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Inside Washington (08/26/2010)

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* WASHINGTON (8/27/10)--The Securities and Exchange Commission (SEC) this week voted to increase shareholder influence over corporations by approving rules that will force corporations to print the names of shareholder board nominees on corporate ballots. Shareholders currently must pay for the mailing of separate corporate ballots. The result is a boon to labor unions and pension funds that have agitated for greater corporate responsibility and responsiveness. However, the result has been decried by businesses and Republican members of the SEC board… * NEW YORK (8/27/10)—The Federal Reserve has requested a 90-day delay on a ruling that would require it to release documents related to borrowing from its discount window and other lending programs used during the recent financial troubles. As reported in The Wall Street Journal, a Fed representative said that the stay was needed to “permit the board to consult with the Department of Justice regarding an appeal to the Supreme Court." Both Bloomberg News and Fox Business Network sought access to the documents in separate court cases brought against the Fed…

NACHA introduces payment cycle pilot program

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WASHINGTON (8/27/10)--NACHA, The Electronic Payments Association, earlier this week announced that it has launched a pilot program that will allow credit unions and other financial institutions to “truncate low-value consumer checks and collect them as ACH debits.” NACHA said that it structured the pilot program, which will go on for a minimum of 18 months, “to identify and quantify cost savings for both originating and receiving financial institutions.” NACHA President/CEO Janet Estep said in the press release that the program could “transform the collection of low-value consumer checks by removing them from the payment cycle at the point of deposit.” The association will monitor the progress of the program and may follow it up by establishing a full program. Six financial institutions had signed up for the program at the time of the release. NACHA told News Now that while there are no credit unions currently enrolled in the program, it is actively encouraging credit unions to take part. For the full release, use the resource link.

NCUA approves low-income FCU charter

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ALEXANDRIA, Va. (8/27/10)—The 1,400 members and employees of Charlotte, N.C.-based Unity, the Way of Holiness Christian Church may now become members of their own credit union after the National Credit Union Administration (NCUA) approved the charter of Shepherd’s FCU on Thursday. The credit union, which has been granted a low-income designation by the NCUA, expects to open in September. In comments accompanying the release, NCUA Chairman Debbie Matz said that the credit union “will offer hands-on help and long-term hope to a group that is striving to build a more prosperous community.” “With its low-income designation, the credit union will have opportunities to participate in special NCUA programs--including valuable technical assistance grants and low-cost loans to provide needed services and stimulate economic activities,” Matz added. The credit union, which is sponsored by Charlotte’s Neighborhood Church Coalition, will offer share accounts, unsecured loans, and used-vehicle loans at first, and may extend its services to include share certificates of deposit, new-auto loans and check-cashing services in the future. The credit union is the third to be chartered in 2010. For the full release, use the resource link.

Quality of Fannie Freddie-backed mortgages improves

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WASHINGTON (8/27/10)--The credit quality of the mortgages acquired by Fannie Mae and Freddie Mac has “improved substantially” since Fannie and Freddie were taken under government conservatorship, the Federal Housing Finance Agency (FHFA) reported on Thursday. Both Fannie and Freddie were placed under government conservatorship in 2008. In its Conservator’s Report on the Enterprises’ Financial Condition, the FHFA noted that the single-family mortgages that Fannie and Freddie have acquired during this period “have, on average, higher credit scores and lower loan-to-value ratios, resulting in lower early cumulative default rates.” The report, which will be released quarterly, also addresses the sources of Fannie and Freddie’s losses, related capital reductions, their loss mitigation activities, and other mortgage market information. According to the report, Fannie and Freddie’s investments and capital markets business segment was responsible for 9% of the total capital reductions realized between the end of 2007 and the second quarter of 2010. Their single-family credit guarantee business segment accounted for 73% of the capital losses realized during that same period. In a recent panel discussion, U.S. Treasury Secretary Timothy Geithner said that the federal government must adjust the housing finance system to eliminate the conflict between Freddie Mac's and Fannie Mae's public policy role and the need to enhance shareholder returns. Reps. Paul Kanjorski (D-Pa.) and Barney Frank (D-Mass.) have scheduled a slate of housing finance hearings for September, and Kanjorski has said that policies related to calculating guarantee fees and ideas for recovering the costs associated with Fannie and Freddie’s conservatorship will be discussed. For the full FHFA release, use the resource link.