Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

Washington Archive


Bernanke names next steps as Fed adapts to CFPB changes

 Permanent link
WASHINGTON (10/1/10)—Federal Reserve Chairman Ben Bernanke this week said that the Fed is moving forward with its implementation of the recently enacted Dodd-Frank Financial Reform legislation, adding that the Fed has identified 250 implementation-related projects to take up. Bernanke made the remarks during a Senate Banking Committee hearing on the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Bernanke said that the Fed is “drawing on expertise and resources” from Fed-based experts in banking supervision, economic research, financial markets, consumer protection, payments, and legal analysis to ensure that the Fed meets its obligations “in a timely manner.” One such obligation is the establishment of the new Office of Financial Research and an associated oversight council, and the Fed is working closely with the U.S. Treasury as it develops this office. The Fed is also moving to transfer a number of its consumer proterction responsibilities to the to-be-established Consumer Financial Protection Bureau (CFPB). The Fed will also need to act quickly to meet a Dec. 1 deadline for information on some individual transactions that were made under various liquidity programs. According to Bernanke, the Fed will “provide detailed information,” including the “names of counterparties, the date and dollar value of individual transactions, the terms of repayment, and other relevant information.” U.S. Treasury Deputy Secretary Neal Wolin, Federal Reserve Chairman Ben Bernanke, Federal Deposit Insurance Corporation Chairman Sheila Bair, and U.S. Securities and Exchange Commission Chairman Mary Schapiro were also among those who testified.

Compliance Challenge Watch for these NCUA examiner red flags

 Permanent link
WASHINGTON (10/1/10)--With National Credit Union Administration (NCUA) Chairman Debbie Matz earlier this month saying that the NCUA would likely redesign some aspects of its examination process to better interact with the Consumer Financial Protection Bureau (CFPB), credit unions should be sure that they are up to date on NCUA examination practices. In an example given in this month’s Compliance Challenge, NCUA examiners are reviewing a credit union’s indirect lending program. According to the Compliance Challenge, high instances of first payment default, payment deferment, and account reaging, as well as weak loan documentation, would draw attention from examiners. Poorly executed dealer management programs and insufficient analysis of indirect loan portfolio performance are other “red flags” that would surely be noted by NCUA examiners. The NCUA’s recently released letter to credit unions No. 10-CU-15 covers due diligence for indirect lending programs, as well as some other steps that credit unions should take during the planning process. The letter also addresses what should be covered in vendor contracts and written agreements, what steps are necessary to detect and prevent fraud, and how to develop the processes needed to institute and manage indirect lending programs. For the Compliance Challenge and the NCUA’s letter to credit unions, use the resource links.

Treasury announces new 312 million round of CDCI funds

 Permanent link
WASHINGTON (10/1/10)--The number of community development credit unions (CDCUs) receiving funds from the U.S. Treasury’s Community Development Capital Initiative (CDCI) rose to 48 on Thursday, as the Treasury revealed the latest round of CDCI Fund recipients. The 48 credit unions, which represent 21 U.S. states and Guam, have received nearly $70M in CDCI funds since the fund was created earlier this year. Up to $100 million in funds have been made available to credit unions, and 111 CDCUs applied for the funds. The CDCI makes secondary capital investments of up to 3.5% of assets in eligible low-income credit unions. A total of $312 million in funds were awarded to eligible financial institutions during this round of the CDCI. Overall, that program has invested $570 million in 84 Community Development Financial Institutions (CDFIs) in 26 states, the District of Columbia, and Guam. The Treasury defines CDFIs as “institutions that target at least 60% of their lending and other economic development activities in areas underserved by traditional financial institutions.” The Treasury’s CDCI investments are made at a dividend rate of 2%. That rate increases to 9% after eight years, the Treasury said. See related story "Capital funds a 'milestone' for CDCUs, says federation" with response from the National Federation of Community Development Credit Unions, in News Now's System section. For the Treasury release, use the resource link.

