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Inside Washington (07/11/2008)

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* WASHINGTON (7/14/08)--At a hearing Thursday, House Financial Services Committee Chairman Barney Frank (D-Mass.) said expanding the Federal Reserve Board’s powers would be at the top of his priority list next year. He also noted that he wants to give the Treasury more oversight (American Banker July 11). This contrasts to his announcement last year that he wanted to remove some of the Fed’s power because of a poor consumer protection record. If Frank moves ahead with the expansion, it would be the largest broadening of the Fed’s authority in several decades ... * WASHINGTON (7/14/08)--President Bush has nominated Anthony Ryan, assistant secretary of financial markets for the Treasury, to succeed Robert Steel as Treasury undersecretary (American Banker July 11). Steel accepted a position at Wachovia Corp. Wednesday ...

In iRoll Calli Mica warns of bad lenders comeuppance

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WASHINGTON (7/14/08)—For mortgage lenders who acted improperly, or even in the gray areas of good lending practices, there may be a “comeuppance” in Congress next year, Credit Union National Association (CUNA) President/CEO Dan Mica said recently in the Capitol Hill publication Roll Call. A July 10 article, “Financial Crisis Keeps K Street Busy,” noted that Congress has made easing the foreclosure turmoil a legislative priority this year and predicted that the crisis will continue to dominate the federal legislative agenda in 2009. Mica’s statements concurred: “There will be continuing massive Congressional involvement in the financial services industry, and they will be looking at cures and prevention of what caused this subprime crisis, and I believe they may be placing some blame.” “There will be very direct and riveted action in the financial services community next year,” Mica added. “For those financial services who acted in the gray areas or improperly, there may be a comeuppance.” The article, which included comments from a range of lobbyists--representing consumers, banks, insurance interest and more--noted that legislative changes could come in the form of increased consumer protections and “sweeping” new regulatory proposals for banks, investment houses, insurers and other financial services firms.

CUNA urges Paulsons support for PCA reform

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WASHINGTON (7/14/08)—The Credit Union National Association (CUNA) thanked U.S. Treasury Secretary Henry Paulson for his remarks recognizing credit unions during congressional testimony last Thursday, and used the occasion to urge him to support risked-based prompt corrective action (PCA) reform for credit unions. Testifying before the House Financial Services Committee on changes to the country financial regulatory structure, Paulson said he “appreciates what credit unions do” and does not want to “impact credit unions.” CUNA President/CEO Dan Mica told Paulson that credit unions “welcome your recognition.” He added that CUNA respectfully requests “that consistent with your comments the Treasury support PCA revisions for credit unions.” “Given the implementation of Basel II and the fact that a new proposal from the Federal Deposit Insurance Corporation and the Federal Reserve Board is pending that would allow all except the largest banks to take advantage of Basel II-type standards modified to fit their risk profiles, it is timely and appropriate to consider risk-based PCA reform for credit unions,” Mica urged. He noted that also within the context of last week’s committee’s hearing on financial restructuring, CUNA has written to its chairman, Rep. Barney Frank (D-Mass.), and ranking member Rep. Spencer Bachus (R-Ala.). CUNA urged their support for revisions to the Federal Credit Union Act that would replace the current inflexible statutory net worth standards for credit unions with a risk-based system that will more accurately reflect a credit union’s portfolio risk. (See News Now, July 11, “CUNA urges House panel to focus on CU risk system.”)

Hyland touts four Cs of good lending

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ALEXANDRIA, Va. (7/14/08)—Credit unions have an opportunity to be a trusted lender to members in these times of economic uncertainty, said National Credit Union Administration (NCUA) board member Gigi Hyland last week, but they need to adhere to principles of good lending. Hyland noted in a release that she represented her agency at the Federal Deposit Insurance Corporation (FDIC) forum on strategies for promoting responsible, sustainable mortgage lending for low- and moderate-income (LMI) families. That forum was held in Arlington, Va. on July 8. "Getting back to basics in mortgage lending by adhering to solid underwriting standards and following the four ‘Cs’ of good lending -- commitment, credit, collateral and capital -- were key themes of the day,” Hyland said. She encouraged credit unions stick to “time-tested” lending principles. Hyland noted Mortgage Bankers Association predictions that mortgage originations may decline by 18% in 2008 and by 11% in 2009. Use the resource link below to access a webcast of the forum and a follow-up meeting addressing strategies to encourage mortgage lending.

Help from CUNA on credit card overdraft restrictions

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WASHINGTON (7/14/08)—National Credit Union Administration (NCUA) officials will be on hand to offer guidance in July as the Credit Union National Association (CUNA) provides information for credit unions on proposed restrictions for credit cards and overdraft plans. CUNA has organized a July 28 audio conference on the emerging issues surrounding the planned restrictions. The hour-and-a-half session will be conducted from 2-3:30 p.m. ET. The range of topics will include:
* The joint plan issued by the NCUA, Federal Reserve Board, and the Office of Thrift Supervision that will prohibit a number of credit card practices and will impose restrictions on overdraft protection plans; * Details of the credit card proposals, such as: time periods for making payments, payment allocations, interest rate increases on outstanding balances, fees resulting from credit holds, methods for computing balances that are subject to interest charges, excessive security deposits and fees that are charged when credit is issued, and advertisements that include multiple interest rates and multiple credit limits; * Details on the overdraft protection plan restrictions, such as: requirements that consumers be provided an opportunity to “opt-out” of the plan, address fees resulting from holds on debit card transactions, and receive disclosure requirements in periodic statements; and * Two separate but related Fed proposals to amend Regulation Z, the Truth in Lending Act, Regulation DD, and the Truth in Savings Act.
Scheduled audio conference speakers include the following:
* Tonya Green, NCUA staff attorney in the Operations Division of the Office of General Counsel. Her responsibilities include providing interpretations of the Federal Credit Union Act and NCUA Rules and Regulations to the agency and outside parties; advising the Board and NCUA staff on general legal matters; and drafting regulations designed to ensure the safety and soundness of credit unions; * Ross Kendall, a member of the NCUA’s office of general counsel, who has more than twenty-five years of experience in the law of financial institutions, including both private practice and as a regulator; * Matt Biliouris, who as program officer in the NCUA Office of Examination & Insurance addresses various issues involving the agency’s examination program, with a specialized focus on BSA, lending, and consumer compliance; * Mike Long, vice president of lending at the University of Wisconsin CU, chairman of the CUNA Lending Council Regulation and Legislation Committee, and member of the CUNA Consumer Protection Subcommittee; * Mary Dunn, CUNA senior vice president of regulatory advocacy and deputy general counsel. Dunn regularly represents credit union interests before the NCUA, the Federal Reserve Board, and other federal agencies; and * A Federal Reserve representative.
For more details and to register, use the resource link below.