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Four funds get clean audits NCUA

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ALEXANDRIA, Va. (2/17/12)--The National Credit Union Administration (NCUA) has received "clean" audit opinions for its National Credit Union Share Insurance Fund (NCUSIF), Central Liquidity Facility, Community Development Revolving Loan Fund, and Operating Fund.

KPMG LLP completed the audits of the 2011 financial statements of all four funds.

NCUA Chairman Debbie Matz said the agency "takes its stewardship responsibilities very seriously" and works diligently to protect the NCUSIF and the other funds.

KPMG will issue its opinion on the Temporary Corporate Credit Union Stabilization Fund's 2011 financial statements in the coming months, the NCUA said.

The stabilization fund was created by the U.S. Congress in 2009 to provide flexibility to the NCUA as it worked to manage the impact of the costs to consumer credit unions associated with the troubled mortgage-backed securities purchased by the five failed corporate credit unions.

The stabilization fund received a clean--or unqualified--audit for 2010.

For the full KPMG audit opinions, use the resource link.

CUs encouraged to take part in AmericaMilitary Saves Week

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ALEXANDRIA, Va. (2/17/12)--National Credit Union Administration (NCUA) Chairman Debbie Matz Thursday encouraged credit unions to participate in next week's national savings campaign, America Saves/Military Saves Week.

America Saves/Military Saves Week begins on Sunday.

The motto for the 2012 program is: ""Set Goals, Make a Plan, Save Automatically."

Matz said the week gives credit unions new opportunities to kick-start their savings promotions and financial education programs. "By promoting automatic savings, credit unions can help their members buy homes, purchase cars, go to college, enjoy secure retirements and set money aside for emergencies," she added. Matz noted that savings at the nation's 7,179 federally insured credit unions jumped by $32.8 billion during the first nine months of 2011.

The NCUA said that credit unions can partner with local America Saves campaigns to offer a number of resources, including motivational workshops, posters and brochures.

America Saves Week is coordinated by the nonprofit Consumer Federation of America (CFA) in partnership with the American Savings Education Council.

Military saves week aims to persuade, motivate, and encourage military families to save money every month, and to convince leaders and organizations to be aggressive in promoting automatic savings.

For the NCUA release and more information on the America Saves and the Military Saves programs, use the resource link.

New CFPB tool to streamline comment process

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WASHINGTON (2/17/12)--The Consumer Financial Protection Bureau (CFPB) Thursday announced a new online comment tool to streamline its public comment process, as the bureau continues to accept public comment on how some financial regulations themselves could be streamlined.

Under the Dodd-Frank Act, rulewriting authority for consumer financial protection laws was transferred to the CFPB from federal financial institution regulators. The CFPB last year announced it would accept public comment on how these regulations could be streamlined "to make it easier for banks, credit unions and others to follow the rules" and to ensure that regulations work better for consumers and the firms that serve them.

The new online comment tool, which is hosted on the CFPB's homepage,, asks for personal and business-related contact information, and then moves the user on to forms that collect specific comments on CFPB regulations.

The online comment form offers a scrollable list of 19 regulations the agency is accepting comment on, and also allows commenters to select individual sections of those regulations.

Commenters can then write what specific changes they would make, explain the rationale behind those changes, and provide additional details on how their suggested modifications would impact consumers and financial services firms.

The CFPB said commenters may consider suggesting provisions of regulations that should be:
  • Simplified, rationalized, or consolidated;
  • Relaxed, modified, or eliminated, perhaps for smaller firms or certain classes of transactions without undermining essential protections;
  • Updated to reflect current practices and technology;
  • Adjusted to avoid unintended consequences; or
  • Changed to remove an obstacle to responsible innovation.
The agency will accept streamlining suggestions until March 5.

The Credit Union National Association (CUNA) has asked credit unions to identify their highest priorities for updating, modifying, or eliminating specific provisions of regulations that are outdated, unduly burdensome, or unnecessary, and issued a comment call on the CFPB's regulatory streamlining endeavor.

CUNA continues to work with credit union leagues, the American Association of Credit Union Leagues' Regulatory Advocacy Advisory Committee, key CUNA subcommittees, credit union councils, and other credit union officials to develop regulatory streamlining suggestions, and is encouraging credit unions to offer their own recommendations to the CFPB.

