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Washington Archive

Washington

NEW: Brown, Moran Introduce Privacy Notice Bill In Senate

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WASHINGTON (UPDATED: 3/21/13, 12:30 p.m. ET)--Legislation to end the redundancy of privacy notices was just introduced in the Senate. The bill (S. 635) diverges slightly from the language of a similar bill passed recently in the House. For instance, the Senate bill would require credit unions and other financial institutions to make their privacy policy always accessible in some form in order to qualify for the bill's exemption from sending annual privacy notices.

Both the House and Senate bills would eliminate a requirement that privacy notices be sent on an annual basis. They would instead allow the notices to be sent only when the privacy policy of a financial institution has changed.

"Credit unions make every effort to provide the most effective and efficient services to their members, which includes ensuring their members are aware of their privacy rights. This legislation safeguards member awareness of those rights, but eliminates repetitive notices that are often ignored by consumers," Credit Union National Association President/CEO Bill Cheney said. He noted that the bill "streamlines the regulatory burden on credit unions by reducing the amount of diverted time and resources that a credit union's staff could be using for more important services to its members.

"Above all, the bill enhances consumer protection by ensuring that when a consumer receives a privacy notification, it has significance and is not redundant," Cheney said.

The House version of privacy notice reform (H.R. 749) recently passed by voice vote and with broad bipartisan co-sponsorship.

The Senate bill was introduced by Senate Banking subcommittee on financial institutions Chairman Sherrod Brown (D-Ohio) and committee member Sen. Jerry Moran (R-Kan.).

Immediately upon introduction of the Senate bill, CUNA and other financial trade groups sent a joint letter to urge a Senate vote on the bipartisan legislation "without further delay and amendment."

House Hearing Looks At Bank Failures: CUs To Have Reg Burden Hearing

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WASHINGTON (3/21/13)--The House Financial Services subcommittee on financial institutions and consumer credit Wednesday conducted a "state of the community banking industry" hearing that looked into the causes of the 414 bank failures that occurred from 2008 through 2011.

The hearing was ordered by a bill enacted into law last year (P.L. 112-182) that required the Government Accountability Office (GAO) to issue a study on community banks and for the U.S. Congress to conduct a hearing within 150 days of the issuance of the study, which came out in January.

The single panel of witnesses Wednesday featured four staff representatives from the Federal Deposit Insurance Corporation and one from the GAO.

Congress has not required any similar study of credit union performance during the financial crisis. However, a committee spokesman told News Now that the panel does intend to hold a hearing to study the regulatory burden of credit unions. That session will be part of a 2013 series to study, in part, the impact of the Dodd-Frank Act.  A date will be announced in the near future.

In fact, the series is a continuation of regulatory burden hearings conducted in 2012, in which the Credit Union National Association repeatedly testified on how the growth of financial services regulations has impacted his credit union's ability to lend to and serve its members.

"We have held several meetings since the beginning of the year with committee members and staff on both sides of the aisle to discuss the importance of regulatory relief legislation," said Ryan Donovan, CUNA senior vice president for legislative affairs.  "It is apparent from those meetings that there is an understanding and appreciation for the crisis of creeping regulatory complexity facing America's credit unions and a willingness to examine how to address that from a statutory perspective.

"We look forward to continuing to work with the members of the House Financial Services Committee and the Senate Banking Committee on these issues."

Reducing credit unions' regulatory burden is one of CUNA's top priorities and CUNA is working aggressively on that issue on Capitol Hill and when dealing with the regulatory agencies that have jurisdiction over credit unions.

CFPB To Study Regulatory Compliance Costs

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WASHINGTON (3/21/13)--The Consumer Financial Protection Bureau is planning to reach out to financial institutions to study the extent and nature of compliance costs, and, ultimately, to increase public understanding of those costs.

"Regulations can have many benefits for consumers, but the benefits sometimes come at a cost," CFPB Division of Research, Markets & Regulation Deputy Associate Director Dan Sokolov wrote in a Wednesday blog post. "Banks, credit unions, and other financial services providers are concerned with compliance costs--how much it costs to comply with financial regulations--and we're interested as well," Sokolov added.

The Credit Union National Association has reached out to CFPB on this issue. CUNA's recent exam survey included questions on credit unions' top regulatory concerns, and the Filene Research Institute is conducting its own study of U.S. and Canadian credit union regulatory burdens, CUNA Deputy General Counsel Mary Dunn noted.

Sokolov said the CFPB's Research, Markets, and Regulations team is studying the costs related to rules the bureau took on from other regulators, and plans to speak with financial institutions to detail the costs institutions incur to comply with consumer regulations for deposit products and services.

The bureau will examine costs related to checking accounts, debit cards and other products. "Through our research, we hope to become better and smarter regulators," Sokolov wrote.

Debt collectors are one group that has recently been added to the list of financial market participants that are subject to CFPB oversight.

The CFPB on Jan. 2 began supervising debt collection agencies with more than $10 million in annual receipts, and the agency on Wednesday delivered an annual report to Congress on the Fair Debt Collection Practices Act (FDCPA).

The CFPB report addresses consumer complaints about debt collectors, and the bureau's response to those complaints, as well as the CFPB's supervision of debt collection activities. Enforcement activities, education, outreach, research and policy initiatives, and the cooperative efforts of the CFPB and the Federal Trade Commission are also covered in the report.

For the full CFPB report, use the resource link.

