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NCUA makes 250k acct. insurance permanent

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ALEXANDRIA, Va. (9/20/10)--The National Credit Union Administration (NCUA) late last week made permanent its $250,000 account coverage limit. The NCUA action codifies changes that occurred with the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July. The account coverage is provided by the NCUA’s National Credit Union Share Insurance Fund (NCUSIF). The $250,000 coverage limit would have expired on Dec. 31, 2013. In a Friday release, NCUA Board Chairman Debbie Matz said that the coverage enchancement provides “an extremely visible and important benefit to consumers.” Noting the NCUA's pending work with financial expert Suze Orman, Matz added that the NCUA “is committed to making sure that the financial public is fully aware of the newly permanent $250,000 limit.”

Cheney Warren speak as she takes on CFPB role

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WASHINGTON (9/20/10)--Harvard Law Professor Elizabeth Warren on Friday “enthusiastically agreed” to take on the task of setting up the government’s Consumer Financial Protection Bureau (CFPB). Warren’s official position will be Assistant to the President and Special Advisor to the Secretary of the Treasury on the CFPB. In a blog post on whitehouse.gov, Warren said that the CFPB is “based on a pretty simple idea: people ought to be able to read their credit card and mortgage contracts and know the deal.” The CFPB is “based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices,” she added. Credit Union National Association (CUNA) President/CEO Bill Cheney spoke to Warren on Friday. He said that CUNA looked forward to working with her as she takes on the role of ramping up the CFPB. CUNA is “particularly eager” to work with Warren as the CFPB begins its work to “consolidate and streamline consumer protection rules.” Such work will help reduce the regulatory burden “of those who have been regulated and performed well, such as credit unions,” Cheney added. The CFPB, which was created when the Dodd-Frank financial regulatory reform package was passed earlier this year, will also monitor financial markets for evidence of systemic risk.

CUNA comments on increased CARD Act flexibility

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WASHINGTON (9/20/10)--The Credit Union National Association (CUNA) in a comment letter said that it supports an amendment to the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act) that delays the effective date of portions of the Act until Jan. 31, 2011. Specifically, the amendment pushes back the Aug. 22 effective date for new disclosures on gift certificates, store gift cards, and general-use prepaid cards that were issued before April 1. To be eligible for the delayed effective date, “disclosures must be provided to consumers by way of toll-free telephone numbers, websites, signage in stores, and general advertising that inform consumers that there will be no dormancy, inactivity, or service fees and that these cards, specifically the underlying funds, will not expire, regardless of what is printed on the card,” the letter added. This information, which can be provided to consumers directly or through associated retailers, must be made available until Jan. 31, 2013 , although the in-store signs and general advertising will not be required on or after Jan. 31, 2011. More generally, CUNA said that it appreciated “the additional flexibility in the interim final rule that will facilitate compliance with these extended effective date provisions.” For the full comment letter, use the resource link.

Compliance Respond quickly to opt-in requests

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WASHINGTON (9/20/10)--In the event that a credit union member elects to revoke his or her overdraft opt-in status, the Credit Union National Association (CUNA) has recommended that credit unions react by honoring this request “as soon as realistically possible.” In September’s Compliance Challenge, CUNA said that Regulation E specifically states that credit unions (and other financial institutions) must implement an opt-in revocation request “as soon as reasonably practicable.” The Fed did not prescribe a specific period of time for the credit union to honor the member’s revocation request. That's because “the appropriate time period may depend on a number of variables, including the method used by the consumer to communicate the revocation request (for example, in writing or orally) and the channel by which the request is received (for example, if a consumer sends a written request to an address specifically designated to receive consumer opt-in and revocation requests),’” CUNA added. Opt-in requests are effective until a member/customer revokes opt-in consent, or the financial institution no longer provides the service. The Compliance Challenge also covered the notifications that credit unions must provide to members that opt-in to overdraft programs. According to CUNA, the Federal Reserve determined that requiring “subsequent notice” of a member’s overdraft status “is unnecessary when the consumer has affirmatively elected to enroll in the overdraft service and ... receives a record of their right to revoke their opt-in.” Credit unions that simply provide written or, in some cases, electronic overdraft program consent forms to their members, and confirm that consent with their members, are in compliance with the newly established overdraft rules. For more of CUNA’s September Compliance Challenge, use the resource link.

Inside Washington (09/17/2010)

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* WASHINGTON (9/20/10)--The Federal Housing Administration (FHA) has proposed dropping the maximum share of a buyer’s closing costs that sellers can pay to 3% from 6%, said American Banker (Sept. 17). The Department of Housing and Urban Development (HUD) has received more than 1,000 comment letters on proposals the FHA has made to beef up its mutual mortgage insurance fund, according to Vicki Bott, HUD deputy assistant secretary for single-family housing. Most have been about the proposal to halve seller concessions, she said. Loans with a high percentage of seller concessions are up to 1.5 times more likely to default, but there are considerations, Bott added. For instance, the proposal could more greatly impact $50,000 loans than $500,000 mortgages, she said ... * WASHINGTON (9/20/10)--The Securities and Exchange Commission (SEC) voted 5-0 to propose rules to heighten disclosure connected to some banks’ practice of curtailing debt at the end of a quarter (The Wall Street Journal Sept. 17). Under the proposal, all companies would have to disclose more about their short-term borrowings quarterly and annually. Banks already must disclose their debt levels annually, but the proposal would take the disclosure a step further by requiring companies to disclose debt levels and average and maximum short-term borrowing at the end of a quarter. Financial institutions, including hedge funds, broker-leaders and any lender would have stricter requirements ...