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iCompBlogi covers share insurance credit score disclosures

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WASHINGTON (8/16/11)--Information on terms and conditions, loan rates, member privacy, and other issues must be included in the brochures that are given to new credit union members. However, the Credit Union National Association (CUNA) has noted, details on share insurance coverage are not required to be provided in membership packets. CUNA in a recent CompBlog post noted that while National Credit Union Administration regulations require credit unions to inform members of share insurance coverage, that disclosure may be provided by posting the NCUA’s “Your Insured Funds” brochure or Part 745 of the regulations in branches and offices. Individual copies of National Credit Union Share Insurance Fund details must be provided upon request. CUNA in a recent CompBlog post noted that while National Credit Union Administration regulations require credit unions to inform members of share insurance coverage, that disclosure may be provided by posting the NCUA’s “Your Insured Funds” brochure or Part 745 of the regulations in branches and offices. Individual copies of National Credit Union Share Insurance Fund details are also available by request. Credit Score Disclosures to current members were also covered by CompBlog this month. In a separate blog post, CUNA said that credit unions are required to provide an adverse action notice with credit score information when they deny a member’s loan application based on a credit score, even if they have previously disclosed that members credit scores to them via a credit score exception notice. CUNA clarified that creditors may not use these exception notices in place of adverse action notices, as the two notices satisfy different Fair Credit Reporting Act (FCRA) requirements. Portions of the Dodd-Frank Act require creditors to disclose credit scores and related information to consumers in risk-based pricing (RBP) notices and adverse action notices under the FCRA if a credit score was used in setting the credit terms or in taking adverse action against a consumer. For more of CUNA’s CompBlog, use the resource link.

Call-in info available for MasterCard interchange call

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WASHINGTON (8/16/11)--Call-in information is now available for Credit Union National Association (CUNA) members wanting to participate in a free, hour-long call with MasterCard regarding its plans for a two-tiered debit interchange fee rate structure, how that rate structure will impact credit unions, and the anticipated time table for implementation. The call is scheduled for Aug. 17 at 2 p.m. (ET). A Q&A session will follow the prepared portion of the presentation. CUNA Chief Economist Bill Hampel, CUNA Deputy General Counsel Mary Dunn, and MasterCard Global Head of Public Policy Shawn Miles will lead the call. A similar call with VISA representatives is being planned. A Federal Reserve Board rule, implementing the interchange provisions of the Dodd-Frank Wall Street Reform Act, caps debit interchange fees for issuers with assets of $10 billion or more at 21 cents, and allows an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Use the resource links below to access the call-in information (CUNA members only) for the MasterCard call, review the Fed rule, and to see the Fed lists of names of card issuers that are and are not exempt from the interchange rule.

Consider CU burden CUNA to CFPB nominee

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WASHINGTON (8/16/11)--As Richard Cordray prepares for his Sept. 6 nomination hearing before the Senate Banking Committee, Credit Union National Association (CUNA) President/CEO Bill Cheney urged the candidate for Consumer Financial Protection Bureau (CFPB) director to “consider ways in which the Bureau can help minimize regulatory requirements for credit unions and other financial institutions.” Cordray, who has been serving as the CFPB's assistant director for enforcement and has also served as the attorney general of Ohio and that state's treasurer, was announced as President Barack Obama’s nominee for CFPB director last month. Ohio Credit Union League representatives told News Now that the league worked closely with Cordray at the county and state levels as he developed a financial literacy campaign and encouraged younger Ohioans to plan for their financial futures through the "small savers" campaign. CFPB architect Elizabeth Warren recommended Cordray for the post, noting last month that he "has a proven track record of fighting for families during his time as head of the CFPB enforcement division, as attorney general of Ohio, and throughout his career" and will be "a strong leader" for the CFPB. Cheney in the letter also encouraged the CFPB to establish an Office of Regulatory Burden Monitoring to help the agency “track, consider, and help mitigate the cumulative regulatory burden under which credit unions and others must operate. “ The CFPB’s process for revising and combining Truth-in-Lending-Act and Real Estate Settlement Procedures Act forms in to a single mortgage disclosure reflects a “positive, useful approach” to working with stakeholders, and Cheney said that the CFPB should use similar processes in its future rulemaking projects. The CFPB last week completed the third of five separate mortgage disclosure comment rounds. The agency is planning to release a final version of its single draft disclosure later in the year. CUNA has met with the CFPB on this and other issues, and further meetings are planned.

Inside Washington (08/15/2011)

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* WASHINGTON (8/16/11)--President Barack Obama’s administration has identified two economists, one Republican and one Democrat, as the top candidates for two empty seats on the seven-member Federal Reserve Board (The Wall Street Journal Aug. 15). Jeremy Stein, a Harvard University specialist in finance, worked at the White House at the beginning of the Obama administration. Richard Clarida, an executive vice president at the money management firm Pimco, and professor of economics and international affairs at Columbia University, was a Treasury official early in the George W. Bush administration. The administration hopes that matching a Republican with a Democrat will ease the path to Senate confirmation, according to the Journal. The White House has yet to formally nominate either and could change course. Stein has a Ph.D. from M.I.T. and has been a professor of economics at Harvard for 10 years. Clarida, who earned his Ph.D. at Harvard, has been at Pimco since 2006, where he is co-head of the official-institutions channel, which oversees coverage of the firm’s central-bank and sovereign-wealth-fund clients. He was assistant Treasury secretary for economic policy under Bush from February 2002 to May 2003 … * WASHINGTON (8/16/11)--Fannie Mae and Freddie Mac should renegotiate their agreements with the Treasury Department to manage President Barack Obama’s anti-foreclosure efforts, according to a report released by the Federal Housing Finance Agency’s (FHFA) inspector general (The Wall Street Journal Aug. 15). The report said the current contracts didn’t define the scope of work or how much the companies would be paid, and should be reworked to hold down expenses and establish a process for dispute resolution. The report acknowledges conflict between the FHFA, the regulator in charge of protecting the companies’ financial interests, and the Treasury, which assumed ownership of many mortgage companies after bailing them out during the 2008 financial crisis. Since the financial crisis, Fannie Mae and Freddie Mac have received $170 billion in Treasury aid, making them currently the biggest beneficiaries of federal aid …