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CFPB Expands Its Consumer Complaint Database

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WASHINGTON (6/3/13)--The Consumer Financial Protection Bureau (CFPB) announced Friday that it has expanded its Consumer Complaint Database to include state-by-state information and also has added complaints about money transfers and credit reporting to the database.

"This data puts valuable information in the hands of consumers to help them understand what is happening in their states," said CFPB Director Richard Cordray. "And by adding credit reporting and money transfer complaints to the Consumer Complaint Database, we are making these important markets more transparent and accountable to all consumers."

The CFPB said its database has gone from logging nearly 90,000 complaints on credit cards, mortgages, student loans, bank accounts and services, and other consumer loans, like auto loans in March to 113,000 complaints today. The live database updates nightly.

While credit unions are not likely be the subject of a sizable number of consumer complaints, the Credit Union National Association has expressed concern that the public data release could have unintended consequences and has worked with the bureau to address concerns.

CUNA has warned that sensitive or confidential business or consumer information could be inadvertently disclosed when consumer complaints are filed in the database. "The bureau should take steps to minimize privacy risks and other unintended consequences," CUNA has said in a series of comment letters.

Regarding the ability to sort information by state, the CFPB said it will  add a new field to every complaint to identify the state from which it came.  The state designation will be in addition to the five-digit ZIP code information that consumer complainant have always been able to include.

Also on Friday, the CFPB said it was adding more than 6,000 credit reporting complaints to the database and will continue to will add new complaints as they come in and are processed. The CFPB began taking credit reporting complaints in October 2012.

Money transfers were the latest category of complaints that the CFPB began accepting and that happened in April; they now also are being updated to the Consumer Complaint Database. Money transfer complaints include domestic or international wire transfers.

For more on the CFPB announcement, use the resource link below.

NCUA Voices Concerns With FASB Credit Impairment Plan

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ALEXANDRIA, Va. (6/3/13)--National Credit Union Administration Chairman Debbie Matz urged the Financial Accounting Standards Board (FASB) to strongly consider how proposed credit impairment recognition changes could impact small- and medium-sized credit unions, and their ability to serve members of modest means, in a Friday letter to the board.
 
Matz said the compliance costs that this proposal could create are a particular concern for the agency. The NCUA also has safety and soundness concerns regarding the proposal, she added.

The Credit Union National Association strongly opposes the FASB rule because it would be detrimental to the credit union system and could have serious, unintended consequences for borrowers and the economy.
 
It is an unusual step for the NCUA to weigh in in this manner with FASB, an action that is likely to draw extra attention from the accounting body. 
 
The NCUA makes points similar to those CUNA has made about how the FASB plan would unnecessarily burden the resources of credit unions and have the unintended consequence of reducing available credit options for consumers during this time of economic rebuilding.


The FASB proposal would update accounting standards regarding financial reporting of expected credit losses on loans and other financial assets held by financial institutions, including credit unions. The proposed model would utilize a single "expected loss" measurement for the recognition of credit losses. It would replace the multiple existing impairment models in U.S. generally accepted accounting principles that generally use an "incurred loss" approach.
 
Under the proposal, the reporting entity would be required to estimate the cash flows that it does not expect to collect, using all available information, including historical experience and forecasts about the future.
 
Matz in the agency letter noted that many small- and medium-sized credit unions lack the resources to perform complex economic analysis at the time of loan underwriting. This lack of resources could force these credit unions to make the difficult choice of paying third-party economic consultants, or cutting back on their lending activities.
 
"Either choice would result in lower net income and reduced services to consumers, which would threaten the viability of these institutions over the long term," the NCUA chairman noted.
 
"Since credit unions were the only federally insured financial institutions to increase lending throughout the recent economic downturn, discouraging credit union lending would negatively impact consumers going forward," she wrote.

CUNA welcomed the NCUA's letter to FASB. Last week, CUNA urged FASB to drop its proposal, calling it "the most critical regulatory concern credit unions have faced in quite some time, including rules or proposals that have been issued under the Dodd-Frank Wall Street Reform and Consumer Protection Act."

House Fin. Services Releases Two-week Hearing Schedule

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WASHINGTON (6/3/13)--The U.S. House and Senate return today for a four-week session leading up to a July 4 District Work Break.

