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Complaint site could create privacy woes CUNA

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WASHINGTON (7/19/12)--The Consumer Financial Protection Bureau's (CFPB) consumer credit card complaint database and policy statement, unveiled last month, could create privacy risks for credit unions and other financial institutions, the Credit Union National Association (CUNA) reiterated in a comment letter filed on Wednesday.

CUNA raised similar points as the CFPB was developing the consumer complaint database earlier this year.

The CFPB database, which now lists 1749 complaints against financial institutions of at least $10 billion in assets, provides details on the credit card issue that prompted a consumer complaint, the zip code of the consumer that made the complaint, and the company against which the complaint was made. Information on how the complaint was resolved and whether it was resolved in a satisfactory fashion is also included.

The bureau plans to add consumer complaints on other types of financial products to the consumer complaint database.

While credit unions will not likely be the subject of a sizable number of consumer complaints, CUNA said it was still concerned that the public data release could have unintended consequences.

CUNA 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," the CUNA comment letter said.

CUNA also encouraged the CFPB to make any necessary adjustments to the data to minimize potentially misleading implications. "The publicly released data should be adjusted to account for differences among institutions and the product or service at issue, such as the size of the institution, the relative size of the institution's offering of the product or service, and the different types and characteristics of the financial product or service," CUNA said.

The CFPB is planning to include only non-narrative data that does not contain confidential information for complaints on other non-credit card financial products.

CUNA in the letter urged the CFPB to consider the potential benefits of including some limited narrative information in these databases. "For example, it may be helpful to the public to have a better understanding of the substance of the complaint if the consumer's description and institution's written response were included along with the other information regarding the complaint," CUNA wrote.

For the full CUNA comment letter, use the resource link.

ATM bill developing in Senate

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WASHINGTON (7/19/12)--Legislation that would ease the burdensome ATM fee disclosure regulations that have created legal and financial issues for many credit unions is now working its way through the Senate, bringing an ATM fix closer to a final vote.

The most recent Senate ATM action took place this week. Language that would revise Regulation E to only require ATM fee disclosures to be presented on an ATM's screen was combined with a Consumer Financial Protection Bureau (CFPB) provision. The CFPB provision would address how the agency handles information from entities it regulates.

The ATM and CFPB bill, known as S. 3394, was introduced by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and ranking committee member Richard Shelby (R-Ala.) on Tuesday.

Sens. Jon Tester (D-Mont.), Sherrod Brown (D-Ohio), Claire McKaskill (D-Mo.), Mike Crapo (R-Idaho), Mike Johanns (R-Neb.) and Kay Hagan (D-N.C.) have also signed on to cosponsor the bill.

Interested parties are working to ensure that all Senators are supportive of this measure before it moves forward.

CUNA President/CEO Bill Cheney recently encouraged the Senate to take up ATM disclosure legislation as soon as possible and provide credit unions with much needed regulatory relief.

H.R. 4367, a House bill that only addressed ATM fee disclosure issues, passed the House last week by a 371 to 0 vote.

Matz 10 things to know about NCUA

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ALEXANDRIA, Va. (7/19/12)--A list of 10 things credit unions may not know about the National Credit Union Administration (NCUA), as written by NCUA Chairman Debbie Matz, is one of the featured

articles in the July edition of The NCUA Report.

In her monthly article, Matz notes that the agency cannot change NCUA regulations that are required by law or those written by other agencies. Matz also pledges that the NCUA is making every effort to provide regulatory relief to credit unions, and that the NCUA is providing a wide range of assistance to small credit unions.

Also in the issue, board member Gigi Hyland discusses how credit unions can keep their well-earned reputations for customer service intact. ANd in his column, fellow board member Michael Fryzel tells credit unions that it may be time for the agency to better tailor some one-size-fits-all regulations to create a better fit.

Interagency guidance addressing mortgages held by servicemembers and how assumptions about non-maturity shares can impact credit unions' interest rate risk are also addressed in the July NCUA Report.

