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CompBlog Wrap-Up Preps CUs for Mortgage Reg Compliance

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WASHINGTON (12/10/13)--As credit unions prepare to comply with pending Consumer Financial Protection Bureau mortgage regulations, the Credit Union National Association continues to answer key questions: CUNA staff addressed one credit union's concern about semi-monthly payments, and provided general details on changes to mortgage loan originator (MLO) regulations and disclosure changes in this month's  CompBlog Wrap-Up.
 
First, the credit union query: How can a credit union comply with the periodic statement requirements in the CFPB's Mortgage Servicing final rule if it permits members, as a courtesy, to make semi-monthly payments on certain mortgage loans?
 
The answer is simple: CUNA compliance staff noted that credit unions may still issue one monthly statement covering the entire month or may decide to issue statements that reflect the semi-monthly payments in situations where the legal obligation requires a monthly payment, but semi-monthly payments are permitted for the convenience of the member. More details, as spelled out in the rule itself, are provided in the Wrap-Up.
 
Up next, CUNA provides a refresher on MLO regulations: The Wrap-Up details how credit unions can determine whether potential loan originators are qualified for the job, and what credit unions can do to ensure that MLOs receive appropriate training in connection with offering closed-end consumer credit transactions secured by a dwelling.
 
Outlines of the CFPB's integrated Truth in Lending Act and Real Estate Settlement Procedures Act disclosures, which were released last month, are also included in the Wrap-Up.
 
The Wrap-Up also lays out five things credit unions must know about the homeownership counseling list requirement included in the new CFPB mortgage rules, and provides information on the National Credit Union Administration's new fixed assets rule and supervisory letter on enterprise risk management.

And, as it does every month, the CompBlogUp lists the upcoming effective dates of new regulations, important compliance articles and reports to read, as well as CUNA training programs.

For more of the CUNA CompBlog Wrap-Up, and other compliance gems, use the resource link.

FDIC Provides More on Its Big Firm Resolution Plan

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WASHINGTON (12/11/13)--The Federal Deposit Insurance Corp.  (FDIC) announced Tuesday that it is publishing its Single Point of Entry (SPOE) strategy for the resolution of Systemically Important Financial Institutions (SIFIs) in the Federal Register with request for comment.
 
Under the Dodd-Frank Act, the FDIC is charged with resolving a SIFI in a manner that holds accountable the owners and management responsible for the failure of the company while maintaining the stability of the U.S. financial system. The FDIC explain in it announcement that creditors and shareholders must bear the losses of the financial company in accordance with statutory priorities and without imposing a cost on U.S. taxpayers.
 
The agency's resolution strategy was developed after consultation with public and private sector stakeholders and Tuesday's action is intended to seek further public comment.
 
"The FDIC has provided greater detail on how it envisions the implementation of various aspects of this strategy including such key issues such as capital, liquidity, governance and restructuring. The FDIC looks forward to detailed public comment to further inform our resolution strategy planning," FDIC Chairman Martin Gruenberg said in a release.
 
The FDIC's Advisory Committee on Systemic Resolution is scheduled to meet today.
 
Also on Tuesday, the FDIC was scheduled to consider a joint rule, along with other agencies, that would implement the Dodd-Frank ban on banks' proprietary trading, known as the Volcker Rule.
 
Use the resource link to access more information on both rules.

Medical Niche Credit Card Ordered to Refund $34M to Consumers

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WASHINGTON (12/11/13)--A credit card issuer big in the niche market of credit card enrollments at doctors' and dentists' offices around the country is being ordered by the Consumer Financial Protection Bureau to refund up to $34.1 million to consumers because of alleged deceptive enrollment tactics.
 
The CFPB announcement Tuesday said GE Capital Retail Bank through its subsidiary, CareCredit, has been engaged in "harmful consumer practices" since January 2009 and that the bureau came to the case after receiving substantial complaints from consumers. 
 
CareCredit, according to the CFPB, is offered by more than 175,000 enrolled providers across the country.  Receptionists, office managers, and office staff sell it to patients when they are paying for their medical care, waiting to see the doctor or dentist, or sometimes in between treatments. 
 
"Our investigation showed that many patients thought they were signing up for an interest-free loan.  Or they may have thought they were signing up for an in-house payment plan with their doctor.  But the card was really a 'no interest if paid in full' product that is a much trickier deal," CFPB Director Richard Cordray said. "While the arrangement guarantees that the health-care provider gets paid, patients sometimes end up with huge credit card bills they cannot afford."
 
The CFPB estimates that more than 1.2 million consumers were wronged and could be eligible for money from the reimbursement fund. In the future, CareCredit will be required to be more transparent to consumers about its product.
 
Cordray said, "When people seek medical care, they are in a particularly vulnerable situation….So it is particularly important that a credit card company offering personal lines of credit to pay for health care is doing everything to the letter of the law--that they are treating people fairly, with dignity, and with the utmost transparency."