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Congress this week Senate awaits reform House committee bustling

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WASHINGTON (3/9/10)--With the Senate Banking Committee awaiting the release of the Senate version of a comprehensive financial regulatory reform bill, much of the committee action for credit unions will take place on the House side. The House Financial Services Committee will open its week on Tuesday by holding a hearing entitled, "Community Development Financial Institutions (CDFIs): Their Unique Role and Challenges Serving Lower-Income, Underserved and Minority Communities." Witnesses set to testify during this hearing include Community Development Financial Institution Fund Director Donna Gambrell, Assistant Treasury Secretary for Financial Institutions Michael Barr, and various other witnesses. Financial services subcommittees will also be active, with the subcommittee on financial institutions discussing the regulation of money service businesses and the capital markets, insurance and government sponsored enterprises subcommittee discussing the role of the homeowners defense act in mitigating and managing the consequences of natural disasters. The Financial Services capital markets subcommittee will also convene on Thursday to discuss corporate governance, and the House subcommittee on housing and community opportunity on Thursday will discuss the Federal Housing Administration Reform Act of 2010. Despite the light hearing calendar, the Senate will be busy discussing possible House amendments to a jobs bill that was passed by the Senate last week.

Compliance Challenge Can CUs give overdraft incentives

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WASHINGTON (3/9/10)--In this month's Compliance Challenge, the Credit Union National Association (CUNA) addresses a question regarding overdraft protection policies. In the Challenge, a credit union asks whether or not it can provide incentives such as gift cards to members that choose to opt in to its overdraft service for ATM and one-time debit card transactions. According to CUNA, while credit unions may offer incentives to members that opt-in to the overdraft service for ATM and one-time debit card transactions, the same incentive would also need to be extended to members that do not opt in to the overdraft program. Additionally, credit unions and other institutions may offer incentives to members or customers that enroll in overdraft services for check and ACH transactions, as these transactions are not covered by Regulation E overdraft rules. Regulation E also requires credit unions and other financial institutions to apply the same account terms, conditions, and features to all members or customers, regardless of their opt-in choice, and this rule would also apply in cases of debit card abuse. In the example provided in the Compliance Challenge, CUNA said that a credit union can only suspend the debit card of a member that has not opted in to its overdraft program, but violates its stated overdraft account rules, if that rule also applies to members or customers that have opted in to the overdraft program. To see the full Compliance Challenge, use the resource link.

Inside Washington (03/08/2010)

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* ALEXANDRIA, Va. (3/9/10)--This week is National Consumer Protection Week, a designation intended to emphasize the importance of thrift and the wise use of one’s financial resources and to highlight that message, National Credit Union Administration Chairman Debbie Matz issued a statement. “This week-long focus on the importance of consumer education and protection presents a perfect opportunity for credit unions to showcase their commitment to members,” Matz commented in a release. She lauded credit unions for their historic commitment to providing members with basic money management information. “But more can and should be done. I encourage credit unions to redouble their efforts to ensure that members are educated and aware consumers, and are well-equipped to navigate an increasingly complex financial landscape. Such an investment in consumers is credit union member service in action,” she said… * WASHINGTON (3/9/10)--Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, sent a letter to the four largest U.S. banks demanding immediate steps to write down second mortgages (The Wall Street Journal March 8). Frank sent the letter to CEOs at Wells Fargo and Co., JPMorgan Chase and Co., Citigroup Inc. and Bank of America Corp. Bank of America said it is committed to working with interested parties to develop more solutions to help homeowners modify first and second mortgages. Wells Fargo said it is helping as many customers as it can to find options to help pay their home equity loans. JPMorgan and Chase did not respond to the letter ... * WASHINGTON (3/9/10)--The Office of Thrift Supervision (OTS) is seeking comments on a proposal regarding applications for conversion from OTS-regulated, state chartered savings association to federal savings association; national bank, state savings bank or credit union to a federal savings association; and a state mutual holding company to a federal mutual holding company. The application is reviewed to determine whether it meets applicable eligibility requirements for the conversion and complies with applicable OTS policies. Applications also are reviewed to determine whether special conditions are needed to establish the institution’s authority to continue activities or investments permitted under state law but not authorized for a federal association, according to the Federal Register (March 8). Comments must be submitted by April 7 ...

SBA seeks comments on increased openness

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WASHINGTON (3/9/10)—Interested parties have until March 19 to send their ideas to the U.S. Small Business Administration on how the agency can become “more transparent, participatory, and collaborative.” The request for public comment is in accordance with the Obama administration’s “Open Government Initiative,” under which certain federal agencies are required to publish a plan, one that incorporates public comment, on becoming more transparent. Some commenters have already recommended that the SBA consider such things as improving functionalities of the agency website, offering specific data like performance metrics, and participating in online communities. Questions can be directed to Thirty-six government agencies, including the Federal Reserve Board and the Federal Deposit Insurance Corp., are listed on a government website as being required to seek public comment on becoming more open. The National Credit Union Administration is not on the list.