For the full report, use the resource link.

Inside Washington (07/18/2012)

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  • WASHINGTON (7/19/12)--Comptroller of the Currency (OCC)  Thomas Curry Tuesday said his agency will be more aggressive in implementing anti-money laundering (AML) controls. Testifying before a Senate Permanent Subcommittee on Investigations that examined years of lax anti-money-laundering controls at HSBC Holdings PLC's U.S. offices, Curry said the OCC did not act fast enough in addressing HSBC's security issues. "With the benefit of hindsight, the OCC could have, and should have taken this action sooner," Curry said. He said the agency has made adjustments to account for Bank Secrecy Act (BSA) and AML deficiencies and react sooner. The agency also will review other areas such as training, staffing, recruitment, policies and interagency coordination and  to make improvements in its BSA/AML supervision program …

FinCEN updates on e-filing problems

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VIENNA, Va. (7/19/12)--The Financial Crimes Enforcement Network (FinCEN) has updated credit unions and other financial institutions on recent Bank Secrecy Act (BSA) electronic filing problems saying the system is now functioning properly and FinCEN has completed the processing of backlog data.

E-filing of all BSA reports became mandatory on July 1.  That requirement effective date combined with a concurrent and massive power outage in the Washington, D.C. metropolitan area--of which Vienna, Va. is a part-- resulted in delays, failed login sessions and, in a few cases, mistaken rejections of properly filed reports.

State and federal financial regulators have been informed of the unique circumstances that arose during this period and examination staff should consider these events when reviewing a financial institution's filings for this period.

As a reminder and reflected in FinCEN's Feb. 24 Notice to Financial Institutions on the Exemption Process, FinCEN acknowledges that financial institutions may at times, and on limited occasions, have ad hoc administrative difficulties in submitting BSA reports electronically within the required timeframes.

At such times, financial institutions should contact FinCEN's regulatory helpline at 1-800-949-2732 to alert FinCEN of the compliance concerns and to determine the best option to ensure the required information is submitted in the most expedient manner.

Capital One fines prompt CFPB card guidance

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WASHINGTON (7/19/12)--Credit unions should be aware of compliance guidance posted yesterday by the Consumer Financial Protection Bureau (CFPB) that addresses marketing practices associated with certain "add-on" features related to credit cards.

The guidance was, at least in part, prompted by the CFPB's announcement of its first public enforcement order, which requires Capital One Bank (U.S.A.), N.A., to refund approximately $140 million to two million customers and pay an additional $25 million penalty because of alleged deceptive marketing tactics used by Capital One's vendors.

CFPB said it determined that Capital One vendors pressured or mislead consumers into paying for "add-on products," such as payment protection and credit monitoring, when they activated their credit cards.

CFPB said the compliance bulletin puts other financial institutions on notice that the bureau "will not tolerate deceptive marketing practices, and institutions will be held responsible for the actions of their third-party vendors."

The bulletin addresses Regulation B (Equal Credit Opportunity Act) and Regulation Z (Truth in Lending Act) provisions, as they relate to credit card practices. While only credit unions with more than $10 billion in assets fall directly under CFPB supervision, on matters involving interpretive guidance on consumer protection laws and regulations under the CFPB's purview the National Credit Union Administration will defer to the CFPB.

The guidance sets forth both steps to be taken to ensure vendors market and sell credit card add-on products in a manner that limits the potential for statutory or regulatory violations and related consumer harm, as well as a list of features that should be included in compliance management by financial institutions that offer credit card add-on products.  (See resource link to read guidance.)

The CFPB enforcement action Tuesday was taken in coordination with the Office of the Comptroller of the Currency.  Between the agencies actions, Capital One was assessed $60 million in total civil money penalty with $150 million in total restitution to cardholders. 

Use the resource link to read the examiners' findings regarding Capital One opt-in marketing practices.