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California lawmaker wins CUNA financial ed award

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WASHINGTON (2/5/08)--California State Assemblyman Ted Lieu will receive the Credit Union National Association's (CUNA's) 2007 National Desjardins Youth Financial Education Award for State Lawmakers for his efforts to pass legislation that would funds financial education programs in the state’s schools. In nominating Lieu for the award, the California Credit Union League said the lawmaker’s commitment to the financial literacy issue reveals a “deep understanding of the powerful consequences of appropriate and effective financial literacy on individuals, families and the economy.” Elected to the California State Assembly in 2006, Lieu immediately led the effort to craft a bill that would have authorized schools to include personal finance and financial literacy curriculum in the existing economics requirements for high school graduation. Governor Arnold Schwarzenegger ultimately vetoed the bill. Leiu responded the following year with another bill that would have established the California Financial Literacy Initiative. The program would have collected public and private funds and disbursed them to schools for financial literacy programs. Schwarzenegger also vetoed that bill, calling it “unnecessary.” Lieu will be honored at the 2008 CUNA Governmental Affairs Conference (GAC) in March. The award was bestowed by CUNA's State Credit Union Subcommittee. The award for state lawmakers is the third component of the Desjardins Awards. Related awards go to credit unions and leagues making outstanding efforts to promote financial literacy.

Financial institution diversity in House subcommittees sights

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WASHINGTON (2/4/07)--The House subcommittee on oversight and investigations, has announced a hearing Thursday on diversity in the financial services industry. The hearing will focus on the employment, retention and promotion of minorities and women at all levels in the financial services sector, according to announcement from the subcommittee’s chairman, Rep. Melvin Watt (D-N.C.). Watt said witnesses would include representatives from the Equal Employment Opportunity Commission (EEOC), financial industry representatives and non-governmental organizations that monitor workplace diversity. The subcommittee will be investigating best practices for expanding the presence of women and minorities in the financial services industry and economic benefits that may result from diversity. “This hearing will examine workplace diversity in the financial services industry. I look forward to hearing from the Equal Employment Opportunity Commission (EEOC), industry representatives and non-governmental organizations that monitor workplace diversity about best practices for expanding the presence of women and minorities in the financial services industry and about the economic benefits that result from diversity.”

President wants deep CDFI cutsagain

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WASHINGTON (2/4/08)—In his FY 2009 budget proposal submitted to Congress Monday, President George W. Bush is seeking a deep reduction in the money appropriated for the Treasury Department’s Community Development Financial Institutions (CDFI) Fund. The administration plan would give the CDFI Fund $28.6 million, broken into two parts: $24.4 million for the actual CDFI program and $4.2 million for the New Market’s Tax Credit Program. That is down from the $94 million approved by Congress for FY 2008. The 2009 spending plan requests no funding for either the Bank Enterprise Program or Native American initiatives. In its FY2006 and FY2007 budget proposals, the Bush administration proposed consolidating the CDFI Fund along with several other community development block grant programs. It also proposed that they be administered by the Department of Housing and Urban Development and the Department of Commerce. That proposal was not was not included in the FY2008 budget, nor was it brushed off for this newest budget package. The Credit Union National Association (CUNA) has worked with the National Federation of Community Development CUs and the Coalition of Community Development Financial Institutions to oppose previous attempts to move administration of the Fund and cut its annual appropriation. CUNA supports keeping the Fund under the administration of the Treasury Department.

Task force to address third-party vendors due diligence

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WASHINGTON (2/5/08)-–The Credit Union National Association (CUNA) is establishing a new task force to help credit unions meet their due diligence responsibilities with third-party vendors and to do so without unnecessary duplication of effort. The National Credit Union Administration (NCUA) has identified third-party vendor relationships as one of its top examination issues for 2008. The CUNA task force will be headed by Chairman Henry Wirz of SAFE CU in California, and Vice Chairman William Raker of US FCU in Minnesota and will be comprised of 14 additional members from around the country The new task force will provide practical resources and model procedures for assessing, controlling and monitoring the risks associated with third-party vendor agreements and performance. Last week, the NCUA staged a Webinar on 2008 top exams issues. Dominick Nigro, information systems officer of the NCUA's Office of Examination and Insurance, said effective third-party due diligence must include background checks, review of the vendor's business model, and the vendor's financial condition. Board member Gigi Hyland, who moderated the session, specifically highlighted the need to review the legal agreement with the vendor and to ensure compliance with all applicable state and federal laws. The other members of the CUNA task force members are:
* Tom Dare, associate general counsel, CUNA Mutual Group, Madison, Wisc.; * Charles Emmer, president/CEO, ENT CU, Colorado Springs, Co.; * Dave Fearing, VP Sales/Services. Ohio CU Union, Dublin, Ohio; * Tom Gaines. president/CEO., Tennessee CU League, Chattanooga, Tenn.; * Joseph Ghammashi, VP/chief risk officer, Corporate One FCU, Columbus, Ohio; * Debie Keesee, president/CEO, Spokane Media FCU, Spokane, Wash.; * RoxAnne Kruger, SVP, Business and Member Development, Washington CU League, Federal Way, Wash.; * Erin Mendez, SVP, IS and Finance Orange County Teachers FCU, Santa Ana, Calif.; * Dave Osborn, president/CEO, Anheuser-Busch Employees U, St. Louis, Mo.; * Earle Pierce, director, Internal Audit, Community First CU of Florida, Jacksonville, Fla.; * Lisa Pleasure, director, Internal Audit, CommunityAmerica CU, Lenexa, Kan.; * John Sackett, board chair, Royal CU, Eau Claire, Wisc.; and * Christina Vaughn, compl;iance officer, Municipal ECU of Baltimore, Md.

