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Exam Criteria Addressed By NCUA Fair Lending Letter

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WASHINGTON (3/20/13)--In a new letter to federal credit unions (13-FCU-02), the National Credit Union Administration said it will select a number of federal credit unions to undergo a fair lending examination this year, and outlined the factors that agency examiners will use to determine whether a federal credit union should be subject to further fair lending reviews.

Credit Union National Association President/CEO Bill Cheney said CUNA will follow up with the agency on fair lending issues to provide more information to the credit union system. "CUNA recognizes credit unions must obey the law, but we have urged NCUA to refrain from directives and sanctions unless, based on measurable factors, the agency can demonstrate material compliance issues exist. We will continue to press this view," he added.

Federal credit unions that are selected for a fair lending exam or off-site supervision contact "will have demonstrated the potential for a higher fair lending risk" based on certain criteria discussed in the letter, including fair lending violations and general compliance risks, the letter noted.

Credit unions' whose Home Mortgage Disclosure Act report results fall outside the normal range for pricing, denials, withdrawals, or lending terms when compared to other financial institutions may also be subject to these examinations, the agency said.

Selected federal credit unions that fit the exam criteria will receive advance written notification of the exam or off-site supervision contact from NCUA's Office of Consumer Protection, according to the letter.

Off-site fair lending supervision contacts will also be made in certain situations, the agency said.

The NCUA's new fair lending educational and compliance tools, and off-site supervision contacts to help federal credit unions comply with fair lending laws, are also highlighted in the letter. The agency has also provided credit unions with a guide describing fair lending law and regulations, credit union operational requirements, issues to consider when developing fair lending compliance policies, and checklists for testing compliance with laws and regulations, or developing a fair lending policy for compliance.

The NCUA will provide an overview of its 2013 fair lending examination program and detail fair lending best practices during an April 4 webinar. (See related story: Fair Lending Is Topic Of NCUA April 4 Webinar.)

For the letter, use the resource link.

The NCUA also announced an April 4 webinar on fair lending. (See News Now story: Fair Lending Is Topic Of NCUA April 4 Webinar)

CU Performance Scenarios Are Subject Of NCUA Video

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ALEXANDRIA, Va. (3/20/13)--The immediate future of the U.S. economy remains uncertain, and National Credit Union Administration Chief Economist John Worth addresses what different economic forecasts could mean for credit unions in a new YouTube video.



The video is the latest in a series of YouTube videos to inform the public and credit unions about general economic and credit union specific developments.

The videos can also be viewed on the NCUA's YouTube page by using the resource link below.

GSE Reform Must Move Forward, Hensarling, FHFA Head Agree

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WASHINGTON (3/20/13)--The U.S. Congress should get to work and develop a plan for the future of the U.S. mortgage market, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Federal Housing Finance Agency Acting Director Edward DeMarco each said during a Tuesday committee hearing.

DeMarco was the sole witness at Tuesday's hearing, entitled "Sustainable Housing Finance: An Update from the Federal Housing Finance Agency on the GSE Conservatorships."

In his opening remarks, Hensarling said he is determined that the hearing would be the last time that DeMarco or another FHFA leader testified before the committee before true government-sponsored enterprise (GSE) legislation is marked up. "This I define as legislation to once and for all abolish Fannie Mae and Freddie Mac as government-sponsored enterprises. And two, one that would truly create a sustainable housing policy," Hensarling said.

In his own remarks, DeMarco noted that the conservatorships of Fannie Mae and Freddie Mac, which began in late 2008, "were never intended to be a long-term solution," but rather "were meant primarily as a 'time out' for the rapidly eroding mortgage market--an opportunity to provide some stability while Congress and the Administration could figure out how best to address future reforms to the housing finance system.

"The U.S. housing finance system cannot really get going again until we remove this cloud of uncertainty and it will take legislation to do it," DeMarco said. He noted that only Congress can abolish or modify the GSE charters "and set forth a vision for a new secondary market structure."

U.S. House and Senate members last week introduced separate bills addressing the government's role in that market. Overall, a range of mortgage market reforms have been discussed, including almost completely privatizing the housing finance system, limiting the government's intervention in the mortgage market to times of financial distress, and using a system of reinsurance to backstop private mortgage guarantors to a targeted range of mortgages.

The Credit Union National Association has repeatedly said that any changes to secondary mortgage market structure must allow credit unions and other small issuers to maintain full and unrestricted access to that market. CUNA has also highlighted the importance of preserving 30-year, fixed-rate mortgages and ensuring that the secondary market is strong enough to weather economic adversity.

For more on the hearing, use the resource link.

Cordray Nomination To Move Forward In Senate

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WASHINGTON (3/20/13)--Richard Cordray's nomination to continue as the head of the Consumer Financial Protection Bureau now moves on for a full U.S. Senate vote, after the Senate Banking Committee Tuesday approved the nomination in a 12 to 10 vote.

Senate Majority Leader Harry Reid (D-Nev.) had not set a date for Cordray's Senate vote as of late Tuesday.  Because of controversy surrounding the CFPB's makeup, Cordray's CFPB future is not entirely clear at this time. Many Senate Republicans have consistently said they would block any CFPB nominee if certain structural changes were not made to the agency makeup.

Cordray's nomination passed the committee in 2011, but ultimately failed to get a vote in the Senate. President Barack Obama appointed Cordray to the CFPB director position during a brief congressional recess in 2012, and Cordray's term as director would end this year if he is not confirmed.

House and Senate Republicans have supported replacing the CFPB director's position with a five-member panel of leadership. Legislation that would create such a panel (S. 205) has been introduced in the Senate. The Credit Union National Association backs a multi-member panel of directors if it includes seats statutorily designated for credit union system representatives, including a state or federal credit union regulator, and possibly a state consumer agency representative.

Fair Lending Is Topic Of NCUA April 4 Webinar

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ALEXANDRIA, Va. (3/20/13)--The National Credit Union Administration will provide an overview of its 2013 fair lending examination program, and detail fair lending best practices, during an April 4 webinar.

The free webinar, entitled "Fair Lending Examination Program and Compliance Assistance," is scheduled to begin at 1 p.m. ET.

NCUA Office of Consumer Protection (OCP) Director Gail Laster and agency staff will present the webinar. The NCUA staff plan to address how the fair lending off-site supervision contact process works, and take related questions during the webinar.

The NCUA said webinar participants may submit questions in advance by sending an email to WebinarQuestions@ncua.gov. The subject line of the email should read, "Fair Lending Webinar." 

The webinar follows the Tuesday release of a letter to federal credit unions (13-FCU-02) that addresses fair lending issues and examinations. (See News Now story: Exam Criteria Addressed By NCUA Fair Lending Letter)

To register for the NCUA webinar, use the resource link.

Also on fair lending, the NCUA Tuesday released a new letter to federal credit unions (13-FCU-02) saying it will select a number of federal credit unions to undergo a fair lending examination this year. The letter also outlined the factors that agency examiners will use to determine whether a federal credit union should be subject to further fair lending reviews. (See related story: Exam Criteria Addressed By NCUA Fair Lending Letter.)