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Washington Archive

Washington

Inside Washington (07/06/2012)

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  • WASHINGTON (7/9/12)--The Office of the Comptroller of the Currency and the Federal Reserve failed to clearly communicate with homeowners that they were eligible for financial assistance related to their mortgage foreclosures, according to a report from the Government Accountability Office (GAO). "Readability tests found the initial outreach letter, request-for-review form, and website to be written above the average reading level of the U.S. population, indicating that they may be too complex to be widely understood," the GAO said. Regulators also did not solicit input from consumer groups when reviewing the initial communication materials, according to the report. Communication materials developed by mortgage servicers with input from regulators and consultants included information about the purpose, scope and process for the foreclosure review and noted that borrowers may be eligible for compensation. However, the materials did not provide specific information about remediation. "Without informing borrowers what type of remediation they may receive, borrowers may not be motivated to participate," the report said …

House could vote on ATM bill today

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WASHINGTON (7/9/12)--Legislation that would help credit unions and other financial institutions by easing duplicative ATM regulations is on the U.S. House suspension calendar for this week, and could receive a full House vote as early as today.

The bill (H.R. 4367) would eliminate portions of Regulation E that require credit unions and other financial institutions that provide ATM services to display a physical notice on the ATM that a fee will

be charged. Under the legislation, ATMs would only be required to display the ATM disclosures on their screen, and give ATM users the choice of opting in to such a fee.

These ATM disclosure requirements are creating issues for credit unions and other financial institutions that continue to be subject to frivolous lawsuits. The Credit Union National Association (CUNA) has

noted that outside notices on ATMs are, in some cases, being intentionally removed or destroyed, without the financial institution's knowledge, and then pictures are then taken of the ATM to show noncompliance with disclosure rules. Some ATM users may then use this as evidence of apparent noncompliance and as grounds for lawsuits, and the number and cost of these lawsuits continues to climb.

CUNA President/CEO Bill Cheney said the bill is "a common-sense solution that will alleviate an unnecessary compliance burden and reduce instances of baseless litigation."

The House Financial Services Committee unanimously approved the bill before the July 4 district work period, and committee members at that time said they hoped the bill could be moved on to the Senate quickly.

The bill has 145 House co-sponsors.

Recovery on slower track CUNA economists

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WASHINGTON (7/9/12)--Credit Union National Association (CUNA) economists have revised their economic forecast, and while they expect the economic recovery to remain on track, they now have a slightly less optimistic view of the near-term economic future.

The new CUNA outlook--developed during a quarterly economic forecast meeting held last week--reflects a marginal downward adjustment to overall economic growth, CUNA Senior Economist Mike Schenk said.

CUNA economists lowered their U.S. gross domestic product (GDP) growth estimates to 2% for 2012, and 2.5% for 2013. They had previously estimated GDP growth rates of 2.6% for 2012 and 3% for 2013. These changes reflect consumer caution arising from a softer-than-anticipated labor market recovery and from uncertainty surrounding the Eurozone crisis and U.S. budget issues, Schenk noted.

The CUNA economists continue to expect the unemployment rate to remain elevated and to improve only marginally over the next year-and-a-half.  The new economic forecast calls for an average 7.75% unemployment rate in 2013, slightly higher than the group's previous estimate of 7.5%.

Slower labor market improvement and nagging uncertainty mean that changes in headline inflation--as measured by the Consumer Price Index (CPI)--will likely be less pronounced than previously thought, Schenk said. The economists now expect CPI to increase by 1.75% in both 2012 and 2013. They previously predicted CPI increases of 2% for 2012 and 2013.

"This all continues to signal a somewhat wider spread between long-term and short-term interest rates over the forecast horizon. The Federal Reserve is expected to keep its overnight interest rate target close to 0%, at least through year-end 2013. On the other hand, longer-term rates are likely to increase – just not as quickly as previously believed," Schenk said.

The group's forecast now calls for the 10-year Treasury interest rate to average 1.7% in 2012 and 2.25% in 2013.  This is down from the 2.15% and 2.75% expected averages in the previous predictions.

Credit union operating results will continue to improve, but at a somewhat slower pace than previously thought, Schenk said. The new baseline forecast suggests credit unions will experience slightly faster savings growth in the near-term and slightly slower loan growth. "Credit union savings balances are now expected to increase by 6% in 2012--up from the previously anticipated 5% increase--as more cautious consumers forego some spending and borrowing," Schenk noted.

Credit union loan balances are expected to increase by 3% in 2012 and 5% in 2013--down from the previous projections of 4% in 2012 and 6% in 2013.

Earnings, while continuing to improve, are expected to show a less pronounced increase than reflected in the previously released forecast. Credit union return on assets (ROA) averaged 0.68% in 2011 and was expected to increase to 0.9% in both 2012 and 2013. The revised outlook calls for ROA of 0.8% in 2012 and 0.9% in 2013.

For the full revised forecast, use the resource link.

Examiners ID CU risk areas NCUA OIG says

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ALEXANDRIA, Va. (7/9/12)--National Credit Union Administration (NCUA) regional management and staff are identifying and monitoring potential high-risk areas, and ensuring that risks are adequately addressed, the NCUA's Office of the Inspector General (OIG) said in a recent report.

