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Three blocked from CU work

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ALEXANDRIA, Va. (7/10/08)—Three former credit union employees are barred from participating in the affairs of any federally insured financial institution under the most recent enforcement order issued by the National Credit Union Administration (NCUA). The NCUA has blocked a former credit union teller from Washington, a former credit union loan officer from Tennessee, and a former credit union loan officer from Indiana from future work at those institutions. According to an agency announcement posted on its Web site late Tuesday:
* Anita Hubert, a former loan manager at Community Choice FCU, Indianapolis, Ind., consented to a prohibition order, without admitting or denying fault, to avoid the time and cost of litigation; * Anne M. Massey, a former teller at Simpson Community CU, Shelton, Wash., was found guilty of theft and sentenced to serve 18 months in prison and ordered to pay $3,970 in restitution; and * Patricia A. Russell, a former loan officer and Visa coordinator for First Kingsport CU, Kingsport, Tenn., consented to a prohibition order, without admitting or denying fault, to avoid the time and cost of litigation.
Violation of an NCUA prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. Use the resource link below to view NCUA enforcement orders.

Key compliance deadlines outlined

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WASHINGTON (7/10/08)—Two key deadlines are approaching quickly and compliance expert Valerie Moss says credit unions must gear up now for new rules on affiliate marketing and identity theft red flags. Moss, director of compliance information for the Credit Union National Association (CUNA), notes in a July article in Credit Union Magazine that Oct. 1 is the drop-dead date for affiliate marketing rules and Nov. 1 for ID theft red flags. On affiliate marketing, Moss explains that, with a few exceptions, if a credit union shares certain consumer information—called eligibility information—with an affiliate that affiliate cannot use the information for marketing solicitations unless certain conditions are met. Moss lays out those conditions and more in her article. Regarding ID red flags, Moss poses the seven questions credit unions should be asking during the few months left before the mandatory compliance date. As a little bonus in the article a credit union, Moss shares with readers a preliminary look at a brand new risk-based pricing proposal and previewed final “furnisher” regulations. The furnisher rules will require credit unions to have policies and procedures in place ensuring the accuracy and integrity of consumer information. And the proposal on risk-based pricing requires additional disclosures to consumers when less favorable credit terms are offered. Use the resource link below to glean more compliance gems in “FACT Checkup.”

Inside Washington (07/09/2008)

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* WASHINGTON (7/10/08)--Sen. Barack Obama (D-Ill.), presidential hopeful, said Tuesday he would broaden a bankruptcy plan to include a “fast-track” process to help military families and help older Americans or those impacted by natural disasters (American Banker July 9). The senator also criticized Sen. John McCain (R-Ariz.), his opponent in the presidential race, for siding with “big banks” and not believing that the government should protect Americans from poor lending practices. He also noted McCain’s support for a 2005 bankruptcy law that made it more difficult for consumers to discharge their debt by supporting lenders. A McCain spokesperson said 18 Democrats also supported the bill ... * WASHINGTON (7/10/08)--The Securities and Exchange Commission (SEC) Tuesday released findings from 10-month examinations of three major credit rating agencies. The exams found that the agencies struggled with the increase in the number and complexity of subprime residential mortgage-backed securities and collateralized debt obligations deals since 2002. None of the agencies had specific written comprehensive procedures for rating the securities or deals. Aspects of the rating process were not disclosed or even documented, and conflicts of interest were mismanaged, according to the SEC report ... * WASHINGTON (7/10/08)--The Federal Housing Administration (FHA) should stand on its own, FHA Commissioner Brian Montgomery said last week during a forum on mortgage lending. The FHA needs to recruit and retain professional staff, he added. If the agency were independent, it could focus on its own mission and have the tools and staff it needs to serve that role, he said (American Banker July 9) ... * WASHINGTON (7/10/08)--Treasury Secretary Henry Paulson supports using covered bonds by U.S. financial institutions as alternate liquidity sources. The bonds could decrease expenses for first-time home buyers and help existing ones refinance, he said. The Federal Deposit Insurance Corp. recently adopted a rule that would increase investors’ access to the bonds as collateral in case of a bank failure (American Banker July 9). The bonds are more popular in Europe than in the U.S. ...