Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive

Washington

Corporate prepayment proposal webinar on May 26

 Permanent link
ALEXANDRIA, Va. (5/23/11)–The National Credit Union Administration (NCUA) will deliver a presentation on its proposed voluntary prepaid Corporate Stabilization Fund assessments program, and field credit union questions about this proposal, during a May 26 webinar. The webinar will be led by NCUA Deputy Executive Director Larry Fazio and Office of Examination and Insurance Director Melinda Love. It is scheduled to begin at 4 p.m. (ET). The NCUA has invited credit union industry representatives and all public stakeholders to take part in the webinar. The agency said those already registered for its May 26 webinar on allowance for loan and lease losses -– which begins at 2:00 p.m. (ET) –- can just stay online at 4 p.m. (ET) to participate in the second webinar. Those interested only in the voluntary prepaid assessments proposal should log in at 4 p.m. The NCUA prepayment proposal would allow most credit unions to voluntarily prepay a portion of their future Corporate Credit Union Stabilization Fund assessments. The Credit Union National Association last week commented on the proposal, saying that “spreading the cost of assessments is an issue of importance to credit unions” and one that has been raised often with the agency. The NCUA proposal would allow credit unions with more than $3 million in assets to pay up to 36 basis points of their fund assessment in advance. The minimum payment would be $10,000. These payments could reduce fund assessments in 2011 and 2012, and, potentially, beyond those two years. The agency is collecting comment on the proposal, and has said it will only go forward with the prepayment plan if it receives $300 million in commitments from eligible credit unions. For News Now coverage of the proposal, and to register for the NCUA webinar, use the resource links.

CUNA seeks comment on Fed remittance disclosures

 Permanent link
WASHINGTON (5/23/11)--The Credit Union National Association (CUNA) has encouraged credit unions to comment on a Federal Reserve proposal that would require institutions to add new disclosures to remittance transfers that are sent to foreign countries. The Fed proposal would apply to virtually all cross-border, consumer-initiated electronic funds transfers – other than debit or credit cards, transactions from a consumer’s U.S. credit union account to a credit union or bank account in that consumer’s name in another country, or online bill payments made through a website. International wire transfers, international ACH transfers, and products such as the World Council of Credit Unions (WOCCU) IRnet, as well as money transfer organizations such as Western Union and Vigo, would be subject to the rule. However, international wire transfers that are initiated from accounts at federally insured credit unions would be exempt from many of the cost estimate requirements until at least 2015. Credit union international wire and ACH transfers would not be exempted from some of the error resolution and cancellation requirements. There are additional proposed exemptions for transfers between a sender’s account in the U.S. and an account in the sender’s name in another country, as well as a proposed exemption for institutions that do not regularly engage in international transfers. The proposed disclosures are required by the Dodd-Frank Act. One disclosure would be provided before the remittance transaction is initiated. A second disclosure would need to be provided when the remittance is received. The initial disclosure would include the actual exchange rate, fees and taxes, and the amount of currency to be received by the recipient, although, as noted above, federally insured credit unions would be able to provide an estimate of the costs rather than the exact costs. The second disclosure would come in the form of a written receipt that includes that same prepayment disclosure as well as additional information about error resolution, provider and regulator contact information, and the availability of the funds upon receipt. For the CUNA comment call, use the resource link.

