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Washington

Waters Requests More Details From Regulators On IFR's End

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WASHINGTON (2/20/13)--Rep. Maxine Waters, the top Democrat of the House Financial Services Committee, continues to press bank regulators for details about their termination of the Independent Foreclosure Review (IFR).

Waters released a letter Tuesday to Federal Reserve Chairman Ben Bernanke and Comptroller of the Currency Thomas Curry seeking additional information from the regulators about the termination of the IFR. It is a follow up to an inquiry earlier this month.

Also, earlier this month Waters (D-Calif.), who has been an advocate for foreclosure prevention, asked Chairman Jeb Hensarling (R-Texas) of House Financial Services for a hearing into a Jan. 7 tentative $9.3 billion settlement between the Fed and OCC and mortgage servicing companies which Waters said is intended to resolve claims of wrongdoing by the servicers against an estimated 4.4 million borrowers.  It effectively ended the IFR.

Information requested by Waters includes: Policies and Procedures documents created by independent consultants outlining how loan files were to be reviewed by analysts; information on error rates of reviewed loan files; guidelines issued by the regulators to independent consultants relating to the foreclosure notice process; and other pertinent information.

NEW: Federal, State Regulators Offer Easier LICU Process for State-Chartereds

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ALEXANDRIA, Va. (2/20/13, UPDATED 5:35 p.m. ET)--Federal and state regulators have worked together to devise a plan to help state-chartered credit unions find it easier to to determine if they are eligible for designation as low-income credit unions (LICU).

Under a cooperative effort by the National Credit Union Administration and the National Association of State Credit Union Supervisors (NASCUS), state regulators can now provide limited geographic and income data to NCUA's AIRES system when they upload their examinations.

The NCUA said in a release it will use that data to determine if there are state-chartered credit unions eligible for the low-income designation and provide a list to state regulators on a quarterly basis of those credit unions. State regulators have the sole authority to make the LICU designation for state-chartered credit unions. (Watch News Now Thursday for more.)

Short And Simple, CFPB Blogs On 'QM'

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WASHINGTON (2/20/13)--The Consumer Financial Protection Bureau posted a recent blog entry intended to explain the "qualified mortgage" rule in a single page.

"Qualified mortgages explained," by Peter Carroll, CFPB assistant director of mortgage markets, notes that the bureau recently released the Ability-to-Repay rule intended to protect consumers from irresponsible mortgage lending.

The post goes on to explain that as part of that rule, and at the direction of the U.S. Congress, the CFPB also defined a category of loans that carry more protections for borrowers--called "Qualified Mortgages."

The blog post briefly discusses the bureau's considerations when making the rule,  a transitional provision included to allow time to adjust to the new rule, and the CFPB's expectation that, over time,  the rule will help "responsible lending practices flourish" for all residential mortgage loans.

Use the link below to read the post.

NEW: NCUA Provides CUs With Cybersecurity Guidance

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ALEXANDRIA, Va. (UPDATED: 1 p.m. ET, 2/20/13)--The National Credit Union Administration has stepped into Washington's cybersecurity discussion, identifying appropriate policies and procedures to guard against distributed denial-of-service (DDoS) attacks in a new credit union risk alert (13-Risk-01).

"The increasing frequency of cyber-terror attacks on depository institutions heightens the need for credit unions to maintain strong information security protocols," the notice said.

DDoS attacks are attempts to disrupt or suspend online service by saturating the target's network with external communication requests to overload its server. The NCUA letter noted that such attacks are sophisticated, requiring the vigilance of credit unions offering Internet-based financial services. "As the goal of DDoS attacks is causing service outages rather than stealing funds or data, typical network security controls--such as firewalls and intrusion detection and prevention systems--may offer inadequate protection," the risk alert said.

To mitigate the issues presented by DDoS attacks, the NCUA suggested that credit unions:

  • Perform risk assessments to identify risks associated with DDoS attacks;
  • Ensure incident response programs include a DDoS attack scenario during testing and address activities before, during, and after an attack; and
  • Perform ongoing third-party due diligence, in particular on Internet and web-hosting service providers, to identify risks and implement appropriate traffic management policies and controls.
The agency also noted that DDoS attacks may also be paired with attempts to steal member funds or data. The letter suggested that credit unions voluntarily file Suspicious Activity Reports if DDoS attacks impact Internet service delivery, enable fraud, or compromise member information.

For the full NCUA risk alert, use the resource link.

NCUA Net Worth Webinar Is Today

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ALEXANDRIA, Va. (2/20/13)--Interested in the common causes of net worth declines, and how credit unions can restore their net worth? There is still time to sign up for this afternoon's National Credit Union Administration webinar, "Net Worth Restoration Plans: A Path to Recovery."