For the new CFPB site and the CUNA comment call, use the resource links.

NCUA approves Corporate OneSoutheast Corp. merger

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ALEXANDRIA, Va. (2/17/12)--Corporate One FCU, Columbus, Ohio, and Southeast Corporate FCU, Tallahassee, Fla., have been officially approved to merge their operations by the National Credit Union Administration.

The merger was approved at a closed NCUA board meeting Thursday.

Corporate One President/CEO Lee Butke said the merger will "create a combined organization that will be highly efficient and financially strong, with an enhanced ability to serve our combined membership bases and credit unions across the country."

The merger "is a great opportunity for our members and we are anxious to bring the merger to a conclusion," Southeast Corporate President/CEO Brad Miller added.

The two corporates announced their intent to merge on Sept. 13 and signed a definitive merger agreement on Jan. 18.

Southeast Corporate provides liquidity, investment, payment, and other back-office services to more than 400 credit unions in the Southeast U.S., and manages $3 billion in assets. The corporate also owns portfolio management, data management, and web hosting firms. Corporate One works with 780 credit unions and manages $4.7 billion in assets.

The corporates said the main goal of the merger was to preserve the collective $63 million in member capital shares (MCS) held by members at Southeast Corporate.

The capital subscription phase of the merger will begin on Feb. 17, and the corporates said that members should receive official capital documents and a ballot to vote on the merger in the next 10 days.

The Corporate One and Southeast Corporate merger will be the fourth to take place this year once it is completed.

The agency continues to manage the resolution of the corporate credit union system, and it recently unwound the payment services of the failed U.S. Central Bridge FCU. The NCUA is working to make information on the costs associated with the resolution of the corporate credit union system's problems more widely available.

This month, the NCUA cancelled its customary open board meeting, with NCUA Chairman Debbie Matz saying board members concluded there were "no essential board action items to publicly consider" at that time.

Inside Washington (02/16/2012)

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  • WASHINGTON (2/17/12)--People seeking a review of their mortgage foreclosures under the federal banking agencies' Independent Foreclosure Review have until July 31 to submit their requests. The Office of the Comptroller of the Currency and the Federal Reserve Board Wednesday announced that the deadline for submitting requests the Independent Foreclosure Review has been extended. The new deadline provides an additional three months for borrowers to request a review if they believe they suffered financial injury as a result of errors in foreclosure actions on their homes in 2009 or 2010 by one of the servicers covered by enforcement actions issued in April 2011. The deadline extension provides more time to increase awareness of how eligible people may request a review through the Independent Foreclosure Review process and to encourage the broadest participation possible, the two regulators said …
  • WASHINGTON (2/17/12)--Two experts on executive compensation in the financial industry testified Wednesday that a pay proposal issued last April by banking regulators leads bank executives to take excessive risk. Robert Jackson of Columbia Law School said the proposal, required by the Dodd-Frank Act, leaves bonuses completely unregulated for employees who take risks at the largest banks (American Banker Feb. 16). Jackson also said that 4,742 bankers at JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America, Morgan Stanley and Wells Fargo received incentive pay of more than $1 million in 2008, the year the financial crisis began. Lucien Bebchuk of Harvard Law School said the regulators' proposal leads banks to take risks because it focuses on short-term, rather than long-term, results and the companies' stock prices at the expense of shareholders, bondholders and depositors …
  • WASHINGTON (2/17/12)--In the future, the Consumer Financial Protection Bureau (CFPB) will provide more detail to Congress and the public on its spending, the agency's director told a House panel on Wednesday. CFPB Director Richard Cordray, testifying before the House Financial Services Committee, said Republican concerns about information on the bureau's budget were fair (American Banker Feb. 16). He said the bureau's needs for its $448 million 2013 budget were more comprehensive because it adds staff in its second year. Republicans continued to argue they should have some authority in the CFPB budgeting process. Rep. Spencer Bachus (R-Ala.), chairman of the House Financial Services Committee, said that  the CFPB lacks oversight and accountability because it receives funding from the Federal Reserve Board. Democrats noted that Congress still has significant authority to oversee the bureau's activities. Wednesday was the sixth oversight hearing Congress has held in regard to the agency, said Rep. Barney Frank (D-Mass.) …
  • WASHINGTON (2/17/12)--U.S. Treasury Under Secretary for Terrorism and Financial Intelligence David S. Cohen, in a statement Thursday, said the U.S. welcomes the completion of the Financial Action Task Force's  (FATF) work to revise and strengthen its recommendations to combat the global threat of money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction. The FATF is an intergovernmental organization focused on developing and promoting national and international policies to combat money laundering and terrorist financing. The body's recommendations have been revised, the Treasury statement said, to provide governments with stronger tools to take action against financial crime and protect the integrity of the international financial system. At the same time, the new standards address new priority areas such as proliferation finance, corruption and tax crimes. The revisions are meant to reflect a risk-based approach, strengthening safeguards in areas that pose higher risks, and providing more flexibility to simplify measures in areas that pose a low risk for abuse …
  • WASHINGTON (2/17/12)--The Consumer Financial Protection Bureau (CFPB) has proposed adding debt collectors and consumer reporting agencies to the list of firms it oversees under its nonbank supervision program. The CFPB rule would subject debt collectors and credit reporting agencies that qualify as larger participants to the same supervision process that that agency applies to financial institutions, CFPB Director Richard Cordray said in a release. Debt collectors and credit reporting agencies have not been subject to federal supervision in the past. Debt collectors with more than $10 million in annual receipts from debt collection activities would be subject to supervision, a threshold that the CFPB said would bring 175 debt collection firms under agency oversight. These 175 firms account for 4% of all debt collection agencies, but handle 63% of the market. Consumer reporting agencies with more than $7 million in annual receipts from consumer reporting activities would be subject to supervision, the CFPB said. This would bring 30 consumer reporting agencies, which account for 94% of the yearly profits made in that market, under CFPB supervision. The CFPB's proposed rule will be open for public comment for 60 days after it is published in the Federal Register...

