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CFPB may give some financial offenders early warning

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WASHINGTON (11/8/11)--The Consumer Financial Protection Bureau (CFPB) on Monday said it plans to give individuals and institutions that will be subject to potential agency action an "early warning" before legal or regulatory proceedings are taken.

The suspected offenders would be allowed to provide "any relevant legal or policy arguments and facts," in writing, within 14 days of the notice, the CFPB said.

The early warning notice process allows the subject of an investigation to respond to any potential legal violations that CFPB enforcement staff believe have been committed before the CFPB ultimately decides whether to begin legal action, the agency said in a release. Specifically, the CFPB said its Office of Enforcement would first explain to individuals or firms "that evidence gathered in a CFPB investigation indicates they have violated consumer financial protection laws."

De facto CFPB leader Raj Date said the early warning notice process "strikes a balance between the goal of fairness to those being investigated and [the CFPB's] mission to protect consumers."  The process is modeled on procedures that have been implemented at other federal agencies, the CFPB added.

The CFPB stressed that these early warning notices are discretionary in nature, are not required by law, and may not be given in all situations, adding that they may not be used in cases of ongoing fraud or in instances where the CFPB needs to act quickly.

For the full CFPB release, use the resource link.

Slow week for CUs in Washington

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WASHINGTON (11/8/11)--Members of the U.S. House have left Washington for Veteran's Day recess, and with only the Senate in town, the legislative calendar is expected to be light this week.

The most relevant action for credit unions will likely be a Thursday Senate Banking Committee hearing entitled "Opportunities and Challenges for Economic Development in Indian Country." Business, finance and community representatives will testify alongside Federal Reserve Bank of Minneapolis Community Development Advisor Sue Woodrow during that hearing, which is scheduled to begin at 10:00 a.m. ET.

H.R. 674, a bill that would amend the Internal Revenue Code of 1986 to repeal the imposition of 3% withholding on certain payments made to vendors by government entities, and would modify adjusted gross income calculations that are used to determine eligibility for some healthcare-related programs, is also expected to come up in the Senate. This legislation has passed the House. The Senate will also consider adding an amendment to boost tax credits to businesses that hire veterans.

CUNA responds to national quest for more BTD info

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WASHINGTON (11/8/11)--The media blitz showcasing credit unions as a better deal for consumers continued following Saturday's Bank Transfer Day, as Credit Union National Association (CUNA) President/CEO Bill Cheney appeared on CNN and ABC World News Tonight on Sunday.

Overall, Cheney told CNN Sunday Morning host T.J. Holmes, Bank Transfer Day "has been helpful" to credit unions, increasing the public profile of institutions that are far more focused on helping their members than spending the advertising dollars seen at firms like Bank of America.

Click for videoCUNA President/CEO Bill Cheney discussed Bank Transfer Day's impact on credit unions on ABC World News Tonight on Sunday. For video of his remarks on ABC, click the photo.
Cheney added that the build up to Bank Transfer Day saw around 650,000 people join credit unions in the last month, which tops the membership total recorded in all of 2010.  Even more joined on Saturday, and while CUNA is working to tally those final numbers, credit unions from across the country reported "lots of activity" on Bank Transfer Day, with some reporting as many as 600 new members. (See related story: Early reports show Bank Transfer Day success)

"There's definitely a movement going on," Cheney said on CNN, which aired his interview throughout the day on Sunday.

CUNA's online credit union locator tool, hosted on, recorded about 70,000 visitors on Friday--an all time single-day high--and another 62,000 on Saturday.

"Credit unions deserve the attention they're getting, they're a better deal," Cheney told CNN's Holmes.

He also used the Sunday morning CNN interview to dispel many common myths about credit union membership and services. Credit unions have "all the modern conveniences" of banks, offering their members access to a nationwide network of 28,000 ATMs for members of 3,000 participating credit unions, online banking, and other traditional services, he added.

Cheney also represented the credit union view on Bank Transfer Day in an ABC World News piece, which also spotlighted membership growth at Redwood CU, Santa Rosa, California, whose CEO, Brett Martinez, serves on the CUNA board.  With CUNA and state leagues' media outreach teams aggressively working the story, Bank Transfer Day was also covered in hundreds of national and local media outlets, from print media, to television, radio and blogs. Those outlets included MSNBC, NPR Morning Edition, Marketplace radioThe Wall Street Journal, the Los Angeles Times, The Washington Postthe New York TimesUSA TodayFox Business Network, Time, and many others.

For more of the recent credit union/Bank Transfer Day media coverage, use the resource link.

Inside Washington (11/07/2011)

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  • WASHINGTON (11/8/11)--Although an international regulatory board named 29 financial firms it regards as systemically important and thereby subject to a capital surcharge, the Financial Stability Board's (FSB) announcement last week failed to provide any detail on key issues.  For instance, the board did not identify the exact size of the surcharge, which will vary across institutions.  In fact, the board said that decision would not be made until later this month (American Banker Nov. 7). Previously regulators have noted that the identified firms would have to hold between 1% to 2.5% in extra capital---the precise amount would be determined based on the bank's size, risk exposure, and interconnectedness. Then on Friday, the Basel Committee on Banking Supervision said there would be four primary levels--or "capital buckets"--into which institutions would be placed: Some firms would be required to hold an additional 1% in capital, and others required to hold 1.5%, 2% or 2.5%. If a particular firm is identified as having increased its potential threat to the world economy, there is a special fifth bucket of 3.5% for them--but regulators noted that no firm yet has been identified as being required to hold that level of extra capital. The FSB said it examined 73 firms prior to naming the 29 listed as systemically important. The board intends to update that list each November and said it would continue to keep an eye on the pool of 73. The surcharge will not be fully phased in until November 2016. …
  • WASHINGTON (11/8/11)--The Federal Reserve Board, in conjunction with other U.S. banking agencies, will be working in the coming months to make changes to the proposed global liquidity coverage ratio under the Basel III accords. Fed Governor Daniel Tarullo said in a recent speech that he anticipates the regulators will want a "recalibration of certain deposit run-off and commitment draw-down rates," as well changes that would better emphasize liquidity characteristics assets in the buffer definition.  Tarullo said regulators are also studying how best to regulate during liquidity "stress events" so to best preserve financial stability. …