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Inside Washington (08/21/2008)

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* WASHINGTON (8/22/08)--The Office of the Comptroller of the Currency (OCC) has outlined its concerns regarding a proposal to reform credit card practices in a letter to the Federal Reserve Board. The proposal would limit credit for consumers and could weaken thrifts and banks, OCC said. (American Banker Aug. 21). It also could pose litigation risks to the credit card industry, wrote Comptroller John Dugan. In May, the Fed, Office of Thrift Supervision and the National Credit Union Administration released the proposal, which would ban double-cycle billing and define deceptive credit card practices. Dugan suggested that the Fed prevent deceptive practices, rather than define them, by placing the proposal under the Truth-in-Lending Act. That way, more entities would be covered by the rule ... * WASHINGTON (8/22/08)--Treasury Secretary Henry Paulson’s move to reassure investors on Wall Street could backfire, analysts say. Last month, Paulson asked Congress for a government rescue of Fannie Mae and Freddie Mac he didn’t intend to use. However, his request is creating uncertainty among investors and could trigger a bailout, according to investors ( Aug. 21). Stock in Fannie Mae has dropped since the law was passed. This week, the enterprise’s shares dropped 28% while Freddie’s fell 38%. Had Paulson not made a request for the rescue, Freddie Mac’s bond sale Monday may have been a total failure, said William Poole, former Reserve Bank of St. Louis president ...

Mortgage lending registration required next year

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WASHINGTON (8/22/08)—Title V of the Housing and Economic Recovery Act brings new licensing and registration requirements for mortgage originators and the Credit Union National Association (CUNA) is advising credit unions on just what that means. The housing recovery measure was signed into law in July and is the result of problems with mortgage lending in recent years, especially with subprime mortgage loans. Under the new law, any individual who originates residential mortgage loans as an employee of any state or federal credit union will have to annually register with the “Nationwide Mortgage Licensing System and Registry” as a “registered loan originator.” The law calls for the federal banking agencies and the National Credit Union Administration to develop and maintain a system for registering the appropriate employees of banks and credit unions in conjunction with the Conference of State Banking Supervisors (CSBS) system, and this agency program has to be in place by August 2009. Credit union mortgage lending staff will have to provide fingerprints for a criminal background check, provide a personal employment history and authorization for the CSBS system to obtain information about any administrative, civil or criminal rulings, and be assigned a "unique identified" number that will facilitate electronic tracking and public access to this information. CSBS has had its licensing system and registry up and running since Jan. 2, and with some minor tweaks they will soon meet the Title V requirements, according to Valerie Moss, CUNA’s director of compliance information. Generally under the CSBS plan, if a state does not take necessary action to participate in the system by August 2009, then HUD is required to develop a system of licensing and registration for state-licensed loan originators in those states not participating. The law does give the Department of Housing and Urban Development(HUD) the authority to wait up to an additional two years if it feels the state is making a good faith effort to take state action. HUD is also authorized to step in at some future time if it feels the system is not working in one or more states. And who must be registered? Moss says any individual who originates residential mortgage loans as an employee of any state or federal credit union will have to annually enroll as a “registered loan originator.” “Other people who originate residential mortgage loans will have to be licensed and registered as ‘state-licensed loan originators.’ “And employees working for a ‘subsidiary that is owned and controlled by’ a credit union and that is regulated by NCUA doing residential mortgage loan originations will also be subject to registration, but it’s unclear if any CUSOs will fit into this definition,” according to CUNA’s Moss. Use the resource link below to access more information on credit union employee registration, licensed loan originators, and other provisions of the new law, which affect credit unions.

Fryzel intends partnership approach with state regulators

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ALEXANDRIA, Va. (8/22/08)—Michael Fryzel, the newly installed chairman of the National Credit Union Administration (NCUA), said he is committed to a partnership of shared ideas and opinions with state credit union regulators. Addressing the National Association of State Credit Union Supervisors 2008 Summit in Seattle, Wash., Fryzel emphasized his belief in strong regulatory oversight. He said he hopes to share with NASCUS a partnership of open dialogue on problems and solutions, and of working together to achieve “our common goal of a strong, vibrant credit union industry.” The NCUA chairman identified a rigorous safety and soundness standard as the central focus of both state and federal regulators when describing the primary principles that will guide his approach as head of the federal agency. His other essential elements, he said include:
* Maintaining strong regulatory control that aggressively protects the rights of consumers; * Providing common-sense rules that benefit both credit unions and the members they serve; and * Monitoring credit union to ensure consumers get a fair deal.
“These principles are central to the continued durability of the dual chartering concept,” Fryzel said. “The existence of strong, vital federal and state systems benefits all facets of the credit union industry. We have a commitment to those who placed us in these regulatory positions and to the consumers who depend on us, to be diligent stewards keeping their financial institutions safe, sound and well-functioning.”

CUNA conference has new BSA highlights

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WASHINGTON (8/22/08)—Registration is open of the Credit Union National Association’s (CUNA’s) next four-day Bank Secrecy Act (BSA) conference, to be held Oct. 19-22 in Atlanta. New topics include who is responsible for what under BSA in shared branching arrangements, and the latest on automated clearinghouse and wire issues. Also, conference attendees will get an in-depth, hands-on look at developing an institution-wide BSA risk assessment for their credit union, as well as help to understand how BSA due diligence before a merger can save a credit union from other pitfalls. This conference will feature informative discussions on practical, operational compliance issues; open forums for question and answer; big picture compliance trends; overviews of common mistakes; and networking opportunities. As in its prior BSA conferences, CUNA will offer Bank Secrecy Act Compliance Specialist Certification as an optional feature. The conference, presented in partnership with the National Association of State Bank Supervisors, will be held at the The Westin Buckhead Atlanta. For conference and registration information, use the resource link below.