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Inside Washington (03/28/2011)

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* WASHINGTON (3/29/11)--The Federal Reserve Board on Monday launched a new interactive Web-based guide to the Flow of Funds Accounts. The tools and descriptions in the guide are designed to help users explore the structure and content of the quarterly flow of funds statistical release and the integrated macroeconomic accounts for the U.S. Users of the guide can search for series, browse tables of data, and identify links among series within the flow of funds accounts. It also provides descriptions of each of the published tables and information on the source data underlying each series. Information in the guide will be updated quarterly. To access the guide visit: Printed copies of the Guide to the Flow of Funds Accounts will no longer be available for purchase, said the Fed …

CUNA seeks Treasury backing for interchange delay

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WASHINGTON (3/29/11)--In its continuing efforts to pursue relief for credit unions, the Credit Union National Association (CUNA) Monday encouraged the U.S. Treasury Department to support a delay in the debit fee interchange statute’s implementation. In a meeting with Treasury Deputy Assistant Secretary for Financial Institutions Lance Auer and others, CUNA also urged the department to continue its support of legislation that would increase the cap on credit union member business lending (MBL). The Obama administration has publicly endorsed the MBL plan that CUNA says would boost both credit availability for small businesses and the jobs market at no cost to taxpayers. Sen. Mark Udall (D-Colo.) has introduced legislation that would increase the MBL cap to 27.5% of a credit union’s assets. Auer indicated that the administration’s previous support for this legislation had not changed because the legislation itself has not changed since last year. CUNA also urged Treasury to support legislative reform to make supplemental capital available to credit unions, pointing out that U.S. credit unions are the only credit cooperatives in the world without access to such capital. CUNA also raised credit union concerns on regulatory examination issues. On interchange, CUNA asked the Treasury officials to support bills in the House and Senate that would order a delay in the implementation of the interchange rule contained in last year’s Dodd-Frank Wall Street Reform Act. That provision orders the Federal Reserve to set limits on the interchange fee that could be charged to merchants who use the debit card system. The interchange language was added to the Dodd-Frank bill “at the 11th hour,” CUNA notes, without congressional hearings. Although it contains a small-issuer exemption that covers all but three credit unions, CUNA and many other parties are concerned that the small-issuer exemption will not work in practice. While CUNA maintains that the government should not engage in price-fixing in interchange fees at all, at a minimum the association urges the U.S. Congress to “stop, study, and start over” on the issue, and asked Treasury to add its voice to that message. Also, as noted, CUNA raised another key credit union issue, noting the important role that supplemental capital could play in enabling credit unions to contribute to the economic recovery by serving their members more extensively. In addition, the CUNA representatives discussed concerns credit unions have with the regulatory examination process. Earlier this year, after an exhaustive look at credit unions' increasing frustrations with the examinations, CUNA developed a 64-page guidance document titled "Supervisory Issues and Examinations: Guidance For Credit Unions During The Current Economic Times And Beyond," and a 24-item bill of "examination rights."

NCUA announces April 4 closed meeting in Calif.

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ALEXANDRIA, Va. (3/29/11)--The National Credit Union Administation Monday announced a special closed meeting to be held April 4 in San Diego, Calif. The published agenda includes the following items:
* Consideration of Supervisory Activities. Closed pursuant to exemptions (8), (9)(A)(ii) and (9)(B); and * Personnel (2). Closed pursuant to exemption (2).
The meeting will be conducted at the Westin San Diego Hotel at 9:30 a.m. (PT).

FinCEN Mortgage fraud SARs up but rate is slowing

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VIENNA, Va. (3/29/11)--The Financial Crimes Enforcement Network (FinCEN) Monday released its new report, “Mortgage Loan Fraud SAR Filings In Fourth Quarter and Calendar Year 2010,” revealing the year’s experience with a 4% increase in suspicious activity reports (SAR) involving mortgage loan fraud (MLF SARs). In 2010, according to the report, 70,472 mortgage loan-related SARs were filed, compared with 67,507 in 2009. However, the report also shows that the growth rate of MLF SARs has slowed over the past two to three years. In fact, looking at just the 2010 fourth quarter, filers submitted 18,759 MLF SARs, which is a 1% decrease from the 18,884 filings over the same period in 2009. The FinCEN data also indicate a steady increase over time in the number of references to bankruptcy contained in the MLF SARs. In 2010, mortgage loan fraud was cited in 54% of all SARs referencing bankruptcy fraud, up from 42% in 2009. Some MLF SARs specified the type of bankruptcy filing, most frequently Chapter 7, which was cited in 27% of 2010 reports citing both bankruptcy and MLF. Also of interest: There was a decline in 2010 of all types of SARs filed by depository institutions; they fell 3% to 697,389 compared with 720,309 in 2009. And yet, the total number of SARs filed in 2010 by all types of financial institutions covered by the Bank Secrecy Act grew nearly 4%, the report said. FinCEN also announced it has reorganized its Web page on mortgage fraud and added a section that includes state, urban and county mortgage fraud SAR data. Use the resource link below for more information.

