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Inside Washington (07/05/2012)

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  • WASHINGTON (7/6/12)--John Fairbanks has been named the new public affairs specialist at the National Credit Union Administration (NCUA). Fairbanks joins NCUA from the Brookings Institution, where he served as a senior media relations officer. Prior to joining Brookings, Fairbanks served as the public affairs manager for the Vermont Housing Finance Agency for eight years. He also has five years' of communications and press experience in Congress …

NCUA must improve FSOC info security inspector says

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ALEXANDRIA, Va. (7/6/12)--The National Credit Union Administration (NCUA) should coordinate with the Financial Stability Oversight Council (FSOC) and its member regulators to improve its own protections for private FSOC information, and better protect FSOC information from unauthorized disclosure, the NCUA's Office of the Inspector General (OIG) said in a recent review.

NCUA Chairman Debbie Matz is a member of the FSOC, which was created when the Dodd-Frank Wall Street Reform Act was signed into law in 2010. The council provides a forum for discussion between various regulatory agencies and has also been tasked with monitoring markets for disturbances and overseeing the resolution of troubled financial institutions.

Treasury Secretary Tim Geithner is the current chairman of the FSOC. Federal Reserve Chairman Ben Bernanke, Comptroller of the Currency Thomas Curry, Securities and Exchange Commission Chairman Mary Schapiro, Federal Deposit Insurance Corp. Chairman Martin Gruenberg, Consumer Financial Protection Bureau Director Richard Cordray, Commodity Futures Trading Commission Chairman Gary Gensler, and Federal Housing Finance Agency Acting Director Edward DeMarco are also voting members of the council. An independent insurance industry representative is also given a vote, and non-voting members and observers also attend FSOC meetings.

In its analysis of NCUA information security practices, the OIG found that the agency, in general, does a good job of protecting sensitive information. However, the OIG said the NCUA's policies or procedures for handling, protecting and controlling confidential non-public information, analyses or documentation of FSOC deliberations were limited.

The OIG said potential improvements could include:
  • Protecting oral communication of confidential non-public FSOC information;
  • Inventorying or tracking FSOC information requests and responses;
  • Controlling access to and authorizing release of confidential non-public information to FSOC, FSOC member agencies or other external parties, such as the U.S. Congress; and
  • Placing appropriate markings on FSOC information to identify it as containing confidential information.
The NCUA responded to the OIG report, saying that its existing information security policies, procedures, and training are effective. However, the agency said it would work with its fellow FSOC members to implement improved information security policies, procedures, and practices for FSOC information.

For the full OIG report, use the resource link.

Compliance Remittance rate-risk changes on the way

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WASHINGTON (7/6/12)--Details on the Consumer Financial Protection Bureau's (CFPB) upcoming remittance regulation, and the National Credit Union Administration's (NCUA) pending interest rate risk (IRR) rules, are among the items covered in the June edition of the Credit Union National Association's (CUNA) CompBlog Monthly Wrap-Up.

The June edition of the Wrap-Up was published on July 2.

The remittance and IRR info, Bank Secrecy Act e-filing news and compliance dates for the NCUA's new Troubled Debt Restructuring regulation are all covered in a new occasional CompBlog Wrap-Up feature, known as Compliance Shorts.

The "Compliance Shorts" column also prepares credit unions for compliance challenges coming in the next year, including changes to Regulation B adverse action notices, Regulation V risk-based pricing model forms, and Regulation Z credit card application and solicitation model forms.

Click for slide showCUNA's CompBlog Wrap-Up also periodically features cartoons that mix comedy and compliance issues.
CUNA in the Wrap-Up notes that credit unions with more than $10 billion in assets will be required to amend their Reg B adverse action notices to list the CFPB as the agency that examines them for Equal Credit Opportunity Act (ECOA) compliance. This change will need to be made by January 1, 2013.

State-chartered credit unions will not need to make this change, and federal credit unions should list the NCUA's Office of Consumer Protection as their ECOA examiner on these forms, CUNA adds.

The Reg V and Reg Z changes are also simple, and merely involve adding CFPB information to the forms. These changes will also need to be made by Jan. 1, 2013, CUNA said.

This edition of the Wrap-Up features a list of CUNA training programs to prepare credit unions for a myriad of coming compliance conundrums, and to educate credit union staff on some general credit union/finance industry issues.

The question-and-answer section of the Wrap-Up highlights questions addressed by CUNA's compliance staff in the CompBlog during the month of June.

For more of CUNA CompBlog's monthly Wrap-Up, and other compliance gems, use the resource links.

CFPB prepares folks for new mortgage disclosures

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WASHINGTON (7/6/12)--In what it indicated was one of probably three website posts on the subject, the Consumer Financial Protection Bureau (CFPB) Thursday started to prepare consumers, credit unions and other financial institutions, and any other interested parties, for the upcoming introduction of the new combined mortgage disclosure form.

To the home-buying and potential home-buying public, the CFPB message said:

"If you've ever applied for a mortgage loan, you've received two forms required by federal law: a two-page Truth in Lending form and a three-page Good Faith Estimate. They are meant to give you the basic facts about home loans that you apply for and to help you pick the mortgage product that's best for you. But these forms have overlapping information and complicated terms and are just plain difficult to understand."

The CFPB goes on to note that it has worked months to gather comments from consumers and lending industry representatives from across the country as it designed a simplified disclosure document.

"Soon, we will submit a Notice of Proposed Rulemaking to the Federal Register to begin the public notice-and-comment process.

"When we submit the proposed rule, we're also going to release a lot of interesting information here on our site: a side-by-side comparison of the existing forms and the new ones, reports on what we learned from testing the forms and from our discussions with small businesses, a timeline of the project leading up to this point, and a new way of presenting the rules and commentary that tell industry how to fill out the forms."

So stayed tuned.