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Leon-Decker withdraws her name from NCUA consideration

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WASHINGTON (3/13/12)--Carla Leon-Decker requested that her nomination to the National Credit Union Administration board be withdrawn and that request was honored by the White House Monday.

Leon-Decker had been named as the White House candidate for a term on the NCUA that would expire Aug. 2, 2017.

León-Decker would have taken an NCUA board spot vacated by the pending departure of Gigi Hyland, whose six-year term on the NCUA board ended in August. Hyland is still serving as an NCUA board member.

León-Decker is the current president/CEO of D.C. Government Employees FCU and has also served as operations manager and president/CEO of PAHO/WHO FCU and branch manager of Transportation FCU.

She is also a credit union development educator and director of the Network of Latino Credit Unions & Professionals.

CUNA backs Bachus in tough primary fight

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WASHINGTON (3/13/12)--House Financial Services Chairman Spencer Bachus (R-Ala.) is facing a tough Republican primary fight ahead of this fall's general election, and the Credit Union National Association (CUNA) has stepped in to help the chairman ahead of today's primary vote.

CUNA is supporting the chairman with rush-hour radio ads in Alabama's sixth congressional district, which includes Birmingham, Tuscaloosa and a portion of the state capitol, Montgomery.

The radio ads, an independent expenditure financed by the Credit Union Legislative Action Council (CULAC), CUNA's federal political action committee, began on Sunday and will run through the close of polls on Tuesday. Independent expenditures are campaign communications directed at voters that are conducted independently of the candidate or candidate's campaign they are intended to support.

"CUNA is backing Chairman Bachus in this early contest, and we will continue to support other friends of credit unions ahead of this fall's races," Richard Gose, CUNA's senior vice president of political affairs, said.

Bachus's main challenger is state Sen. Scott Beason (R). Two others, David Standridge and Al Mickle, are also challenging for the congressional seat. To win, a candidate must secure more than 50% of the primary vote.  If no candidate does so, the two highest vote getters will face one another in a runoff.

Bachus, who joined the House of Representatives in 1993 and has led the Financial Services Committee since early 2011, has called credit unions "an integral part of our financial system" and has praised credit unions for their pro-consumer work and their straightforward credit practices.

He also has fought against predatory lending practices, and authored legislation that lifted the federal deposit insurance level for credit unions and banks to $250,000.

Overall, CUNA plans to spend more than $3 million on 2012 congressional races.

FI info could be protected under CFPB plan

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WASHINGTON (3/13/12)--Protections for private information that financial institutions and others submit to the Consumer Financial Protection Bureau (CFPB) could be codified under a new CFPB proposal.

The proposal would ensure that groups or individuals that supply information to the CFPB would not waive their right to privacy protections, and clarify that these protections would remain intact when privileged information is transferred from the CFPB to other federal or state agencies.

CFPB Director Richard Cordray called the proposal "a common sense rule" that is consistent with the CFPB's practice of guarding the confidentiality of supervised institutions' information. "This rule will allow us to further protect consumers by facilitating the flow of information between the Bureau and its supervised entities," he added.

The proposed rule will be open for public comment for 30 days after it is published in the Federal Register.

Bills that would provide these same types of privacy protections have been offered in the House and Senate, and CUNA has said it appreciates the intent of these bills. CUNA has worked closely with legislators and the National Credit Union Administration to ensure that both bills sufficiently protect credit unions.

CUs cover challenges in Texas field hearing

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WASHINGTON (3/13/12)--Credit union concerns will be heard at a Wednesday House Financial Services financial institutions and consumer credit subcommittee field hearing on the challenges facing small financial institutions in Texas.

This hearing will be held in San Antonio, Texas.  Maria Martinez, president/CEO of Border FCU, Del Rio, Texas and Robert Glenn, president/CEO of Air Force FCU, of San Antonio, will testify alongside other finance industry representatives.

The subcommittee has also scheduled a Thursday Las Vegas, Nevada-based hearing on potential private sector solutions to foreclosure issues, and Sue Longson of El Monte, California-based SCE FCU will testify at that hearing.

