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Washington Making fin. ed. resources available: Part I

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ALEXANDRIA, Va. (9/2/14)--While most of the National Credit Union Administration's day-to-day functions involve its mandate of regulating, chartering and supervising federal credit unions, as well as operating the National Credit Union Share Insurance fund, the agency also exists as a resource to credit unions and their members. is the NCUA's official consumer protection website, launched in 2011. Morgan Rogers, director of the NCUA's Division of Consumer Affairs, in an interview with News Now , said the site is intended to be a resource for anyone interested in financial literacy, especially credit unions members, staff and board members.

"Our goal is to make financial education resources available to all who need them. Credit unions, by their nature, tend to be community-based organizations, which puts us in a unique position," she said. "As member-owned institutions, the more financial literacy members are exposed to, the better it is for the entire system."

The site also contains the basics on credit unions, everything from the history of the credit union movement, to fraud prevention tools, to information on how share deposits are insured.

"Some of our top-viewed web pages are the ones with the explanations of what a credit union is, the differences between credit unions and banks and how deposits are insured," added Kenneth Worthey, financial literacy and outreach analyst with the NCUA's Office of Consumer Protection. "Hopefully the site is becoming a go-to resource for people who might be interested in becoming a credit union member."
In addition to information about credit unions, the site contains the latest information on consumer protection issues, credit reports and scores and tips to prevent identity theft and other scams.

The NCUA takes more than one route to support consumer financial education. Agency staff also take a proactive approach by participating in such things as the U.S. Department of Defense's annual Financial Readiness events and Financial Literacy Day on Capitol Hill. The agency also hosts webinars for credit unions--like the one in April, also known as Financial Literacy Month, which was attended by more than 400 people--with an additional 130 watching online.

"When we see representatives from 400 different credit unions attending something like this, we see 400 credit unions that are ready to reach out to their members, to inform their members about the resources that are available to them," Rogers said. "We see the members of those credit unions benefitting from this because their credit union is actively looking at ways to spread financial literacy strategies."

The NCUA is active on the social media front as well. It has hosted several Twitter chats this year using its @TheNCUA account, and the @MyCUGov Twitter accounts to tweet out daily tips. Some examples include: "Credit cards must tell you at least 45 days before your rate/account terms change," "Consider keeping emergency savings in a seprate, federally insured savings account" and "Paying bills late can affect your credit score just as much as missing a payment."

Watch for part 2 of this article in the Thursday issue of News Now .

Inside Washington (09/02/2014)

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  • WASHINGTON (9/2/14)--The Federal Deposit Insurance Corp. has released a list of orders of administrative actions taken against banks and individuals. A total of 39 orders and one notice have been issued, including nine removal and prohibition orders; three section 19 orders; six civil money penalties; one order of prohibition; one modification order; 16 orders terminating consent orders and cease and desist orders; one termination of a supervisory prompt corrective action directive; two adjudicated decisions; and one notice of intention to prohibit from further participation, notice of charges, notice of assessment of civil money penalties, findings of fact, conclusions of law, order to pay  and notice of hearing.

NEW: Loan balances up 9.8% according to NCUA 2Q data

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ALEXANDRIA, Va. (9/2/14 11:20 a.m. ET)--Second quarter data from the National Credit Union Administration indicates the highest year-over-year loan growth since 2006, the agency announced today. Data also showed federally insured credit unions saw membership grow by 909,452 over the last quarter.

Lending increased in all categories, with outstanding loan balances up 9.8%, to $673.9 billion from the same time last year.

The data released from the NCUA shows federally insured credit unions saw:
  • New auto loans grow 17% to $77.7 billion;
  • Used auto loans increase 11.6% to $135.3 billion;
  • Net member business loan balances rise 12% to $48.8 billion; and
  • Non-federally guaranteed student loans increase 26% to $2.9 billion.
First mortgage real estate loans reached $279.2 billion, up 9.9% from the second quarter of 2013. Of those loans 61% had fixed rates.

