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Washington Archive

Washington

Inside Washington (09/04/2008)

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* WASHINGTON (9/5/08)--New Small Business Administration (SBA) disaster loan rules will not be effective until 2009. However, Steven G. Smith, head of the SBA office of disaster strategic planning, said the SBA can handle up to 15 times its normal loan volume even though the Midwest has been flooded and the Gulf Coast is recovering from hurricanes Gustav and Fay (American Banker Sept. 4). The SBA bill was enacted in May, allowing the agency to create rules governing how banks can make the loans. If more storms hit the country, the SBA might be pressured to implement the program sooner, said Jaret Seiberg, Stanford Group Co. policy analyst ... * WASHINGTON (9/5/08)--The Department of Housing and Urban Development (HUD) has implemented a final rule on home equity conversion mortgages (HECM). The rule adopts an interim rule making two technical changes to HUD's HECM program, according to the Federal Register (Sept. 4) The interim rule extended the date for calculating the maximum claim amount in the HECM program from the date of the underwriter's receipt of the appraisal report to the date of closing ...

New housing agency announces its arrival

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WASHINGTON (9/5/08)--The Federal Housing Finance Agency (FHFA), created under the Housing and Economic Recovery Act signed into law July 30, published a notice of “Establishment of a New Independent Agency” in the Federal Register. The document, signed Aug. 30 by FHFA Director James Lockhart, serves to provide formal notice to the public of the existence of the agency, as well as to set out its purpose and identify the chapter of the Code of Federal Regulations that it will employ for public dissemination of regulations, guidance and other publications. “FHFA was established to ensure that Fannie Mae, Freddie Mac and the Federal Home Loan Banks operate in a safe and sound manner,” Lockhart said in a release. “We are working quickly to set up the regulatory framework needed to make certain that their operations and activities foster liquid, efficient, competitive, and resilient national housing finance markets.” The release said the new entity is “making good progress” in integrating the Office of Federal Housing Enterprise Oversight (OFHEO), the Federal Housing Finance Board and HUD mission and affordable housing programs. Lockhart was formerly the director of OFHEO. Use the resource link below to access the complete Federal Register document.

Fair lending Compliance is in the details

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WASHINGTON (9/5/08)—Overt discrimination in lending practices rarely occurs any more, but lenders need to be aware that some subtle procedures could add up to unintentional unfair practices, writes Valerie Moss in the September issue of The Credit Union National Association’s (CUNA’s) Credit Union Magazine. Moss, CUNA’s director of compliance information, suggests credit unions consider these examples:
* A program that’s designed to serve all members but unintentionally discriminates against the elderly. This program would violate fair lending unless the credit union could show a business need for the policy or practice; * A rogue employee who ignores the credit union’s fair lending policies and procedures. The credit union would be held liable for the unchecked discriminatory behavior of one of its employees; or * A marketing campaign that targets only consumers in affluent suburbs, while ignoring predominantly minority neighborhoods in the inner city. Fair lending laws cover every aspect of the lending process, including the credit union’s advertising campaigns.
The article, “Fair Lending Lifeline,” advises credit unions that examiners expect credit unions to have solid policies in place to serve their entire memberships equitably. The National Credit Union Administration’s (NCUA) will continue its ongoing focus on fair lending issues next year. To read fair-lending examination pointers and credit union fair-lending insights, use the resource link below to access the magazine article.