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Inside Washington (11/03/2008)

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* WASHINGTON (11/4/08)--Six individuals caused the financial crisis, said former Federal Deposit Insurance Corp. (FDIC) Chairman L. William Seidman while speaking on a panel at the International Association of Deposit Insurers (American Banker Nov. 3). The individuals Seidman named are: William H. Donaldson, former Securities and Exchange Commission chairman; Daniel Mudd, former Fannie Mae CEO; Alan Greenspan, former Federal Reserve Board chairman; Bob Rubin, former Treasury Secretary; Frank Raiter, Standard and Poor’s head of residential mortgage-backed securities; and Seidman himself ... * WASHINGTON (11/4/08)--Public comment is due on the Federal Deposit Insurance Corp.’s temporary plan to insure no-interest deposits and unsecured debt (American Banker Nov. 4). The program covers for three years senior unsecured debt that was issued between Oct. 14 and June 30. The coverage on zero-interest deposits expires Dec. 31, 2009 ... * WASHINGTON (11/4/08)--IntercontinentalExchange Inc. of Atlanta, which has been working with the Federal Reserve Bank of New York to launch a clearing house for credit-default swaps (CDS), announced that it is buying Clearing Corp., a Chicago-based firm that was its partner in the project. The planned merger could bolster the Federal Reserve Board’s case to oversee the CDS market, according to observers (American Banker Nov. 3). Clearing has received support from CDS players Morgan Stanley, Bank of America Corp. and JPMorgan Chase and Co. CME Group also is working on a rival swap that would be operated by the Commodities Futures Trading Commission. The Fed’s clearing house may be more popular, but it may not mean the Fed will regulate CDS business, said Kip Weissman, former attorney for the Securities and Exchange Commission ... * WASHINGTON (11/4/08)--The Federal Deposit Insurance Corp. (FDIC) rejected a bid by Wachovia Corp. to remain independent (American Banker Nov. 3). Wachovia presented the FDIC with a plan that included a loss-sharing agreement and proposed raising $10 billion in capital. FDIC Chairman Sheila Bair said Wells Fargo will buy Wachovia, and that the deal would close next month ... * WASHINGTON (11/4/08)--Up to 1,800 publicly held financial institutions are expected to apply for government investments during the next few weeks. Thousands of private banks could apply for capital as well, according to a Treasury spokesman (The Wall Street Journal Nov. 3). The institutions fear that if they do not apply for the funds, they will be left out of the rescue plan, the spokesman said. Applications are due Nov. 14 ...

FinCEN reminder New e-filing program deadline

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WASHINGTON (11/4/089)—The Financial Crimes Enforcement Network (FinCEN) Monday sent an important reminder that as of Jan.1 it will require any electronic filing of Bank Secrecy Act (BSA) information to be executed through a new BSA Electronic Filing program. FinCEN announced the new program in July and said it was part of its effort to make BSA filing requirements more “secure, efficient, and effective.” FinCen is retiring its BSA Magnetic Media Filing Program in favor of the new program. The magnetic media filing has required credit unions and other financial institutions to submit BSA reports using tapes and diskettes. The more secure BSA E-Filing is a web-based system that is user-ID and password protected. Importantly, it does not require storage media. BSA E-Filing supports both single and multiple BSA report filings and uses the same file format as the Magnetic Media Program. FinCEN has suggested that without tapes or diskettes to mail, BSA E-Filing may help reduce reporting costs. FinCEN said it is collaborating with the Internal Revenue Service (IRS) to ensure this transition is as seamless as possible. Financial institutions currently using the Magnetic Media program to file BSA reports may register to use BSA E-Filing at any time. Filers may contact the BSA E-Filing Help Desk at 1-888-827-2778 (option 6) from 8 a.m. to 6 p.m., Monday through Friday or use the resource link below to access details on registration and see an overview of BSA E-Filing.

CUNA monitors races of CU friends

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WASHINGTON (11/04/08)—The nation’s media outlets for months have been predicting record voter turnout for today’s presidential election as the country decides whether Democrat Barack Obama or Republican John McCain will lead the country for the next four years. Also, hanging in the balance are a number of key races involving credit union friendly candidates. The Credit Union National Association (CUNA), state leagues and credit unions will be carefully watching developments in the following races involving credit union supporters and co-sponsors of the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). Races of interest in the U.S. House include:
* Long-time credit union advocate and CURIA co-author Rep. Paul Kanjorski (D-Pa.), who is being challenged by Hazelton Mayor Lou Barletta (R); * State Rep. Judy Baker (D-Mo.), who is running against banker and former State Rep. Blaine Leutkemeyer (R), for an open seat; *Kansas State Treasurer Lynn Jenkins (R), a long-time credit union advocate, who is challenging Rep. Nancy Boyda (D-Kan.); * Rep. Joe Knollenberg (R-Mich.), a CURIA co-sponsor, in a three-way race against Michigan State Lottery Commissioner Gary Peters (D) and Dr. Jack Kervorkian (I), assisted suicide advocate; * Rep. Steve Chabot (R-Ohio), a CURIA co-sponsor and key player in passage of H.R. 1151, against State Rep Steve Driehaus (D); * Rep. Chris Carney (D-Pa.), a freshman House member and CURIA co-sponsor, against businessman Chris Hackett (R); and * Rep. Jon Porter (R-Nev.), a CURIA co-sponsor, who is running against State Sen. Dina Titus (D).
Key races in the U.S. Senate of interest to credit unions include:
* In Louisiana, Sen. Mary Landrieu (D), a Senate CURIA co-sponsor who is being challenged by State Treasurer John Kennedy (R); * In Colorado, Rep. Mark Udall (D), a House CURIA co-sponsor, who is running for an open Senate seat against former Rep. Bob Schaffer (R), * Rep. Steve Pearce, a New Mexico Republican and House CURIA co-sponsor, running for an open Senate seat against Rep. Tom Udall (D).
“These are just some of the races that we are following with great interest,” said CUNA Political Director Trey Hawkins Monday. “We encourage credit unions and credit union members to get out today and vote for credit union friends across the country.”

Compliance FACTA address violations

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WASHINGTON (11/4/08) -- The Fair and Accurate Credit Transaction Act (FACTA) identity theft red flag regulations require credit and debit card issuers to validate an address whenever they receive a request for a replacement or additional card. Is this true or false, asks the Credit Union National Association’s (CUNA’s) Compliance Challenge. It’s false. The FACTA ID theft red flag regulations only require validation of an address when a card issuer has also received a notification of a change of address. The mandatory compliance date was Nov. 1 for both state- and federally chartered credit unions. The Federal Trade Commission's 6-month enforcement delay for the ID theft red flags rule does not extend to the rule regarding address discrepancies applicable to users of consumer reports, or to the rule regarding changes of address applicable to card issuers. The Challenge advises that the regulations require credit and debit card issuers to assess the validity of change of address requests when a card issuer receives a change-of-address notice and then, within a short period of time afterwards--at least 30 days--receives a request for an additional or replacement card. The credit union is prohibited from issuing a new card unless it takes steps to assess whether the change of address is valid, such as:
* Notifying the cardholder at the old address; * Notifying the cardholder through some other means of communication that the cardholder has previously agreed to; or * Using another method of assessing the validity of the change of address that the issuer has included in its red flag program.
In any case, CUNA notes, credit unions can always opt to validate addresses when issuing new cards, even when no change-of-address is involved. This is a good idea if the credit union has experienced incidences of identity theft related to requests for new credit/debit cards. Use the resource links below for more FACTA information.