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Fryzel proposes an NCUA Consumer Protection Office

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ALEXANDRIA, Va. (7/1/09)--National Credit Union Administration (NCUA) Chairman Michael E. Fryzel will propose the creation of an NCUA Consumer Protection Office in the 2010 Agency Budget. "The new office will consolidate existing consumer protection functions already administered by NCUA and would create a liaison relationship with relevant external parties, such as the Consumer Financial Protection Agency (CFPA), if that proposed entity becomes a reality," Fryzel said Tuesday afternoon. President Barack Obama's recently released Financial Regulatory Reform proposal, called for the creation of the CFPA to protect consumers and investors from financial abuses. The proposed CFPA would have broad jurisdiction over credit, savings and payment products. "While NCUA has always placed a high priority on the enforcement of consumer regulations, and credit unions themselves have a strong track record of pro-consumer conduct, it is important that the highest level of compliance with these essential laws be maintained at all times," Fryzel said. Creating a dedicated Consumer Protection Office "will make NCUA supervision of consumer protections even more efficient and effective, and will further underscore the priority of this function," the chairman added.

Mica Treasury eager to discuss CU issues

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WASHINGTON (7/1/09)--Credit Union National Association President/CEO Dan Mica Tuesday met with Treasury Secretary Timothy Geithner to discuss some of the pressing issues currently of great interest to credit unions--including member business lending and alternative capital--and to ensure that credit unions would have a “place at the table” as the Obama administration and Congress move forward with their restructuring of the financial regulatory system.
Click for video CUNA President/CEO Dan Mica met with Treasury Secretary Tim Geithner Tuesday to discuss credit union regulatory needs. Click for a video summary of the meeting. (Photo provided by CUNA)
Mica and other CUNA representatives, including Chief Economist Bill Hampel, Vice President of Legislative Affairs Ryan Donovan, and Executive Vice President/General Counsel Eric Richard, discussed CUNA’s views regarding the general plans for regulatory restructuring and the Obama administration’s proposed Consumer Financial Protection Agency during the meeting. Geithner also showed an “intense interest” in the credit union-specific issues of member business lending and alternative capital, telling Mica that he looked forward to working with CUNA to address these and other issues. Overall, Geithner indicated that the Treasury recognizes the need to receive input from credit unions and a number of other outside sources as it works to correct some of the perceived deficiencies in the current financial regulatory structure. Mica said that CUNA would oppose any regulatory changes that would be redundant or would add an unneeded layer of additional regulatory complexity, adding that CUNA would favor easing some of the regulatory burden on credit unions. Mica told Geithner that CUNA is willing to discuss the administration’s proposed consumer financial protection agency in “good faith” as it is developed, provided that legislation would meet the needs of credit unions. (See related story: Obama admin delivers consumer protection plan) While some members of Congress have signaled their intent to keep the National Credit Union Administration (NCUA) independent, a position that CUNA also supports, Mica told Geithner that allowing the NCUA to remain independent would mean little if the NCUA was only afforded “a second-class existence.” For a video summary of the meeting, click on the photo.

Obama admin delivers consumer protection plan

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WASHINGTON (7/1/09)--The Obama administration on Tuesday revealed its full plan for a proposed Consumer Financial Protection Agency by delivering 152 pages of draft legislation to Congress. In a statement, President Obama said the planned agency would ban “the most unfair practices,” and added that “enforcement” would “be the rule, not the exception.” The legislation, as currently constructed, would transfer all consumer financial protection functions and authorities of the National Credit Union Administration (NCUA) to the proposed new agency. More generally, House Financial Services Committee Chair Rep. Barney Frank (D-Mass.) has repeatedly indicated that the NCUA would maintain its full independence under any resulting regulatory regime. In a Tuesday statement that followed the administration’s release, Frank said that while he welcomed the Obama administration’s legislative blueprint for the agency, “the committee will, of course, exercise its own judgment on the specifics.” The House Financial Services Committee began its discussion of the proposed Consumer Financial Protection Agency last week, and the committee is scheduled to continue the discussion once it has returned from the Independence Day district work period. Frank previously has said that the committee would begin marking up related legislation in July, and Tuesday added that his group would “draft and approve a bill in committee before the August recess.” Frank has indicated that while the final regulatory reform legislation would take the form of one all-encompassing bill, each piece of that legislation will be discussed and marked up separately by his committee.

