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Washington Archive

Washington

Fed adjusts TILA triggers for mortgages

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WASHINGTON (8/7/08)--The Federal Reserve Board yesterday published its annual adjustment of the dollar amount that triggers additional disclosure requirements under the Truth in Lending Act (TILA) for home mortgage loans that bear rates or fees above a certain amount. The dollar amount of the fee-based trigger has been adjusted to $583 for 2009 based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1, 2008. The adjustment is effective Jan. 1, 2009. This adjustment does not affect the new rules adopted by the Board in July 2008 for "higher-priced mortgage loans." Coverage of mortgage loans under the July 2008 rules is determined using a different rate-based trigger. The Home Ownership and Equity Protection Act of 1994 restricts credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed the fee-based trigger--initially set at $400 and adjusted annually--or 8% of the total loan amount, whichever is larger. Use the resource link below to review the board's complete notice.

CO-OP Financial joins interchange bill opposition

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WASHINGTON (8/7/08)--CO-OP Financial Services has joined the Credit Union National Association (CUNA) and others’ efforts to oppose and educate legislators about H.R. 5546, the “Credit Card Fair Fee Act,” which could substantially reduce credit and debit card interchange income, negatively affecting credit unions and their members. Despite a narrow 19-16 vote victory in the House Judiciary Committee last month, H.R. 5546 is not expected to go to the full House for a vote this year, though the Senate Judiciary Committee could hold a hearing on the issue in September. CO-OP President/CEO Stan Hollen said CO-OP would maintain an active role in any public education campaign and other grassroots efforts, should the bill be reintroduced next year. “At a time when economic conditions are straining earnings at virtually all credit unions, a material decline in interchange income would likely result in reduction or elimination of rewards programs and increased fees to members,” said CO-OP President/CEO Stan Hollen. “Past experience with similar legislation in Australia suggests the merchants did not pass any interchange reduction on to consumers.” Hollen said CO-OP will work with credit unions to further their understanding of interchange revenue, expense and fee structure.

CUs surveyed on regulatory exam process

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WASHINGTON (8/7/08)--The Credit Union National Association (CUNA) is circulating a survey to 2,000 credit unions to determine the areas of concern they have with the routine examination process. The two-page, 16-item questionnaire asks participants about their recent examination histories and experiences. However, it also queries specifically to what extent the credit union has pursued such actions as informally questioning examiner findings, refusing to agree to an item in a record of action, submitting a written response to an examination report, or requesting a different examiner, among other things. The purpose of the CUNA poll is to elicit credit union concerns regarding the regulatory examination process, according to CUNA Regulatory Affairs Senior Vice President Mary Dunn. In a letter accompanying the survey, CUNA President/CEO Dan Mica and CUNA's Examination and Supervision Subcommittee Chairman Tom Gaines write: “The annual examination by a state agency or the National Credit Union Administration can be one of the highest impact events on a credit union's calendar.” “As part of our ongoing effort to improve the examination process, CUNA's Examination and Supervision Subcommittee is collecting information about examination practices and credit union perceptions of examiners and examinations.” Gaines is president and CEO of the Tennessee Credit Union League. Separate, but similar, polls are being sent to federal and state-chartered credit unions. Replies will be held in confidence. Once poll results are in, CUNA will execute computer analysis and the questionnaires will be destroyed at the study's completion, said CUNA’s Dunn. Summary results will be published.

Inside Washington (08/06/2008)

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* WASHINGTON (8/7/08)--The Office of the Comptroller of the Currency Tuesday issued an interim final rule that provides guidance to national banks investing in public welfare projects (American Banker Aug. 6). Banks can invest in the projects regardless of community income levels under a provision in a recently approved housing rescue law. Banks have been able to participate in the projects since 1963, but in 1992, Congress capped the investments at 10% of a bank’s capital. John Dugan, comptroller of the currency, headed lobbying efforts for the change ... * WASHINGTON (8/7/08)--Rep. Barney Frank (D-Mass.) and members of the House Financial Services Committee sent letters to banking trade groups, the government-sponsored enterprises and mortgage servicers asking them to use a refinancing program that becomes effective Oct. 1. The program would allow the Federal Housing Administration to insure more mortgages (American Banker Aug. 6). Recipients of the letters include JP Morgan Chase and Co., Citigroup, Bank of America, Wells Fargo, Washington Mutual, Option One Mortgage Corp., HSBC Holdings PLC and Litton Loan Servicing LP. The lawmakers requested a response by Aug. 31. Frank’s committee scheduled a hearing on the matter Sept. 17 ...