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CFPB Adds Senior Money Management Resources

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WASHINGTON (10/30/13)--Tips to prevent elderly financial abuse and help newfound financial caregivers manage a loved one's funds were released Tuesday by the Consumer Financial Protection Bureau.

The guides will walk financial caregivers through their new duties, provide resources that will help them in times of need, and tell them how to prevent and address scams and cases of financial exploitation, the CFPB said.

The bureau crafted four separate guides for newfound financial managers that have been:
  • Named in a power of attorney to make decisions about money and property for a loved one;
  • Appointed by a court as guardians or conservators of property to manage money and property for someone who cannot manage it alone;
  • Named as trustees under revocable living trusts; or
  • Appointed by a government agency to manage someone else's income benefits, such as Social Security or veterans benefits.
The CFPB prepared the guides with the help of the American Bar Association Commission on Law and Aging.

"The Greatest Generation deserves our commitment to their economic security, and these guides will help us all to defend and protect them more effectively," CFPB Director Richard Cordray said.

Credit unions and others can order free copies of the manuals in bulk from the bureau.

The CFPB also added new information to its AskCFPB site, Cordray noted. Some of the information in the new fund management documents was drawn from AskCFPB submissions, he said.

For more, use the resource link.

CUNA To Testify On Housing Finance Reform Tuesday

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WASHINGTON (10/30/13)--Credit Union National Association Senior Vice President and Chief Economist Bill Hampel will testify next week on how to protect credit unions' access to the secondary mortgage market.
 
Hampel will be testifying before the Senate Banking Committee during its hearing on "Housing Finance Reform: Protecting Small Lender Access to the Secondary Mortgage Market." It is scheduled for Nov. 5, 10 a.m. (ET).
 
In July, Hampel was the CUNA witness at the Senate's first hearing of the year on housing finance reform. He told members of the Senate Banking subcommittee on securities, insurance and investment that credit unions appreciate the need to reform the current housing finance system, but any reforms must not hinder the ability of credit unions to meet their members' housing finance needs in a member-friendly cooperative way.
 
Hampel also said the transition from the current system to any new housing finance system must be reasonable and orderly, and the transition deadline needs to be flexible.
 
And at a meeting with Federal Housing Finance Agency officials this month, CUNA staff suggested these actions to help preserve credit union access to the secondary markets:
  • The pricing policies of government-sponsored enterprises (GSEs) and their replacements should factor in credit unions' low delinquency and default rates;
  • The GSEs and their replacements should purchase one loan as readily as pools of loans;
  • The GSEs and their replacements should not require small issuers to use large aggregators to service their loans; and
  • The GSEs and their replacements should purchase non-qualified mortgage loans.
Also scheduled to testify at the Tuesday hearing: Richard Swanson, president/CEO, Federal Home Loan Bank of Des Moines on behalf of the Council of Federal Home Loan Banks; William A. Loving, Jr., president/CEO Pendleton Community Bank, Franklin, W.Va., and chairman of Independent Community Bankers of America; Bill Cosgrove, president/CEO, Union Home Mortgage Company and chairman-elect of Mortgage Bankers Association; and, John Harwell, associate vice president of Risk Management, Apple FCU, Fairfax, Va., on behalf of the National Association of Federal Credit Unions.

Yellen Fed Nomination Could See Nov. 14 Senate Banking Hearing

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WASHINGTON (10/30/13)--A Senate Banking Committee hearing on Janet Yellen's nomination to lead the Federal Reserve could be held on Nov. 14, according to Reuters (Oct. 28).

The committee plans to hold preliminary meetings with Yellen this week, Reuters added.

Yellen was nominated earlier this month by President Barack Obama. If confirmed, she would replace outgoing Fed Chairman Ben Bernanke when his term ends on Jan. 31.  She would become the first woman to  head the Fed, or any other central bank.

Yellen has served as vice chair of the Board of Governors of the Federal Reserve System since Oct. 4, 2010. Her term ends on Jan. 31, 2024. She also has served as president/CEO of the Twelfth District Federal Reserve Bank, at San Francisco.

NCUA Sets Nov. 14 Employee Fraud Prevention Webinar

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ALEXANDRIA, Va. (10/30/13)--The impact of credit union employee fraud, and warning signs credit unions can look for to prevent that fraud, will be the topics of a free Nov. 14 National Credit Union Administration webinar.

The webinar, entitled "Deterring Employee Fraud," is scheduled to begin at 2 p.m. (ET). The NCUA's Office of Small Credit Union Initiatives will host the webinar. Joni Lovingood, a senior consultant with CUNA Mutual Group, and Scott Butterfield of Your Credit Union Partner will be among the speakers during the webinar.

