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Washington Archive

Washington

Inside Washington (12/11/2007)

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* WASHINGTON (12/12/07)--The Senate was scheduled Tuesday to consider a tougher mortgage bill, authored by Sen. Christopher Dodd (D-Conn.). Dodd’s legislation would create new regulations for investment banks and mortgage brokers and crack down on aggressive lending practices, according to congressional aides (The New York Times Dec. 11). Dodd’s bill is similar to Rep. Barney Frank’s (D-Mass.) legislation, which the House approved last month. But unlike Frank’s measure, Dodd’s proposal would bar prepayment penalties and would not call for a national registry for loan officers and brokers. Strong opposition to Dodd’s bill from bankers and mortgage companies is expected …

Five banned from CU activity

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ALEXANDRIA, Va. (12/12/07)-- The National Credit Union Administration (NCUA) has issued orders prohibiting six former credit union employees from participating in the affairs of any federally insured financial institution. Five of the individuals received jail terms and four were ordered to pay a total of almost $1.75 million in restitution. According to an agency announcement posted on its Web site Tuesday, Stephen E. Edraney, former manager and consultant at #11713 Bethlehem Municipal Employees FCU, Bethlehem, Pa., agreed to an order of prohibition, without admitting or denying fault, in order to save the time and expense of litigation. The other prohibition directives involved:
* Renee Brizza-Davis, a former teller at Connects FCU, Richmond, Va., who was convicted of embezzlement and sentenced to 10 years in prison. All but eight months of the sentence was suspended, a period which is to be followed by supervised release. Brizza-Davis was ordered to pay $46,400 in restitution. * Stephen W. Deaton, a former employee of River Valley CU, Middletown, Ohio, who pled guilty to theft of credit union funds. He was sentenced by the state of Ohio to 18 months in prison and ordered to pay $128,000 in restitution. * Karl R. Hedke, a former loan officer at Wyandotte FCU, Wyandotte, Mich., who pled guilty to bank fraud and was sentenced to 64 months in prison to be followed by four years of probation. Hedke was ordered to pay $1,494,131.96 in restitution. * Reatha Hall Johnson formerly with North Gulfport Community FCU, Gulfport, Miss., who pled guilty to bank fraud and embezzlement. The former manager was sentenced to 21 months in prison to be followed by five years of supervised probation and was ordered to pay $78,461 in restitution. * Matthew A. Pickup, former treasurer at Hopes Employees FCU, Jamestown, N.Y., who pled guilty to grand larceny and was sentenced to 6 months in prison followed by 5 years of probation.
Violation of an NCUA prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. Use the resource link below to read NCUA administrative orders.

Norlarco buyer decision expected in January

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WASHINGTON (12/12/07)--The National Credit Union Administration (NCUA) Region V director will post a “dear member” letter this afternoon on the Norlarco FCU website saying a decision will not be made on an acquiring bid until next month. Originally the regulator anticipated a purchase-and-assumption agreement would be approved by December, chosen from among three credit union proposals. However, according to John McKechnie, NCUA director of public and congressional affairs, the process is taking longer than expected. McKechnie said the delay doesn’t indicate a problem with the acquisition, but rather a “problem of timing.” “We making sure the acquirer gets a clean balance sheet,” McKechnie said, restating the agency’s goal of protecting the members’ assets, keeping the acquisition costs down, and avoiding lawsuits. NCUA continues to negotiate with Norlarco creditors. Norlarco became eligible for acquisition proposals after being place by Colorado state into conservatorship in May. That action was taken after the $334 million-asset, Fort Collins, Co.-based credit union was found to have a growing number of delinquent construction loans issued in Lee County, Fla. In July, the NCUA took control of the credit union and removed its board of directors. Norlarco's delinquent loans totaled more than $65 million. According to reports, Bellco CU, Greenwood Village; Ent CU, Colorado Springs; and Public Service Employees CU, Denver, have submitted bids to the NCUA. NCUA has not confirmed the identity of the bidders, but today’s members’ letter confirms that all three bidders under consideration are based in Colorado and have “a longstanding history of sound financial management and are federally insured by the National Credit Union Share Insurance Fund.” “We had projected the selection process to be complete in December 2007 and consolidation finalized in early 2008. We anticipate naming the winning credit union bidder in January; consolidation will be finalized soon thereafter,” says the letter signed by Region V Director Melinda Love, who also bears the designation “agent for the conservator.” One observer noted that due to the continued volatility in the Lee County market, bidders may be "dragging their feet" hoping for a better deal.

NCUAs Skiles to testify on easy access hotline

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WASHINGTON (12/12/07)—National Credit Union Administration (NCUA) Executive Director Leonard Skiles is scheduled to testify today on the merits of establishing a single, toll-free telephone number consumers with banking problems could call to reach the appropriate credit union, bank or thrift regulator. Skiles is slated to be part of a panel of witnesses representing federal and state financial institution regulators and will present his agency’s views on the “Financial Consumer Hotline Act of 2007.” The hearing is being conducted by the House Financial Services subcommittee on financial institutions and consumer credit. The chair of that committee, Rep. Carolyn Maloney (D-N.Y.), in announcing the hearing said of the hotline idea, “A number of different governing bodies currently regulate banks, which can make it difficult for consumers to figure out who they should contact with concerns and complaints. One number could help cut down on the confusion and put consumers in quicker contact with the appropriate regulator.” A second panel of witnesses will feature consumer groups, Consumers Union and U.S. Public Interest Group.