Fixed-asset Plan Comments Due May 20

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WASHINGTON (3/20/13)--Comments are due May 20 on the National Credit Union Administration's proposal that clarifies and reorganizes portions of its rule addressing federal credit union ownership of fixed assets, according to the Wednesday issue of the Federal Register.

When the agency proposed the clarifications for comment at its March open board meeting, staff noted that the proposed amendments do not make any substantive changes to regulatory requirements. Rather, they are intended to clarify the rule by improving its organization, structure, and "ease of use."

Use the resource link to see the Federal Register document.

CUNA: Overdraft Bill Addresses Problems That Don't Exist At CUs

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WASHINGTON (3/21/13)--A bill introduced this week that would cap overdraft fees is "legislation that seems to address a problem that doesn't exist in the credit union system," according to the Credit Union National Association.

CUNA Senior Vice President of Legislative Affairs Ryan Donovan made that point in a story posted on the NBC "Today Show" website that takes a look at the overdraft bill. The story noted credit unions are concerned about their growing regulatory burden.

CUNA President/CEO Bill Cheney also noted overdraft protection plans that are reasonably structured can help ensure consumers will have access to funds when needed. "CUNA supports the ability of credit unions to offer these plans as a means to help their members resolve short-term financial problems," Cheney said Wednesday.

Just a day earlier, Reps. Carolyn Maloney (D-N.Y.) and Maxine Waters (D-Calif.) introduced the Overdraft Protection Act of 2013, which would amend the Truth in Lending Act. In addition to capping overdraft fees, the bill proposes to impose a limit on the number of overdrafts that a member could use per year, and require financial institutions to post credits and debits in a particular order.

Cheney added that CUNA historically has had concerns with legislative and regulatory proposals that make it more difficult for credit unions to offer these services to their members: "We believe these decisions are best made by the democratically elected boards of directors of credit unions, not by Congress or the regulator."

Kinecta Purchases ICE FCU

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ALEXANDRIA, Va. (3/21/13)--Kinecta FCU, Manhattan Beach, Calif., will take on the assets, shares and members of I.C.E. FCU, Inglewood, Calif., after the National Credit Union Administration announced an approved purchase and assumption agreement Wednesday.

The NCUA assumed control of I.C.E. FCU last week after it determined the credit union was insolvent and had no prospects for restoring viable operations. The credit union held $3.4 million-in-assets and had 942 members.

The agency said the new Kinecta members should experience no further interruption in services, and noted that their accounts will continue to be covered by the National Credit Union Share Insurance Fund up to $250,000.

Kinecta holds $3.2 billion in assets and has more than 242,000 members. The credit union was chartered in 1940 and serves individuals who live, work, worship or attend school in the central Los Angeles area, select employer groups, and members of the Consumers Cooperative Society of Santa Monica.

For the full NCUA release, use the resource link.

NCUA Encourages CU Member Outreach Ahead Of Fin Lit Month

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ALEXANDRIA, Va. (3/21/13)--National Financial Literacy Month in April provides an excellent opportunity for credit unions to talk with their members about saving, building wealth and making smarter financial decisions, the National Credit Union Administration noted in a Wednesday release.

These discussions not only help members make better-informed financial decisions, but also strengthen a credit union's relationship with its members, and ultimately contribute to a credit union's bottom-line, NCUA Chairman Debbie Matz said.

To help spark these conversations, the NCUA has provided a host of personal finance resources on its consumer website MyCreditUnion.gov, and the agency's financial literacy microsite, Pocket Cents. Credit unions and their members can also watch the NCUA's consumer Twitter feed, @MyCUgov, which features timely personal finance tips to help individuals make smarter financial decisions, the NCUA added.

For more on the NCUA efforts, use the resource link.

Credit unions across the country will encourage their members to budget, save, manage credit, and pay down debt during this year's Financial Literacy Month.

The Credit Union National Association is observing the month by holding National Credit Union Youth Week between April 21 and 27. CUNA and credit unions will offer art, articles, celebration materials and promotional products for the week. This year's theme, "Savings Sleuth--Solve the Mystery," challenges credit unions to help the nation's youth solve the mystery of how to save money for meaningful purchases.

Campaign materials offered by CUNA include financial education content, items to reward young members and apparel for credit union staff.

Last year, credit unions and state credit union leagues nationwide observed Financial Literacy Month by developing programs to raise awareness of credit unions' financial education activities and the importance of financial education, sponsoring financially fit days, working with state legislators at youth financial education events, and providing other resources.

CDFI Fund Updates Web Resources

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WASHINGTON (3/21/13)--The U.S. Treasury's  Community Development Financial Institutions Fund (CDFI Fund) has added new online resources to support CDFI Fund recertification applicants.

The materials include archived versions of six recertification conference calls that were held in February and March of this year. The calls are divided by institution type, and feature question and answer sessions with CDFI Fund representatives.

The Fund also released a document detailing frequently asked questions on CDFI Fund certification.

For more on the CDFI Fund resources, use the link.

CDFIs that were originally or most recently certified before Feb. 1, 2010, must apply for recertification no later than April 1. The recertification requirement includes but is not limited to CDFIs currently in the process of submitting an application under the fiscal year 2013 rounds of the CDFI Program or Native American CDFI Assistance (NACA) Program, the CDFI Fund has said. CDFIs that were originally certified after February 1, 2010, will need to apply for recertification no later than 60 days after their three-year certifications expire.

The Treasury's CDFI Fund helps locally based financial institutions--including credit unions--offer small business, consumer and home loans in communities and populations that lack access to affordable credit. Credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding to help maintain their credit union's presence in the community.