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Inside Washington (02/09/2011)
* WASHINGTON (2/10/11)--The Federal Reserve Board on Wednesday approved a final rule to implement the provisions of the Dodd-Frank Act that give banks a period of time to align their activities and investments to the so-called Volcker Rule. The Volcker Rule generally prohibits banking entities from engaging in proprietary trading in securities, derivatives, or certain other financial instruments and from investing in, sponsoring, or having certain relationships with a hedge fund or private equity fund. The statute generally provides banking entities two years to bring their activities and investments into compliance and allows the Fed to extend the period under certain conditions. The rule can be viewed online … * WASHINGTON (2/10/11)--The National Federation of Community Development Credit Unions and the Institute of Mexicans Abroad will offer a webinar to provide information on an ACH-based remittance platform that the Federal Reserve Bank of Atlanta and Banco de Mexico (BANXICO) have developed. The webinar, to be held at 2 p.m. ET Feb. 23, will present an overview of Directo a Mexico, an alternative platform for sending money to Mexico. Directo a Mexico provides participant financial institutions with tools to serve the needs of immigrant consumers and with opportunities to work with the growing network of Mexican Consular offices throughout the U.S. It also offers a bridge for cross-border collaboration between U.S. and Mexican credit unions. Register for the webinar here. Another network that works with primarily with Hispanic clients is the International Remittances Network (IRNet), operated by the World Council of Credit Unions (WOCCU). About 109 U.S. credit unions participate in WOCCU’s IRNet, a remittance service operated by WOCCU Services Group. The service transmits remittances to eight countries and has taken part in over $2.9 billion in total transactions since its inception. Overall, $307 billion in remittances were sent from the U.S. to other nations in 2008, according to WOCCU estimates … * WASHINGTON (2/10/11)--The House Financial Services Committee will meet at 10 a.m. Feb. 15 to examine the economic and market impact of the derivatives title of the Dodd-Frank Act, announced Chairman Spencer Bachus (R-Ala.). The Dodd-Frank Act requires that all derivatives contracts be cleared through a central clearinghouse and that collateral is posted for each contract. The hearing will review the strengths and weaknesses of the derivatives title; the potential effects on U.S. competitiveness, job creation, and the overall U.S. economy; the likelihood of international harmonization of derivatives regulation; the consequences of the derivatives marketplace shifting from the U.S. to foreign markets; and the establishment of margin and capital requirements for end users who engage in legitimate hedging of business risks. “The derivatives market has evolved over the past 25 years into a highly sophisticated market that provides U.S. businesses with the ability to protect themselves against legitimate business risks, said Bachus. “Requiring companies that did not cause nor contribute to the financial crisis to be treated like banks will unnecessarily remove capital from the economy. We will work to ensure that the derivatives title of Dodd-Frank does not force valuable capital to sit on the sidelines or create a patchwork regulatory regime leaving market participants with conflicting regulatory mandates,” he said … * WASHINGTON (2/10/11)--Directors and officers of failed institutions may access bank records “where appropriate,” provided that the information is subject to the terms of a confidentiality agreement or protective order, according to Federal Deposit Insurance Corp. (FDIC) General Counsel Michael Krimminger. In recent months, the FDIC has discovered that former directors and officers of still-open banks have removed copies of confidential bank records, much of which is protected by federal law. Some of the banks subsequently failed. In a letter to the American Association of Bank Directors, Krimminger said the FDIC’s policy is not new nor does it represent a change in interpretation. Directors and officers may have individual interests in accessing bank records after failure but prior to the implementation of legal or administrative action. At issue are the lawsuits against former directors and officers for their roles in bank failures. Krimminger said the FDIC understands the interests of those seeking the information but proper procedures must be followed … * WASHINGTON (2/10/11)--The Federal Deposit Insurance Corporation (FDIC) Monday issued a Notice of Proposed Rulemaking intended to improve consumer awareness of deposit insurance coverage. Certain bank staff would receive annual training on the basic principles of deposit insurance coverage with the FDIC providing the materials--a computer-based module-- with no recordkeeping required by the insured institution. The rule would limit the required training to those employees who open accounts or are authorized by the bank to answer deposit insurance questions. Bank employees opening new accounts would be required to ask whether the customer has other accounts at that institution and determine whether the aggregate deposits may exceed the deposit insurance limit of $250,000. Read the Financial Institution Letter here


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