The NCUA OIG reviewed examiner actions from 25 credit unions. Five credit unions from each of the five NCUA regions were chosen for the study.

NCUA examiners had recently addressed high risk issues such as concentration, liquidity, and interest rate risks at 19 of those 25 credit unions, the OIG found. At these credit unions, NCUA examiners performed follow-ups for open Documents of Resolution (DOR) items, held or planned onsite and offsite contacts with the credit unions, drafted and/or issued Regional Director Letters and letters of understanding, changed CAMEL ratings, or took other actions, the OIG reported.

The OIG report also found that existing issues at four of the six remaining credit unions had been previously addressed by NCUA examiners in some fashion, and reported that examiners had either performed or were scheduled to perform followups at all six of the credit unions.

However, NCUA staff did question the actions of state examiners in two instances.

The OIG did not recommend any changes to the NCUA's examination regime.

NCUA examiners have received a new standardized National Supervision Policy Manual for examiners. The new manual, the NCUA said earlier this year, will help ensure that credit unions are treated more consistently from region to region. The manual responds to the NCUA Board's direction to remove regional differences in quality control, and implements key recommendations from federally mandated Material Loss Reviews conducted by NCUA's Office of Inspector General, the agency added.

The Credit Union National Association has said that while examination consistency can be positive, the goal is to have examiners treat credit unions in a consistently professional manner, allowing the credit unions to develop and implement their own solutions to address problems.

For the OIG report, use the resource link.

FinCEN e-filing change results in user issues

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WASHINGTON (7/9/12)--The Financial Crimes Enforcement Network's (FinCEN) Bank Secrecy Act (BSA) e-filing system and e-filing telephone help desk are both experiencing extremely high volume, and this volume is creating issues for some users, FinCEN has said.

The high e-filing volume "may result in intermittent delays in a filer's ability to submit required reports or complete the on-line application process for a new BSA E-Filing System account," FinCEN said in a post on its homepage, www.fincen.gov. The high call volume is resulting in extended hold times and, in some cases, busy signals, FinCEN added.

FinCEN said it is aware of both of these issues, and is working to resolve them. In the meantime, e-filing system users that are having issues can reach FinCEN staff at the following addresses:

  • For E-File technical questions: BSAEfilinghelp@fincen.gov
  • For regulatory inquiries related to form completion or selection:BSA_Resource_Center@fincen.gov
  • For form completion or selection issues specific to FBAR: fbarquestions@irs.gov
  • For law enforcement related matters: liaisonservices@fincen.gov
  • 314 Inquiries from Law Enforcement: le314a@fincen.gov
  • 314 Inquiries from Financial Institutions: sys314a@fincen.gov
  • General FinCEN Inquiries: webmaster@fincen.gov
  • For any other matters, you can also send your inquiry to webmaster@fincen.gov.
Electronic filing of all BSA reports became mandatory on July 1. Currency Transaction Reports, Designations of Exempt Persons, and Suspicious Activity Reports are among the reports that can be e-filed. Almost all BSA reports now need to be e-filed, but Currency and Monetary Instrument Reports are not covered under the e-filing requirement.

FinCEN has said the switch to all-electronic BSA filing will improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information. Increased BSA E-Filing will also help speed up financial crime investigations, the agency added.

NEW FinCEN e-filing change results in user issues

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WASHINGTON (UPDATED: 1:20 P.M. ET, 7/6/12)--The Financial Crimes Enforcement Network's (FinCEN) Bank Secrecy Act (BSA) e-filing system, and e-filing telephone help desk, are both experiencing extremely high volume, and this volume is creating issues for some users, FinCEN has said.

The high e-filing volume "may result in intermittent delays in a filer's ability to submit required reports or complete the on-line application process for a new BSA E-Filing System account," FinCEN said in a post on its homepage, www.fincen.gov. The high call volume is resulting in extended hold times and, in some cases, busy signals, FinCEN added.

FinCEN said it is aware of both of these issues, and is working to resolve them. In the meantime, e-filing system users that are having issues can reach FinCEN staff at the following addresses:

  • For E-File technical questions: BSAEfilinghelp@fincen.gov
  • For regulatory inquiries related to form completion or selection:BSA_Resource_Center@fincen.gov
  • For form completion or selection issues specific to FBAR: fbarquestions@irs.gov
  • For law enforcement related matters: liaisonservices@fincen.gov
  • 314 Inquiries from Law Enforcement: le314a@fincen.gov
  • 314 Inquiries from Financial Institutions: sys314a@fincen.gov
  • General FinCEN Inquiries: webmaster@fincen.gov
  • For any other matters, you can also send your inquiry to webmaster@fincen.gov.
Electronic filing of all BSA reports became mandatory on July 1. Currency Transaction Reports, Designations of Exempt Persons, and Suspicious Activity Reports are among the reports that can be e-filed. Almost all BSA reports now need to be e-filed, but Currency and Monetary Instrument Reports are not covered under the e-filing requirement.

FinCEN has said the switch to all-electronic BSA filing will improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information. Increased BSA E-Filing will also help speed up financial crime investigations, the agency added.