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Inside Washington (08/11/2011)

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* WASHINGTON (8/12/11)--Rules being drafted by U.S. regulators for the largest U.S. banks won’t be more restrictive than global capital standards agreed to in Basel, Switzerland, according to Federal Reserve Gov. Daniel Tarullo (Bloomberg Aug 11). In a June 3 speech, Tarullo said the board will seek congruence with the Basel standards while it rewrites banking regulations as mandated by the Dodd-Frank Act. The Basel Committee on Banking Supervision, which includes regulators from the U.S. and Europe, set a supplemental capital standard for the largest international banks. The buffer will range from 1 percentage point to 2.5 percentage points of risk-weighted assets--on top of a required 7% common equity for all banks … * WASHINGTON (8/12/11)--Three Federal Reserve regional bank presidents formally dissented from Fed Chairman Ben Bernanke’s decision to open the door to easier monetary policy Tuesday during the Federal Open Market Committee meeting The Wall Street Journal Aug. 11). It was first time in the chairman’s five-and-half-year tenure that so many colleagues had dissented from a formal Fed decision, a sign of opposition that contrasts with Bernanke’s desire for consensus, said the Journal. How the dissent shapes future Fed moves is a key question moving forward for Bernanke and the board. One of the dissenters, Dallas Fed President Richard Fisher, declined comment on Fed policymakers’ discussions Tuesday, but offered praise for Bernanke’s leadership. Another dissenter, Narayana Kocherlakota, president of the Minneapolis Fed, said Bernanke cultivates the expression of disparate views, which leads to better monetary policy …

15-year fixed ARMs reach record lows

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WASHINGTON (8/12/11)—Average rates on 15-year fixed, five-year adjustable- and one-year adjustable-rate mortgages (ARM) all fell to all-time lows this week as economic issues and worldwide stock market troubles ruled the news, Freddie Mac reported. Fifteen-year fixed mortgage rates averaged 3.5%, while five-year ARMs averaged 3.13% and one-year ARMs averaged 2.89%. Thirty-year mortgage rates reached their lowest point this year, averaging 4.32%. Last year at this time, 30-year mortgages averaged 4.44%, and 15-year mortgages averaged 3.92%. Five-year ARMs averaged 3.56% this time last year, and one-year Treasury-indexed ARMs averaged 3.53% at that time. Freddie Mac Chief Economist Frank Nothaft said that developments in European debt markets, as well as the Federal Reserve’s decision to hold interest rates at between 0% and 0.25% and keep the rate at "exceptionally low levels" at least through mid-2013, were among the many factors leading to lowered rates. Nothaft said that the lower mortgage rates “will help to maintain the high degree of home-buyer affordability in the market.” For the full release, use the resource link.

CUNA releases RESPA rule analysis

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WASHINGTON (8/12/11)--The Credit Union National Association has released its analysis of the U.S. Department of Housing and Urban Development’s (HUD) final rule that makes technical corrections and clarifies amendments to HUD’s Real Estate Settlement Procedures Act (RESPA) regulations. The corrections and amendments regard RESPA's Good Faith Estimate form and Appendix A to the regulations. The changes made by this final rule are effective Aug. 10. For the final rule analysis, use the resource link.

CDFI Fund reaching new heights director says

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WASHINGTON (8/12/11)--The U.S. Department of the Treasury's Community Development Financial Institutions (CDFI) Fund eclipsed $1 billion in total awards this year and is "reaching new heights" in 2011, said CDFI Fund Director Donna J. Gambrell in a Thursday release. The CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit. The number of certified CDFIs reached 960 this year, the highest number since the fund began in 1994 and an increase of nearly 20% since last year, Gambrell noted, adding that the list of CDFIs will grow “as more organizations recognize the benefits of certification. “We also recognize that, as it does grow, we must continue to work closely with new and existing CDFIs to ensure that they fully appreciate the responsibilities that come with being a certified CDFI,” Gambrell added. The fund earlier this year awarded $142,302,667 to 155 institutions, including 25 credit unions, in the largest single round of monetary awards in it's history. The fund’s New Market Tax Credits (NMTC) program also grew during 2011, receiving a record 314 applications for $26.6 billion in NMTC allocation authority. Credit unions are among those eligible to participate in the NMTC, which seeks to spur the investment of new private sector capital into low-income communities by permitting individual or corporate taxpayers to receive a credit against federal income taxes for making Qualified Equity Investments. Those investments must be made in designated Community Development Entities. Gambrell also previewed some upcoming CDFI Fund projects, including its developing CDFI Bond Guarantee Program and a potential project that would aid low-income individuals living along the U.S.-Mexico border. For the full CDFI Fund release, use the resource link.

Pelosi names final trio to debt reduction super committee

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WASHINGTON (8/12/11)--The full 12-member Congressional Joint Select Committee on Deficit Reduction was completed on Thursday when House Minority Leader Nancy Pelosi (D-Calif.) named Reps. Xavier Becerra (D-Calif.), Chris Van Hollen (D-Md.) and James Clyburn (D-S.C.) as her selections for the panel. Clyburn and his family have been involved in the credit union movement for years, and the congressman publicly appealed for credit unions to be exempted from portions of the Dodd-Frank Act during the Credit Union National Association’s (CUNA) 2010 Governmental Affairs Conference. Van Hollen was one of many co-sponsors of the Credit Union Regulatory Improvements Act and has backed credit unions in other capacities during his time in Congress. Other members of the committee include:
*Republican senators Jon Kyl (Ariz.), Pat Toomey (Pa.) and Rob Portman (Ohio); *Democratic senators Patty Murray (Wash.), Max Baucus (Mont.) and John Kerry (Mass.); and *Republican House members Jeb Hensarling (Texas), Dave Camp (Mich.) and Fred Upton (Mich.).
Murray and Hensarling will serve as committee co-chairs. The committee, which was created as part of the recently approved debt ceiling lift/deficit reduction agreement, has been charged with creating more than $1 trillion in deficit reductions. Committee recommendations will be subject to votes in the House and Senate. If both congressional bodies fail to approve the cuts, automatic spending cuts will be made. CUNA Vice President of Legislative Affairs Ryan Donovan said CUNA will be following the activity of this joint select committee closely because of the possibility, currently viewed as remote, that the credit union tax status could come under scrutiny. "CUNA will continue to emphasize the positive impact that the credit unions have on the members and communities that they serve," he added.