WASHINGTON (4/10/12)--Three community development credit union (CDCU) representatives, heeding the encouragement of the National Federation of CDCUs, have nominated themselves for membership on the Consumer Financial Protection Bureau's (CFPB) new Consumer Advisory Board.
The federation noted Monday that by the March 30 nominating deadline, the following three individuals were among the nominees for the advisory panel:
- Bernard Balsis, president, EG FCU, Hilo, Hawaii;
- Gary Bell, CEO, Cooperative Center FCU, Berkeley, Calif.; and
- Laura McKinley, interim president/CEO, Georgia Coastal FCU, Brunswick, Ga.
The CFPB's consumer advisory board is expected to be comprised of 20 members with varied backgrounds and the panel is scheduled to meet at least twice a year here to discuss, advise and consult with the bureau of emerging consumer financial issues.
Rafael Morales, public affairs and west coast program officer at the federation, said the above-named nominees are ones that notified the federation of their action, and others in the industry could also have been nominated.
Morales said credit unions, both within the CDCU movement as well as the "broader credit union world," are well-suited for membership to the advisory board.
"We don't know yet how many will be selected, but credit unions were created to maximize service to their members ahead of profits, and this consumer-oriented approach makes them ideal candidates to help guide this new agency," Morales added
HIGHTSTOWN, N.J. (4/10/12)--The New Jersey Credit Union League (NJCUL) is publicizing the promise of credit union member business lending legislation through an in-state radio ad and a postcard campaign ahead of a possible vote on a Senate MBL bill later this month.
The NJCUL radio and internet advertisements encourage Sens. Frank Lautenberg (D) and Robert Menendez (D) to vote in favor of Sen. Mark Udall's Credit Union Small Business Jobs Act (S. 2231). The bill, which would increase the MBL cap from 12.25% of assets to 27.5% of assets, is expected to come up for a vote in the Senate after Congress returns from their spring district work period next week. A vote on similar U.S. House MBL legislation has been promised by sponsor Ed. Royce (R-Calif.)
Both bills would inject $13 billion in new funds into the economy and create 140,000 new jobs, according to Credit Union National Association (CUNA) estimates.
The ads also direct listeners to www.bankingyoucantrust.com, a NJCUL website that features information on the MBL legislation and information to help citizens contact their Senators. NJCUL has also sent more than 800 postcards to the two Senators as part of the MBL campaign, and created a website, is also asking credit union employees, volunteers and members to send their own cards in.
"Our ads help communicate the necessity of support from Senators Lautenberg and Menendez and seek to inform New Jersey consumers of the true economic benefits of the Senate lifting the MBL cap. We hope that this is just the push the Senators need to vote yes when the bill comes before the Senate," NJCUL President/CEO Paul Gentile said.
CUNA and state credit union leagues in Arizona, Virginia, Wisconsin, Mississippi, Iowa, Alabama, Nebraska, South Dakota, South Carolina, and Idaho have also released their own radio ads to let small business-owning listeners that have had trouble accessing loans know that "credit unions are ready to lend a hand," and will have more money to lend to them, once Congress moves to increase the credit union member business lending cap. The ads are part of heavy in-district activity, and CUNA has urged credit unions to use every opportunity during the current April District Work Break to speak up on behalf on an MBL cap lift. (See related April 9 News Now story: CUNA/league radio ads tout MBL aid for small biz)
WASHINGTON (4/10/12)--Legislation that would require schools to counsel students before they take out private student loans, and would help students research their own federal student loan eligibility, has been introduced in the U.S. Senate.
The bill, the Know Before You Owe Act of 2012 (S. 2280), is sponsored by Sens. Richard Durbin (D-Ill.) and Tom Harkin (D-Iowa).
Under the legislation, higher education institutions would also require the prospective borrower's school to confirm the student's enrollment status, cost of attendance and estimated federal financial aid assistance before the private student loan is approved, according to a release on Durbin's website. The bill, the release said, would make lenders provide students with quarterly updates on the status of their loans, including details on accrued interest and capitalized interest. Lenders would also be required to inform the Consumer Financial Protection Bureau on their student lending activities.
