Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive


Inside Washington (03/12/2010)

 Permanent link
* WASHINGTON (3/15/10)--The Obama administration has picked Janet Yellen, president of the Federal Reserve Bank of San Francisco, to serve as vice chair of the Federal Reserve Board of Governors, succeeding Donald Kohn, who will step down when his four-year term expires in June. To fill the others slots on the board, the administration has selected Peter A. Diamond, a Massachusetts Institute of Technology economist, and Sarah Bloom Raskin, Maryland commissioner of financial regulation (The New York Times March 12). Yellen, 63, previously chaired the White House Council of Economic Advisers and was a member of the Fed Board of Governors during the Clinton administration. She has a Ph.D in economics from Yale and has taught in the Haas School of Business at the University of California-Berkeley since 1980. Yellen also wrote “The Fabulous Decade: Macroeconomics Lessons from the 1990s,” with former Fed vice chair Alan Blinder. Yellen declined comment to The New York Times about the offer ... * WASHINGTON (3/15/10)--Legislation that would end private lenders’ role in government-guaranteed student lending is sparking debate. Six Democratic senators object to including the bill in a healthcare reform package because they say the move would not save the government as much money as originally estimated--$67 billion over 10 years, compared with the earlier estimate of $87 billion (American Banker March 12). The bill’s sponsors continue to move forward. Sen. Tom Harkin (D-Iowa), a key sponsor, said the government has subsidized banks and wasted taxpayer money for too long. Last year, the House approved a bill to end the Federal Family Education Loan Program, which lets lenders offer student loans through partial government guarantees. Senate leaders packaged it with healthcare reform to generate support ... * WASHINGTON (3/15/10)--David Stevens, Federal Housing Administration (FHA) commissioner, defended FHA’s plans to boost capital reserves without down payment increases. Increasing down payments would have negative effects on the broader housing market, Stevens said (American Banker March 12). The FHA wants to increase the up-front premium for the majority of borrowers by 50 basis points to 225 basis points of the loan amount. The hike would be effective in April. Stevens said raising the down payments would generate $500 million for the agency, while the basis point raise would generate $5.8 billion ... * WASHINGTON (3/15/10)--The Federal Deposit Insurance Corp. (FDIC) approved an extension of the Safe Harbor Protection for Treatment by the FDIC as conservator or receiver in the failure at an insured depository institution in connection with a securitization or participation. The safe harbor protection prevents FDIC from seizing the assets. Under the safe harbor, all securitizations or participations in process through Sept. 30 are permanently grandfathered. “We will continue to seek broad agreement on securitization reforms that can be implemented by all the regulatory agencies,” said FDIC Chairman Sheila Bair ...

Feb. federal loan-mod report shows jump

 Permanent link
WASHINGTON (3/15/10)--The U.S. Treasury and the Department of Housing and Urban Development (HUD) on Friday reported that the number of mortgages modified through the Obama Administration’s Home Affordable Modification Program (HAMP) increased by 45% in February. In total, the HAMP program modified 170,000 mortgages during February, with “an additional 91,800 permanent modifications" being approved by servicers, the release added. According to the report, “borrowers in active trial and permanent modifications have saved more than $2.7 billion through HAMP modifications,” with a median savings of $519 per borrower, “or 36% of the median before-modification payment.” The program has been most active in California, with Florida ranking a close second in the number of active trials and permanent mortgage modifications. The New York, Los Angeles, Chicago, and Miami metropolitan areas had the highest HAMP participation among larger cities. For the full report, use the resource link.

Compliance Answers on Reg CC notification check-holding issues

 Permanent link
WASHINGTON (3/15/10)--The Credit Union National Association (CUNA) has advised credit unions that they may provide a change notice in their newsletter if their current disclosures under Regulation CC are no longer accurate due to the recent elimination of nonlocal checks. However, CUNA, in this month’s Compliance Challenge, warns that that very newsletter may be released after the Reg CC compliance date of March 29. In that case, credit unions must determine the cost benefit of producing a separate mailing. Another option is to simply wait until after the compliance date to inform members. No matter what action a credit union takes, its employees should ensure that their new account disclosures are updated, post information about the changes in their funds availability policies online. In general, credit unions should make as many online notifications as possible, and make sure that information posted in their lobbies and ATMs is correct. Addressing the new check policy more directly, CUNA said that the “reasonable” timeframe for holding a check under one of the Regulation CC exceptions is one extra business day for cashier’s, teller’s, certified, and “on us” checks otherwise subject to next day availability, five extra business days for checks subject to second business day availability, and six extra business days for checks deposited in nonproprietary ATMs. Additional days can be applied to large deposits, re-deposited checks, repeated overdrafts, and other emergency conditions, but the credit union itself is responsible for determining whether or not a given situation requires a longer hold period. For CUNA’s Compliance Challenge, use the resource link.

Freddie Mac 30-year mortgage rates remain below 5

 Permanent link
WASHINGTON (3/15/10)--In its weekly release on the state of the home loan market, Freddie Mac disclosed that the average rate of 30-year fixed-rate mortgages was 4.95% for the week ended March 11, a slight drop from the previous week's average of 4.97%. Freddie Mac vice president/chief economist Frank Nothaft said that the easing of mortgage rates was related to the comparatively “light week of mixed economic reports.” Fifteen-year mortgages averaged 4.32% during the week, a slight drop from the 4.33% average reported during the previous week. Thirty-year and 15-year fixed rate mortgages averaged 5.03% and 4.64%, respectively, this time last year. Freddie Mac also released numbers on less conventional mortgages, noting that the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.05% for the week, with the 1-year Treasury-indexed ARM averaging 4.22%. Average rates for the 5 and 1 year mortgages averaged 4.99% and 4.80%, respectively, last year.