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NCUA continues focus on share insurance outreach

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ALEXANDRIA, Va. (12/5/08)--The National Credit Union Administration (NCUA) continues its efforts to promote awareness of the safety of federally insured credit union deposits through a nationwide advertising campaign. Over the last two months, the agency has taken a number of steps to provide the public with necessary information regarding share insurance. The NCUA has:
* Provided nearly 9,000 radio stations across America with 90-second and 30-second public service announcements regarding National CU Share Insurance Fund insurance; * Supplied each federally insured credit union with an “Uncle Sam” federal insurance poster. The poster, intended for display in credit union lobbies, informs members of the recent temporary change in coverage to $250,000 and emphasizes the safety of insured funds: * Run a newspaper ad featuring the same “Uncle Sam” motif in 23 major newspapers nationwide between Oct. 1 and Nov. 17; * Aired 10-second radio ads in six major-market radio stations throughout the month of November describing the changes and share insurance coverage and the security of member funds in a federally insured credit union; and * Continued to update its Share Insurance Toolkit available through the NCUA’s website.
Also board member Gigi Hyland hosted “Share Insurance 101,” an interactive webinar describing share insurance and its changes. NCUA Chairman Michael Fryzel noted of his agency’s efforts, “At times of economic difficulty and uncertainty surrounding the financial services system, it is more important than ever for the NCUA and other federal agencies to step forward and remind consumers of the strength and safety of federal deposit insurance. “While the crisis that intensified during the summer has been unsettling, it has also served as an opportunity for NCUA to increase our educational efforts. I am gratified that, based on feedback from credit union members and leaders, the advertising campaign has succeeded in enhancing public awareness.”

Financial Services Committee to study GAO TARP report

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WASHINGTON (12/5/08)--House Financial Services Committee Chairman Barney Frank (D-Mass.) Thursday announced that the committee will hold a hearing to examine oversight concerns regarding the U.S. Treasury Department’s conduct of the Troubled Asset Relief Program (TARP). This hearing announcement follows the unveiling of a report by the Government Accountability Office (GAO) on the Treasury’s implementation of TARP. In announcing the hearing, Frank noted he has been highly critical of the way the Treasury has handled the Capital Purchase Program, a part of TARP. And, referring to the GAO report, Frank said in a Dec. 3 release, "The American people received two kinds of news about the TARP program – bad and worse news.” He said the report confirms that Treasury has no way to measure whether taxpayer funds invested in banks are being used in accordance with the purpose of the law. He added, “The much worse news is Treasury's response that it does not even have the intention of doing so.” Witnesses have not yet been announced for the Dec. 10 hearing.

Inside Washington (12/04/2008)

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* WASHINGTON (12/5/08)—Consumer protection by bank regulators is not an oxymoron, said Federal Deposit Insurance Corp. Chairman Sheila Bair in a speech Thursday, but those regulators need to change how they approach the role. Addressing the Consumer Federation of America’s Financial Services Conference here, Bair noted that the subprime “debacle” has shaken confidence in the bank regulators ability to protect consumers. “No doubt, when the next Congress convenes and looks at regulatory restructuring, there will be a robust debate on whether the federal banking agencies should maintain responsibility for consumer protection,” Bair said. She said that while “the bulk” of lending abuses were outside the banking sector, some banks were involved. Therefore, she added, if the federal banking agencies hope to keep their consumer protection jurisdiction, they need to demonstrate both to federal lawmakers and the public that they can be more proactive and effective in moving against harmful practices… * WASHINGTON (12/5/08)—Some Republican lawmakers may come back to Congress in January poised and ready to push their case that the Community Reinvestment Act (CRA) caused banks to make poor loans that lend to delinquencies and foreclosures and ultimately caused the subprime crisis. They will use that argument to try to springboard efforts to change CRA. (American Banker Dec. 4) However, at the same time, Bush administration officials have spoken out against criticism of CRA saying data does not support the idea that bankers made poor loans as a result of the requirements. Among those expressing strong support for CRA are Federal Reserve Board Governor Randall Kroszner, Comptroller of the Currency John Dugan and, most recently Federal Deposit Insurance Corp. Chairman Sheila Bair… * WASHINGTON (12/5/08)—House Minority Leader John Boehner and 11 other senior Republican members of the House sent a letter to U.S. Treasury Secretary Henry Paulson criticizing his failure to set clear goals and produce accountability for funds spent to date under the Trouble Asset Relief Program (TARP). The lawmakers signaled that they may launch an effort to clock release of the remaining $350 billion of funds (American Banker Dec. 4)… * WASHINGTON (12/5/08)—The Securities and Exchange Commission this week changed its rule for rating firms in an attempt to curb conflicts of interest and promote competition. Rating firms are now prohibited from rating a security if the firm or its affiliate helped structure it. Employees who work on ratings are barred from participating in fee arrangement. Also, the new rules ban them from accepting gifts worth more than $25 from security issuers, underwriters, or sponsors. (American Banker Dec. 4)…

FinCEN broadens CTR exemptions

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WASHINGTON (12/5/08)— The Financial Crimes Enforcement Network (FinCEN) has simplified its rules for depository institutions to exempt eligible members or customers from currency transaction reporting as required under the Bank Secrecy Act (BSA). “These regulatory changes will make it easier for financial institutions to take better advantage of exemptions from CTR filing requirements for certain classes of customers, while continuing to report valuable information to law enforcement," said FinCEN Director James Freis in a release. "FinCEN also made improvements to our proposed rule based on valuable industry feedback received during the comment period," Freis added. FinCEN’s plan to simplify the regulatory exemption requirements is primarily based on recommendations from a Governmental Accountability Office (GAO) study on the current CTR exemption regime. The Credit Union National Association backed FinCEN’s improvements and called them “a good first step for a more efficient and effective reporting structure under BSA.” The final rule makes the following changes to the current CTR exemption system:
* Depository institutions will no longer be required to review annually or make a designation of exempt person (DOEP) filing for depositors who are other depository institutions, U.S. or state governments, or entities acting with governmental authority; * Depository institutions will be able to designate an otherwise eligible non-listed company or a payroll customer after either two months time, down from the previous one-year requirement, or after conducting a risk-based analysis of the legitimacy of the member’s or customer's transactions; * FinCEN's guidance on the definition of "frequent" transactions will be changed to five transactions per year instead of the current eight transactions per year; * Depository institutions will no longer be required to biennially renew a designation of exempt person filing for otherwise eligible Phase II customers, but an annual review of these customers must still be conducted: and * Depository institutions will no longer be required to record and report a change of control in a designated non-listed or payroll member or customer.
The new rules take effect 30 days after publication in the Federal Register. Use the resource link below to access the final rule.