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Jennifer Shasky Calvery named new FinCEN director

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WASHINGTON (8/21/12)—Jennifer Shasky Calvery will take over as director of the Financial Crimes Enforcement Network (FinCEN) next month, the U.S. Treasury announced on Monday.

Shasky Calvery will replace outgoing FinCEN Director James H. Freis. Freis was dismissed from his position in late May.

Treasury Under Secretary for Terrorism and Financial Intelligence David Cohen thanked Freis for his service, and said he is "delighted" to welcome Shasky Calvery to the Treasury. "Her proven record of leadership and strong working relationships with Treasury, law enforcement and the federal bank regulatory agencies will be enormous assets to us as we work together to chart a course for FinCEN's future," he said.

Shasky Calvery served as chief of the asset forfeiture and money laundering section of the U.S. Department of Justice since 2010. In that role, she oversaw the forfeiture of more than $1.5 billion in criminal assets each year. Those funds were used to compensate crime victims and support law enforcement efforts, the Treasury noted. She also combatted organized crime, corruption, Bank Secrecy Act violations and other forms of illicit financial activity.

She also prosecuted money laundering and international crime cases during her 15-year career with the DOJ.

The Credit Union National Association plans to meet with Shasky Calvery soon after she takes on her new post.

Heavy reg burdens harm CUs members CU exec testifies

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CHARLESTON, W. Va. (8/21/12)--Increased regulatory burdens and "the multitude of complex regulations" that credit unions must now address has been one of the "most significant changes" in his 27 years in the movement, Tom Brewer, president/CEO of People's FCU, Nitro, W. Va., told federal lawmakers Monday.

Brewer spoke during a House Financial Services financial institutions and consumer credit subcommittee field hearing in Charleston, W. Va..

Subcommittee leader Rep. Shelley Moore Capito (R-W. Va.) led the hearing, which focused on how financial regulations impact job growth.

Sen. Joe Manchin (D-W. Va.) also joined the subcommittee members in the discussion. Manchin and the subcommittee members acknowledged that credit unions and small institutions did not cause the financial crisis, but now have to live with increased regulations as a result.

The credit union CEO in a prepared statement said regulatory compliance is a top priority, and an expense, for his $95-million-in-asset, 11,000-member credit union.

Budgets are tight for credit unions, especially one with as small of a staff as his, and every dollar spent on compliance represents a dollar that could be spent on direct member service, he added.

"Most of the costs of compliance do not vary by [the size of an institution] and, therefore, are proportionately a much greater burden for smaller institutions," Brewer said. Around half of credit unions in West Virginia hold less than $10 million in assets, and regulatory burden is also a top issue for these credit unions. "Difficulties in maintaining high levels of member service in the face of increasing regulations is a key reason that some credit unions have merged into larger credit unions in recent years," he added.

Many members have noticed how regulatory issues can impact their own daily business at their credit unions, Brewer said. He noted that some repetitive regulations have confused consumers, and that members feel the disclosures they are provided for loans and deposit accounts are excessive.

The National Credit Union Administration, Federal Reserve Board and state regulatory agencies have steadily increased the number of regulations imposed on credit unions, and the regulatory burden could increase with the recent creation of the Consumer Financial Protection Bureau (CFPB), Brewer noted.

While evaluating risk management is a key part of regulatory examinations, and the examination process "works reasonably well," Brewer said there is inconsistency in how risk is evaluated in some cases.

He said approval of the Examination Fairness and Reform Act (H.R. 3461) would improve the exam process for financial institutions. That bill would make information gathered by financial regulatory examiners available to financial institutions, codify certain examination policy guidance, and establish an exam appeals process that would allow financial institutions to air grievances before an independent administrative law judge. Similar legislation has been introduced in the Senate (S. 2160), and both bills have been referred to their respective financial institution committees.

Overall, Brewer said, "there is nothing about the current climate of over-regulation that could be considered positive for economic growth in West Virginia." However, he noted one action that Congress could take to improve the economy in his state and nationwide: approving legislation that would increase the current 12.25%-of-assets credit union member business lending cap.

Increasing the MBL cap to 27.5% of assets, as proposed in separate House and Senate bills, would inject $13 billion in new capital into the economy and create an estimated 140,000 new jobs, at no cost to taxpayers. Brewer said increasing the MBL cap would mean $31 million in new credit union business loans, and 335 new jobs, for West Virginians.

City National Bank President Charles Hageboeck, Pendleton Community Bank President William Loving, Mountaineer Mobile Homes Owner John Wohlever, and Mountain State Justice Inc. Attorney Sarah Brown were also scheduled to testify at the hearing.

Inside Washington (08/20/2012)

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  • WASHINGTON (8/21/12)--As part of its ongoing efforts to wind down and recover its remaining Capital Purchase Program (CPP) investments under the Troubled Asset Relief Program (TARP), the Treasury Department Friday said it would sell its preferred stock positions in five banks: BNC Bancorp, High Point, N.C.; First Community Corp., Lexington, S.C.; First National Corp., Strasburg, Va.; Guaranty Federal Bancshares Inc., Springfield, Mo.; and Mackinac Financial Corp., Manistique, Mich. Treasury expects to begin the public offerings today. To date, Treasury has recovered $265 billion from TARP's bank programs through repayments, dividends, interest and other income--compared with the $245 billion initially invested. Treasury has remaining outstanding CPP investments in 304 banks …

Fryzel encourages CUs to hire more vets

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ALEXANDRIA, Va. (8/21/12)--National Credit Union Administration (NCUA) board member Michael Fryzel challenged credit unions to "lead the way in the veteran job creation effort" and help create 1,000 new jobs for military veterans.

