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Cheney touts low CU chargeoff delinquency rates on CNBC

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WASHINGTON (8/26/10)--In a Wednesday appearance on CNBC’s "Closing Bell," Credit Union National Association (CUNA) President/CEO Bill Cheney said that the underwriting practices and cooperative structure of credit unions result in lower delinquency and chargeoff rates among membership. “We do see consumers paying down debt, and there have certainly been chargeoffs on credit cards at credit unions,” Cheney said. “It does make some sense” to pay down debt, but only if you have the money available to do so, Cheney said. While year-over-year chargeoff rates are up overall, recent trends have improved at credit unions, with declining delinquency rates in both credit cards and mortgages, Cheney said. Credit unions are “starting to see some improvement,” Cheney added. However, noting recent press reports that many are foregoing payments on their mortgages to pay off their credit card debt, Cheney recommended that those who are having trouble with their mortgage should first contact their lender. For the full interview, click on the image.

Inside Washington (08/25/2010)

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* WASHINGTON (8/26/10)--A Federal Reserve official this week hinted that increasing the financial literacy of potential homebuyers may do more to prevent future housing market and foreclosure-related troubles than strengthened regulations would. As reported in American Banker on Aug. 25, Federal Reserve Bank of Chicago President Charles Evans indicated that while governmental elimination of so-called "nonstandard" mortgage loan products would reduce the number of risky loans, eliminating those types of loans would result in fewer options for qualified, knowledgeable homebuyers. Rather, promoting greater financial literacy could “keep those who shouldn't be in exotic mortgages from getting them while leaving such mortgages available to the small group of people for whom they are appropriate," Evans said…

Congress could correct some reg reforms CUNA says

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WASHINGTON (8/26/10)—Though the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law just before the August congressional recess began, Credit Union National Association (CUNA) Vice President of Legislative Affairs Ryan Donovan said that the Congress may consider technical corrections and other changes, possibly before the end of the year. According to Donovan, a technical corrections bill is "almost a certainty" given the size and the complexity of the legislation. As the legislation is implemented, CUNA may identify areas that are problematic to credit unions and will address statutory concerns with Congress. "We will be following the implementation of this legislation. As we identify areas that need correction, we will be working with Congress to make those corrections," Donovan said. Donovan spoke during a Wednesday CUNA audio conference. Jeff Bloch, CUNA senior assistant general counsel, hinted that the rulemaking process itself could prove to be a drawn out affair, with many of the rules not being finalized until after their prospective effective dates. The panelists again emphasized that a small percentage of the total number of reforms will impact credit unions. Many of the rules will be written by the yet-to-be-established Consumer Financial Protection Board (CFPB) but could be taken on by the Federal Reserve if the establishment of the CFPB is delayed. One set of rules that will likely not directly impact credit unions are new remittance restrictions, CUNA Special Projects Counsel Michael Edwards said. During the development of the regulatory reforms, CUNA encouraged Sen. Chris Dodd (D-Conn.) to consider exempting credit unions or, more broadly, exempting transactions that are routed through programs administered by the major central banks, including Fedwire, Fed Global ACH, NACHA ACH, and the SWIFT system, from the remittance provisions.

FASB Chair Herz to retire

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WASHINGTON (8/26/10)—Financial Accounting Standards Board (FASB) Chairman Robert Herz will retire, effective Oct. 1, the board announced on Wednesday. Current FASB member Leslie Seidman will take on the role of acting chairman following Herz’s retirement. In a release, Herz said that his eight years as chairman of the FASB “have been among the most professionally challenging and personally satisfying” of his career. Herz has overseen the progress of several issues during his tenure, including the protracted, and still ongoing, process of converging international and U.S. accounting standards. The Credit Union National Association (CUNA) has worked with its accounting subcommittee to identify key problems and frame its message to FASB regarding pending changes to FASB's Generally Accepted Accounting Principles (GAAP). The proposed changes, as set forth in a FASB exposure draft released in May, would modify GAAP by requiring most financial instruments to be measured at fair value. The changes would require loan loss reserves to be measured on a forward-looking "expected loss" basis, which differs from the historical "incurred loss" approach that is currently used. FASB has informally stated that it would like to have a final rule in place by next summer. Credit unions over $10 million in assets are required to comply with GAAP, and CUNA is working with the National Credit Union Administration and other policymakers to ensure credit union concerns are presented to and considered by FASB. CUNA will also meet with FASB and file a formal comment letter in the near future, and CUNA welcomes input from member credit unions.