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Compliance The dog ate my ATM receipt

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WASHINGTON (1/28/08)—The Federal Reserve Board’s Regulation E, governing electronic funds transfers, requires that a receipt be made available for each transaction at an electronic terminal, unless the consumer declines the receipt. So, what happens when there is an honest mistake? While it’s clear the “dog ate my receipt” excuse doesn’t quite fit the situation, the “dog ate my ATM’s receipt paper roll” might. The Credit Union National Association’s January Compliance Challenge asks, would a credit union have violated the Reg E requirement if its ATM runs out of paper and fails to give someone a receipt? And the answer is no. Comment 205.9(a)(5) in the regulation clarifies that if a receipt is not provided to the consumer because of a bona fide unintentional error, such as when a terminal runs out of paper, or the mechanism jams, no violation results if the financial institution maintains procedures reasonably adapted to avoid such occurrences. So, having procedures in place to prevent this from happening on a routine basis is the key to avoiding a Regulation E violation in these instances, the Challenge advises.

NCUA announces CDRLF application period

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ALEXANDRIA, Va. (1/228/08)--The National Credit Union Administration (NCUA) has announced it will accept applications for participation in the Community Development Revolving Loan Fund's (CDRLF’s) loan program beginning in September, subject to the availability of funds. The CDRLF provides assistance to credit unions with an official “low-income” designation to provide basic financial services to residents in their communities. The assistance is in the form of low-interest loans and is intended to stimulate income levels, home ownership, and employment. Applications can be submitted from Sept. 1 to Nov. 30, according to a Federal Register document submitted by the NCUA. The Fund's total appropriation is $13.4 million. As of Dec. 31, 2007, the Fund's loan portfolio totaled to $13.3, according to the document. Application procedures for the 2008 Fund Loan Program will be posted to the NCUA Web site. Or applications for participation may be obtained from and should be submitted to: NCUA, Office of Small Credit Union Initiatives, 1775 Duke Street, Alexandria, VA 22314-3428.

Inside Washington (01/25/2008)

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* WASHINGTON (1/28/08)—The Senate Committee on Banking, Housing, and Urban Affairs has announced a Jan. 31 hearing on “Strengthening our Economy: Foreclosure Prevention and Neighborhood Preservation.” A witness list has not yet been made publicly available … * WASHINGTON (1/28/08)--After spending the last year focusing on his presidential campaign, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has unveiled his 2008 agenda (American Banker Jan. 24). Dodd plans to tackle mortgage reform, the credit crisis, government-sponsored enterprise reform, industrial loan companies and regulation for hedge funds. Dodd also said he wants to take the lead in developing short- and long-term economic stimulus proposals for the subprime mortgage crisis. He also is working on a plan that would create a government corporation to purchase delinquent mortgages at discounted values. The discounts would be passed along to homeowners through more affordable mortgages. The program would receive funding of $10 billion to $20 billion and the loans would consist of 30-year, fixed-rate mortgages ... * WASHINGTON (1/28/08)--Home Depot has decided to drop its bid to buy EnerBank USA, a Salt Lake City industrial loan company (ILC). Home Depot applied for the ILC in May 2006, but its application was frozen in two moratoriums after a debate over ILC ownership (American Banker Jan. 25). If the Home Depot application had been approved, the ILC ownership issue would likely come up in the Senate again, according to George Sutton, a lawyer and former financial institutions commissioner. The second application freeze expires this week. Other pending ILC applications include Blackstone Group and Chrysler Financial ... * WASHINGTON (1/28/08)--President Bush’s plan to stimulate the economy by sending checks to households could put stress on the Internal Revenue Service (IRS) and delay tax rebates (The New York Times Jan. 25). Under Bush’s plan, the checks would be sent out two months after he authorizes the payments, with the first checks scheduled to arrive in early May. But the Congressional Joint Committee on Taxation noted that the checks could snag the tax-filing season and delay distribution until June. The checks will be based on income and other factors, and many may receive checks who don’t owe income tax. The IRS also must update outdated computer systems as the estimated 135 million tax returns arrive now and through April 15. Treasury Secretary Henry Paulson said Thursday he didn’t think the payments would affect the tax rebates ... * WASHINGTON (1/28/08)--House Financial Services Committee Chairman Barney Frank (D-Mass.) released a statement regarding legislation passed by the House on environmental standards for new public housing in the U.S. ... * WASHINGTON (1/28/08)--Anthony W. Ryan, Treasury assistant secretary for financial markets, will speak at the World Research Group’s annual conference on market liquidity in New York City today. His speech will focus on the importance of liquidity in capital markets and risk management ...

ABA CUs are No. 3 super priority for 08

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WASHINGTON (1/28/08)--A prioritized list of goals outlined by the American Bankers Association (ABA) places credit unions No. 3 on the list--behind terrorism and security concerns, and regulatory burden--but well ahead of the mortgage crisis. Those priorities are "out of whack," says Credit Union National Association (CUNA) President/CEO Dan Mica. "Just as they did several years ago when they ranked attacking credit unions higher than safeguarding the U.S. from terrorism, the bankers again have their priorities way out of whack," said Mica. "The mortgage crisis--to which more than a few banks contributed--is at the root of the economic problems now facing the country, yet it too now falls below attacking credit unions on the bankers' wish list." "Housing and Mortgage Markets" are No. 6 on the bankers' list. ABA Chairman Bradley E. Rock outlined ABA's "super priorities" for 2008 in ABA Banking Journal (Jan. 1). The priorities are the result of meetings of ABA's board, the Government Relations Council and America's Community Bankers Council, he said. On the list, the language related to credit unions has changed. Instead of the "level the playing field" language of the past, ABA uses a new term: "government-advantaged institution." And it is more specific in its goals of ending credit unions' Congress-mandated tax-exempt status. The No. 3 priority is: "Unfair Competition from Government-Advantaged Institutions." ABA says it will "strongly oppose efforts by credit unions and Farm Credit System to abandon their core missions and to use government advantages to expand into the banking business." ABA also would "Encourage IRS (Internal Revenue Service) to continue to re-evaluate whether tax benefits for these institutions should be retained and to ensure that unrelated business income is taxed fairly." "Banks should put their own house in order and recognize that, now more than ever, 90 million hard-working Americans need and trust their credit unions," Mica said. Other ABA priorities include:
* Banking and Commerce--Work with Congress and regulators to strengthen statutory restrictions on the ownership of banks by nonfinancial firms; * Payments System--Pursue legislation allowing banks to sustain leadership of the system. Insist that nonbank firms operating elements of the system be subject to comparable requirements for protecting its integrity. * Housing and Mortgage Markets--Support policies that strengthen primary and secondary mortgage markets and set clear national standards for all mortgage originations. * Mutual Charter--Support the mutual and mutual holding company charter options, and work with banking agencies to achieve more flexible and tailored rulemaking and supervisory guidance for mutual charters. * Regulatory depth--Preserve choice by advocating the retention of a variety of financial charters and the banking agencies that support them. Advocate enhanced coordination among agencies rather than agency consolidation. * Federal Home Loan Bank System--Encourage reforms that enhance the utility of the FHLB System and oppose proposals that would harm its operations. Begin efforts to ensure FHLB payments to fund REFCorp are not continued once REFCorp obligations are met (possibly in 2010).
Rock is CEO of Smithtown (N.Y.) Bancorp.