Mass. CU considers conversion to mutual co-op bank

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WASHINGTON (2/17/12)--In Brockton, Mass., the directors of HarborOne CU posted an announcement to its website yesterday informing members that the credit union is considering a charter conversion from state credit union to a Massachusetts-chartered mutual co-operative bank.

Credit Union National Association (CUNA) President/CEO Bill Cheney said of the announcement, "Ultimately, the interests of the members of the credit union need to be protected.

"That can only happen when the members--who will make the decision on whether to convert from a credit union to some other institution--have all of the facts about the impact on them as a result of the change, provided with complete transparency."

Cheney added that it is CUNA's view that the credit union charter is the best option for the members of a credit union.

Massachusetts Credit Union League President Dan Egan had this to say: "The league strongly believes the member-owned, not-for-profit, credit union charter is the charter of choice for providing the public with consumer-friendly financial products and services, and allows credit unions to offer a far better economic return."

He added, "Credit unions now have 2.5 million members in Massachusetts and 92 million members nationwide because they put the interests of consumers first. In the last quarter of 2011, credit unions grew dramatically as consumers searched for a financial institution that would best serve their needs."

The HarborOne directors, in their website notice, cited membership restrictions, lending rules, and access to capital as some of the reasons the charter change is being considered.

Egan noted, "While a credit union's management may appreciate the operational advantages of a bank charter, those benefits must extend to the credit union's members. Any charter conversion should be approached from the perspective of what is best for the credit union's member-owners."

Among the conversion consequences to members noted by HarborOne were the facts that volunteer directors of the credit union would become compensated directors under the mutual bank structure; also, HarborOne would lose its current tax status.

"Based upon its extensive analysis," HarborOne noted, "the board of directors believes…this tax impact would be more than offset by the enhanced earnings capacity through increased commercial and small business lending and…by adding more customers with an expanded marketing area."

HarborOne will accept comments from members through March 15. On March 21, the credit union's directors intend to consider the adoption of a plan of mutual charter conversion.

"In the event a conversion plan is adopted by the board of directors, we would file with our regulators for review of all the conversion-related materials to be sent to members, including an information statement covering in greater detail all of the matters referred to in this notice.

"Members should not expect to receive any conversion-related materials from HarborOne until this review is completed, which can take several months. Upon completion of this review, the conversion proposal would be submitted to the membership for a vote following a notice period no shorter than 90 days," the notice said.