Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

FHFA Mortgage mods rose 75 in 2009 4th quarter

 Permanent link
WASHINGTON (4/16/10)--The volume of trial and permanent loan modifications at Fannie Mae and Freddie Mac increased by nearly 75% in the fourth quarter of 2009, the Federal Housing Finance Agency (FHFA) reported earlier this week. Overall, the FHFA reported that the number of trial and permanent modifications made under the Obama Administration’s Home Affordable Modification Program (HAMP) totaled over 485,000 at the end of 2009. Sixty percent of the loan modifications that were made in the fourth quarter reduced borrowers’ monthly payments by over 20%, and completed loan modifications rose to a total of 57,600 during that same time period, the FHFA reported. The FHFA also reported that refinancings made via the Administration’s Home Affordable Refinance Program (HARP) rose by 63% in the fourth quarter, totaling 190,200. That number continued to rise, totaling 257,100 as of February. Under the HARP program, which began in April of last year, Fannie Mae and Freddie Mac helped refinance a total of 190,810 mortgages in 2009. The FHFA last month extended HARP, which helps borrowers whose loan-to-value ratio is between 80% and 125% refinance without added mortgage insurance requirements, until June 30, 2011. Total foreclosure prevention activities, “driven by increases in all forms of home retention activities and short sales,” increased by 38% in the fourth quarter, the FHFA added. For the full FHFA release, use the resource link.

Texas CU league backs MBL cap lift in iRoll Calli

 Permanent link
WASHINGTON (4/16/10)--The Texas Credit Union League again stepped in to the member business lending (MBL) cap debate on Thursday by publishing a pro-MBL cap lift ad in D.C.-based publication Roll Call. The Texas League ad focuses on the unique story of bagel shop owner Suzanne Herman, who “had problems finding capital” for her business until she worked with her local credit union.
Click to view larger image Click to download pdf
The Independent Community Bankers of America (ICBA) have also chimed in on the financial regulatory reform debate, encouraging legislators to end too big to fail and “cut the giants down to size and make them pay their fair share.” The ICBA ad was also published in the pages of Roll Call. The MBL issue has certainly garnered some attention in the recent weeks, with state credit union leagues and independent backers seeking support for the legislation through district town hall meetings, district office visits, advertising, and pro-MBL editorials. Rep. Paul Kanjorski's (D-Penn.) bill that would lift the member business lending cap from 12.25% to 25% of assets and exclude loans less than $250,000 from being defined as a "business loan" currently has a total of 112 cosponsors. Similar legislation has also been introduced by Sen. Mark Udall (D-Colo.). The Credit Union National Association has estimated that lifting the MBL cap would inject up to $10 billion in new capital into the economy, potentially creating as many as 108,000 jobs, all at no cost to taxpayers.

Hensarling introduces legislation to repeal CRA

 Permanent link
WASHINGTON (4/16/10)--Rep. Jeb Hensarling (R-Texas) on Thursday introduced H.R. 5038, the Fair Access to Credit and Job Creation Act, legislation that would repeal the Community Reinvestment Act (CRA). Hensarling criticized CRA in remarks that were made during a Thursday House subcommittee on financial institutions and consumer credit hearing, asking why legislators would “want to force institutions to do what they are already doing.” In addition to remarks from the attending members of the panel, that hearing featured testimony from National Community Reinvestment Coalition President/CEO John Taylor and representatives from various Washington-based interest groups. CRA was enacted in 1977 in response to a practice known as "redlining," which refers to the failure to lend to lower-income and minority neighborhoods by banks and thrift institutions during the 1960s and early 1970s. The purpose of the law is to ensure that for-profit financial institutions adequately meet the financial service needs of all parts of the communities from which they draw deposits. In his opening statement, subcommittee chairman Rep. Luis Gutierrez (D-Ill.) said that legislators should “talk about how to more effectively combat ‘red-lining’… and not about the ‘red herring’ of CRA allegedly causing the current financial crisis.” However, Rep. Ed Royce (R-Calif.) reiterated the criticism of some that that CRA had potential part in creating the ongoing housing market difficulties, saying that “CRA’s mandate that private institutions offer loans they otherwise would not offer contributed to the erosion of credit standards throughout the market.” He called on legislators to cease “giving private entities public missions.” The Credit Union National Association (CUNA) opposes any effort to include credit unions under CRA requirements. CUNA maintains that by their nature and mission of "people helping people," credit unions already meet the financial needs of a broad spectrum of people that fall within their fields of membership, and play an active role in community development and growth. It is not at this time expected that Congress would take vote on a CRA bill this year.

Privacy notices can be built online FFIEC

 Permanent link
WASHINGTON (4/16/10)--The National Credit Union Administration (NCUA) has joined other federal agencies in announcing a new model consumer privacy notice online form builder that financial institutions can download and use to develop and print customized versions of a model consumer privacy notice. The NCUA worked along with The Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, and the Federal Trade Commission to develop the online form builder and cosigned on the release. The form builder “will guide an institution to select the version of the model form that fits its practices, such as whether the institution provides an opt-out for consumers,” according to the release. The agencies in the release also said that financial institutions “must follow the instructions in the model form regulation when using the online form builder” to obtain legal safe harbor and satisfy disclosure requirements. To see the online form builder, use the resource link.

Inside Washington (04/15/2010)

 Permanent link
* WASHINGTON (4/16/10)--Richard Fisher, Federal Reserve Bank of Dallas president, said Wednesday that financial institutions believed to be “too big to fail” need to be broken up (American Banker April 15). Fisher said he would support measures to bring the financial institutions down to a manageable size. Regulators have debated mechanisms that would make failures at financial institutions more orderly, and while this would be a step forward, Fisher said it falls short. The sound thing to do is to dismantle the institutions over time so they can be “prudently managed and regulated,” he said. He spoke before an event in New York sponsored by the Levy Economics Institute of Bard College ... * WASHINGTON (4/16/10)--Two members of the House have introduced legislation that would save the Department of Agriculture’s Single-Family Housing Guaranteed Loan Program, which is expected to use its funding in the coming weeks. Rep. Shelley Moore Capito (R-W.Va.) introduced a bill Tuesday to increase the guarantee fee to 3% or 4% from the current 2%. Separately, Rep. Paul Kanjorski (D-Pa.) introduced a bill that would have the lender pay a 3.5% upfront fee when the loan is issued, along with an annual assessment of 0.5% of the outstanding balance. Neither programs cost taxpayers. The bills are expected to be discussed in committee before a final bill moves to the House floor (Dow Jones April 15) ...