ability to pay." According to CUNA, there is no exception to the rules that soon will restrict creditors from opening a credit card account for a consumer under the age of 21. Such an account will be prohibited unless that young consumer submits a written application, obtains the signature of a cosigner, guarantor, or joint applicant who is at least 21 and has the means to repay the debt and agrees to joint liability, or proves that the consumer has the income needed to make the required payments. These rules would apply to all credit card accounts, including share-secured credit card accounts. Regarding Regulation E rules that address overdraft fees, CUNA has indicated that credit unions may begin to collect consent forms for members to opt-in to overdraft services, provided they clearly communicate the effective date of the change, which will take place on July 1. As of that date, credit unions will be required to provide an opt-in notice and obtain the member’s affirmative consent before charging any fees for paying ATM and one-time debit card overdrafts. A separate deadline of August 15 will apply to accounts that are opened before the July 1 compliance date. The Compliance Challenge also addresses another Fed rule, Regulation B, which does not require credit unions to send an adverse action notice if a member requests a reduction in their line of credit, according to CUNA. Currently, Regulation B would require an adverse action notice if there is a refusal to grant credit in substantially the amount or on substantially the terms requested in an application, absent a counteroffer from the credit union. A refusal to increase the amount of credit available to an applicant that has applied for an increase would also trigger an adverse action notice, according to Regulation B. Changing the terms of a given account, as agreed to by the applicant, would not cause a credit union to file an adverse action notice, CUNA said. For the full Compliance Challenge, use the resource link.