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Data collection on Thursday NCUA agenda

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ALEXANDRIA, Va. (5/19/08)--The National Credit Union Administration’s (NCUA’s) has four items on its open meeting agenda this week, including an Outreach Task Force (OTF) recommendation on data collection on credit union membership profiles and possible changes to criteria used to approve service to underserved areas. Mary Dunn, deputy general counsel of the Credit Union National Association (CUNA), said Friday that CUNA feels strongly that such initiatives should not be undertaken during the current economic environment and that if NCUA does proceed, data collection is a matter that credit unions should be allowed to comment on. “We will be closely scrutinizing how NCUA handles this matter as well as NCUA’s proposed action on underserved areas.” Dunn said. Other aspects of the task force report, including executive compensation, could be discussed during the meeting Thursday. At its April open meeting, the NCUA board proposed action on the first of the recommendations of its OTF, which was to change the agency’s low-income designation to consider different income patterns in metropolitan area. Also on the May 22 agenda:
* Board Briefing: Proposed Rule - Part 706 of NCUA’s Rules and Regulations, Unfair or Deceptive Acts or Practices; and * Proposed Rule: Part 721 of NCUA’s Rules and Regulations, Incidental Powers.

Inside Washington (05/16/2008)

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* WASHINGTON (5/19/08)--In a speech before attendees of the Federal Reserve Bank of Chicago’s Annual Conference on Bank Structure and Competition, Federal Reserve Board Chairman Ben Bernanke strongly urged financial institutions to remain proactive in their capital-raising efforts. Financial institutions also should pay attention to the value of proper risk identification and measurement, the need for robust and objective valuation methods, the importance of preparing for liquidity disruption, and the role of strong oversight by senior managers, he added. During his speech, Bernanke focused on some lessons learned regarding trouble in the financial markets and pointed to items financial institutions should focus on in the future. Improvement in banks’ risk management will provide a more stable financial system and help make firms more resilient to shocks, he said. “Supervisors must insist on effective risk management and provide as much support as possible for the implementation of needed changes,” he advised. The Fed also is considering additional supervisory guidance regarding risk management, and is working to implement the International Basel II capital accord. Basel II will enhance the quality of risk management by tying regulatory capital more closely to institutions’ underlying risks and requiring stronger systems to evaluating credit, he said ... ` * WASHINGTON (5/19/08)--Donna J. Gambrell, director of the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund, joined Reps. Nydia M. Velazquez (D-N.Y.) and Edolphus Towns (D-N.Y.) to celebrate the opening of Brooklyn Cooperative FCU’s first new branch office in Bedford-Stuyvesant. The celebration was held Saturday ... * WASHINGTON (5/19/08)--Amy L. Taylor has been selected as chief information officer (CIO) and associate director of technology solutions and services at the Financial Crimes Enforcement Network (FinCEN), effective immediately, James H. Freis Jr., FinCEN director, announced Friday. Taylor joined FinCEN in April 2007 as assistant director for customer relations management. She has served as acting CIO for the past three months. She has more than 17 years of experience in federal government, supporting technology in the Department of Defense ...

Compliance Tips for affiliate marketing

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WASHINGTON(5/16/08)—The compliance folks of the Credit Union National Association (CUNA) remind credit unions that the Fair and Accurate Credit Transactions Act’s (FACTA) affiliate marketing rules only apply when credit unions and their credit union service organizations (CUSOs) share “eligibility information” for marketing purposes. Eligibility information includes a person’s transaction and experience information, such as account history, with the credit union or affiliate, and certain “other” information submitted on consumer reports and applications. Beginning on Oct. 1, if a credit union shares eligibility information with an affiliated CUSO, the CUSO cannot use that information to make a solicitation for marketing purposes, unless three conditions exist:
* A consumer must be provided with a notice that the information may be used for marketing solicitations. * An individual must be given a reasonable opportunity to “opt-out” of these solicitations. * A consumer must not have “opted out.”
A credit union or CUSO would not have to comply with these requirements for marketing communications directed to the general membership since no eligibility information sharing is involved. Additionally, affiliates may “constructively share” eligibility information without triggering the affiliate marketing rules. One possibility is where an affiliated CUSO develops specific eligibility criteria without using any information received from the credit union. The CUSO provides its criteria to the credit union, and asks the credit union to identify members that meet the criteria, and send the CUSO’s marketing materials to those members. When a member returns a coded response form to the CUSO, the member’s response provides the CUSO with discernible eligibility information. For more compliance gems, use the resource link below to visit CUNA’s Compliance Challenge.