The growth in total loans over the year contributed to a 4.2 percentage-point increase in the overall loan-to-share ratio, which reached 71.7%, the highest ratio since the fourth quarter of 2010.

Total membership in federally insured credit unions now stands at 98 million, according to the NCUA.

The Credit Union National Association announced that total credit union membership passed the 100 million mark in June. According to CUNA's monthly survey, that number grew by 0.4% in July, bringing total credit union membership to 100.5 million.

See tomorrow's News Now for more on the NCUA's second quarter data.

NCUA prohibits 3 from participating in CU activity

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ALEXANDRIA, Va. (9/2/14)--Three individuals have been prohibited from participating in the affairs of any federally insured credit union, the National Credit Union Administration announced.

The individuals are:
  • Donna Harabin, former president/manager of Telco FCU in Elmira, N.Y., with $22 million in assets, pleaded guilty to the charge of making false entries. Harabin was sentenced to time served and ordered to pay a fine of $500;

  • Cindy Moser, former employee of Logan Medical FCU in Logan, Utah, with $18 million in assets, pleaded guilty to the charges of theft and forgery. Moser was sentenced to 90 days in prison, three years of probation and ordered to pay a fine of $583; and

  • Marnett Pich, formerly known as Marnett Parket, a former employee of St. Jean's CU in Lynn, Mass., with $154 million in assets, pleaded guilty to the charge of embezzlement. Pich received six years of probation and was ordered to pay restitution in the amount of $31,019.96.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

Use the resource link below to access the NCUA's administrative orders.

CUNA seeks comments on FinCEN customer due diligence proposal

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WASHINGTON (9/2/14)--The Credit Union National Association has issued a comment call for a proposed rule that would clarify and strengthen member/customer due diligence obligations of financial institutions.

The proposal, issued by the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN), aims to amend regulations in the Bank Secrecy Act (BSA) to prevent anonymous companies from conducting illegal activity in the American financial sector ( News Now Aug. 4).

The rule would clarify that customer due diligence includes: identifying and verifying identities of members; identifying and verifying beneficial owners of legal entity members; understanding the nature and purpose of member relationships; conducting ongoing monitoring to maintain and update customer information and to identify and report suspicious transactions.

There would also be a new explicit regulatory requirement for a financial institution to establish and maintain written customer due diligence procedures that are "reasonably designed to identify and verify beneficial owners of legal entity customers." Existing supervisory guidance would also be incorporated.

The proposed effective date would be one year after the final rule is issued.

CUNA's comment call asks credit unions to answer several questions, including:
  • Does your credit union generally support this proposed customer due diligence rule?

  • Do you have an estimate of the additional compliance costs that would arise from the new requirements for beneficial owners? FinCEN believes that a financial institution would have to spend an additional 20 minutes to receive and verify the information on the new certification form for each new account opening; and

  • Does your credit union have any comments regarding the scope of the proposed exemptions? Are there any additional accounts that should be exempt?
Comments to CUNA are due by Sept. 22, and the deadline for comments to FinCEN are due by Oct. 3.

Use the resource link to access the full comment call.

Carpenter to be nominated Treasury asst secretary for financial markets

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WASHINGTON (9/2/14)--President Barack Obama announced he will nominate Seth Carpenter to be the U.S. Treasury's assistant secretary for financial markets.

The position reports to the undersecretary of the Treasury for domestic finance, who oversees policy relating to domestic finance issues, fiscal policy,  fiscal operations, government assets, government liabilities, and other related economic and fiscal matters.

Carpenter is currently a senior advisor in the Office of Financial Markets. From 2013 to 2014, he served as the deputy assistant secretary for economic policy at the Treasury, and was at the Board of Governors of the Federal Reserve from 1999 to 2014. 

He also taught undergraduate and graduate courses at Duke University, the College of William and Mary, George Washington University and The Johns Hopkins University. 

Carpenter would replace Matthew Rutherford, who has taken over as undersecretary for domestic finance on an interim basis.