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Audio conference addresses credit card overdraft regs

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WASHINGTON (7/28/08)--Credit unions interested in the proposed credit card and overdraft protection regulations can participate in today’s audio conference hosted by the Credit Union National Association (CUNA). The National Credit Union Administration (NCUA), along with the Federal Reserve Board (Fed) and the Office of Thrift Supervision, has published a joint proposed rule that will prohibit a number of credit card practices and will impose restrictions on overdraft protection plans. The Fed has also published two separate but related proposals that amend Regulation Z, the Truth in Lending Act, Regulation DD, and the Truth in Savings Act. The conference is from 1-2:30 p.m. CT. Panelists include:
* Matt Biliouris, NCUA program officer in the Office of Examination & Insurance; * Alan Cameron, president/ CEO of the Idaho Credit Union League; * Mary Dunn, CUNA senior vice president and associate general counsel of regulatory advocacy; * Tonya Green, NCUA staff attorney in the Office of General Counsel; * Ross Kendall, NCUA Office of General Counsel; and * Mike Long, vice president of lending at UW CU, Madison, Wis.
A speaker from the federal reserve board also will participate. Use the resource link below for more information and to register.

House panel to consider credit card bill this week

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WASHINGTON (7/28/08)--The House Financial Service Committee Tuesday is scheduled to markup a package of credit card reforms which is being billed as the Credit Cardholder's Bill of Rights (H.R. 5244). The bill, introduced by House Financial Services subcommittee on financial institutions and consumer credit chair Carolyn Maloney (D-N.Y.), is intended to curb abusive practices, such as some interest-rate increases and late fees. The subcommittee held its first hearing on it on March 13. In part, the bill would require card issuers to provide a 45-day notice period for consumers before an interest rate could be increased. Cardholders would then have the right to cancel their card and pay off their existing balance at the existing rate and repayment schedule. H.R. 5244 would also prohibit a practice known as "double-cycle billing," in which card companies charge interest on payments made on time during a grace period. It would also ban arbitrary changes in the credit card contract. The Credit Union National Association (CUNA) generally supports legislative action that protects consumers from predatory lending practices, but also monitors this type of legislation to ensure that it does not have an unintended consequence which would hamper credit union service to their members. CUNA Vice President of Legislative Affairs Ryan Donovan has noted that, while credit unions are not the target of these bills, the legislation may affect credit card programs that credit unions offer their members.

Inside Washington (07/25/2008)

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* WASHINGTON (7/28/08)--Rep. David Dreier (R-Calif.) has introduced legislation that would help the Federal Deposit Insurance Corp. (FDIC) protect the deposits of a bank facing financial crisis. The bill, the FDIC Flexibility Act of 2008, repeals the “low-cost solution” provisions that require the FDIC to choose the solution with the lowest cost to the banking fund when resolving an institution. “The problem is that what might be a low cost solution for a particular institution might not always be the best or fastest way to ensure that depositors have access to their funds,” according to a statement on the congressman’s website ... * WASHINGTON (7/28/08)--Nehemiah Corp. of America is fighting against a provision in a housing bill that would prohibit seller-funded down payment assistance. The provision would put Nehemiah and other providers out of business (American Banker July 25). Scott Syphax, Nehemiah’s CEO, said the Department of Housing and Urban Development (HUD) overstated the number of loans that have defaulted from seller-funded down payment programs. The Federal Housing Administration said loans from programs such as Nehemiah’s are three times more likely to go into foreclosure, but Syphax said the data the agency used was unreliable. HUD tried to eliminate the assistance program last year, but Nehemiah filed a lawsuit ... * WASHINGTON (7/28/08)--Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair reiterated the rights of insured depositors in an opinion piece published Thursday by Reuters. She said the FDIC has a “promise to keep to our nation’s bank customers,” and spelled out FDIC depositors’ bill of rights ...

Foreclosure forbearance urged until law takes effect

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WASHINGTON (7/28/08)--Federal lawmakers Friday called on the mortgage industry to delay or cancel foreclosures until a new law designed to refinance in-trouble borrowers goes into effect on Oct. 1. The new legislation, which is expected to be signed by President George W. Bush, will allow qualified applicants to refinance into FHA-insured mortgages and avoid foreclosures. House Financial Services Committee Chairman Barney Frank (D-Mass.) and Housing and Community Opportunity Subcommittee Chairwoman Maxine Waters (D-Calif.) through a press release urged the mortgage industry to work with borrowers who can take advantage of the new refinancing program. Chairman Frank will hold a hearing in September to monitor the progress of loan modification by mortgage servicers. “I would hope that no one would be foreclosed upon between now and October 1st who would have qualified for this program had the effective date been immediate,” cautioned Frank. “And that is within your power to do. You can show some forbearance.” To qualify for FHA refinancing under this program, borrowers must have more than 31% of their monthly income dedicated toward their mortgage payment as of March 1, 2008, and live in their only home. Borrowers would have to meet the specific qualifications of the FHA program, and would have to agree to share future home appreciation with the government. Lenders would also have to agree to significant reductions in the amount owed to them. The Congressional Budget Office estimates that at least 400,000 families will avoid foreclosure at no cost to the taxpayer. In addition, Frank also called for restructuring the mortgage servicing industry if servicers fail to cooperate in aggressively forbearing and preventing foreclosures.

Hood explains federal CU share insurance in video

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ALEXANDRIA, Va. (7/28/08)--National Credit Union Administration (NCUA) Vice Chairman Rodney Hood appears in a new online presentation that explains credit union share insurance. The presentation is derived from comments Hood made last spring during an appearance on “Home and Family Finance Radio,” presented by America’s Credit Unions. He answers questions--that the agency says consumers have been posing lately--in a three-minute audio/video presentation now playing on CUNA’s consumer website, www.creditunion.coop. In the presentation, Hood explains in clear, familiar terms, how credit union savings are federally insured by NCUA, the role of NCUA as the federal savings insurer of credit unions, and the scope of federal share insurance. Use the link below to watch the complete video.