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House committee hearing to examine CRA

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WASHINGTON (2/6/08)--The full House Financial Services Committee will hold a hearing next week on the Community Reinvestment Act (CRA). The hearing, “The Community Reinvestment Act: Thirty Years of Accomplishments, but Challenges Remain,” is scheduled for Feb. 13. Witnesses for the invitation-only event were not determined. According to CUNA Legislative Affairs Vice President Ryan Donovan, the hearing is being held to mark the 30th anniversary of the passage of the Community Reinvestment Act, and is not likely legislative in nature. As early as last summer, House Financial Services Committee Chairman Barney Frank (D-Mass.) indicated plans for a comprehensive review of CRA, which he said has eroded because of an increase in nonbank lenders who need not abide by such rules (News Now Sept. 12, 2007). Frank said it would be unfair to exclude any institutions from a CRA review, but acknowledged if every financial institution was like a credit union, CRA would be unnecessary. CUNA remains opposed to CRA for credit unions. Donovan said the Feb. 13 hearing represents the first in what is likely to be a series of hearings on the issue. He did not expect credit unions to be in the spotlight. “Regardless of the focus, we know that at a hearing like this, anything can happen. Members of the committee and the witnesses can bring up just about anything--including credit unions--either in the testimony or during the question and answer period,” he said. Congress enacted CRA in 1977 in response to the “redlining” of lower income and minority neighborhoods by banks and thrift institutions during the 1960s and early 1970s. The purpose was to ensure that for-profit financial institutions were adequately meeting the financial service needs of all parts of the communities from which they draw deposits.

Inside Washington (02/05/2008)

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* WASHINGTON (2/6/08)--The Office of Housing and Enterprise Oversight announced that President Bush’s 2009 budget would provide $66.6 million for the agency. The amount is $0.6 million more than the 2008 budget. The budget also calls for legislation to create a regulator for Fannie Mae, Freddie Mac and the Federal Home Loan Banks ... * WASHINGTON (2/6/08)--A proposed requirement forcing lenders to assess a mortgage borrower’s ability to repay could increase loan costs, said Gov. Randall Kroszner of the Federal Reserve Board Monday. The rule could raise litigation risk and compliance costs, which would then increase credit costs for borrowers with high risks, he added (American Banker Feb. 5). The proposal could go into effect next year. The comment period ends April 9 ... * WASHINGTON (2/6/08)--Ford Motor Co. filed another application Friday for an industrial loan company (ILC), marking the first commercial firm to apply for a charter after a moratorium on ILCs imposed by the Federal Deposit Insurance Corp. expired last month. Ford applied in June 2006 but later withdrew its application (American Banker Feb. 5) ... * WASHINGTON (2/6/08)--President Bush announced Monday that the proposed 2009 budget for the U.S. Small Business Administration would authorize more than $28 billion in its primary small-business financing programs, including a level of $17.5 billion for the Guaranteed Loan Programs, $7.5 billion for the Certified Development Company, and $3 billion for venture capital support under the Small Business Investment program. The overall proposed budget is $657 million, a 15.5% increase over 2008 and a 6% increase in core operating budget over 2008. Including anticipated carryover funds, the total spending package would be $819 million ...

NCUA alert warns of late HMDA filings

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ALEXANDRIA, Va. (2/6/08)— Credit unions subject to Home Mortgage Disclosure Act requirements for 2007 activity must submit loan/application register (LAR) data to the Federal Reserve Board (FRB) by March 1, 2008. Noting that date in a recent regulatory alert, the National Credit Union Administration (NCUA) also warned of the possible consequences of a late filing. A credit union must file HMDA data in 2008 if it meets these three criteria:
* Had total assets as of Dec. 31, 2006 that exceeded $3 7 million., a threshold established by the the Federal Reserve Board; * Has a home or branch office in a metropolitan statistical area (MSA); and * Originated during 2007 at least one home purchase loan or a refinance of a home purchase loan secured by a first lien on a one-to-four-family dwelling.
In its alert, the NCUA stated it anticipates that every credit union that is required to report 2007 HMDA data will provide a readable transmission file to the FRB by the March 1, 2008 deadline. Following March 1st, the Fed will provide a list of delinquent filers to the NCUA, the agency noted, and credit unions appearing on this list could become subject to civil money penalty assessments. Use the resource link below to access the NCUA Alert.