Hudson Miracle pilot Matalin-Huffington debate highlight CUNAs 2011 GAC

 Permanent link
WASHINGTON (10/1/10)-- A genuine American hero and a face-off between two of the nation’s best known female political pundits headline the Credit Union National Association’s 2011 Governmental Affairs Conference, Feb. 27 through March 3 at the Washington Convention Center. Registration and housing lines are now open (use the resource links below).
The GAC will feature remarks from Captain Chesley B. “Sully” Sullenberger III, the heroic pilot who on Jan. 15, 2009 masterfully landed U.S. Airways Flight 1549 on New York’s Hudson River and saved the lives of 155 people. Sullenberger’s daring landing captivated the nation and has been dubbed the “Miracle on the Hudson.” Sullenberger later wrote the New York Times bestseller “Highest Duty: My Search for What Really Matters” and was named one of the 2009 world’s 100 most influential people by Time magazine. Another 2011 GAC highlight will be a political point-counterpoint between Mary Matalin and Arianna Huffington. Matalin is a celebrated conservative voice, CNN commentator, and former assistant to President George W. Bush and Vice President Dick Cheney. She and her husband, Democratic strategist James Carville, are one of Washington's best-known political couples. Huffington is the liberal commentator who co-founded The Huffington Post blog and news site that has become one of the most widely read and frequently cited media brands on the Internet. The Huffington Post also was the launch pad for the “Move Your Money” campaign that has urged consumers to move their accounts from big banks to credit unions and community banks. Matalin and Huffington are accustomed to sparring with one another over political issues; the two recently began a radio show together, "Both Sides Now," as a forum to debate politics and current events. CUNA’s GAC is the credit union movement’s premier political conference, each year giving credit union executives and board members an opportunity to hear influential leaders from Congress, the administration and the federal regulatory agencies. The afternoon of Wednesday, March 2, and the morning of Thursday, March 3, will be devoted to Capitol Hill visits, when attendees meet face-to-face with their members of Congress and staff to discuss issues of concern to the credit union movement. The 2011 GAC conference theme is, "Visionary: Creating the Credit Union Future." "The new Congress that gavels into session in 2011 will be dramatically different than its predecessor,” noted Bill Cheney, who will be presiding over his first GAC as CUNA’s president/CEO. “More than ever, we must educate legislators, demonstrate our grassroots strength, and make a powerful impact. The GAC presents an early opportunity to do precisely that and set a compelling vision for political success.” The conference also offers a wide array of educational “breakout” sessions, the credit union industry’s largest exhibitor showcase, guest programs to tour Washington’s sights, and a number of entertaining events such as the Gala Reception and Dance on the evening of Wednesday, March 2, where attendees can network and socialize with colleagues from around the country. The conference will begin the evening of Sunday, Feb. 27, with an opening reception in the Grand Exhibit Hall. Additional speakers and session topics will be announced in the weeks to come. For more information and to register, use the resource link below or go to

New CRA bill as expected excludes CUs

 Permanent link
WASHINGTON (10/1/10)--Legislation that would strengthen the Community Reinvestment Act (CRA) examination process “to decrease the current problem of grade inflation” was introduced by Rep. Luis Gutierrez (D-Ill.) on Wednesday. As noted earlier this month by House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) speaking to a Massachusetts league meeting in Washington, D.C., the CRA legislation will not impose CRA requirements on credit unions. The legislation (H.R. 6334), known as the American Community Investment Reform Act of 2010 (ACIRA), would “expand the CRA beyond banks to the institutions that provide financial products in the modern financial services marketplace,” according to a release. The legislation would introduce an "outstanding" rating for financial institutions that show a “genuine and extraordinary commitment to their community” and would seek to “encourage safe and responsible lending” via the creation of a Community Development test. Current CRA requirements provide tests for lending, investment and service. The CRA rating and review processes would be “more open to public review and comment,” the release added. Gutierrez in a statement said that “it was the failure to include more of the financial services industry under the standards of CRA” that contributed to the financial crisis. “Had mortgage brokers, the subsidiaries of bank holding companies, and those that helped to finance so many of these toxic, predatory mortgages been held to the standards of the CRA, we might have avoided this crisis. That's one of the main goals of this bill." The bill is currently cosponsored by Reps. Maxine Waters (D-Calif.), Eddie Bernice Johnson (D-Texas), and Rep. Al Green (D-Texas).

Fannie Freddie loan limits get temporary extension

 Permanent link
WASHINGTON (10/1/10)—Both chambers of the U.S. Congress voted late Wednesday in favor of a bill that would temporarily extend higher loan limits for loans backed by the Federal Housing Administration, Freddie Mac, and Fannie Mae. In effect, the votes extend increased loan limits through Sept. 30, 2011. The current maximum loan limits of $729,750 in high-cost regions would revert back to $625,000 at the end of this year without the extender. The provision was included in a broad continuing resolution that would fund the government through Dec. 3. It has been widely reported that lawmakers want to have time to campaign before a contentious and perhaps pivotal November election and intend to turn their attention back to the federal budget after the elections.

Inside Washington (09/30/2010)

 Permanent link
* WASHINGTON (10/1/10)—Janet L. Yellin has been confirmed by the U.S. Senate as vice chairwoman of the Federal Reserve Board and Sarah Bloom Raskin has been confirmed as a Fed governor (The New York Times Sept. 30) The Fed’s seven-member board has been operating with just four members since Donald L. Kohn retired as vice chairman on Sept. 1. There is one place still left vacant, and Peter A. Diamond, an MIT economics professor, has been nominated by President Obama to fill that spot … * WASHINGTON (10/1/10)—November is the new ETA for legislation that would outline the future of the country’s housing finance system, according to House Financial Services Committee Chairman Barney Frank, who said Wednesday that a shorter—by seven days—than expected legislative calendar prior to the pre-election recess would make it too much of a rush job to tackle such legislation before then (American Banker Sept. 30) Frank made his remarks during a committee hearing on the future of Fannie Mae and Freddie Mac, at which witnesses such as Phil Swagel, a professor at the McDonough School of Business at Georgetown University and a former Bush administration official, and Ed Pinto, formerly the chief credit officer at Fannie Mae and now a consultant, testified. During the hearing one panel member, Rep. Paul Kanjorski (D-Pa.), wondered if the transition of student-loan giant Sallie Mae from a government-sponsored enterprise (GSE) to private ownership could serve as a model for a new structure for housing GSEs, Fannie Mae and Freddie Mac …