The following hearings have also been scheduled:
  • A Wednesday Senate Banking financial institutions subcommittee hearing on pre-paid card issues; and
  • A Thursday Senate Banking housing, transportation and community development subcommittee hearing on how to strengthen the housing market while minimizing taxpayer losses.
The House is on recess this week, but the Senate continues to consider its transportation bill.

The Senate's developing jobs bill could also be released this week, and CUNA is working to include Sen. Mark Udall's member business lending legislation (S. 509) as part of that bill. S. 509 would increase the MBL cap from 12.25% to 27.5% of assets. CUNA has estimated that increasing the MBL cap to 27.5% of assets would inject $13 billion in new funds into the economy, creating as many as 140,000 new jobs, at no cost to taxpayers.

CUNA and credit union leagues have encouraged supporters to contact their legislators and urge them to support S. 509.

To join CUNA's MBL call to action, use the resource link.

HSBC NCUA settle on corporate CU losses

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ALEXANDRIA, Va. (3/13/12)--HSBC has agreed to pay the National Credit Union Administration (NCUA) $5.25 million to settle potential claims relating to the sale of residential mortgage-backed securities to five failed corporate credit unions, the agency reported Monday.

The NCUA said HSBC did not admit fault on their part.

NCUA Chairman Debbie Matz said the agency appreciates HSBC's efforts to resolve potential claims and avoid the expense and delay of litigation. "This settlement furthers our goal to minimize losses and thereby reduce the assessments that all credit unions will have to pay. NCUA will continue to fulfill our statutory responsibility to secure maximum recoveries for credit unions and ensure that consumers remain protected," she added.

The agency is using proceeds from this and other settlements to reduce assessments that are charged to credit unions to cover corporate credit union losses.

The NCUA also collected $165.5 million in funds after it settled with Citigroup and Deutsche Bank Securities last year.

The NCUA is seeking to recover an additional $2 billion from the Royal Bank of Scotland, RBS Securities, JP Morgan Securities, and Goldman Sachs in suits it has filed against these entities. There may be additional recoveries from other firms that sold residential mortgage-backed securities to corporate credit unions that contributed to their losses.

For the full NCUA release, use the resource link.

CUNA comments on HUD loan appeal changes

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WASHINGTON (3/13/12)--The Credit Union National Association (CUNA) has suggested the Department of Housing and Urban Development (HUD) give greater consideration to its proposal to eliminate the process for requesting alternative Federal Housing Administration (FHA) maximum mortgage amounts before it moves forward.

HUD currently limits the maximum principal obligation on FHA-insured single-family mortgages to either 115% of the median house price for a single-family home in a surrounding metropolitan area, or 65% of the national conforming limit. However, HUD allows this cap to be challenged through an appeals process if any party involved in the mortgage "believes that a mortgage limit established by the [HUD Secretary] does not accurately reflect the median house prices in the area."

HUD recently said this appeals process was outdated and creates unneeded costs, and said removing the appeals regulation would not have any impact on the calculation of area loan limits.

HUD in 2008 began collecting home price data through data collection firm CoreLogic, and the accurate data gathered in these collections has resulted in fewer appeals. Under current HUD rules, appeals can only be made in ten of the 3,234 counties in the U.S. and related territories, and HUD saw appeals decline to zero in 2010. However, CUNA suggested in its comment letter that the FHFA monitor the number of appeals lodged over a longer period of time to determine whether the appeals process should be abandoned.

"We do not believe one year is enough time to conclude with certainty that the appeals process is altogether obsolete--especially given the lackluster state of the current mortgage market," CUNA said.

CUNA pointed out that eliminating the appeals process altogether would penalize the ten counties for which HUD does not have sufficient direct or indirect data to accurately determine a loan limit.

CUNA said HUD should maintain an adequate process by which parties in these counties may request alternative loan limits, at least until HUD has sufficient direct or indirect data to accurately calculate an appropriate loan limit for those counties.

For the full comment letter, use the resource link.

NEW Carla Leon-Deckers NCUA nomination has been withdrawn

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WASHINGTON (UPDATED 3/12/12 5:48 p.m. ET)--The White House has announced the nomination of Carla Leon-Decker to be a member of the National Credit Union Administration (NCUA) has been withdrawn.

