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Inside Washington (07/22/2008)

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* WASHINGTON (7/23/08)--As members of Congress work to pass a housing package this week, the Bush administration remains poised to veto the measure if it includes a provision that allows state and local governments to buy and resell foreclosed properties, said White House spokesperson Dana Perino. The provision would cost $4 billion (American Banker July 22). The package would give the Federal Reserve Board oversight over Fannie Mae and Freddie Mac, and allow the Treasury to purchase the enterprises’ debts. Lawmakers, including Sen. Christopher Dodd (D-Conn.), Rep. Barney Frank (D-Mass.)., and Sen. Richard Shelby (R-Ala.) appear willing to compromise on several issues, such as raising the loan limits for Fannie Mae and Freddie Mac. Frank, who had pushed for a six-month delay on the effective date for the enterprises’ regulation, has now eased off, saying the effective date is no longer an issue ... * WASHINGTON (7/23/08)--The health of mortgage finance enterprises will be key to the U.S.’s economic recovery, Treasury Secretary Henry Paulson said in a speech at the New York Public Library (Reuters July 22). The country’s financial markets likely will remain stressed until the housing market improves, and Fannie Mae and Freddie Mac are needed to finance mortgages, he added. The Treasury has proposed expanding the enterprises’ access to government loans, a measure that Congress will consider this week. Improved regulatory structure to mitigate risk from nonbank institutions also is needed to prevent a failing institution from triggering a systemic event, he said ...

Mortgage servicing foreclosures subject of House hearing

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WASHINGTON (7/23/08)—The House Financial Services Committee has announced a July 25 hearing to review mortgage servicing practices and foreclosure mitigation. Specifically, the committee intends to examine the role of mortgage servicing in the foreclosure crisis, focusing on ongoing problems with loan modifications, and the need for improvements in servicing practices and responsiveness to consumers. A witness list has not yet been made public.

New FinCEN BSA e-filing required by new year

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WASHINGTON (7/23/08)—By the first of next year, the Financial Crimes Enforcement Network (FinCEN) will require any electronic filing of Bank Secrecy Act (BSA) information to be executed through a new BSA Electronic Filing program. As part of its effort to make BSA filing requirements more secure, efficient, and effective, FinCEN announced this week that it will retire its current BSA Magnetic Media Filing Program in favor of the new system. The magnetic media filing has required credit unions and other financial institutions to submit BSA reports using tapes and diskettes. The more secure BSA E-Filing is a web-based system that is user-ID and password protected. Importantly, it does not require storage media. BSA E-Filing supports both single and multiple BSA report filings and uses the same file format as the Magnetic Media Program. FinCEN has suggested that without tapes or diskettes to mail, BSA E-Filing may help reduce reporting costs. The following forms are currently available for BSA E-Filing:
* Currency Transaction Reports (CTRs); * Designations of Exempt Persons (DEPs); and * Suspicious Activity Reports (SARs).
“Reporting institutions will also see a decrease in the time it takes to file a wide range of BSA forms and will obtain a more rapid receipt of acknowledgements,” according to a FinCEN release. FinCEN is collaborating with the Internal Revenue Service (IRS) to ensure a transition as seamless as possible. Use the resource link below to register to use BSA E-Filing.