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Washington Archive

Washington

NCUA commentary addresses CARD Act CUSO assistance

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ALEXANDRIA, Va. (8/18/09)--In a recent National Credit Union Administration (NCUA) legal opinion letter, the agency said that a so-called “courtesy period” that follows the payment due date for a credit account does not constitute a grace period under the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act. NCUA Associate General Counsel Sheila Albin wrote that the CARD Act prevents creditors from treating credit account payments as late unless the creditor has “reasonable procedures” to ensure that account statements are delivered to the consumer “at least 21 days before the payment due date or the date on which the grace period expires.” The CARD Act and recent amendments to Regulation Z (Truth in Lending) also do not require federal credit unions “to disclose any period after the payment due date before which late fees are actually imposed,” Albin wrote. Albin also addressed nonmember loan servicing in a separate comment letter, telling an executive from Government of Guam Employees FCU that his credit union lacks the authority to provide loan servicing and collection services directly or through the assistance of a credit union service organization. However, Albin noted, the organization that this FCU wishes to assist, which in this case is the Guam chapter of Habitat for Humanity, could work with the credit union if it becomes a member of that credit union. The credit union could also donate the sought after lending program assistance as an “in-kind, charitable contribution or donation” if Habitat for Humanity does not qualify for membership in the credit union. To read either of the complete letters, use the resource links below.

Inside Washington (08/17/2009)

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* WASHINGTON (8/18/09)--National Credit Union Administration (NCUA) Chairman Michael Fryzel emphasized unity and commitment while speaking to the African American Credit Union Coalition’s 11th annual conference. “You have been through tough times. You have seen adversity. You have faced challenges financial and otherwise. And you have overcome these obstacles each time. I have a great deal of faith that you will continue to do so,” Fryzel said. He also noted the unique and important role that African American-oriented credit unions play in expanding credit union service to all eligible members. The coalition places a priority on increasing the global credit union movement’s strength by emphasizing the important role of credit union volunteers and professionals of African-American and African descent ... * WASHINGTON (8/18/09)--The Obama administration’s proposed Consumer Protection Agency is slated to focus equally on banks and nonbanks, but financial observers doubt that the agency will be able to do that. There are about 75,000 nonbank mortgage lenders and 8,000 banks. Michael Barr, Treasury assistant secretary of financial institutions, told American Banker (Aug. 17) that smaller banks could be given a break on supervision. Ellen Seidman, director of the Financial Services and Education Project at the New America Foundation, said the agency would likely be concerned with large institutions offering pay option adjustable-rate mortgages to millions of people rather than community banks providing basic 30-year mortgage loans. Nonbank lenders are concerned because regulators may not be familiar with their business models and therefore may not examine them the same way they examine banks. Smaller banks also are concerned about high examination fees, but Treasury officials have said larger banks would pay more in examination fees than smaller institutions ... * WASHINGTON (8/18/09)--Eric J. Spitler, top lobbyist at the Federal Deposit Insurance Corp. (FDIC), is leaving to work as the top lobbyist at the Securities and Exchange Commission (SEC) Tuesday. He was named director of the SEC’s office of legislative and intergovernmental affairs, and counselor to SEC Chairman Mary Schapiro (American Banker Aug. 17). Spitler worked for the FDIC for 18 years in positions including special assistant to the chairman, deputy director of the office of legislative affairs and legislative attorney ...

CDFI announces funding for Native American program

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WASHINGTON (8/18/09)--The U.S. Treasury Department's Community Development Financial Institutions (CDFI) Fund will make $12 million in Native American CDFI Assistance (NACA) Program awards available during the 2010 fiscal year. In comments accompanying a Monday release, CDFI Fund Director Donna Gambrell expressed her satisfaction with the record $12 million in NACA funding, adding that she has “seen firsthand” the accomplishments made by Native financial institutions that receive these funds. The CDFI awards financial assistance awards and technical assistance grants to Native American, Alaska Native, and Native Hawaiian communities through the NACA program, which was instituted in 2004. The CDFI Fund early last month awarded $8 million in financial aid and $3.6 million in technical assistance funds to Native CDFIs. A total of 33 credit unions applied for CDFI Funds during a supplemental application round held in late July, and the CDFI in September will award $52 million in annual appropriations to the highest rated applicants. A Senate bill that would set out $244 million for grants and assistance via the CDFI Fund is still awaiting action, and could be voted on when Congress returns in early September.

Credit CARD Act CUNA addresses CUs FAQs

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WASHINGTON (8/18/09)--The Credit Union National Association (CUNA) has prepared a document to assist state leagues and credit unions with credit unions' questions regarding their compliance obligations under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act provisions--especially on the 21-day periodic statements provision. CUNA has continued to receive compliance questions on the provision, which requires periodic statements to be provided 21 days before the payment due date for all open-end credit, effective Thursday. Although the trade association continues to aggressively pursue relief for credit unions on several fronts, the Federal Reserve Board has signaled that it will not provide relief to credit unions beyond the "short period of time" approach addressed in the rule's supplementary information, said Jeff Bloch, senior assistant general counsel, and Mike McLain, senior compliance counsel at CUNA.. That approach allows credit unions to comply with the rule even if periodic statements disclose payment due dates that are technically inconsistent with the rule. However, the CUNA attorneys said this relief is only available if a disclosure is provided on or with the periodic statement that the consumer's payment will not be treated as late for any purpose--if:
* It is received within 21 days after the statement was mailed or delivered; and * The credit union does not treat the payment as late for any purpose if received within that time period.
"Our primary focus for relief right now is Congress," Block and McLain said. "We will be working diligently throughout the recess and when Congress returns to achieve passage of an amendment to limit the scope of the 21-day rule to credit cards. Meanwhile, we continue to pursue other avenues of relief, including enforcement flexibility from the regulators." Questions frequently asked are addressed at the resource link.