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NCUA hits exam issues at Fla. Listening Session

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ORLANDO, Fla. (6/15/12)--It was another productive meeting, Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said of the National Credit Union Administration (NCUA) Listening Session she attended here this week, with examination issues and a possible revised definition of "small" credit union, in particular, front and center.

With about 80 credit unions in attendance, NCUA's Director of Examination and Insurance Larry Fazio underscored that the agency is working to develop a productive examination environment for credit unions and examiners.

Fazio urged credit unions to communicate regularly with their examiners and also to move those communications up the line to their supervisory examiner.

NCUA Chairman Debbie Matz, adding to that advice, suggested a credit union go even further when needed. She told the Listening Session participants that credit unions should move up the chain of command until they successfully resolve an issue. Improprieties, she added, should be referred to NCUA's Inspector General.

It was notable, said Dunn Thursday, that some credit union participants said they have recognized improvements with their examiners.

As reported previously, the NCUA is rewriting its supervisory policy manual for examiners and hopes to have that out in the field by July. The manual is intended to promote consistency among the regions on supervisory issues. (Examinations and the new examiners' manual are among topics discussed in the just-released June NCUA Monthly Report. See today's Inside Washington section for the link.)

On another topic, the NCUA chairman noted that the agency board may soon consider adopting a revised definition for what constitutes a small credit union. She said the threshold may be raised above the current $10 million-asset mark.

Matz also noted that the NCUA will be sending information to about 1,100 credit unions in July indicating that they qualify for low-income designation, thereby qualifying them to fall under rules that allow access to supplemental capital and an exemption from the current 12.25% member business lending cap.

There are two remaining of the six Listening Sessions scheduled by the NCUA this year. They are:

· July 10 in San Diego, Calif.; and

· July 31 in Denver, Colo.

Registration is limited to the first 150 reservations. See resource link for more information.

CFPBs next target Elder financial abuse

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WASHINGTON (6/15/12)--The Consumer Financial Protection Bureau (CFPB) has asked for public comment on any fraudulent or deceptive practices that target elderly Americans and their families, and for information on financial products, services and literacy efforts that help combat these types of scams.

"We want to know what programs exist and how effective they are," the CFPB said in a Thursday release.

The agency said comments could focus on what resources are provided to help seniors vet any financial advisors and planners they may hire. Information on how financial education, financial counseling and management programs can be tailored to meet the needs of senior citizens and those that care for them has also been requested by the CFPB.

The CFPB will accept comments for 60 days after its request is published in the Federal Register, which will likely bring the comment period to a close around mid-August.

Skip Humphrey, head of the CFPB's Office of Older Americans, noted that an estimated $2.9 billion was stolen from financially exploited senior citizens in 2010. Reported instances of financial theft from seniors grew by 12% between 2008 and 2010, he said.

In a separate release, the CFPB said older Americans can protect themselves from some forms of financial abuse by granting power of attorney to a trusted family member. However, the CFPB cautioned, seniors should be careful when they decide to cede that type of power.

Potential signs of elder financial abuse, the Financial Crimes Enforcement Network (FinCEN) said in warnings, can include large ATM withdrawals, debit transactions that are not consistent with a customer or member's normal activities, and sudden non-sufficient fund activity. Credit unions and other financial service providers should also be aware of caregivers that take a sudden interest in a senior citizen's financial activities, caregivers that attempt to speak for the senior citizen, or caregivers that refuse to leave a senior citizen's side when they are discussing financial matters.

FinCEN in 2011 reported a sharp increase in the number of financial institutions that filed Suspicious Activity Reports (SARs) related to elder financial abuse.

The Maine Credit Union League and the Northwest Credit Union Association are among those that have supported elderly financial abuse prevention legislation in their respective states, and more than 20 states now have laws requiring financial institutions to report elder abuse.

Maryland became the latest to add such laws to its books last month. The Maryland law will require credit unions and other financial institutions to report any suspicions of elder abuse to Adult Protective Services or local law enforcement within 24 hours by phone, and to later follow up in writing. Financial institutions that fail to do so would face a penalty of as much as $5,000. The law is scheduled to go into effect in October.

Credit unions can also help prevent financial exploitation of the elderly by participating in the U.S. Treasury's GoDirect federal benefit direct deposit program. That program helps seniors avoid potential instances of fraud by electronically depositing federal benefit payments into user accounts. The Credit Union National Association is a GoDirect partner.

CUSO rule is focus of NCUA June agenda

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ALEXANDRIA, Va. (6/15/12)--Proposed credit union service organization (CUSO) regulatory changes drew a substantial number of comments from credit unions when they were released last year, and a final version of the CUSO changes will be the lone item on the agenda when the National Credit Union Administration (NCUA) holds its open board meeting on June 21.

Under the proposal, CUSOs and their subsidiaries would be required to directly file their financial statements with the NCUA, and to forward those reports to state supervisors.

The NCUA currently has the authority to inspect the financials and records of some CUSOs, but the majority of financial information on CUSOs is provided by natural person credit unions that obtain services from the CUSOs.

The agency has noted that this is an inefficient system, and said enhancing the monitoring of CUSOs would protect consumers, credit unions and the National Credit Union Share Insurance Fund (NCUSIF).

The Credit Union National Association (CUNA) filed an extensive comment letter on the proposal, noting that while some CUSOs have had issues, CUSOs as a whole do not pose a systemic risk to the credit union system or overall concerns to the NCUSIF.

CUNA has asked the agency to substantially modify the CUSO proposal before making it final, and CUNA regulatory staff and President/CEO Bill Cheney have met many times with the NCUA to discuss this issue.

CUNA has stressed that the CUSO proposal would introduce unnecessary limitations on credit union activities and add to the already large regulatory burdens faced by credit unions.

Overall, CUNA has urged a more targeted approach than that outlined in the CUSO proposal.

NCUA Chairman Debbie Matz in recent Listening Sessions, as her regional conversations with credit unions are called, said the agency has examined ways that the CUSO proposal could be scaled back.

The closed portion of the Thursday NCUA meeting will feature discussion of personnel issues and supervisory activities.

For the full NCUA agenda, use the resource link.

Inside Washington (06/14/2012)

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  • WASHINGTON (6/15/12)--The Consumer Financial Protection Bureau (CFPB) published a notice and request for information in the Federal Register Wednesday asking state agencies, colleges, consumer advocates and lenders to submit data and information on existing private student loan complaints. The agency also sent a letter to attorneys general and state higher education officials to invite their participation. The request came after the CFPB published close to 2,000 comments from individual consumers about their experiences in the private student loan market. The consumer comments published were submitted in response to a request published in the Federal Register last winter, asking for input on a study the CFPB and the Department of Education are conducting on private student loans. Many borrowers reported relying on school financial aid offices for information and guidance on which loan products to use, the CFPB reported. Other borrowers are finding their private student loan debt to be unmanageable or difficult to navigate in the repayment process, the CFPB said …
  • WASHINGTON (6/15/12)—Information on recent board actions, tips for credit union boards seeking new CEOs, and commentary on credit union regulatory issues are all included in this month's edition of The NCUA Report. For the full report, click here…