On Friday, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) announced the committee's hearing schedule for the first half of June, while noting that the schedule is tentative and dependent upon witness availability and "other factors"  that may require changes.  Meetings become final only when a hearing notice is made public. Hearing notices can be found online using the resource link below.

The panel's tentative hearing schedule includes:

  • A June 5 hearing by the subcommittee on capital markets and government-sponsored enterprises to examine the market power and impact of proxy advisory firms;
  • A June 12 session by the full committee on alternative housing finance models;
  • Also on June 12, the subcommittee on capital markets and government-sponsored enterprises will study proposals to support capital formation;
  • On June 13, the subcommittee on monetary policy and trade will conduct a hearing to discuss reforms to the Export-Import Bank; and,
  • The Housing and insurance subcommittee, also on June 13, will hold a hearing on international insurance issues.

Internet Body Gives CUNA Preliminary OK For .creditunion Domain Name

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WASHINGTON (6/3/13)--The Credit Union National Association has won preliminary approval from the Internet Corporation for Names and Numbers (ICANN), the international body that authorizes web extensions, for the Internet domain name .creditunion (dot credit union). The new domain name is expected to be finalized and go live early next year.

CUNA submitted an application for the .creditunion domain name, which was selected from almost 2,000 generic, top-level domain name applications that had gone to ICANN over the past four months.

In 2011, ICANN announced it would significantly broaden the number of approved top-level domain names beyond the limited number in use, such as .com, .org, .gov, .edu, and.coop.  The action prompted CUNA to submit a .creditunion application on behalf of the credit union movement.

"As the national trade group for credit unions, CUNA felt compelled to secure the .creditunion extension," said CUNA General Counsel Eric Richard.  "We recognized there was both value to the credit union system, and potential abuse if it were not properly safeguarded."

For example, Richard said in the wrong hands a .creditunion domain could allow someone intent on committing fraud to do so from a seemingly legitimate platform.  Or credit unions might have faced high fees to secure a site on the domain if it went to someone willing to sell to the highest bidder.  "That's why we felt it was so important for CUNA to be the gatekeeper," Richard added.

The new domain will also have positive marketing and communication benefits for credit unions  that CUNA didn't want credit unions to be left out of, said Paul Gentile, CUNA executive vice president of strategic communications.

Already, he noted, well-known U.S. companies have sought domain names to associate with their brands, like .Chevy or .AIG, and other financial services categories like .bank and .insure are in the process of being created. 

"Making sure we in the credit union system have control of our own domain name is right in line with our strategic vision to 'Unite for Good' by removing barriers, raising awareness, and fostering service excellence," Gentile added.

Now that ICANN has given CUNA preliminary approval, the next several months will be focused on finalizing details.  Final approval is anticipated, and the .creditunion domain is expected to go live in early 2014.

CUNA has already set up a mechanism for credit unions to register their interest.  Credit unions interested in this issue are asked to use the resource link below to complete an important survey.

Credit unions can also email dotcreditunion@cuna.coop for any questions or comments. These opportunities for feedback are nonbinding, and CUNA is asking credit unions to express their interest by Aug. 1.

CUNA also expressed its gratitude to CUNA Mutual Group and Co-op Financial Services, both of whom assisted in funding the $185,000 application cost.  CUNA also intends to work with the World Council of Credit Unions and foreign regulatory authorities so that CUs around the world can use .creditunion.

Six Banned From Future CU Work

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ALEXANDRIA, Va. (6/3/13)--The National Credit Union Administration Friday issued prohibition orders banning six individuals from participating in the affairs of any federally insured financial institution; four had pleaded guilty to embezzlement, one was adjudged guilty of receipt of stolen money, and one consented to the issuance of the prohibition order to avoid the time, cost and expense of administrative litigation.

