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Inside Washington (03/25/2008)

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* WASHINGTON (3/26/08)—National Credit Union Administration board
NCUA board member Gigi Hyland addresses a Women and Housing and Finance luncheon in Washington. Her topic: foreclosure mitigation counseling program grants distributed through NeighborWorks America.
member Gigi Highland Tuesday discussed the efforts of NeighborWorks America to distribute $180 million in government grants to eligible organizations across the nation that provide foreclosure mitigation counseling programs. Hyland, who is a member of the NeighborWorks board of directors, explained during her speech before Women in Housing and Finance here, that the organization acts as a conduit to distribute the funds to the areas in most need. The group announced in February that $130 million had been awarded to 32 state housing finance agencies, 16 HUD-approved housing counseling intermediaries and 82 community-based NeighborWorks organizations, to provide counseling to families and individuals facing the threat of foreclosure. It estimated that 350,000 to 400,000 troubled borrowers will be directly assisted through the counseling funding … * WASHINGTON (3/26/08)—Sen. Hillary Clinton (D-N.Y.) has endorsed a housing stabilization plan by House Financial Services Chairman Barney Frank (D-Mass.) and Committee Senate Banking Committee Chairman Chris Dodd (D-Conn.). The plan would expand the Federal Housing Administration (FHA) so it could back mortgages whose principal and interest rates had been written down. In a speech in Philadelphia, the Democratic presidential candidate-contender said aggressive action is needed to help borrowers avoid foreclosure. The government, she said, should temporarily purchase the troubled loans and the Bush administration should instigate an emergency study of whether the government should temporarily buy loans to sell in bulk auctions (American Banker March 25)… * WASHINGTON (3/26/08)—The Federal Deposit Insurance Corp. is floating a new plan under which the agency would operate if it were to return excess premiums to the banking industry. The plan is a compromise between earlier proposals that were not well received by the industry. Back in September, the FDIC issued an advance notice of proposed rulemaking detailing two rebate plans; one which favored older banks, another which benefited new ones, such as those chartered after 1996 or those that had increased their deposits rapidly in the ensuing decade. Under its newest version, the FDIC would use two factors to determine a bank’s rebate: its share of the December 1996 assessment base and its premiums in the five years leading up to the rebate. The 2006 deposit insurance reform law requires the FDIC to start issuing premium rebates when its reserves go higher than 1.35% of insured deposits. (American Banker March 25) … * WASHINGTON (3/26/08)--CongressDaily reported in its Monday edition that House Ways and Means Chairman Charles Rangel (D-N.Y.) was hospitalized earlier this month not because of the flu, as first thought, but because he was suffering from viral encephalitis. A Rangel spokesman said the congressman was recovering and expected back in Congress when it resumes session next Tuesday… * WASHINGTON (3/26/08)-- Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Sen. Patty Murray (D-Wash.), who chairs the Senate Appropriations transportation and HUD subcommittee, are claiming Housing and Urban Development Department Secretary Alphonso Jackson is not fit for his job and should be fired by President George W. Bush. The two Senate leaders sent a letter to the White House March 21 after Jackson refused to answer certain questions during two hearings by their respective panels. Jackson was queried on allegations that he is steering contracts improperly to friends (American Banker March 25)…

SBA trolling for more comment on lender oversight

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WASHINGTON (3/26/08)—The Small Business Administration (SBA) this week announced a series of meetings intended to gather public comments on a proposed rule on lender oversight and credit risk management, which includes SBA's oversight of participants in the 7(a), 504 and Microloan lending programs. In October 2007, the SBA published a proposed rule to incorporate SBA's risk-based lender oversight program into SBA regulations and In December of that year extended the comment period on the proposed rule to Feb. 29, 2008. The comments submitted during that period are “greatly assisting SBA with its deliberations” on the proposal, according to an agency release. However, the series of comment meeting is intended to “broaden public participation by offering the public an opportunity to meet with SBA in person and communicate their comments.” The proposed regulatory framework was designed to enhance SBA's Office of Credit Risk Management's (OCRM) ability to maximize the efficiency of SBA's lending programs by effectively managing program credit risk, monitoring lender performance, and enforcing lending program requirements. It is SBA's intent that the proposed framework would also incorporate the mission of SBA to assist small business access to credit. Participants may request to comment orally or through a written statement. Oral comments will be limited to five minutes. The meeting format will consist of a panel of SBA representatives who will moderate the oral comments. The meetings kick off in San Francisco on April 1, although the official registration period for that session closed Tuesday. The next session is April 3 in Los Angeles. Use the resource link below for more information on the other comment meetings and registration details.

NCUA issues prohibition orders

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ALEXANDRIA, Va. (3/26/08)—The National Credit Union Administration (NCUA) Tuesday announced it has issued orders against two individuals, which prohibit them from participating in the affairs of any federally insured financial institution. The individuals are:
* Debra Elaine Finney, a former employee of GAF FCU, Dallas, Tex., who consented to a prohibition order without admitting or denying fault; and * Sara B. Risewick, a former employee of St. Pius X Church FCU, Rochester, N.Y., who pled guilty to falsifying business records at the credit union and was sentenced to 5 years of supervised probation.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. Use the resource link below to view enforcement orders posted to the NCUA’s website.

CUNA gives NCUA Outreach report full review

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WASHINGTON (3/26/08)—The Credit Union National Association's (CUNA's) Governmental Affairs Committee this week is meeting to assess the National Credit Union Administration's (NCUA's) Outreach Task Force recommendations. That meeting follows work and discussion performed by CUNA subcommittees on federal credit unions, community credit unions, and examination and supervision. The CUNA board’s executive committee will be considering the GAC’s recommendations early next week. In February, the NCUA released its report which contained some recommendations that have generated deep concerns among some credit unions, including mandatory disclosure of executive compensation. “CUNA has been communicating these concerns directly to the NCUA board on an ongoing basis,” said CUNA President/CEO Dan Mica, and CUNA has taken the report to the credit union and league representatives on its key policy-making committees. “Our review process fully represents the diverse regions, charter types, asset sizes and other characteristics of U.S. credit unions," said Mica. "This process ensures that CUNA's ultimate response to the recommendations in the report are not just an instinctive reaction, but reflects the views of the many segments of our movement,” he added. Mica also noted CUNA’s efforts regarding the NCUA's advance notice of proposed rulemaking on conversions, mergers, hostile takeovers, board fiduciary duties and other corporate governance issues. He said CUNA is exploring credit union concerns and assured those concerns would be reflected in comments due NCUA by April 30. Use the resource link below for CUNA’s summary of NCUA’s Outreach Task Force Report.