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Inside Washington (04/21/2009)

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* WASHINGTON (4/22/09)--Federal Reserve Board Chairman Ben Bernanke met with Timothy Geithner 17 times in January and February, according to central bank records (American Banker April 21). The meetings indicate that the Fed is working closely with the Treasury department. Records also show that Bernanke met with Paul Volcker, former Fed chairman and top economic adviser to President Barack Obama, and several lawmakers, including Senate Majority Leader Harry Reid (D-Nev.), House Speaker Nancy Pelosi (D-Calif.), House Financial Services Committee Chairman Barney Frank (D-Mass.) and Senate Banking Committee Chairman Christopher Dodd (D-Conn.) ... * WASHINGTON (4/22/09)--Regulators are feeling pressured to increase enforcement orders against depository institutions, Deborah Dakin, deputy chief counsel for businesses transactions at the Office of Thrift Supervision (OTS) said in a speech at Pepperdine University Friday (American Banker April 21). Regulators used to think they could work with management without issuing the orders, but now are feeling as though they have to document everything. She clarified that the views she was expressing were her own, and not those of the OTS ...

Corporate CU share guarantee extended

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ALEXANDRIA, Va. (4/22/09)--The National Credit Union Administration (NCUA) voted Tuesday to provide an option through its Temporary Corporate Credit Union Share Guarantee Program (TCCUSGP) that would allow quarterly extensions of the guarantee through December 2012. Under the two-year rolling expiration date, the final guarantee would expire Dec. 31, 2014. Twenty-three corporates are currently participating in the guarantee program. The NCUA also reopened program enrollment until May 15 to give the remaining four an opportunity to consider participation in the revised TCCUSGP. The agency said its actions Tuesday include revisions to TCCUSGP agreements with corporate credit unions to eliminate ambiguities, provide greater flexibility and improve operations. “The action of the NCUA board sends a clear signal to natural person credit unions that their investments in corporate credit unions are not only safe, but also meet sound asset liability management principals by providing for orderly laddering of these investments,” said NCUA Chairman Michael Fryzel in a statement. He added, “It is important that they continue to provide the liquidity that is needed to maintain corporate stability. The board is committed to the safety and soundness of all credit unions and the protection of the deposits of the 90 million credit union members, and we will continue to take the necessary action to instill confidence in the system.”

New round of funds available from CDFI

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WASHINGTON (4/22/09)—The U.S. Treasury Department Tuesday announced the availability of $63 million in new funds through its Community Development Financial Institutions (CDFI) Fund. Treasury invited applications for financial assistance awards through its CDFI program and its Native American CDFI Assistance (NACA) program. A total of $63 million in awards will be made; $55 million under the FY 2009 supplemental funding round of the CDFI Program and $8 million under the FY 2009 supplemental funding round of the NACA Program. The additional funds were made available by an appropriation in the American Recovery and Reinvestment Act of 2009. The application deadline for the supplemental funding round of the FY 2009 CDFI Program and the FY 2009 NACA Program is 5:00 p.m. (ET) on May 27. Credit unions interested in Community Development Financial Institution (CDFI) certification should note the Treasury Department kicked off a series of conference calls on the subject April 16 and will hold three more sessions in the coming months. The upcoming sessions are scheduled for:
* May 21, 2 p.m. EST; * June 18, 2 p.m. EST; and * July 16, 2 p.m. EST.
To access the conference calls, participants must call (202) 927-2255 and enter in the pin number 315646. No prior registration is necessary. The phone number and pin number are the same for all of the conference calls. Use the resource link below for more CDFI information.

NCUA votes on UDAP changes CLF positions

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ALEXANDRIA, Va. (4/22/09)—The National Credit Union Administration (NCUA) proposed clarification of its unfair and deceptive acts or practices (UDAP) rule and approved some staffing changes at the Central Liquidity Facility (CLF), among other actions, at its open meeting Tuesday. The clarification involves a rule issued jointly in December by the
Click to view larger image NCUA Chairman Michael Fryzel prepares to open Tuesday’s public meeting at which the three-member board considered five items including clarifications to an unfair and deceptive practice rule that goes into effect July 1. Seated behind the chairman is NCUA Deputy Executive Director Larry Fazio. (CUNA photo)
NCUA, Office of Thrift Supervision and the Federal Reserve Board and will take the form of additional official staff commentary. The agencies intend the further guidance to facilitate compliance with the final UDAP rule. If adopted, it would specifically amend portions of the regulation that address deferred/waived interest credit card programs and the Servicemembers Civil Relief Act (SCRA). The effective date of the rule is July 1, and the NCUA requested comment on the clarification proposal within 30 days of the date the plan is published in the Federal Register, which is likely to occur within two weeks. Specifically, the proposals would clarify that:
* Key protections in the final rules continue to apply to balances on a consumer credit card account when the account is closed or acquired by a different institution, or when the balances are transferred to another account issued by the same institution; * Institutions are banned from increasing the rate on a credit card balance because the account has been closed; and * Institutions and retailers may continue to offer deferred interest and similar programs, but the programs are subject to all protections in the final rules.
Regarding its staffing decision for the CLF, the NCUA agreed to upgrade two existing jobs and add two new positions to the CLF force. CLF President Owen Cole requested and was granted a ranking upgrade for the position of division director of the office of capital markets and planning. Also upgraded was the current position of National Capital Markets Specialist, which will now be National/Senior Capital Specialist. The new positions are a senior level position with a special focus on CLF lending, and a technician’s position. Cole said the cost to the CLF, which is a self-funded entity, will be $178,000 and the cost to the NCUA would be $119,000.