The free webinar will be presented by NCUA Office of Small Credit Union Initiatives (OSCUI) Director William Myers. It is scheduled to begin at 2 p.m. ET.

The webinar will feature:
  • A review NCUA's capital requirements for credit unions and the net worth restoration plan process;
  • Discussion of the minimum regulatory requirements for net worth under Prompt and Corrective Action and Part 702 of NCUA's Rules and Regulations;
  • Information on restoration plan timelines; and
  • Details on assistance available for credit unions that are developing a net worth restoration plan.
To sign up for the webinar, use resource link.

NCUA Receives Clean Audits For Permanent Funds

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ALEXANDRIA, Va. (2/19/13)--The National Credit Union Administration announced that all four of its permanent funds received unqualified, or "clean," audit opinions for 2012. The report covers the NCUA's National Credit Union Share Insurance Fund, the Operating Fund, the Central Liquidity Facility and the Community Development Revolving Loan Fund.

KPMG LLP completed the audits of all four permanent funds and expects to issue an opinion on the 2012 financial statements for the Temporary Corporate Credit Union Stabilization Fund in the coming months. The Stabilization Fund earned a clean audit opinion for 2011.

"Diligent stewardship of our funds and public transparency are both top priorities for the agency," NCUA Chairman Debbie Matz said when releasing the report results.  She added that the independent auditor's clean opinions "lead me to say with full confidence that we have fully lived up to our commitments to credit unions, credit union members and their communities."

Use the resource link to access the financial reports.

Government Cybersecurity Prep Must Be Improved: GAO

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WASHINGTON (2/20/13)--A new Government Accountability Office (GAO) report hones in on the hot topic of cybersecurity, and the study finds that federal agencies and the executive branch need to step up their cybersecurity practices and that a comprehensive, executive branch-level strategy is needed to address online security issues.

The GAO said that the goal of a federal cybersecurity strategy should be to "better ensure that federal departments and agencies are held accountable for making significant improvements in cybersecurity challenge areas, including designing and implementing risk-based programs; detecting, responding to, and mitigating cyber incidents; promoting education, awareness, and workforce planning; promoting [research and development]; and addressing international cybersecurity challenges."

The report noted that credit unions and other financial institutions are already well regulated in this area. The GAO also found that the U.S. Department of Treasury had neither departmental workforce plans nor workforce plans that specially addressed cybersecurity workforce needs.

The Obama administration and the U.S. Congress have both moved to address cybersecurity issues in recent weeks.

An executive order released earlier this month provides a broad, general framework intended to improve "critical infrastructure" cybersecurity coordination and information sharing among government agencies and the private sector. The order does not provide new legal authority. "Critical infrastructure" is not defined in the order, but could potentially include the power grid, financial market exchanges, and telecommunications networks, the Credit Union National Association has noted.

Legislation to improve public/private cybersecurity cooperation was also introduced by House Intelligence Committee Chairman Mike Rogers (R-Mich.) and Ranking Member C.A. Dutch Ruppersberger (D-Md.) last week. The bill, H.R. 624, provides positive authority to the government to provide classified cyber threat information to the private sector, and knocks down the barriers that impede cyber threat information sharing among private sector companies, and between private sector companies and the government, Rogers noted. (See Feb. 14 News Now story: Cybersecurity Order Offers Public/Private Coordination Chances: CUNA)

CUNA continues to work with the National Credit Union Administration, the Financial Services Sector Coordinating Council, BITS, the Treasury and other entities to coordinate on cybersecurity issues, and to ensure that credit unions are not unduly impacted from the cybersecurity framework for critical infrastructure entities. CUNA is also engaged with Congress on any cybersecurity legislation.

For the full GAO report, use the resource link.

Small Detroit CU Closed By Regulators

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ALEXANDRIA, Va. (2/20/13)--Amez United CU, a Detroit, Mich., credit union with 158 members and $168,865 in assets, has been liquidated by the Michigan Office of Financial and Insurance Regulation.

The state regulator then appointed the National Credit Union Administration to serve as liquidating agent. As liquidating agent, the NCUA has the authority to take on other rights and responsibilities of the credit union. The NCUA said its Asset Management and Assistance Center will issue checks to individuals holding verified share accounts in the credit union within one week.

The agency on Tuesday reported that the Michigan regulator moved to close the credit union after it determined the credit union was insolvent and had no prospect for restoring viable operations.

Amez is the second federally insured credit union liquidation of the year. The credit union was chartered in 1961 and served registered members of the churches in the Detroit district of the Michigan Conference of the African Methodist Episcopal Zion Church.

There were 13 federally insured credit union liquidations in 2012.

For the full NCUA release, use the resource link.