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Senators introduce new version of HARP changes

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WASHINGTON (9/12/12)--Sens. Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) this week introduced The Responsible Homeowner Refinancing Act of 2012 (S. 3522), which would "remove the barriers preventing borrowers who are making their payments on time from refinancing their loans at the lowest rates possible."

The bill is similar to legislation introduced by Menendez in May.

Overall, the bill would make it easier for homeowners whose mortgages are backed up by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to refinance their home loans. The GSEs would be required to offer streamlined underwriting and associated representations and warranties to both new mortgage servicers and mortgage servicers that already work with the GSEs.

The Home Affordable Refinance Program (HARP), which was created to ease the refinancing process, requires lenders to distinguish between borrowers with more than 20% equity in their home and those with less than 20% equity. Owners with high-equity homes are often subject to increased fees.

Under S. 3522, appraisal costs and other fees charged to mortgage refinancing applicants would also be eliminated for all HARP applicants. The bill would eliminate employment and income verification requirements for applicants as well.

This bill would ensure that all GSE borrowers who are making their payments have the same access to simple, low-cost refinances, regardless of the level of equity they have in their home, and would allow lenders to offer a single, streamlined program to all GSE borrowers who have been paying their loans on time, the Senators said in a release.

Menendez in a release said the bill, if passed, would eliminate the red tape that can leave some homeowners "trapped in higher interest loans" and would "put money back into the pockets of middle class families and strengthen our economy."

Boxer noted that the legislation would help lessen the number of home foreclosures.

The Federal Housing Finance Agency (FHFA) last month reported that one of every three refinances through the GSEs were made through HARP, the highest percentage claimed by the program since its inception in April 2009.

The FHFA attributed the HARP volume increase to record-low mortgage rates, as well as enhancement instituted to the program last fall.  Those changes included removal of the loan-to-value (LTV) ceiling for borrowers who refinance into fixed-rate loans and fee reductions.

The senators in the release estimated that 13.5 million borrowers with GSE-backed loans could benefit by refinancing their loans through HARP.

Inside Washington (09/11/2012)

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  • WASHINGTON (9/12/12)--The Federal Deposit Insurance Corp. (FDIC) plans to release its community bank study by the end of the year, and the agency will continue its focus on community banks beyond this year, Acting FDIC Chairman Martin Gruenberg said Monday (American Banker Sept. 11). The FDIC said it would explore the evolution and challenges faced by community banks through three initiatives: regional roundtables with bankers and agency officials; research on the history and development of the community bank sector; and a review of its examination and rulemaking policies to find ways to improve the regulatory process for community banks. The outcome of those initiatives will form the basis of the FDIC's year-end findings. The FDIC hopes to make the operation of community banks simpler and more efficient for both bankers and examiners, Gruenberg said …
  • WASHINGTON (9/12/12)--The Federal Reserve announced the results of Monday's auction of $3 billion in 28-day term deposits through its Term Deposit Facility. Forty-six bids from 27 participants were submitted. The competitive amount tendered was $11,775 billion with more than $3 billion awarded. The non-competitive amount awarded totaled $40.1 million. The awarded deposits will settle on Sept. 13 and mature on Oct. 11 ...
  • WASHINGTON (9/12/12)--The Federal Housing Finance Agency (FHFA) has launched a new representation and warranty framework for conventional loans that are sold or delivered after Jan. 1, 2013. The framework will apply to loans that are delivered to Fannie Mae and Freddie Mac, and will "clarify lenders' repurchase exposure and liability on future deliveries," the FHFA said in a release

Exam issues addressed by new manual NCUA OIG

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ALEXANDRIA, Va. (9/12/12)--In an internal review requested by the U.S. Congress, the National Credit Union Administration's (NCUA) Office of the Inspector General found inconsistencies in how small credit union examination policies and procedures are implemented. However, the OIG noted, the NCUA's recently released National Supervision Policy Manual addresses these and other examination concerns.

The report, which was developed at the request of Senate Banking Committee Chairman Tim Johnson (D-S.D.), details the agency's examination and complaint processes for small credit unions.

