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Cleveland designated an underserved community by NCUA

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ALEXANDRIA, Va. (2/17/10)--The National Credit Union Administration (NCUA) late last year added Cleveland, Ohio to its list of areas that are underserved by financial institutions. The NCUA decision follows a request from Cleveland-based Steel Valley FCU for the NCUA to include the majority of the city, as well as close-in suburbs, as an underserved area. Steel Valley FCU will now be able to take on any Cleveland resident as a member under its new membership structure. The urban population of Cleveland, as estimated by the U.S. Census, stood at 478,403 in 2000, and cleveland.com reported that the metropolitan Cleveland area has lost 59,852 residents between 2000 and 2008.

Reverse mortgage guidance generally helpful CUNA

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WASHINGTON (2/17/10)--The Credit Union National Association (CUNA) in a Feb. 16 comment letter to the Federal Financial Institutions Examination Council (FFIEC) said that it generally supports the FFIEC’s proposed guidance for reverse mortgages. While the majority of credit unions do not currently offer reverse mortgage loans and those that do “are likely already compliant with the principles outlined in the guidance,” Bloch said that CUNA understands the need for the FFIEC guidance, as the complexity of reverse mortgage loans may create greater opportunities for “abuses and excessive fees” by some lenders. Citing the complexity of reverse loans, which can often come with significant fees, CUNA said it supports the FFIEC’s requirement for financial counseling “and believes that, with limited exceptions, such counseling should be done in-person, as opposed to telephone conversations,” CUNA Senior Assistant General Counsel Jeff Bloch said. CUNA has argued that telephone counseling is ineffective. “However,” Bloch added, “although consumers should receive general information and guidance about reverse mortgages before the application is submitted, much of the required counseling should occur after the application is submitted for a proprietary reverse mortgage loan, since the counseling will be more targeted and, therefore, more beneficial after the consumer applies for a specific loan.” Additionally, CUNA supports portions of the guidance that address potential conflicts of interest as well as the FFIEC’s recommended policies, procedures, and internal controls that lenders should take on, including recommendations on how lenders can manage third-party relationships. For the full CUNA comment letter, use the resource link.

Speakers named for NCUA virtual meeting on corporates

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ALEXANDRIA, VA. (2/17/10)--The National Credit Union Administration (NCUA) on Tuesday announced the agenda for its Feb. 18 virtual town hall webinar, the last in a series of public discussions on the proposed changes to its corporate credit union rules. Following opening remarks by NCUA Chairman Debbie Matz, NCUA officials, including Deputy Executive Director Larry Fazio, General Counsel Bob Fenner, and Office of Corporate Credit Unions Director Scott Hunt, will provide background on the current corporate credit union situation and discuss both the recently proposed changes to the NCUA’s corporate credit union and field of membership rules. A question and answer session will follow the NCUA staff presentations. The webinar continues the NCUA’s "nationwide listening tour," which also included live town hall meeting sessions in which the proposed corporate rule and related issues, such as the proposed field-of-membership rule, alternative capital, and continuing economic challenges facing natural-person credit unions, were discussed. To sign up to participate in the virtual session, which is scheduled to begin at 3 p.m. ET on Feb. 18, use the resource link.

CUNA survey CUs gaining ground with voters

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WASHINGTON (2/17/10)—Just 39% of voters who responded to a Credit Union National Association (CUNA)-sponsored survey indicated that they would favor banks over credit unions if a disagreement over financial legislation broke out in the U.S. Congress or their state legislature, CUNA reported on Tuesday. CUNA’s national voter survey, which was conducted between Jan. 24 and 28 and surveyed 1,000 registered voters across the nation, showed that half of the 1,000 voters who responded said that they would side with credit unions over banks in that potential legislative disagreement. Large numbers of respondents also favored credit unions on more specific issues, with a mere 27% of them agreeing with banking industry claims that removing restrictions on credit union business lending would give credit unions, which do not pay taxes, an unfair advantage. Those same respondents overwhelmingly supported giving credit unions the opportunity to assist the economy by helping to create jobs through greater business lending by credit unions, and 69% favorably viewed the MBL legislation that, if approved, would create 108,000 new jobs. The CUNA survey, which has been taken for 11 years, “has never shown an environment more complimentary to credit unions,” CUNA Senior Vice President of Political Affairs Richard Gose said. “Clearly, jobs and the economy are the issues voters are most concerned about,” Gose said, adding that while additional surveys clearly show that “voters support credit unions,” the CUNA survey “goes beyond that, showing voters support credit unions’ ability to help the economy and grow jobs.” While consumers trust in banks continues to slip, their favorable views of credit unions have not decreased during the past year, with 56% of respondents saying that they would classify credit unions as “safe and sound” financial institutions. The number of consumers who judged banks to be “safe and sound” fell to 50%, down from 55% in the 2009 edition of the survey. Credit unions have remained steady with 42% of registered voters identifying themselves as credit union members, and 22% saying that credit unions were their primary financial institution. However, there is room for growth. A large majority of voters had positive impressions of several credit union-specific business practices, including returning earnings to members, specifically working with underserved communities, and the collective, member-owned structure of credit unions, rated extremely favorably among survey respondents. Surveys by Forrester Research and the Chicago Booth/Kellogg School also noted high customer approval ratings, and Michigan's American Customer Satisfaction Index, which was also released on Tuesday, found that credit unions rated near the top of scale for their customer service. (See related story: CUs at top of customer satisfaction heap--new survey.)

Biliouris named as special aide to NCUA exec director

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ALEXANDRIA, Va. (2/17/10)— Matthew Biliouris, who first starting working for the National Credit Union Administration (NCUA) about 18 years ago, has a new position at the agency starting March 8. He’ll be Special Assistant to NCUA Executive Director Dave Marquis. Biliouris, who, in the newly-created position, will advise executive director David Marquis and serve as a senior assistant and program specialist with policy and strategic responsibilities, was hailed by NCUA Chairman Debbie Matz for “his breadth of experience and exceptional work ethic,” traits that Matz said “will be on display during these challenging times.” Biliouris first worked for the NCUA as an examiner in 1992, and over the years served as a supervision analyst, information systems officer, and recently as special assistant to NCUA Board Member Michael Fryzel. Biliouris’ name may be familiar to credit unions because he was NCUA’s “point man” on Bank Secrecy Act matters for several years.

Inside Washington (02/16/2010)

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* WASHINGTON (2/17/10)--The Senate has confirmed three Treasury officials: Charles Collyns, assistant secretary for international finance; Marisa Lago, assistant secretary for international markets and development; and Mary Miller, assistant secretary for financial markets. Collyns was previously deputy director of the International Monetary Fund’s Research department, Lago was president/CEO of Empire State Development, and Miller worked at T. Rowe Price Group Inc. as director of its fixed income division ... * WASHINGTON (2/17/10)--Creating an agency to collect and analyze data needed to monitor systemic risk will be costly and complex, said Federal Reserve Board Gov. Daniel Tarullo at a Senate subcommittee meeting Friday. The financial crisis has underscored gaps in the data collection, and an independent data collection agency might be more effective than the current process where each regulator collects its own data (American Banker Feb. 16). However, such an agency would be expensive, Tarullo said. Separation of data collection and regulation also could diminish accountability if supervisors don’t have the authority to shape reporting requirements with supervisory needs, he added. Some policymakers have supported creating such an agency. Sen. Jack Reed (D-R.I.) introduced a bill Feb. 4 to establish the National Institute of Finance for data collection. Reed said regulators did not have the data they needed during the financial crisis ...