Information on federal financial aid availability and eligibility, and how taking out a private loan could impact their eligibility for federal loans, would also need to be disclosed ahead of time, the release said.
Another piece of student loan legislation, the Fairness for Struggling Students Act (S. 1102), was introduced by Durbin last year and was discussed at a Senate Appropriations subcommittee on financial services and general government hearing last month.
That bill would treat privately issued student loans the same as other privately issued debt in bankruptcy proceeding by restoring a pre-2005 provision in the bankruptcy code allowing for discharge of privately-issued student loans – like other forms of private debt, including credit cards--in bankruptcy.
The Consumer Financial Protection Bureau (CFPB) is also working to address student loan issues, working with the U.S. Department of Education and launching the "Know Before You Owe" project to help borrowers, including student borrowers, understand debt implications.
The agency has also asked credit unions and other financial institutions, students, the higher education community, and others in the student loan industry to provide information on the role of schools in the private student loan marketplace, student loan underwriting criteria, repayment terms and behavior, loan servicing and loan modification, and financial education and default avoidance.
The full results of this study on the private student loan market will be released this summer. (See related March 28 News Now story: Hearing on student loans set for today)
For prior News Now coverage and the Durbin release, use the resource links.
WASHINGTON (4/10/12)--The Credit Union National Association (CUNA) is seeking credit union comment on how the Financial Crimes Enforcement Network's (FinCEN) proposed changes to consumer due diligence (CDD) rules would impact credit union operations and compliance procedures.
FinCEN recently released an Advanced Notice of Proposed Rulemaking (ANPR) proposing to codify, clarify, consolidate, and strengthen current CDD rules.
The proposed CDD rule would apply to financial institutions, brokers or dealers in securities, mutual funds, futures commission merchants, and introducing brokers in commodities. A key part of the FinCEN ANPR addresses standards for verifying the identity of each member/customer and understanding the "nature and purpose" of each account that is held at an institution to assess the likelihood of suspicious activity.
Credit unions and other institutions would also need to establish and maintain policies for monitoring the accounts they hold under the proposal.
Establishing a uniform CDD regulation would strengthen the ability of financial institutions to identify and report illicit financial transactions, help federal authorities as they investigate potential crimes, and promote greater global financial transparency and aid efforts to combat transnational illicit finance, FinCEN added.
The new regulations, if created, would be one part of a broader U.S. Treasury strategy to enhance financial transparency in order to strengthen efforts to combat financial crime, including money laundering, terrorist financing, and tax evasion, FinCEN said.
In the comment call, CUNA asks credit unions what compliance cost changes, if any, they would need to make if the CDD rule changes are approved. CUNA also asks whether the CDD rules, if approved, should be extended to also cover other institutions covered by FinCEN regulations, including prepaid card providers, money services businesses, non-bank mortgage lenders or originators, and certain other entities. FinCEN has also asked which entities should be exempted from the CDD changes, and how the changes, if adopted, could impact members and customers.
CUNA is accepting credit union comment on the ANPR until April 20. FinCEN will accept public comment until May 4.
For the full CUNA comment call, use the resource link.
WASHINGTON (4/10/12)--Credit unions need meaningful relief from the Consumer Financial Protection Bureau's recently adopted final regulation on remittances, Credit Union National Assocation (CUNA) Deputy General Counsel Mary Mitchell Dunn wrote in a comment letter filed yesterday with the agency.
The letter was filed in response to the agency's proposed rule designed to provide some limited relief regarding the regulation of remittances.
A new remittance rule was adopted by the CFPB earlier this year and would require remittance transfer providers to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers will also be required to investigate disputes and fix mistakes. The rule will become effective on Feb. 7, 2013.
The remittances regulation will likely affect most U.S. credit unions that provide consumers with international electronic funds transfer services because it broadly defines the term "remittances" to include virtually all cross-border electronic funds transfers initiated by consumers in the U.S., other than most transfers involving credit, debit, and prepaid cards.