Renacci to Durbin Interchange fee cap is price fixing

 Permanent link
WASHINGTON (5/23/11)—Rep. Jim Renacci (R-Ohio) in a recent letter to Sen. Richard Durbin said the Illinois Democrat could remain consistent with his recent “commitment to ending price fixing” by allowing a vote on Senate legislation that would delay the implementation of debit card interchange fee rate cap regulations. Renacci referenced a recent Durbin letter to the Federal Trade Commission in which the Illinois legislator called the practice of price fixing “beyond reproach.” The Ohio-based House member, Renacci, said that he fully supports “the concept that consumers should not be subject to an artificial price set on a good or service integral to day-to-day life. “Whether set by the private sector or government, an artificial price undermines the spirit of capitalism and the free markets on which our society relies,” Renacci added. Sen. Durbin was the author of interchange language added at the eleventh hour to the Dodd-Frank Wall Street Reform Act. That amendment requires the Federal Reserve Board to set a cap on debit card interchange fees. That cap could be as low as seven-to-12 cents per transaction. Sens. Jon Tester (D-Mont.) and Bob Corker (R-Tenn.) have introduced S. 575 to delay implementation of the cap. That legislation originally proposed a 24 month delay to allow time to study the impact of the interchange provisions, but Tester last week said that he would adjust his proposed delay to 15-months after some Senate colleagues indicated they thought the 24-month delay was too long. Tester in remarks made before the Senate added that he considered 15 months to be the "the bare minimum" to get a study of the issues "right." The 15-month delay would be broken into three periods: six-months to study issues surrounding government imposition of a cap on what card issuers may charge for use of the debit card system, six months for the Federal Reserve to rewrite rules to implement the Dodd-Frank Wall Street Reform provision, and three months to implement rules. S. 575 had 16 cosponsors as of Friday. Absent a delay, the Fed’s interchange provisions are scheduled to come into effect on July 21. A final version of the proposal, however, has not yet been offered by the Fed.

Fixed mortgage rates continue to drop

 Permanent link
WASHINGTON (5/23/11)--Thirty-year fixed-rate mortgages continued to trend down last week, averaging 4.61% during the week ended May 19, the lowest average mortgage rate recorded this year. Fifteen year mortgages also reached a yearly low, averaging 3.80%. Freddie Mac Vice President/Chief Economist Frank Nothaft said that the decreased mortgage rates were tied to mixed home market and economic data. Five-year and one-year adjustable rate mortgages (ARM) crept up during the week, averaging 3.48% and 3.15%, respectively. Five-year ARMs averaged 3.91% this time last year, while one-year ARMs averaged 4.00%.

Inside Washington (05/20/2011)

 Permanent link
* WASHINGTON (5/23/11)--Pending mortgage-related regulations could create unintended harmful consequences within the industry, Acting Comptroller of the Currency John Walsh said Thursday (American Banker May 20). Walsh said 15 to 20 regulatory measures could create a “tsunami” of change for mortgage servicers at a time when the industry is already in a fragile recovery period from the housing crisis. The regulations include registration and compensation requirements for originators and standards for the independence of appraisers, the finalization of a rule mandating risk-retention for securitized loans, new servicing guidelines from Fannie Mae and Freddie Mac and proposals by the new Consumer Financial Protection Bureau. Walsh likened the possible side effects of combining so many rules to the dangerous side effects of a drug interaction … * WASHINGTON (5/23/11)--Senate Small Business Committee members pressed the Obama administration for details on the Small Business Lending Fund (SBLF) during a hearing on Thursday (American Banker May 20). Don Graves, the deputy assistant Treasury secretary in charge of SBLF, said funds will be distributed next month, but committee members wanted more details. Sen. Ben Cardin (D-Md.) pressed Graves for the amount of funds that would be distributed. Sen. Olympia Snowe (R-Maine), the committee’s top Republication and an opponent of the program, also questioned whether applicants of the Troubled Asset Relief Program were seeking further assistance from the program. Treasury will make decisions on the first round of funding within the next few weeks and the money will be distributed to banks in June, Graves said. The deadline to distribute funds is Sept. 27 … * WASHINGTON (5/23/11)--The Government Accountability Office (GAO) on Thursday advised federal bank regulators to update their commercial real estate guidance to standards that are compatible with how examiners deal with loans following the financial crisis. The recommendation was made in a report issued by the GAO at the request of Rep. Barney Frank (D-Mass.), the ranking Democrat on the House Financial Services Committee, in response to concerns from banks that examiners have been overly strict in treatment of commercial real estate loans (CRE) following the crisis. The reports said agencies typically follow 2006 interagency guidance, which was designed to limit CRE concentrations. “A number of banks reported that examiners have been applying guidance more stringently since the financial crisis and believe that they have been too harsh in treatment of CRE loans,” the report said. “Regulators have incorporated lessons learned from the crisis into their supervision approach, which may help explain banks’ experiences of increased scrutiny.” The report said balance in bank supervision is needed to help ensure the banking system can support economic recovery …