The NCUA reported the orders involve the following former credit union employees and charges:

  • Jamie Askew, a former employee of St. Louis Community CU in St Louis, Mo., pleaded guilty to the charge of embezzlement from a credit union. Askew was to sentenced time served, five years of supervised release and ordered to pay restitution in the amount of $104,785.97;
  • Stacy Attisano, a former employee of Lawrence County School Employees' FCU in New Castle, Pa., pleaded guilty to the charge of embezzlement from an institution insured by NCUA. Attisano was sentenced to 30 months in prison, three years supervised release and ordered to pay restitution in the amount of $259,847;
  • Krista Marie Cousino, a former employee of St. Patrick Carleton FCU in Carleton, Mich., pleaded guilty to the charge of embezzlement in a credit union. Cousino was sentenced to 270 days in prison, five years of probation and ordered to pay restitution in the amount of $160,000;
  • Kerry Higashi, a former employee of Kauai Teachers FCU, Union in Lihue, Hawaii, was adjudged guilty of embezzlement from a federal credit union. Higashi was sentenced to one month in prison, five years of supervised release and ordered to pay restitution in the amount of $44,043.82;
  • Christopher Langley, a former employee of Eastern New York FCU in Napanoch, N.Y., consented to the issuance of a prohibition order to avoid the time, cost and expense of administrative litigation; and,
  • Halina Mielczarek, a former employee of United Nations FCU in Long Island City N.Y., was adjudged guilty of receipt of stolen money. Mielczarek was sentenced to five months in prison, three years of supervised release and ordered to pay restitution in the amount of $87,665.96.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

Use the resource link to access NCUA enforcement orders.

enforcement actions of other federal regulators

NCUA's Hagan Becomes IG As DeSarno Retires

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ALEXANDRIA, Va. (6/3/13)--National Credit Union Administration Inspector General William DeSarno announced his retirement Friday after completely nearly 45 years of public service.

NCUA Chair Debbie Matz announced that James Hagen, the agency's current deputy Inspector General for Audit, would assume the Inspector General's position over the weekend--effective June 1.

Matz praised DeSarno's service, saying, "Bill DeSarno built a long and distinguished career in public service, holding positions demanding the highest levels of public trust.  He has been consistently diligent and independent, always looking for ways to improve the performance of his office and the agency. He has handled complex issues with skill and integrity. His many insights and investigations have improved the operations of NCUA and ensured that credit unions remain a safe place to save and borrow."

NCUA board member Michael Fryzel also said that DeSarno's  outstanding career at NCUA earned him  the respect of the entire Washington, D.C., Inspector General community.  Fryzel said, "He has handled a tough job in a fair, consistent and independent manner. His efforts to modernize and make the Inspector General's office more responsive and involved in improving the agency are well-recognized."

The agency's Office of Inspector General is charged with promoting the economy, efficiency and effectiveness of NCUA programs and operations and detecting  and deterring fraud, waste and abuse. It is considered integral to the NCUA's mission of monitoring and promoting safe and sound federally insured credit unions. The Inspector General conducts independent audits, investigations and other activities and keeps the NCUA and the U.S.  Congress fully and currently informed of their work.

DeSarno joined NCUA in 1997 and became the agency's Inspector General in 2005. He also has served as assistant inspector general for audits and deputy inspector general. DeSarno was the first to establish an Office of the Inspector General strategic plan, and also is known for having been involved in all aspects of his office, including planning, budget, staffing and structure.

Prior to joining NCUA, DeSarno served seven years with the U.S. Treasury Department's Inspector General's office and 18 years with the General Accounting Office, accumulating more than 14 years of management experience and more 20 years of experience supervising auditors. His government career began in the U.S. Army, including service in Vietnam.

30,000 Tax Advocacy Contacts Hit Capitol Hill

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WASHINGTON (6/3/13)--More than 30,000 congressional contacts have been sparked by the May rollout of a key credit union advocacy effort, the "Don't Tax My Credit Union" campaign launched by the Credit Union National Association and the state credit union leagues.

The campaign and its progress of is discussed in the latest edition of CUNA's "Inside Exchange" video update. CUNA and the leagues announced the large-scale, nationwide grassroots-mobilization campaign in mid-May as the U.S. House and Senate are making broad-based tax reform a major priority.

In this week's video, Richard Gose, CUNA senior vice president of political affairs, tells CUNA Executive Vice President of Strategic Communications and Engagement Paul Gentile he is "excited" to report the large number of contacts credit union supporters have made, and how much traction their efforts have created on the social media front.