Johnson in February asked the NCUA OIG and inspectors general at the U.S. Treasury, Federal Reserve, and the Federal Deposit Insurance Corp. to report on their examination processes for small credit unions and community banks.

The OIG interviewed or obtained documentation from the agency's Office of the Executive Director, Office of Examination and Insurance, Office of Consumer Protection, Office of General Counsel and regional offices as it compiled the report. NCUA policies and procedures were also reviewed by the OIG. The audit addressed examinations for natural-person credit unions with $1 billion or less in assets.

The OIG report found that the agency provides "clear standards and policies" for agency staff that examine small credit unions. The OIG report also found that the NCUA has "a robust appeals process which allows credit unions to question examination results."

However, the NCUA report noted some inconsistencies in how these examination policies are implemented. The report also found some organizational issues related to regional determinations, the NCUA's Supervisory Review Committee, and the NCUA's internal ombudsman position.

The examination inconsistencies are likely a result of the NCUA's structure, which consists of five separate regional offices, each with their own supervisory manuals, the OIG said. This may have contributed to the Senate committee's perception that nationally, examiners conducted examinations with "inconsistent application of agency policies and procedures," the report noted.

The OIG did not recommend any changes to the NCUA's examination regime, noting that the new standardized examination manual would likely address any examination inconsistencies. However, the OIG did recommend some changes to how the NCUA communicates internally and tracks the status of ongoing examinations, and the agency agreed with these recommendations.

The new manual, according to the NCUA, will help ensure that credit unions are treated more consistently from region to region. The manual is an attempt to remove regional differences in quality control.

The Credit Union National Association earlier this year said that while examination consistency can be positive, the goal is to have examiners treat credit unions in a consistently professional manner, allowing the credit unions to develop and implement their own solutions to address problems.

For the full OIG report, use the resource link.

FinCEN sets BSA SAR webinars

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WASHINGTON (9/12/12)--Bank Secrecy Act (BSA), Currency Transaction Report (CTR), Designation of Exempt Person (DOEP) and Suspicious Activity Report (SAR) filing tips will be discussed at a pair of upcoming Financial Crimes Enforcement Network (FinCEN) webinars.

The first FinCEN webinar is scheduled to begin at 1 p.m. ET on Sept. 18 and will address BSA and SAR filing. FinCEN staff will also review frequently asked questions about the new SAR forms during the webinar.

The second FinCEN webinar, which is scheduled to begin at 1 p.m. ET on Oct. 2, will also address the BSA E-filing process. CTR and DOEP filing will also be discussed during the webinar.

FinCEN in 2011 approved a series of technical SAR and CTR changes. The form changes were made to ease the transition from the current paper SAR form submission model to a newer electronic filing model, and the changes will take effect on March 31, 2013. FinCEN has said the switch to all-electronic filing would improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information.

For more on the webinars, use the resource link.

CUNA key lawmakers highlight MBLs in press conference

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WASHINGTON (9/12/12)--Sen. Mark Udall (D-Colo.) and Rep. Ed Royce (R-Calif.) will join Credit Union National Association (CUNA) President/CEO Bill Cheney and other credit union member business lending (MBL) supporters at a 1:30 p.m. (ET) press event on the benefits an MBL cap increase could provide small businesses and the economy at large.

Cheney said CUNA organized today's forum "to highlight the urgency of passing MBL legislation before the year is out."

Credit unions will be able to watch the press event streamed live by going to The event, which also will be open to congressional staff, is part of Washington political newspaper The Hill's "Issue Forum" series.

During the event, John Arensmeyer of The Small Business Majority and Eli Lehrer of the R Street Institute will present a joint research report focusing on job growth, the role small business plays in the economy and the support that credit unions can offer to small business in the economy's recovery with expanded business lending authority.

Bills that would increase the MBL cap to 27.5% of assets, from 12.25%, have been introduced in the House and Senate. Members of both parties support the MBL cap increase bills, and H.R. 1418 has 140 cosponsors. S. 2231 has 21 cosponsors, and Senate leadership remains committed to a floor vote on the MBL legislation. Udall and Royce are sponsors of the bills in their respective chambers.

CUNA has estimated that an MBL cap increase would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment. Both benefits would come at no cost to taxpayers.