Comment due May 9 on CFPB info collection plan

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WASHINGTON (3/29/11)--Credit unions and other interested parties have until May 9 to comment on a Consumer Financial Protection Bureau (CFPB) plan to facilitate the centralized collection of, monitoring of, and responses to consumer complaints regarding financial products and services. The CFPB is developing online and paper intake methods that will include fields to be completed by consumers regarding complaints and questions. The CFPB’s request for comment pertains primarily to the burden on the consumer completing the form. The form has not yet been developed. However, the fields within the form will collect information regarding:
* The type of contact (such as online, by phone, and so on); * The substance of the complaint, question, or other issue; * The consumer’s contact information; * Identifying information about the consumer or consumer’s household; and * Information about the incident and institution giving rise to the complaint, question, or request for other information.
According to the CFPB’s initial estimates, each consumer complaint form will take about 10 minutes to complete and approximately one million to three million forms will be completed annually; the estimated total annual burden on consumers is approximately 330,000 hours. The CFPB provides no projections for regulatory burden on credit unions or other lending institutions. The Credit Union National Association has issued a Comment Call and is seeking credit union remarks on such questions as:
* Do you have any suggestions on how to enhance the quality, usefulness, and clarity of the information to be collected? * Do you have any suggestions on how to minimize the reporting and/or record keeping burdens on consumers, including the use of automated collection techniques or other forms of information technology? * Can you estimate the CFPB’s capital or start-up costs of operation, maintenance, and purchase of services to provide information?
Credit unions are asked to send their comments to CUNA by May 2.

CU comment sought on rate-risk plan

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WASHINGTON (3/29/11)--While acknowledging the importance of appropriate management of interest-rate risk, the Credit Union National Association (CUNA) is asking credit unions to weigh in on whether a recent regulatory proposal on risk management, which ties federal share insurance coverage to compliance, goes too far. The National Credit Union Administration (NCUA) is seeking comments through May 23 on the proposal. Issued at the March 17 open board meeting, the plan would require:
* A written policy on interest rate risk (IRR): and * An IRR management program.
Under the proposal, all federally insured credit unions would be required to have an IRR management program. There are asset-size and activity triggers for how the written IRR policy requirements would apply. (See resource link below for full details.) The proposal states that interest-rate risk is the: “Vulnerability of a credit union’s financial condition to adverse movement in market interest rates.” It also notes that credit unions have to address IRR from several sources which include re-pricing risk, yield curve risk, spread risk, basis risk and options risk. The proposal also states that the NCUA believes credit unions should have a written policy that expressly states the credit union’s IRR tolerance and an effective IRR program that “identifies, measures, monitors and controls IRR.” Such a program is an “essential component of safe and sound credit union operations.” However, CUNA notes in its Comment Call, the NCUA does not state clearly why the agency believes the recent proposal is needed at this time. As recently as January, the NCUA joined with other federal financial regulators to issue joint guidance on IRR management, and CUNA is not aware that the other regulators are currently developing further proposals like the NCUA’s recent action. The NCUA estimates that about 25% of credit unions, or around 800, will need to develop a written IRR policy, and surmises it will take about 16 hours for a credit union to comply. Among information CUNA asks credit unions to provide is an estimate of the burden the rule could pace on its staff. Use the resource link below to access the Comment Call.

House and Senate back in session

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WASHINGTON (3/29/11)--Both chambers of the U.S. Congress return to session this week after a 10-day District Work Break, during which credit union representatives were encouraged by the Credit Union National Association (CUNA) to contact lawmakers on their home turf regarding key issues for credit unions. Those issues include such legislation as a bill to allow credit unions to increase their member business lending (MBL), and others that would delay the implementation of an new law that requires the Federal Reserve to limit debit card interchange fees. In Washington this week, here is a recap of upcoming hearings of interest to credit unions:
* On Tuesday, the Senate Banking Committee will hold a hearing entitled, “Public Proposals for the Future of the Housing Finance System”; * On Wednesday, the House Financial Services subcommittee on oversight and investigations will conduct a hearing entitled, “The Cost of Implementing the Dodd-Frank Act: Budgetary and Economic”; * For Thursday, the House Financial Services subcommittee on capital markets and government-sponsored enterprises has scheduled a hearing entitled, “Immediate Steps to Protect Taxpayers from the Ongoing Bailout of Fannie Mae and Freddie Mac"; and * For Friday, the House Financial Services subcommittee on insurance, housing and community opportunity will hold a hearing entitled, “Legislative Proposals to Reform the National Flood Insurance Program.”
Watch News Now this week for a report on additional co-sponsors added to the MBL legislation, as well as the interchange bills.