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CUNA releases FTC mortgage ad rule analysis

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WASHINGTON (8/1/11)--The Credit Union National Association has released a final rule analysis of the Federal Trade Commission’s (FTC) final rule addressing unfair or deceptive acts and practices that may occur with regard to mortgage advertising. The FTC rule applies to state-chartered credit unions, and specifically targets mortgage lenders, brokers, and servicers; real estate agents and brokers; advertising agencies; home builders; lead generators; rate aggregators; and other entities under the FTC's jurisdiction. It does not impact federal credit unions, banks and thrifts. The final rule bans "all material misrepresentations in advertising about consumer mortgages," including misrepresentations in commercial communications and advertisements regarding any term of any mortgage credit product and also imposes new recordkeeping requirements. The FTC issued its proposed rule to ban deceptive mortgage advertising practices in September. The final rule becomes effective Aug. 19. For the final rule analysis, use the resource link.

Cheney touts CUs in Bloomberg Europe interview

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WASHINGTON (8/1/11)--The amount of total worldwide assets held by credit unions has doubled in the past 10 years, reaching $1.4 trillion, and credit unions continue to grow as more people learn about the “better deal” that they represent, Credit Union National Association (CUNA) President/CEO Bill Cheney said during a live Bloomberg TV interview last week.

Appearing on Bloomberg Europe’s "On the Move", Cheney reiterated that while credit unions were impacted by the financial crisis, they did not cause it, and noted that while banks remain hesitant to lend to their customers, credit unions continue to lend. Cheney was in Glasgow, Scotland for the World Council of Credit Unions World Credit Union Conference. He added that credit unions have a very close relationship with their member-owners, and are now reaping the benefits after they stepped forward to lend to their members during the crisis. Cheney also was asked about credit union work in the aftermath of Haiti’s devastating earthquake. He noted that while one-third of the credit unions in Haiti were lost, “the ones that remain are still there, doing everything they can to help their members.” Cheney told Bloomberg how he observed their rebuilding efforts firsthand while touring Haiti following the earthquake as part of a credit union delegation organized by WOCCU. A basic snapshot of credit unions was also covered during the interview, helping an international audience understand that CUs are not-for-profit financial cooperatives whose business model provides affordable financial services for consumers in the U.S. and worldwide.

Data breach bill brings plans to five

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WASHINGTON (8/1/11)—The Data Security Act of 2011, which was introduced by Sens. Tom Carper (D-Del.) and Roy Blunt (R-Mo.) last week, is now one of five plans for possible fixes to data security regulations. The Credit Union National Association worked with the legislators as they developed S. 1434. That bill would require financial institutions, retailers, and federal agencies to protect sensitive information and to notify consumers and conduct their own investigations in the event of a data breach. Federal authorities, law enforcement, and various consumer reporting agencies must be notified if the breach impacts more than 5000 consumers. Overall, the bill aims to replace various state-based data protection laws with one single federal standard. Carper said that while Americans have “reaped enormous benefits” from the rapid development of the information technology sector, “millions of Americans are at risk for identity theft because of the vulnerability surrounding sensitive personal information.” Blunt added that the bipartisan bill would “help ensure that businesses and government agencies have consistent, national standards across the board as we work to protect consumers’ personal information and prevent identity theft.” S. 1434 has been referred to the Senate Banking Committee, and CUNA will continue to monitor the legislation as it moves through Congress. Other data breach bills include Sen. Mark Pryor’s (D-Ark.) S. 1207 and Sen. Patrick Leahy’s (D-Vt.) S. 1151. Rep. Mary Bono Mack (R-Calif.) has also introduced data protection legislation in the House, and that bill is awaiting a vote in the House Energy and Commerce Committee. The Obama Administration has also released its own data breach proposal. The prospects for these data breach proposals are uncertain at this time due to the ongoing debt crisis talks and the potential congressional recess set to start in early August.

Compliance CUNA offers interchange webinar

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WASHINGTON (8/1/11)--The Credit Union National Association’s (CUNA) Center for Professional Development is offering a webinar on the Federal Reserve’s debit interchange rule ahead of that regulation’s October 1 effective date. The webinar, entitled “The Debit Interchange Rule from a Compliance Perspective,” will take place on Aug. 3 from 3:00 p.m. until 4:30 p.m. ET. Registration will cost $219, and the webinar will be archived. Kathy Thompson, CUNA’s senior vice president for compliance, said “credit unions are rolling up their sleeves to address the impact of the new debit interchange restrictions and requirements on their operations, and CUNA wants to help them understand what needs to be done and think through the compliance implications of possible changes to products and services.” The webinar will:
* Provide an overview of the provisions of the new regulation that are effective October 1; * Discuss some of the still-unknown issues and possible impact on members; * Focus on the exclusivity and routing provisions and what credit unions must do to comply by April 1, 2012; and * Provide some compliance cautions as credit unions look for other sources of revenue and ways to compete.
Andrea Stritzke, vice president of PolicyWorks, will discuss operational considerations, and Thomas Riha, CEO of PayFusion, will share his expertise on payment network issues. Thompson will provide the CUNA Washington perspective on the regulation. The Fed's final rule caps large issuer debit interchange fees at 21 cents, and allows an additional five basis points per transaction may be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with Fed established fraud prevention standards. “Although we are hopeful that a two-tiered debit fee interchange system as envisioned in the law will survive in reality, not just theory, credit unions need to understand the regulation, start to address the exclusivity requirements, and think about how their related product offerings may look a year from now,” Thompson said. To register for the webinar, use the resource link.

Inside Washington (07/29/2011)

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* WASHINGTON (8/1/11)--The Senate Banking Committee will conduct a hearing Thursday on the nomination of Richard Cordray to lead the new Consumer Financial Protection Bureau (CFPB). Earlier this month President Barack Obama nominated Cordray, a former Ohio attorney general, to be the bureau’s first director. Republicans appear intent on blocking Cordray’s confirmation unless changes are made to the structure of the bureau that Democrats oppose. “With next week’s hearing, I will begin the process of moving Cordray’s nomination forward to confirmation,” Senate Banking Committee Chairman Tim Johnson said in a statement. “The CFPB opened its doors as an independent agency on July 21, and it is off to a strong start promoting an equitable and transparent consumer financial marketplace. However, until it has a director, the CFPB will not be able to use its full powers to protect consumers and level the playing field for community banks and credit unions.” The agency cannot regulate non-bank lenders such as payday lenders until it has a director in place … * WASHINGTON (8/1/11)--Despite improvements in their financial results, Fannie Mae and Freddie Mac will require continued capital injections from the Treasury Department to avoid being unwound by their conservator, the Federal Housing Finance Agency, according to the rating agency Fitch Inc. (American Banker July 29). The government-sponsored enterprises have been drawing on average $2 billion to $3 billion a quarter since 2010, according to analysts at Barclays Capital. Fannie and Freddie could continue operations if the U.S. debt ceiling is not raised by Tuesday. But raising the ceiling without a budget deal would leave not only Fannie and Freddie vulnerable, but also the mortgage market …