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CFPB launches website seeks YouTube videos

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WASHINGTON (2/4/11)—The Consumer Financial Protection Bureau (CFPB) on Thursday debuted its new website, The site includes a blog, background information on the bureau, and other resources, including a press release archive and a calendar detailing CFPB architect Elizabeth Warren’s upcoming schedule. Another feature of the site is a resource through which users can receive additional information on issues related to mortgages, credit cards, credit reports, bank accounts, and other financial services. Real stories from ordinary Americans that have experienced problems in the consumer credit market are also included on the site. The CFPB will accept suggestions from the general public through Twitter, YouTube, and its own homepage, and will respond to many of these suggestions via its own YouTube videos. The agency has sought out initial submissions through its own YouTube video, which features Warren and was shot by acclaimed director Ron Howard. Warren also discussed the future goals of the CFPB in a recent letter to Rep. Randy Neugebauer (R-Texas). (See related story: Warren: CFPB will work for reduced reg burden) To access the site, use the resource link.

Cheney talks interchange MBL cap on Bloomberg radio

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WASHINGTON (2/4/11)—Credit Union National Association (CUNA) President/CEO Bill Cheney during a Thursday appearance on Bloomberg Radio’s Taking Stock with Pimm Fox urged the Federal Reserve to stop and study the new Interchange law, rather than forging ahead with new rules, so that everybody wins -- consumers, merchants and financial institutions. The Fed should be given the time needed to consider all interchange related costs, and set a reasonable interchange rate to avoid “unintended consequences," Cheney said. These unintended consequences could include the elimination of debit card programs by credit unions or the addition of new fees that would be imposed on credit union members in order to keep the programs. The Federal Reserve’s interchange proposal would place an arbitrary cap, perhaps as low as 7 cents, on interchange fees. Cheney challenged retailer claims that any savings gained from this interchange fee cap would be passed on to consumers. The promise and progress of credit union member business lending legislation was also addressed during Cheney’s Thursday appearance. Prompted by one show host’s observation that big banks have recently been reluctant to lend to small businesses, Cheney noted that credit unions are waiting to do more to help the economy, and could do so if the cap is raised. Cheney also confirmed one host’s suspicions that fear of competition is the sole motive behind banker opposition to the MBL cap lift. The hosts noted Federal Reserve Chairman Ben Bernanke’s Thursday statement that more jobs would be needed if the economic recovery is to be sustained, and Cheney said that that employment gap could also be filled once the MBL increase is passed into law. Lifting the MBL cap to 27.5% of total assets would create over 108,000 new jobs, Cheney said. CUNA has estimated that the MBL cap increase would add $10 billion in new funds into the market, at no cost to taxpayers. CUNA and credit unions made significant inroads with their 2010 support of MBL legislation in both the House and Senate, and Cheney said that they are “not going to start at the beginning” whenever MBL legislation returns to the House and Senate floors. “We’re going to get it done,” he said. Cheney also took on the credit union tax exemption and credit union chartering issues during the half hour interview. Cheney said that while he is naturally in favor of more credit unions, the current restrictions on the raising of supplemental capital can make it difficult to gather the funds needed to organize and start a new credit union.

Warren CFPB will work for reduced reg burden

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WASHINGTON (2/4/11)—The Consumer Financial Protection Bureau (CFPB), once it is fully organized later this year, will work to reduce some regulatory burdens faced by credit unions and other financial institutions and will review the impact of its own rules on credit unions and other small financial service providers, CFPB architect Elizabeth Warren said in a recent letter to Rep. Randy Neugebauer (R-Texas). Warren’s letter was prompted by a Jan. 18 request from Neugebauer for more information on the development and future operations of the CFPB. Neugebauer, who serves on the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit, also discussed the CFPB during an early January meeting with Warren. In Warren's letter, she said she shares Neugebauer’s “concern for promoting consistent regulation and minimizing implementation burdens,” and added that the CFPBs dialogue with the National Credit Union Administration (NCUA) and other financial regulators is “imperative” as the CFPB transitions into its own regulatory activities. The CFPB will take over a number of regulatory roles from the Federal Reserve and other agencies on July 21. The NCUA will remain mostly independent, however, as credit unions holding under $10 billion in assets will not be examined by the pending CFPB. The NCUA will have a seat on a pending regulatory council. CFPB representatives have discussed the agency’s goals and future work with credit unions, leaders of other financial institutions, and individual consumers as it works toward the July 21 deadline. The Credit Union National Association has met with the CFPB as well, stressing the need to minimize credit unions' regulatory burdens, costs and requirements. CUNA has delivered commentary on how consumer financial regulations can be improved and how consumer financial disclosures can be pared down, and has noted that improving the transparency and consumer-friendliness of many financial products would benefit credit unions, holding competitors to the same high standards generally used by credit unions in these core areas. Warren also outlined the CFPB’s structure in the letter. The CFPB will have six divisions, with respective groups addressing consumer engagement and education, supervision and enforcement, research markets and regulations, legal matters general counsel, external affairs, and the organization’s own internal operations. The CFPB has also set up its own website ahead of the July 21 deadline, and is seeking additional outside input via social media outlets. (See related story: CFPB launches website, seeks Youtube videos)

Inside Washington (02/03/2011)

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* WASHINGTON (2/4/11)--The Federal Deposit Insurance Corp. will meet Monday to finalize several deposit insurance measures and a proposal to prohibit risky compensation plans (American Banker Feb. 3). Among the changes, which were first proposed in November, is a new method for calculating deposit insurance assessments, as required by the Dodd-Frank Act. Under the new proposal, the FDIC would multiply a bank’s risk-based insurance rate by its assets minus its capital--instead of by its deposits--to calculate an assessment. The reform is meant to capture the nondeposit liabilities, used primarily by large banks, in their premiums. The FDIC has also proposed changes in how it comes up with risk-based rates for large banks. Under the new rule, the risk formula for large institutions would make their insurance prices more risk sensitive. The agency is also expected to issue another proposal, drafted jointly with other agencies, requiring greater disclosure of compensation agreements for top banking executives. Under Dodd-Frank, financial institutions must report their compensation plans and eliminate excessive pay packages. The meeting agenda is available online here … * WASHINGTON (2/4/11)--Fifth Third Bancorp, Cincinnati, has fully repaid its $3.4 billion in outstanding Troubled Asset Relief Program (TARP) funds, the Treasury Department announced Wednesday. With the transaction, total repayments and other income from programs within TARP to provide direct financial support to banks (about $243 billion) have nearly surpassed total disbursements (about $245 billion). Treasury currently estimates that bank programs within TARP will ultimately provide a profit of nearly $20 billion to taxpayers. Overall, across all TARP programs--including financial support for banks, the domestic auto industry, and American Insurance Group; targeted initiatives to help restart the credit markets; and foreclosure prevention programs--Treasury has disbursed a total of approximately $410 billion. With the Fifth Third payment, total program repayments (roughly $238 billion) and other income (about $36 billion) have reached more than $274 billion. Fifth Third Bancorp had previously paid a cumulative total of $340.8 million in dividends to Treasury on those preferred shares--representing a return on this investment of approximately 10%. Treasury also continues to hold warrants to purchase Fifth Third Bancorp common stock …