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Inside Washington (03/27/2008)

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* WASHINGTON (3/28/08)—The Office of the Comptroller of the Currency has named William Haas deputy comptroller for midsize bank supervision Haas has been assistant deputy comptroller for that division since March 2003. He started his career with the OCC in 1984 in Grand Island, Neb. and was commissioned as a National Bank Examiner in 1988. In 1994, Haas transferred to Large Bank Supervision, where he served as the commercial credit lead examiner at Norwest Corporation, and later as a member of the credit team at US Bank. He will be based in Chicago in his new position… * WASHINGTON (3/28/08)—A Federal Deposit Insurance Corp. study published in the agency’s March 20 issue of FDIC Quarterly indicated that increasing municipal deposit insurance coverage would have benefits, such as reducing a bank's need to secure municipal deposits, but also could create risks for moral hazard and raise assessments. The study also asserted that while higher coverage would increase the safety of public funds held at depository institutions and would help small banks compete for municipal deposits; it also would have a downside. Increasing the limit would, for example, conflict with traditional agency principles, such as the FDIC "does not generally advocate favoring one depositor class over another." (American Banker March 27)... * WASHINGTON (3/28/08) -- Treasury Secretary Henry Paulson said in a recent speech that the Federal Reserve Board should broaden its authority and include Wall Street investment firms in its oversight. Investment firms are now regulated by the Securities and Exchange Commission (SEC). But former federal regulators are predicting that changes in the country’s financial system will increase the Fed’s influence at the expense of the SEC. A former SEC general counsel posited that his former agency would be so diminished that it would just be a component part of a comprehensive financial services regulator. The speculation has been prompted in part by the Fed’s action involving Bear Sterns. The Fed is taking nearly $30 billion in assets off the Bear Stearns balance sheet in an effort to encourage JPMorgan Chase & Co. to buy the firm, even though Bear Stearns's main supervisor is the SEC. ( Bloomberg.com March 27)…

New RESPA plan awaits CU comments

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WASHINGTON (3/28/08)—It has been a long wait, but the Department of Housing and Urban Development (HUD) has issued its revised proposal to amend Real Estate Settlement Procedures Act (RESPA) rules. HUD has been working since the late 1990’s on revising its rules implementing the 1974 RESPA law with a view to improving the mortgage process and to lower settlement costs for borrowers. The current proposal supplants one issued in 2002, scrapped by HUD after the Credit Union National Association (CUNA) and others noted that some of the proposed changes could be confusing to consumers and could have the opposite effect of the intended simplification. CUNA seeks credit union comment by May 2 on the on the recently issued proposed RESPA changes. HUD will accept public comment until May 13. The proposed rule would make significant changes to the Good Faith Estimate (GFE) form, resulting in a new format for the GFE. That change is intended to ensure that the estimates are more accurate and to facilitate consumer comparisons between lenders. These changes will also facilitate comparisons between the GFE and the HUD-1 or HUD-1A settlement statements. HUD also proposes to ensure that borrowers are aware of the final loan terms and costs at settlement by requiring lenders read to each borrower a copy of a “closing script” containing the information. The proposal would also clarify when it is appropriate to provide borrowers with discounts and average price costing of settlement services. The 2002 proposal would have permitted lenders to provide a package of settlement services that would have guaranteed a lump-sum price for all loan originator and government-required settlement costs associated with obtaining a mortgage, along with a guaranteed interest rate. CUNA and others strongly opposed this as it would have disadvantaged smaller lenders, and it is not included in this latest proposal. Use the resource link below for more on the RESPA proposal and to read CUNA’s comment call.

2008 Regulatory Review List for CUs

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WASHINGTON (3/28/08)—The Credit Union National Association (CUNA) is asking credit unions to review their federal regulator’s recently published 2008 Regulatory Review List to identify particular operational or compliance problems. Each year, the National Credit Union Administration (NCUA) examines one-third of its regulations as part of this annual review process. The NCUA’s Office of General Counsel maintains the schedule that identifies the agency regulations up for review each year. Comments on this year’s batch of regulations subject for review are due to the agency by August 1. The rules under scrutiny include:
* Security Program, Report of Suspected Crimes, Suspicious Transactions, Catastrophic Acts, and Bank Secrecy Act (BSA) Compliance (Part 748); * Records Preservation Program and Records Retention Appendix (Part 749); * Loans in Areas having Special Flood Hazards (Part 760); and * Description of NCUA; Requests for Agency Action (Part 790).
For a complete list and more information, use the resource link below.