Loan modifications delinquencies foreclosures up

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WASHINGTON (7/1/09)--The Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) reported increases in loan modifications, foreclosures, and the number of loan delinquencies in their mortgage metrics report for the first quarter of 2009. In the press release, Comptroller of the Currency John Dugan said that while he is “very concerned about the rise in delinquent mortgages and foreclosure actions, the shift in emphasis by servicers to more sustainable, payment-reducing modifications is a positive step that should show significant benefits in the coming months.” Loan servicers implemented over 185,000 loan modifications during the quarter, a 55% increase from the prior quarter and up 172% from the corresponding period in 2008, the release said. Over half of these loan modifications lowered both principal and interest payments for their homeowners, the agencies said. While modifications have helped some homeowners avoid foreclosure, the foreclosure process was unavoidable for others. The agencies reported a 22% rise in in-process foreclosures during the quarter. The first quarter foreclosure total of 844,389 represented a 73% increase from the amount reported during the corresponding period of 2008. So-called “seriously delinquent” mortgages -- those that are more than 60 days overdue -- also rose, with prime mortgages representing two-thirds of that total. The report, which detailed the status of $6 trillion in funds spread over 34 million mortgage loans, did not reflect the impact of the recently implemented Making Home Affordable or Hope for Homeowners programs.

Inside Washington (06/30/2009)

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* WASHINGTON (7/1/09)--Reps. Travis Childers (D-Miss.) and Gary Miller (R-Calif.) on Tuesday introduced legislation that would direct the Federal Housing Finance Agency to suspend for 18 months its Home Mortgage Valuation Code of Conduct, a code that prevents loan officers and brokers from requesting appraisals themselves. A mortgage broker group has alleged that the legislation, which became effective on May 1 of this year, delays mortgage closings and harms brokers’ business overall, National Mortgage News reported. * WASHINGTON (7/1/09)--Donna J. Gambrell, Director of the Treasury’s Community Development Financial Institutions (CDFI) Fund will later today award $8 million in financial aid and $3.6 million in technical assistance funds to CDFIs that serve the Native American, Alaska Native, and Native Hawaiian communities. The announcement is scheduled to take place at the Lakota Trade Center, a Kyle, South Dakota-based CDFI recipient that aids local businesses and entrepreneurs… * WASHINGTON (7/1/09)--The Federal Reserve Board’s supervisory role over financial institutions that participate in discount window borrowing is not very different from the role of a systemic risk regulator, according to Eric Rosengren, president/CEO of the Federal Reserve Bank of Boston (American Banker June 30). Rosengren commented on the Fed’s powers during a risk regulation summit in Brussels, saying it might be logical for the Fed to assume the role of discount window operator. A macroprudential supervisor should be attuned to changes in leverage, asset-liability mix or underwriting standards, Rosengren added. His comments came after congressional leaders expressed doubt about giving the Fed systemic risk responsibilities under President Barack Obama’s financial regulatory restructuring plan ... * WASHINGTON (7/1/09)--Henry Paulson, former Treasury Secretary, is scheduled to testify July 16 regarding the government’s role in a Bank of America/Merrill Lynch deal. Paulson should be ready to discuss when federal officials knew of losses at Merrill Lynch and their decision to give $20 billion in rescue money to Bank of America in January, Reps. Dennis Kucinich (D-Ohio) and Edolphus Towns (D-N.Y.) said in a letter. The hearing will be held by the House Committee on Oversight and Government Reform. Paulson will be the third to testify in hearings regarding the Bank of America and Merrill Lynch deal (American Banker June 30). Federal Reserve Board Chairman Ben Bernanke and Bank of America CFEO Kenneth Lewis have been scrutinized by lawmakers this month for completing the deal, even though Merrill suffered significant losses shortly before Bank of America acquired the firm ...