Leon-Decker had been named as the candidate for a term on the NCUA that would expire Aug. 2, 2017.

León-Decker is the current president/CEO of D.C. Government Employees FCU and has also served as operations manager and president/CEO of PAHO/WHO FCU and branch manager of Transportation FCU.

She is also a credit union development educator and director of the Network of Latino Credit Unions & Professionals. León-Decker would have taken an NCUA board spot vacated by the pending departure of Gigi Hyland, whose six-year term on the NCUA board ended in August. Hyland is still serving as an NCUA board member.

Inside Washington (03/12/2012)

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  • WASHINGTON (3/13/12)--The Federal Reserve on Thursday will release the results of if its latest stress tests for the 19 largest banks, including many financial institutions that were at the heart of the financial crisis. The tests evaluate whether firms would have sufficient capital in times of severe economic and financial stress to continue to lend to households and businesses. The Federal Reserve estimated revenue and losses under the stress scenario based on detailed data provided by the firms and verified by supervisors. The supervisory stress scenario depicts a severe recession in the U.S., including a peak unemployment rate of 13%, a 50% drop in equity prices, and a 21% decline in housing prices. The supervisory stress scenario is not the Federal Reserve's forecast for the economy, but was designed to represent an outcome that, while unlikely, may occur if the U.S economy were to experience a deep recession at the same time that economic activity in other major economies contracted significantly. Strong capital levels are critical to ensuring that banking organizations have the ability to lend and to continue to meet their financial obligations, even in times of economic difficulty. U.S. firms have built up their capital levels under the Federal Reserve's leadership since government stress tests were conducted in early 2009. The 19 banks that participated in those tests have increased their common capital levels to $759 billion in the fourth quarter of 2011 from $420 billion in the first quarter of 2009. The tier 1 common ratio for these firms, which compares high-quality capital to risk-weighted assets, has increased to a weighted average of 10.4% from 5.4% …
  • WASHINGTON (3/13/12)--William S. Haraf, commissioner of the California Department of Financial Institutions announced his resignation Monday, which will be effective Friday. Haraf joined the California Department of Financial Institutions in 2008 after a long career in commercial and investment banking, the investment branch of federal government, and academia. In his capacity as the state commissioner of financial institutions, Haraf serves as the sole state bank regulator representative on the Financial Stability Oversight Council established by the Dodd-Frank Act. He also is chairman-elect of the board of the Conference of State Bank Supervisors …
  • WASHINGTON (3/13/12)--The Consumer Financial Protection Burea (CFPB) has added auto loans and installment loans, which are typically taken out for appliances and other more expensive items, to the list of financial products it accepts public complaints on. The CFPB will forward complaints to the institutions providing the loan. While the CFPB will resolve issues involving large financial institutions, it said it would forward complaints tied to smaller institutions to their prudential regulators.

NEW HSBC NCUA settle on corporate CU losses

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ALEXANDRIA, Va. (UPDATED: 11:00 A.M. ET)--HSBC has agreed to pay the National Credit Union Administration (NCUA) $5.25 million to settle potential claims relating to the sale of residential mortgage-backed securities to five failed corporate credit unions, the agency reported today.

The NCUA said HSBC did not admit fault on their part.

NCUA Chairman Debbie Matz said the agency appreciates HSBC's efforts to resolve potential claims and avoid the expense and delay of litigation. "This settlement furthers our goal to minimize losses and thereby reduce the assessments that all credit unions will have to pay. NCUA will continue to fulfill our statutory responsibility to secure maximum recoveries for credit unions and ensure that consumers remain protected," she added.

The agency is using proceeds from this and other settlements to reduce assessments that are charged to credit unions to cover corporate credit union losses.

The agency also collected $165.5 million in funds after it settled with Citigroup and Deutsche Bank Securities last year.

The NCUA is seeking to recover an additional $2 billion from the Royal Bank of Scotland, RBS Securities, JP Morgan Securities, and Goldman Sachs in suits it has filed against these entities. There may be additional recoveries from other firms that sold residential mortgage-backed securities to corporate credit unions that contributed to their losses.