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CU SAR filings up again FinCEN

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WASHINGTON (5/15/12)--The number of suspicious activity reports (SARs) filed by institutions that claimed the National Credit Union Administration (NCUA) as their primary regulator increased by 6% in 2011, continuing a trend that has seen SARs filed by credit unions increase every year since 1998, the Financial Crimes Enforcement Network (FinCEN) reported.

The NCUA is the only federal financial regulator that has shown an increase every year since 1998, FinCEN said.

In its SAR Activity Review--By the Numbers, FinCEN reported the total number of SARs filed by credit unions and other financial institutions increased by 13.5% in 2011, with mortgage fraud and check fraud continuing to rank as the most common criminal offenses.

Just over 92,000 mortgage loan fraud SARs were filed in 2011, an increase of more than 20,000, or 31%, above 2010's numbers. Check fraud, commercial loan fraud and credit card fraud SARs declined by 3%, 12% and 5%, respectively.

The largest increase in SARs filed related to consumer loan fraud, as the 32,285 SARs filed in 2011 represented an 127% increase when compared to 2010's total.

SARs reporting instances of debit card fraud and wire transfer fraud increased by 9% between 2010 and 2011, totaling 6,258 and 15,497, respectively.

Overall, the volume of SAR filings in 2011 represented a high over any previous calendar year, FinCEN reported.

For the full FinCEN report, use the resource link.

NFIP extension could come up this week

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WASHINGTON (5/15/12)--Legislation that would provide a short-term extension of the National Flood Insurance Program (NFIP) is expected to be considered by the U.S. House this week, but the NFIP would likely only be extended for a few weeks, Credit Union National Association (CUNA) Senior Vice President of Legislative Affairs Ryan Donovan said.

The NFIP is scheduled to lapse on May 31, and CUNA in a letter sent to Capitol Hill last week urged members of the U.S. Congress to extend the NFIP or reform the program. (See related May 11 News Now story: CUNA calls for NFIP action in letter to Congress)

CUNA last week also joined a coalition of associations representing homebuilders, the insurance industry, other financial institutions, brokers, and others to ask Congress to act on NFIP issues.

Credit unions and other lenders cannot write certain mortgages without NFIP coverage. In the past the program has lapsed for brief periods--three times in 2010.

CUNA in a letter to Congress noted that previous lapses in NFIP authorization have caused significant disruption in the mortgage underwriting process for thousands of prospective homeowners.

Though a comprehensive reform package has not been agreed to in the House or Senate, many Democrats and Republicans have said the NFIP is in need of reform.

Legislation that would extend the NFIP through the end of this year (S. 2344) was introduced recently by Sen. David Vitter (R-La.), and Senate Banking Committee members in a hearing held last week seemed to agree that a long-term reauthorization of the NFIP is needed. Vitter last week said he would offer S. 2344 as a floor amendment.

Legislation that would extend the NFIP for five years has also been approved in the House and by the Senate Banking Committee.

House financial hearings set for this week

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WASHINGTON (5/15/12)--Hearings on the Financial Stability Oversight Council's (FSOC) authority, regulator-led legal settlements, and the Dodd-Frank Wall Street Reform Act highlight the schedules of the House Financial Services Committee and related subcommittees this week.

The first of these hearings will take place on Wednesday, when the House subcommittee on financial institutions and consumer credit is scheduled to discuss how the FSOC would exercise its discretionary authority to designate nonbank financial firms as systemically significant financial institutions. The financial institutions and consumer credit subcommittee will meet again on Friday, as that group examines the Dodd-Frank Act's treatment of regulatory capital requirements.

Oversight of the Federal Deposit Insurance Corp.'s (FDIC) structured transaction program, which allows the FDIC to work with private entities to dispose of assets the regulator has acquired through bank bailouts and takeovers, will be addressed during a Wednesday House subcommittee on oversight and investigations hearing.

The full House Financial Services Committee on Thursday will examine federal financial regulatory agency practices when those agencies settle claims against defendants that neither admit nor deny wrongdoing in connection with the settlement. Also on Thursday, the House insurance, housing and community opportunity subcommittee will hold a hearing on issues affecting the ability of U.S. insurance and reinsurance companies to compete internationally.

Another hearing of interest this week is a Wednesday House oversight committee hearing on the operations of tax-exempt organizations. Subcommittee members are not expected to discuss credit union tax status, but Credit Union National Association (CUNA) staff will be watching the hearing closely.

Separate pieces of legislation related to import-export banks and tax credits for small businesses that hire new employees are among the items that could be considered in the Senate this week, and the Violence Against Women Act Reauthorization and Defense spending authorization are on the House schedule.

Another piece of legislation that could impact credit unions was introduced last week by Rep. Carolyn Maloney (D-N.Y.) That bill would require consumer consent before permitting overdraft fees for paper checks, automated clearinghouse (ACH) charges, and debit card swipe-terminal transactions on consumer accounts; would prohibit the practice of check resequencing to increase the number of overdraft fees; and would attempt to limit the amount and number of overdraft fees that can be charged, among other things.

CUNA Senior Vice President of Legislative Affairs Ryan Donovan said CUNA strongly supports the ability of credit unions to offer overdraft protection plans as a means to help their members resolve short-term financial problems. "We will watch this measure closely as it makes its way through the process with the aim of preserving credit unions' ability to offer their programs," he added.

The House is taking its Memorial Day District Work Period next week through May 29.  The Senate will be in session next week and recess May 28 through June 1.

iGo Directi promotes direct deposit for older Americans

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WASHINGTON (5/15/12)--May is Older Americans Month, and "there's no better time" to help seniors start to receive their Social Security benefits electronically, the U.S. Treasury's Go Direct program said this week.

The Go Direct program said making the switch to direct deposit would help seniors "save taxpayers money and immediately receive their payments in a more reliable way." The program has released news copy, fliers and posters for financial institutions and community organizations to inform citizens of the benefits of switching to direct deposit.

The Go Direct campaign, which started in 2004, also notes that direct deposit enhances safety and convenience.

The Treasury officially ended the use of paper checks for the payment of newly filed Social Security and other federal benefit payments on May 1, 2011, and all federal benefit payments will be made electronically beginning on March 1, 2013.

The Credit Union National Association is a Go Direct national partner and supports the check-safety and cost-savings goals for the program. For more information on Go Direct, use the resource link.

Inside Washington (05/14/2012)

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  • WASHINGTON (5/15/12)--The Office of the Comptroller of the Currency  has directed Allonhill to cease reviewing files related to the OCC's Independent Foreclosure Review as a primary independent consultant or subcontracted consultant due to a possible conflict of interest. The OCC took the action after Allonhill reported work for third parties that the agency determined to be inconsistent with the requirements for an independent consultant. The work at issue involved prior review for third parties of loans that are part of the same pool of loans that Allonhill was reviewing as part of OCC's review. The decision does not reflect on the quality of work performed to date by Allonhill but is necessary to ensure the independence of the loan review process going forward, the OCC said …
  • WASHINGTON (5/15/12)--The Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. Monday issued final guidance on stress testing practices for banks with assets of more than $10 billion. The guidance outlines general principles for a satisfactory stress-testing framework and describes various stress testing approaches and how the testing should be used at different levels within an organization. It also discusses the importance of stress testing in capital and liquidity planning and the importance of strong internal governance and controls as part of an effective stress-testing framework. The guidance does not implement the requirements in the Dodd-Frank Act or in the Federal Reserve Board's capital plan rule that apply to certain companies. Those requirements have been, or are being, implemented through separate proposals by the respective agencies …