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CUNA concerned with ACH compliance implementation costs

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WASHINGTON (8/22/11)—The Credit Union National Association (CUNA) is concerned by potential increases in ACH system compliance and implementation costs, and has offered several recommendations on how NACHA, the electronic payments association, can improve the network. NACHA has proposed several changes to its operating rules that would eliminate some so-called "pain points," areas of misunderstanding, and other problems that it identified during a rules simplification initiative that it completed earlier this year. Among those changes are requiring written authorization for debit entries to a business account if there is no existing contract or relationship. The association is also considering providing a new return reason code to stop all future payments and removing the current requirement of separate Web Initiated-Entry exposure limits for originating depository financial institutions (ODFIs). NACHA may also remove a current requirement which states that an ODFI must suffer a loss to dishonor an untimely return. For CUNA’s comment on these issues, use the resource link.

Bank fraud conviction brings NCUA prohibition order

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ALEXANDRIA, Va. (8/22/11)—Former Fairwinds CU, Orlando, Fla., employee Nazreen Mohammed has been prohibited from future work at any federally insured financial institution by the National Credit Union Administration. Mohammed was recently convicted of bank fraud and aggravated identity theft, and was sentenced to 60 months in prison and a further three years of supervised probation. The former credit union employee will also pay $83,236.12 in restitution. The agency noted that violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. The Ocala Star-Banner reported that the 47-year old Mohammed plead guilty to two counts of bank fraud and one count of identity theft last November. Mohammed used account withdrawals and loans to steal around $127,000 from living and deceased Fairwinds members between April and July of 2009, and used similar tactics to steal from Royal Bank of Canada customers later that year, the Star-Banner said. Fairwinds holds more than $1.5 billion in assets from around 143,000 members. For the full NCUA release, use the resource link.

Inside Washington (08/19/2011)

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* WASHINGTON (8/22/11)--The Credit Union National Association (CUNA) has issued a final rule analysis for a rule adopted by the U.S. Department of Housing and Urban Development (HUD) that establishes minimum mortgage loan originator licensing standards states must follow in implementing the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act. Currently, all states’ SAFE Act rules meet or exceed these minimum standards. The final rule also establishes federal oversight of state SAFE Act standards, and sets forth enforcement options that could apply if a state’s SAFE Act standards ceased to comply with this rule. Jurisdiction over this regulation transferred to the Consumer Financial Protection Bureau July 21 under the Dodd-Frank Wall Street Reform and Consumer Protection Act. This final rule does not apply to credit unions or, to date, any other mortgage originators; rather, the rule sets minimum standards for states’ SAFE Act standards. CUNA’s offers members e-Guide compliance resources. … * WASHINGTON (8/22/11)--National Futures Association (NFA) is likely to have a larger influence in overseeing the role of major banks in the swaps and futures markets as regulators continue to implement the Dodd-Frank Act and determine funding for the Commodity Futures Trading Commission (CFTC) (American Banker Aug 19). The CFTC has requested $308 million for its 2012 budget. But Republican budget-cutting efforts may limit funding. The CFTC’s responsibilities will increase with the implementation of Dodd-Frank while resources may be limited, said NFA President Daniel Roth. The less allocations the agency receives, the more responsibility it may try to shift toward self-regulation, increasing the NFA’s role, Roth said. The NFA recently hired two employees to design data tracking and surveillance systems, develop industry for trading and plan registrations … * WASHINGTON (8/22/11)--Elizabeth Warren, the former Obama administration official who shaped the formation of the Consumer Protection Financial Bureau, announced that she’s starting an exploratory committee for a potential U.S. Senate run in Massachusetts (American Banker Aug 19). Warren, a Democrat, filed papers Thursday and launched a website where visitors can make donations and sign up for updates. Warren has been traveling around Massachusetts last week on a “listening tour.” She said she will make her final decision on running around Labor Day (WBUR.orgAug. 15). If Warren runs, her opponent will be Sen. Scott Brown (R-Mass.), who won his seat in a special election last year to succeed the late Sen. Edward Kennedy …