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Inside Washington (07/29/2009)
* WASHINGTON (7/30/09)--The financial industry expects a push for legislation forcing lenders to rework mortgages because the Treasury’s Home Affordable Modification Program may not yield desired results (American Banker July 29). To make the modifications more permanent, some observers expect that a bill by Sen. Dick Durbin (D-Ill.) addressing the modification issue may resurface. Durbin proposed legislation that would allow bankruptcy judges to rework mortgages--a move that was defeated about three months ago. Durbin, however, said he planned to return to the Senate with similar legislation. The Credit Union National Association (CUNA) opposes allowing bankruptcy judges to rework loan terms because it could lead to borrowers’ gaming of the system. Other financial observers say Congress will have to consider mandatory modification measures. The Obama administration needs to require servicers to rework mortgages, said Bruce Marks, CEO of Neighborhood Assistance Corp. of America. The administration’s plan has yielded 200,000 trial modifications, and 55,000 refinancings. But the figures are below the administration’s goal to help up to nine million borrowers ... * WASHINGTON (7/30/09)--The Federal Deposit Insurance Corp. (FDIC) has scheduled a meeting for today of the Advisory Committee on Economic Inclusion. The committee was formed to provide advice and recommendations on initiatives to expand access to banking services to underserved populations. The meeting will focus on prize-linked savings, and issues and challenges related to reaching out to the underserved and low- and moderate-income consumers, the FDIC said in a release. Witnesses at the hearing include Peter Tufano, Harvard professor, and Ellen Lazar, senior adviser to FDIC Chairman Sheila Bair for consumer policy ... * WASHINGTON (7/30/09)--When planning for the future, financial institutions should “hope for the best” while planning for the worst, according to the president/CEO of the Federal Reserve Bank of San Francisco. During a meeting Tuesday with an Indiana banking group, Janet Yellen said stress tests can be helpful to assess potential effects on capital and earnings, and to develop contingency plans. Institutions also should have back-up plans and procedures for using the Fed’s discount window, she added (American Banker July 29). Yellen, a former Fed governor, has been mentioned as a candidate to lead the Fed if President Barack Obama does not nominate current Fed Chair Ben Bernanke. Bernanke’s term expires in January. Also during the meeting, Yellen said consumer protection and systemic risk oversight need to be strengthened, but did not indicate which agency should have systemic risk oversight powers ... * ALEXANDRIA, Va. (7/30/09)--National Credit Union Administration (NCUA) Chairman Michael Fryzel presented NCUA Vice Chairman Rodney Hood with an NCUA gold medal Wednesday to congratulate him for successfully completing his tenure as vice chair. Hood’s term expired in April, but he will continue to serve in his position until a successor is found. While at NCUA, Hood served on the board of the Neighborhood Reinvestment Corp. (NeighborWorks), which was created by Congress to assist in the revitalization of urban residential neighborhoods. “Vice Chairman Rodney Hood’s legacy will be a strong one: his foresight and diligence on risk mitigation came at a time when much of the financial world was devoting its energies elsewhere; his commitment to credit union professional development, embodied in his ’Blueprint 20/20’ initiative, was impressive,” Fryzel said. “And in countless other ways he encouraged the agency to think ahead, to innovate, and to always apply the best, most forward-looking approach to the challenges confronting us. Hood’s service was an essential part of NCUA’s success in recent years, and his contributions will be missed.” From left are Fryzel, Hood, and NCUA Board Member Gigi Hyland. (Photo provided by the National Credit Union Administration) ...


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