"We're starting to see a lot of people follow us, retweet us, and just really get the word out there," Gose says of the social media response. "This is all about getting (the message) pushed out to the members, and getting as deep as we can in terms of education and knowledge about the tax issue and why (members) need to engage," he adds.

The "Inside Exchange" videos were created to give CUNA another direct line of communication to member credit unions, and provide detailed insights into what's happening in Washington, D.C., in the legislative, regulatory and political arenas.

For more on this new video, and a previous video featuring CUNA President/CEO Bill Cheney's comments on credit union advocacy efforts, use the resource link.

NCUA Closes Two FCUs, Making Nine For the Year

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ALEXANDRIA, Va. (6/3/13)--On Friday, the National Credit Union Administration announced the liquidations of $1.6 million-asset NCP Community Development FCU (NCP) of Norfolk, Va. and of $59.7 million-asset First Kingdom CU of Selma, Ala., bringing the total number of closing for the year to nine.

In Virginia, Chartway FCU, of nearby Virginia Beach, Va., assumed NCP's member shares. Chartway is a federal credit union with more than 188,000 members and assets of $1.9 billion.

Back in February, the NCUA placed NCP into conservatorship, an act taken to bolster the credit union's financial stability and operations. However, the agency subsequently decided the credit union was insolvent and had no prospect for restoring viable operations. 

NCP served 709 members and was chartered in 1999.  It served  "certain underserved communities" in Norfolk, Chesapeake and Portsmouth, Va., the NCUA said.

In Alabama,  Riverdale CU, also of Selma, immediately assumed First Kingdom Community FCU's member shares, thereby assuring uninterrupted service for the 76 former First Kingdom Community members. Riverdale is a federally insured, state-chartered credit union with assets of $59.7 million and which serves 8,360 members.

First Kingdom Community had been placed into conservatorship in May 16, but the NCUA said it made the decision to liquidate after determining this was the best course of action for continued member service.  

The small community-chartered credit union was established in 2007 to serve people who live, work, worship, or attend school in, Dallas County, Ala.; businesses and other legal entities located in the county; spouses of persons who died while within First Kingdom's field of membership; employees of the credit union; volunteers in the community; members' immediate family or household; and organizations of such persons.

CUNA: CFPB Changes Move QM In Positive Direction

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WASHINGTON (6/3/13)--Recent Consumer Financial Protection Bureau changes to ability-to-pay/qualified mortgage (QM) rules are a step in the right direction, Credit Union National Association President/CEO Bill Cheney said in this week's edition of The Cheney Report.

The changes include:
  • The creation of a transitional period when small lenders can make balloon mortgage loans under certain conditions. These balloon mortgage loans would still qualify as QM loans; and
  • Extending QM status to held loans that are made by credit unions and community banks that have less than $2 billion in assets and make 500 or fewer first-lien mortgages annually, even if the borrower's debt-to-income ratio exceeds the rule's 43% QM threshold.
"Both changes will be helpful to credit unions and respond to concerns we have repeatedly raise," Cheney wrote. (For more on these changes, see the May 30 News Now story: CFPB Issues Exemptions To Ability-to-Repay Rule.)
 
CUNA continues to review these changes to gauge their full impact on credit unions, Cheney added.
 
These and other changes were discussed in a meeting between Cheney and CFPB Director Richard Cordray last week. "He wanted to highlight several key changes and exemptions that ease the rule's impact on credit unions," Cheney noted. The two leaders in that meeting also addressed a broad range of topics, including payday loans and overdrafts.
 
"The best thing we can do is to continue to educate Cordray and the CFPB about the great things credit unions are doing for their members," Cheney said.
 
This week's Cheney Report also includes:
  • An update on tax advocacy efforts;
  • CUNA comments on Financial Accounting Standards Board credit impairment rules; and
  • A congratulations to the credit unions everywhere that helped attract 800,000 new members in the first quarter of 2013.
Each Friday, The Cheney Report delivers Cheney's insights on three to four key events and policy developments affecting credit unions into the e-mail inboxes of credit union CEOs. The report also provides a valuable window into CUNA's actions on behalf of member credit unions and reinforces the value of CUNA membership.

To sign up for The Cheney Report, click the resource link below and use the "subscribe" tab on the right of the page.

Past issues of The Cheney Report are also archived on cuna.org.