CUNA presses for CU comment on charter changes

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WASHINGTON (2/5/08)—The Credit Union National Association (CUNA) is launching an all-out press to encourage credit unions to comment on a National Credit Union Administration initiative to more clearly define a credit union board's fiduciary duties in the face of major decisions, such as mergers or conversions to mutual thrifts. The NCUA is asking credit unions whether it should develop new regulations that would address situations in which a federally insured credit union merges or converts to another type of financial institution, other than a mutual savings bank. The agency is also asking for comments on whether it should amend its current rules on mergers, charters conversions and changes in account insurance. The requests for comments were issued in the form of an advance notice of proposed rulemaking (ANPR) at the Jan. 24 open NCUA board meeting. Mary Dunn, CUNA SVP and deputy general counsel, said Monday, “The NCUA is asking for a whole new layer of regulation for credit unions. We want to make sure the agency receives appropriate comment on every element of their ANPR as they seek comment.” Dunn said CUNA’s efforts prior to forming its comment will be multi-pronged. CUNA will initiate its Operation Comment, which enables a credit union to submit its comment both to NCUA and CUNA simultaneously through the CUNA website. It will be briefing its Federal CU Subcommittee and its Examination and Supervision Subcommittee, Community CU Committee, and the CUNA Councils on the issues involved. CUNA also will be working with its Governmental Affairs Committee during its Governmental Affairs Conference in Washington March 2-6. According to NCUA, the agency is looking for ways to protect the interests of members when their credit union is considering transactions that would significantly affect members’ rights, such as a change in the ownership of the credit union, termination of a credit union’s charter or its federal share insurance. More specifically, NCUA is focusing on six types of transactions:
* A merger of a federally insured credit union (FICU) into another FICU; * A merger of a FICU into a privately insured credit union (PICU); * A conversion of a federally insured state credit union (FISCU) into a PICU; * A merger of a FICU into a financial institution other than a mutual savings bank; and * A conversion of a FICU into a financial institution other than an MSB.
Comments are due tot the NCUA March 31.

Inside Washington (02/04/2008)

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* WASHINGTON (2/5/08)--Basel II will be effective April 1, but the 12 largest financial institutions in the U.S. may need six months or more to comply with it. The final rule for Basel II states that financial institutions must submit their compliance plans to regulators by Oct. 1, but they can implement the plans as late as April 1, 2011 (American Banker Feb. 4). During the interim, the institutions must have four consecutive quarters of Basel I compliance but calculate Basel II levels. Gil Schwartz, a former Federal Reserve Board lawyer, said he didn’t think financial institutions would face too many barriers to implement Basel II. Rob Strand, a senior economist at the American Bankers Association, said risk managers are busy. If banks implement Basel II during a rough patch, capital requirements would increase, he added ... * WASHINGTON (2/5/08)--The California Reinvestment Coalition, the Community Reinvestment Association of North Carolina, the Neighborhood Economic Development Advocacy Project and the New Jersey Citizen Action are objecting to the sale of Countrywide Financial Corp. by Bank of America. The consumer groups have asked the House Financial Services Committee and the Senate Banking Committee to hold congressional hearings on the matter. The groups stated that Countrywide’s business practices have contributed to many of its borrowers facing foreclosure and they are concerned that Bank of America has not released a plan to ensure that efforts will be made to keep borrowers in their homes ... * WASHINGTON (2/5/08)--The Securities and Exchange Commission (SEC) extended Sarbanes-Oxley compliance for one year so it can conduct a cost-benefit study of Section 404. The study will consist of a Web-based survey and in-depth interviews, and is expected to be complete later this year. Section 404 requires company management to assess the effectiveness of the company’s internal controls over financial reporting ...

Treasury to unveil reg restructuring progress

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WASHINGTON (2/4/08)—Treasury Under Secretary for Domestic Finance Robert. Steel will speak publicly Thursday on Treasury's progress in creating a blueprint to improve the U.S. financial regulatory structure. Steel is scheduled to make his remarks at the New York Society of Security Analysts Annual Wall Street Forum in New York City at 8 a.m. Treasury Secretary Henry Paulson announced plans in June to evaluate and improve financial regulations in ways that would increase efficiency, reduce overlap, strengthen consumer and investor protections and ensure that financial institutions have the ability to keep pace with evolving markets. In October, the department requested public comment on issues involved in its ambitious and comprehensive plan improve the framework for the regulation and insurance of financial institutions. The Credit Union National Association (CUNA) wrote that the current regulatory structure is right for credit unions. Consolidating federal financial institution regulatory agencies would have dire consequences for credit unions because they are "distinctive and exceptional financial organizations" that require their own regulatory framework, the CUNA letter to Treasury said. For more of the CUNA comment letter, use the resource link below.