The webinar participants will also discuss why credit union employees commit fraud, and how proper supervision and strong internal controls can help fight fraud.

The NCUA said webinar participants may submit questions in advance by sending an e-mail to WebinarQuestions@ncua.gov. The subject line of the e-mail should read "Deterring Employee Fraud."

To register for the NCUA webinar, use the resource link.

Sen. Tester: Small FIs Need Secondary Mortgage Market Access

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WASHINGTON (10/30/13)--The ability of small community-based institutions to provide consumers with competitive pricing and product offerings depends significantly on their ability to access the secondary mortgage market, Senate Banking Committee member Jon Tester (D-Mont.) said in a Tuesday hearing.

The Credit Union National Association has repeatedly noted that credit unions need equal and fair access to a secondary market for lenders of all sizes that will ensure affordable mortgage products for their members. CUNA has also said any mortgage market reforms that are made must not hinder the ability of credit unions to meet their members' housing finance needs in a member-friendly cooperative way.

The Tuesday hearing, "Housing Finance Reform: Essentials of a Functioning Housing Finance System for Consumers," featured testimony from Center for Responsible Lending Senior Vice President Eric Stein, Genworth Financial President Rohit Gupta, National Association of Realtors President Gary Thomas, K & L Gates LLP Partner Laurence Platt, National Consumer Law Center Staff Attorney Alys Cohen and National Council of La Raza Vice President of Housing and Community Development Lautaro Diaz.

Stein agreed fully that having small lenders with direct access to the secondary market is very important. "If there are lenders willing to make those loans in [underserved areas], it's important that the secondary market be designed so that they have an outlet," he said. Gupta also noted it is very important for credit unions and other small lenders to have access to credit "across the board."

Responding to a question from Tester, Thomas noted rural communities depend on community based financial institutions. "The problem that we're getting to with such a tight credit box…is that you're only going to be left with large major lenders," he said. Such a situation would mean these large lenders could dictate what consumers pay, how they pay, and would make the loan market overly restrictive.

"We're getting into a position where only the best can get loans, and that's a big problem for all of us in sustaining a mortgage process that promotes home ownership throughout the country," Thomas added.

Tester during the hearing noted that the committee plans to hold weekly hearings on housing issues up until the Thanksgiving holiday, and could mark up housing reform legislation before the end of the year.

For more from the hearing, use the resource link.

CUNA: QRM Definition Improves, But Concerns Remain

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WASHINGTON (10/30/13)--The Qualified Residential Mortgage (QRM) definition and requirements proposed in August in a joint regulators' rule addressing credit risk retention is a "marked improvement" over the agencies' original proposal issued in April 2011, according to the Credit Union National Association.
 
Under the current proposal, the definition of QRM would be aligned with the Consumer Financial Protection Bureau's definition of a qualified mortgage (QM). This was a development that CUNA had strongly urged.

In a comment letter submitted Tuesday, CUNA Senior Vice President and Deputy General Counsel Mary Dunn wrote, "The 2011 proposal was far too restrictive, including a 20% down payment requirement and front-end and back-end debt-to-income (DTI) ratio requirements."
 
She said that CUNA has an overarching concern that the QM/QRM should never become the only type of mortgage that regulators will permit or that the secondary market will accommodate.
 
"However, absent some flexibility for creditors under this rule, that is precisely what we believe will happen," Dunn warned.
 
She added that while CUNA supports a QRM standard that is aligned with the CFPB's QM, CUNA continues to have serious concerns about the rule's requirement for borrowers' 43% DTI cap.
 
"We urge the agencies to work with mortgage lenders to help ensure non-QM and non-QRM loans will be available to borrowers and acceptable to regulators and the secondary market," Dunn wrote.
 
She added that CUNA would welcome an opportunity to talk with the agencies further about the credit union views expressed in the CUNA letter.
 
The joint rule was proposed by the Federal Reserve Board, Federal Deposit Insurance Corp., U.S. Department of Housing and Urban Development, Federal Housing Finance Agency, Office of the Comptroller of the Currency, and the Securities and Exchange Commission.
 
To read CUNA's complete comments on the 500-plus page proposal, use the resource link below.

Senate Privacy Bill Vote Urged By CUNA, Coalition

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WASHINGTON (10/30/13)--The Credit Union National Association is urging U.S. Senate leaders to bring up the Privacy Notice Modernization Act of 2013 (S.635) for consideration in that chamber. CUNA joined a coalition of financial services and business trade groups in a letter to Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.).

