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Washington Archive

Washington

Bachus selected to chair House Financial Services Committee

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WASHINGTON (12/8/10)--Rep. Spencer Bachus (R-Ala.) was selected Tuesday to serve as chairman of the House Financial Services Committee in the 112th Congress. Serving as ranking Republican on the committee the past four years, Bachus overcame a challenge from Rep. Ed Royce (R-Calif.) and was chosen by the Republican Steering Committee. The position traditionally goes to the most senior member of the majority party who does not lead another committee. Bachus is supportive of credit unions and is attuned to the regulatory burden of financial institutions. In earlier press reports he has indicated he will put review of government-sponsored enterprises (GSEs) and the Dodd-Frank regulatory reform bill among the issues at the top of his agenda. "We want to congratulate Rep. Bachus on his selection as committee chairman," said Credit Union National Association President/CEO Bill Cheney. "We look forward to working closely with him and certainly with Rep. Royce as well in the new Congress."

NFIP broadens PRP flood ins. coverage NCUA

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ALEXANDRIA, Va. (12/8/10)--The National Credit Union Administration (NCUA) has alerted credit unions that pending flood insurance changes set forth by the Federal Emergency Management Agency (FEMA) “could result in cost savings” for credit union real estate borrowers. FEMA recently agreed to extend preferred risk policies (PRP) to owners of properties that are located in so-called Special Flood Hazard Areas (SFHA). The PRPs, which are made available under the National flood Insurance Plan (NFIP), offer low-cost flood insurance to owners and tenants of eligible residential and non-residential buildings located in moderate to low flood risk areas, according to a FEMA release. The PRPs will allow these property owners to maintain lower-cost flood insurance policies for an extended period, the NCUA said. Insurers, not credit unions, will be charged with determining eligibility for these policies. However, credit unions will need to ensure that each borrower’s amount of flood insurance meets mandatory purchase requirements, the NCUA added. FEMA in May officially revised its PRP eligibility rules, allowing buildings that were “newly mapped into an SFHA due to a map revision on or after Oct. 1, 2008, and before Jan. 1, 2011” to be eligible for PRPs for a two-year period. Their PRP may extend until Dec. 31, 2012. Properties that will be classified as SFHAs due to map revisions that come into effect on or after Jan. 1 will be eligible for a PRP for two policy years following the effective date of the map revision, according to FEMA. Properties with PRP policies must shift onto standard policies once the two-year eligibility period has ended, FEMA said. Insurance companies will contact eligible policyholders at least 90 days before their policy expires, according to the release. For the NCUA release, use the resource link.

FinCEN looks to add to list of SARAML institutions

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WASHINGTON (12/8/10)--Non-bank residential mortgage lenders and originators would be required to follow the same suspicious activity report (SAR) regulations as credit unions and other financial institutions if proposed rules released by the Financial Crimes Enforcement Network (FinCEN) become law. The FinCEN rule would also require these financial entities to establish anti-money laundering (AML) programs similar to those of credit unions and other financial institutions. FinCEN Director James Freis said that bringing non-bank lenders and originators under the same SAR/AML regulations would protect “both their business interests and their customers from the abuses of fraud and financial crime." FinCEN rules currently require credit unions, banks and other insured depository institutions that originate mortgage loans to file SARs. FinCEN in a release said that the proposed rulemaking “would close a regulatory gap that allows other originators, such as mortgage brokers and mortgage lenders not affiliated with banks, to avoid having AML and SAR filing obligations.” According to the release, FinCEN believes that new regulations requiring non-bank residential mortgage lenders and originators to adopt AML programs and report suspicious transactions would be are “consistent with those business[es] due diligence and information collection processes to assess creditworthiness in lending, and could augment FinCEN's initiatives in this area.” The effectiveness of the AML/SAR changes may also be aided by the SAFE Act’s proposed development of a nationwide licensing system and registry for many mortgage professionals, FinCEN added. FinCEN will collect comments for 30 days after the notice is published in the Federal Register.

NCUA hosts troubled debt restructuring webinar

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ALEXANDRIA, Va. (12/8/10)—National Credit Union Administration (NCUA) Board Member Gigi Hyland will host a Jan. 6 webinar on troubled debt restructured (TDR) loans. The webinar, which will take place at 2 p.m. ET, will be moderated by Hyland and will feature input from auditing firm Crowe Horwath LLP. The NCUA webinar will discuss the definition of TDR loans, and will attempt to answer what constitutes financial difficulty and how impairment measurement works when dealing with TDRs. The webinar will also flesh out the definition of concessions when dealing with TDRs. TDR loans, which have very specific accounting and reporting requirements, sometimes occur as a result of loan modifications. The financial statement notes and call report data associated with TDRs are also unique. For the NCUA release, use the resource link.

Inside Washington (12/07/2010)

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* WASHINGTON (12/8/10)--The U.S. Treasury sold $10.5 billion worth of Citigroup Inc. shares late Monday, the last of its common-stock holdings in the bank, and a significant step in the government’s exit of its bailout of the financial giant (Bloomberg Dec. 7). The Treasury sold 2.4 billion shares at $4.35 each, a 10-cent discount to the stock’s closing price. Treasury received about 7.7 billion shares of Citigroup common stock at $3.25 per common share from the exchange offers in July 2009 in exchange for the $25 billion in preferred stock Treasury received in connection with Citigroup’s participation in the Capital Purchase Program. At time, the investment represented a 27% stake in Citibank. The average selling price for the entire 7.7 billion shares was $4.14, according to the Treasury. Treasury invested $45 billion in Citigroup pursuant to the Troubled Asset Relief Program. With this offering, Treasury has recovered all of the $45 billion plus roughly $12 billion in profits consisting of dividends, interest and gain on the sale of Citigroup common stock and other securities … * WASHINGTON (12/8/10)--The Federal Deposit Insurance Corp. (FDIC) will host two telephone seminars Dec. 14 and 16 about required coverage for noninterest transaction accounts (American Banker Dec. 7). Temporary, mandatory coverage for all non-interest-bearing checking deposits was established under the Dodd-Frank Act. Noninterest transaction accounts were previously covered by the FDIC’s Transaction Guarantee Program, which was launched during the financial crisis in 2008 and required fees to participate. Under Dodd-Frank, blanket insurance is free and would last through 2012 …