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NCUA-approved LICUs Top 2,000

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ALEXANDRIA, Va. (12/20/13)--The number of credit unions nationwide carrying low-income designations has risen to more than 2,000, the National Credit Union Administration reported Thursday.

The 2,002 NCUA-approved low-income credit unions (LICUs) hold a combined $176 billion in assets and have nearly 20 million members. They individually hold as many as $1 billion in assets.

This LICU growth "could provide additional opportunities for investment in local economies," NCUA Chairman Debbie Matz said Thursday. "These credit unions can promote greater financial security for their members by providing loans to support a small business, purchase a house or send family members to college," she added.

To qualify as a LICU, a majority of a federal credit union's membership must meet low-income thresholds based on 2010 Census data. In addition to the exemption from the 12.25% statutory cap on member business lending for credit unions, other advantages derived from the LICU designation include:
  • Eligibility for Community Development Revolving Loan Fund grants and low-interest loans;
  • Ability to accept deposits from non-members; and
  • Authorization to obtain supplemental capital.
The NCUA has scheduled a LICU webinar for Jan. 15. For more, use the resource link.

177 CUs Eligible For CDFI Funding

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WASHINGTON (12/20/13)--A total of 177 credit unions are now eligible to take part in the U.S. Treasury's 2014 Community Development Financial Institution (CDFI) program.

The Treasury on Thursday released a comprehensive list of CDFI-certified institutions. The list of 808 certified institutions includes credit unions, banks, thrifts, loan funds, venture capital funds and depository institution holding companies.

With this certification, these institutions are able to take part in Treasury programs that help them offer small business, consumer and home loans in communities and populations that lack access to affordable credit. Credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding to help maintain their credit union's presence in the community.

Credit unions made 73 requests for a total of around $77 million in funds for the 2013 fiscal year CDFI Fund program. More than $21 million in CDFI Fund awards and grants were released to 35 low-income credit unions. Up to $191 million in funds is being made available for the 2014 round of the program.

CDFI-certified credit unions may also apply for their share of $481,000 in technical assistance grants from the National Credit Union Administration. The agency this month announced low-income designated credit unions can apply for up to $16,500 in funds to help cover the costs of:
  • A new Community Development Financial Institution (CDFI) certification;
  • New products; and
  • Student internships.
The NCUA will accept applications until Feb. 14.

Feb. 7 Is New Diversity Policy Comment Deadline

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WASHINGTON (12/20/13)--Feb. 7 is the new deadline for credit unions and others to make their voices heard and comment on a proposed joint agency policy statement for assessing diversity policies and practices of financial institutions.

The National Credit Union Administration, Federal Reserve, Consumer Financial Protection Bureau, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and the Securities and Exchange Commission developed the standards.

The proposed standards would encourage regulated entities to include diversity and inclusion considerations in both employment and contracting as an important part of their strategic plan. The standards, required by the Dodd-Frank Act, would also encourage those entities that collect workforce data to use that data to evaluate and assess workforce diversity and inclusion efforts.

Regulated entities would also need to demonstrate supplier diversity policies that provide "for a fair opportunity for minority-owned and women-owned businesses to compete in procurements of business goods and services."

An institution's commitment to these standards will also need to be demonstrated in a transparent fashion, the standards said. The proposed standards are tailored to account for an institution's:
  • Asset size;
  • Number of employees;
  • Governance structure;
  • Income;
  • Number of members or customers;
  • Contract volume;
  • Location; and
  • Community characteristics.
  • Financial professionals, consumer advocates, and community representatives were consulted as the standards were developed.
The agencies have specifically asked for comments on how the standards might better take into account individual entities' circumstances, especially for small regulated entities. Originally the comment period was slated to end in December.

CFPB, States Seek $2B in Homeowner Relief from Ocwen

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WASHINGTON (12/20/13)--Ocwen Financial Corporation and subsidiary Ocwen Loan Servicing, the largest nonbank mortgage loan servicer in the nation, have been ordered to provide $2 billion in principal reductions to underwater borrowers and $125 million in refunds to homeowners that were allegedly wrongly foreclosed upon under a Consumer Financial Protection Bureau court order.

The consent order is cosigned by the CFPB and authorities in 49 states and the District of Columbia. In the order, the authorities allege Ocwen "engaged in significant and systemic misconduct that occurred at every stage of the mortgage servicing process" and violated consumer financial protections, putting thousands of homeowners in jeopardy of losing their homes.

"Deceptions and shortcuts in mortgage servicing will not be tolerated," CFPB Director Richard Cordray said.

Alleged instances of misconduct cited by a CFPB release include:
  • Failing to timely and accurately apply payments made by borrowers and failing to maintain accurate account statements;
  • Charging borrowers unauthorized fees for default-related services;
  • Imposing force-placed insurance on consumers when Ocwen knew or should have known that they already had adequate home-insurance coverage;
  • Providing false or misleading information in response to consumer complaints;
  • Deceiving consumers about foreclosure alternatives;
  • Improperly denying loan modifications;
  • Providing false or misleading information to consumers about the status of foreclosure proceedings; and
  • Robo-signing foreclosure documents.
To remedy these identified issues, the CFPB and other authorities have requested that Ocwen:
  • Stop robo-signing official documents;
  • Adhere to significant new homeowner protections;
  • Properly process pending requests;
  • Honor previous loan modification agreements;
  • Ensure continuity of contact for consumers;
  • Restrict servicing fees; and
  • Notify consumers of loss mitigation options and restrict dual tracking.
For more, use the resource link.

CDFI Fund Providing New Resources, Looking for New Hires

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WASHINGTON (12/20/13)--Community development-focused credit unions will soon have a new resource when the U.S. Treasury's Community Development Financial Institutions Fund (CDFI Fund) provides a series of technical assistance webinars early next year.

The webinars, which will be provided as part of the fund's capacity building initiative's "Strengthening Small and Emerging CDFIs" series, will run from January until June.

Opportunity Finance Network will host the webinars, which the fund said will provide small and emerging CDFIs with best practices and tools to evaluate their business practices and pursue strategies to strengthen their organizations.

Scheduled webinars include:
  • The four stages of CDFI growth on Jan. 8 at 1 p.m. (ET);
  • Capitalization: raising debt and equity for CDFIs on Jan. 21 at 1 p.m. (ET); and
  • Leading organizational change on Feb. 5 at 1 p.m. (ET).
Other topics and times will be announced soon, and posted on the "Strengthening Small and Emerging CDFIs" webpage.

Advanced registration is required, and the webinars will be archived, the CDFI Fund said.

The CDFI Fund is also working on strengthening its own internal resources by hiring new reviewers and alternates to examine applications for the 2014 rounds of the CDFI Program and the Native American CDFI Assistance Program.

The CDFI Fund said candidates should have expertise in:
  • Community and economic development finance sectors such as affordable housing, small business, microfinance, and commercial real estate financing;
  • Financing of community-based organizations; and
  • Development service activities.
Applicants with previous experience will also be accepted.

The reviewers will work remotely and will evaluate applications early in the process.

The CDFI fund helps locally based financial institutions--including credit unions--offer small business, consumer and home loans in communities and populations that lack access to affordable credit. Credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding to help maintain their credit union's presence in the community.