Credit unions want to make sure their members are well informed about transactions at the credit unions, including remittances, the letter said. However, many credit unions rely on independent third parties to complete the transfers and do not have control over their activities, making it difficult to provide the disclosure information the CFPB requires, the letter pointed out.
The CFPB has proposed a safe harbor that would exempt credit unions that provide 25 or fewer international consumer-initiated electronic funds transfers per year from all aspects of the rule. However, credit unions performing more than 25 of these transactions a year would be subject to the rule if they provide remittance transfers in the ordinary course of business" under a facts and circumstances test.
The proposed safe harbor threshold of 25 transfers annually is much too low to provide meaningful relief to credit unions, CUNA stated.
Instead, CUNA urged the agency to provide much broader relief for credit unions under the agency's authority to grant exemptions, which it is authorized to do under the Dodd-Frank Act and the Electronic Fund Transfer Act, which includes the remittance provisions.
Alternatively, CUNA recommended that the agency limit its reach to remittance providers that receive at least 30% of their net income income from remittance transfers. If the agency determines a numerical benchmark is the only approach it can support, then CUNA advocated raising the limit from 25 to 1,000.
The proposed rule also applies to any consumer-initiated electronic transfer using open networks, such as international wire and international automated clearing house (ACH) transactions. International transactions using open networks typically involve three or more financial institutions and, once initiated, the transfer is usually beyond the sending-credit union's control, CUNA has noted.
The open-network transfer rules could create high compliance costs for small credit unions, and force these credit unions with relatively small volume international payments programs to stop offering such programs since they will no longer be economically sustainable.
Overall, CUNA in the comment letter said the CFPB's final remittance rule did not address credit union concerns, and added that some credit unions will be forced to stop offering remittances if they are required to comply with the disclosure requirements as stated in the final rule.
"Credit unions provide these transfers to their members as one of many services they offer and are not in business solely to offer remittance transfers. They are not seeking to charge exorbitant fees or to prevent consumers from having reliable information about their transactions," Dunn said.
CUNA also suggested the agency use its statutory discretion to extend the compliance date by an additional year, but also said the extended compliance date may not be needed if the CFPB made certain changes to the rule, as advocated for by CUNA in its comment letter.
Those changes would include compliance relief for "open network" remittance transfers, preauthorized transfers, and other disclosure changes.
- WASHINGTON (4/10/12)--Thomas J. Curry was sworn in Monday to become the 30th Comptroller of the Currency, regulator of more than 2,000 national banks and federal savings and loans, as well as certain federal branches of foreign banks operating in the U.S. The comptroller also becomes a director on the board of the Federal Deposit Insurance Corp. (FDIC). Curry, prior to being confirmed as comptroller on March 29, served as an FDIC director since 2004, and as chairman of the NeighborWorks America board of directors. NeighborWorks is a coalition of affordable-housing organizations. Among other positions held, Curry served as chairman of the Conference of State Bank Supervisors from 2000 to 2001, and served two terms on the State Liaison Committee of the Federal Financial Institutions Examination Council …
- WASHINGTON (4/10/12)--A report released last week by the Federal Reserve inspector general (IG) said the Fed was not involved in the 1970s Watergate burglary or arms sales to Saddam Hussein, as alleged by Rep. Ron Paul (R-Texas), who is also a Republican presidential candidate. During a February 2010 hearing with Fed Chairman Ben Bernanke before the House Financial Services Committee, Paul alleged that money used during Watergate scandal "came through the" Fed," and that investigators looking into the scandal "were always stonewalled" by the central bank, the IG said. Paul also alleged that the Fed "facilitated a $5.5 billion loan to Saddam Hussein, who then bought weapons from our military industrial complex …" Following Paul's comments, Rep. Barney Frank (D-Mass.), then the chairman of the committee, asked the Fed to look into the claims. "We did not find any evidence of undue political interference with Federal Reserve officials related to the 1972 Watergate burglary or Iraq weapons purchases during the 1980s," the report said ...