"If you believe that every person who served this country deserves a chance of holding a job, then lead the way by helping our heroes and hiring a vet," Fryzel told attendees of the Defense Credit Union Council's 49th annual conference in Denver, Colo.

Fryzel noted that tens of thousands of veterans are set to complete their military service in the next few years. While some of the nation's more than 7,000 credit unions may not have the flexibility to add a new staff member, they can aid this credit union effort by writing loans that will help small businesses hire veterans, Fryzel said. The Credit Union National Association (CUNA) and credit unions are also working to do more to help small businesses and the economy by advocating for legislation to increase the current 12.25% of assets member business lending cap.

"Credit unions should lead the way in this veterans' job-creation effort--and not be modest about publicizing it," he said. He said defense credit unions can lead this charge. "Show the men and women who have served their country in uniform that no one cares more about them than you. Work to make sure that at least 1,000 of them find good jobs in a tough job market so they can settle back into civilian life, buy a home, raise a family and contribute to their communities. Let your motto be: Help Our Heroes – Hire a Vet," Fryzel said.

Recent U.S. Bureau of Labor Statistics (BLS) figures showed an unemployment rate for returning Iraq and Afghanistan veterans of 8.9% for July. While this rate is slightly higher than the 8.3% national unemployment rate, it represents a sharp decline from the 12.4% veteran unemployment rate recorded in July of 2011.

However, the unemployment rate for war veterans between 18 and 24 years of age was 29.1% in 2011, the BLS reported.

Sixty-nine percent of veterans that responded to a recent Prudential/Iraq and Afghanistan Veterans of America survey said finding a job in the civilian workforce was their greatest challenge post-deployment. Explaining how military skills translate into the civilian workforce presented a challenge to 60% of respondents. The survey also found that 24% of respondents believe that employers avoid hiring veterans.

The U.S. Chamber of Commerce is working with a number of businesses in a bid to hire 500,000 veterans and military spouses by 2014. The Transition Assistance Program, which assists veterans with educational and job training efforts, has also been recently revised by the Obama administration, and federal employers have also increased efforts to hire veterans. The U.S. Internal Revenue Service also provides tax breaks to employers that hire veterans through its Work Opportunity Tax Credit.

FDIC launches help for underserved in West Virginia

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WASHINGTON (8/21/12)--The Federal Deposit Insurance Corporation (FDIC) Monday launched an Alliance for Economic Inclusion (AEI) initiative in West Virginia, a move intended to improve the economic well being of low- and moderate-income individuals and families, including the unbanked and underserved.

The AEI is a national initiative to establish broad-based coalitions of financial institutions, community-based organizations and other partners. Efforts have been launched in several markets across the country, but the West Virginia Small and Micro Business AEI is the first AEI to focus specifically on building resources to further small and micro business formation and growth. The FDIC noted this focus was selected after consultations with the Appalachian Regional Commission and other local stakeholders.

The West Virginia program was launched in partnership with the Appalachian Regional Commission (ARC), other state and federal agencies, financial institutions, and community-based stakeholders.

Since 2007, the more than 1,300 have opened more than 400,000 accounts with financial institutions through the FDIC's AEI program.

Use the link to read more about the FDIC's initiative.

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WASHINGTON (8/21/12)--September is national preparedness month and the U.S. Small Business Administration (SBA) is offering a series of free webinars to help credit unions and all other small businesses to prepare in case they are forced by a natural disaster to close their operations for a time.

"This summer millions of business across the country were forced to close their doors in the aftermath of power outages, approaching wildfires, and flooding caused by tropical storms.  Business interruptions, even if it lasts just a few hours, cost business owners greatly in terms of lost productivity and profits," the SBA said in a release announcing the webinars.

The series is being presented in collaboration with the Federal Emergency Management Agency's (FEMA) Ready Campaign. It is intended to help small businesses prepare for the well-being of the business operations, the safety of their employees, and the "sustenance of their local economies" by being prepared to rebound quickly from any kind of disaster.

The webinars, scheduled for each Wednesday in September at 2 p.m. (ET), are:
  • Sept. 5:   "10 Steps to Prepare Any Organization for Disaster" with an introduction from James Rivera, Associate Administrator for SBA's Office of Disaster Assistance.
  • Sept. 12: "Protecting Your Organization by Preparing Your Employees"
  • Sept. 19: "Utilization of Social Media During a Crisis"
  • Sept. 26: "Surviving a Crisis, Large or Small: Real Life Lessons Learned." Business owners who recovered from disasters discuss their proactive emergency planning.

A question and answer session will follow each of the presentations.

Use the resource links to register for the September webinars and to access past webinars on business continuity strategies through the "PrepareMyBusiness" website.