In the letter, CUNA and partners said the "common sense measure would reduce the significant costs institutions incur providing unnecessary disclosures and more importantly give (consumers) a break from redundant notices."

CUNA has previously said that while credit unions make every effort to provide the most effective and efficient services to their members, which includes ensuring their members are aware of their privacy rights, repetitive notices are often ignored by consumers.

The privacy notice bill, which was introduced by Senate Banking subcommittee on financial institutions Chairman Sherrod Brown (D-Ohio) and committee member Sen. Jerry Moran (R-Kan.) in March, would eliminate a requirement that privacy notices be sent on an annual basis. It would instead allow the notices to be sent only when the privacy policy of a financial institution has changed.

S. 635 is similar to legislation (H.R. 749) that passed the House early this year by voice vote and with broad bipartisan co-sponsorship. However, the Senate bill has some key differences: For instance, the Senate bill would require credit unions and other financial institutions to make their privacy policy always accessible in some form in order to qualify for the bill's exemption from sending annual privacy notices.

The Senate bill currently has 35 bipartisan cosponsors, and Consumer Financial Protection Bureau Director Richard Cordray has expressed support for the measure.

The letter to Reid and McConnell was cosigned by the American Bankers Association, American Financial Services Association, Consumer Bankers Association, Financial Services Roundtable, Independent Community Bankers Association, National Association of Federal Credit Unions and the U.S. Chamber of Commerce.

CUNA's Gentile Talks CU Unsecured Loans In Reuters

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WASHINGTON (10/30/13)--Credit unions again received high profile press coverage this week when Paul Gentile, Credit Union National Association executive vice president of strategic communications and engagement, talked credit union unsecured loan terms in a Reuters piece that focused mainly on banks.

In the story, Gentile noted that credit union unsecured loans average $2,600, with a four-year interest rate of around 10%. The Reuters story, which also ran on Moneynews.com, noted that larger banks such as Citibank and TD Bank offer personal loans at higher rates.

One such example cited in the story is Citibank's personal loan, which offers up to $50,000 at a rate between 6.74% and 19.49%.

A 2013-2014 Fees Report generated by CUNA's Market Research Department details just how much credit union members save when compared to fees and charges levied on bank customers.

For instance, more than 80% of credit unions with checking services still offer free checking, compared to 39% of banks. Only 18% of credit unions overall charge maintenance fees on non-interest bearing checking accounts. Half of those credit unions (9%) levy a general maintenance fee. The other 9% of credit unions charged fees only when a minimum balance fell below a certain threshold.

Another example provided in the CUNA report is median overdraft protection fees, which average $25 at credit unions, compared to median fees of $30 at banks and $35 at larger banks.

As for ATMs: The average nonmember credit union ATM fee, for those that charge them, is $2.10. Banks on average charge non-customer fees of $2.50 per transaction.

NFIP Rate Delay Introduced With 57 Co-sponsors

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WASHINGTON (10/30/13)--As expected, a bill was introduced in the U.S. House yesterday that would delay planned National Flood Insurance Plan rate increases for up to four years and implement other reforms.
 
On the one year anniversary of Superstorm Sandy, a bipartisan coalition of 57 House members signed on in support of the bill whose lead sponsors are identified in a release as Reps. Maxine Waters (D-Calif.), Michael Grimm (R-N.Y.) and Cedric Richmond (D-La.).
 
The bill calls for a four-year delay to the program and requires the Federal Emergency Management Agency (FEMA) to complete an insurance affordability study and propose a framework that addresses affordability issues. A companion measure has been introduced in the Senate by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.).
 
Specifically, the legislation will accomplish the following:
  • Imposes a delay likely to total four years for the most vulnerable properties, by delaying implementation of rate increases until two years after FEMA completes an affordability study, which was mandated in Biggert-Waters but not undertaken;
  • Requires FEMA to propose an affordability framework that addresses the identified affordability issues within 18 months after the completion of the study and provides six months for congressional review.
  • Allows FEMA to utilize National Flood Insurance Funds to reimburse policyholders who successfully appeal a map determination;
  • Eliminates the 50% cap on state and local contributions to levee construction and reconstruction;
  • Protects the so-called "basement exception," which allows the lowest flood-proofed opening in a home to be used for determining flood insurance rates;
  • Establishes a Flood Insurance Rate Map Advocate within FEMA to answer current and prospective policyholder questions about the flood mapping process; and
  • Requires FEMA to certify that the agency has fully adopted a modernized risk-based approach to analyzing flood risk.