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NCUA revises 2011 meeting schedule

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Alexandria, Va. -- The 2011 National Credit Union Administration (NCUA) has revised its 2011 board meeting schedule. The September meeting has been pushed back to Sept. 22 from Sept. 15. The next scheduled NCUA board meeting is Feb. 17 and the remaining dates are as follows:
* March 17 * April 21 * May 19 * June 16 * July 21 * No August meeting * September 22 * October 27 * November 17 * December 15
Use the resource link below for more NCUA information.

NCUA details fin lit requirements for FCU directors

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ALEXANDRIA, Va. (2/8/11)—The National Credit Union Administration (NCUA) in its letter to federal credit unions No. 11-FCU-02 sought to remind federal credit union directors of specific financial literacy requirements that will become effective later this year as well as their general responsibilities as credit union leaders. The NCUA in December established a set of guidelines for credit union directors. Those guidelines would seek to ensure that credit union directors have “a base level of financial skills, consistent with the size and complexity of the credit union operation they serve.” In the letter, the NCUA reiterates that directors should have the ability to examine their credit union’s balance sheet and understand specific financial activities that their credit union takes part in. “In particular, a director must understand not only how these activities generate revenue for the credit union but also, and perhaps most importantly, the various risks associated with these activities that could lead to financial loss.” The NCUA has specifically cited the need for complete knowledge of risks, including credit risk, liquidity-related risks, and interest rate, compliance, strategic, transaction, and reputation risks. The NCUA has determined that directors will be given six months to familiarize themselves with the necessary financial information and concepts. Directors elected before Jan. 27 will need to have acquired the necessary knowledge by July 27. NCUA examiners will look for evidence of comprehensive financial training during their inspections, and will evaluate whether a given credit union has the policies needed to offer appropriate training to its directors. However, the Credit Union National Association’s (CUNA) Senior Vice President for Compliance Kathy Thompson noted that NCUA examiners should never quiz credit union board members on the substance of their training. Thompson added that these rules will not apply to state-chartered credit unions. Directors may gain the needed financial understanding through their own in-house credit union training, external training, on the job experience, or online training. The NCUA will offer its own training, and directors may also train through CUNA’s own Center for Professional Development. For the full NCUA letter and more on CUNA’s training sessions, use the resource links.

Reg burden must be addressed CUNA to NCUA

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WASHINGTON (2/8/11)--The Credit Union National Association (CUNA) is “currently reviewing the totality of credit unions' regulatory burdens” and is identifying problematic regulations, and hopes to work with the National Credit Union Administration (NCUA) to “help credit unions shoulder their regulatory responsibilities,” CUNA President/CEO Bill Cheney said in a recent letter to NCUA Chairman Debbie Matz. Although the NCUA, as an independent agency, is not subject to President Barack Obama’s recent executive order that urged regulators to conduct their own internal reviews, Cheney urged the NCUA to comply with the spirit of the order. Obama in a late January executive order called on federal agencies to design cost-effective, evidence-based regulations that are compatible with economic growth, job creation, and competitiveness. Those agencies should also work to reduce burdens on small businesses whenever possible, Obama added. Cheney commended the executive order in a January letter to the President. Cheney recommended that the NCUA look for ways that its 2011 budget, which increased by $25 million over 2010’s budget, could be cut. Cheney also suggested that the NCUA expand its RegFlex program and avoid overregulating credit union volunteers. The CUNA CEO recommended that the NCUA should, where applicable, target rules that can be simplified, and should work with the Consumer Financial Protection Bureau to limit potentially negative regulatory consequences, CUNA added. The NCUA’s own examination process should also be reviewed, and the NCUA should adopt the recommendations contained in CUNA's "Guidance for Credit Unions on Supervisory and Examination Issues," Cheney suggested. Cheney in his letter said that CUNA would work closely with credit union leagues and individual credit unions to develop a series of regulatory recommendations for the NCUA and other policymakers. For the full letter, use the resource link.

Regulatory reviews scheduled this week

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WASHINGTON (2/8/11)—The House and Senate have relatively light legislative calendars this week, as the Senate on Wednesday will recess for the Senate Democratic Caucus retreat, but credit unions will be interested in several regulation-related actions. The House on Wednesday will discuss and potentially vote on a resolution that would direct congressional committees to inventory and review existing, pending, and proposed regulations and orders from various federal agencies. Regulatory review will also be a focus of House committees, with the House Oversight and Government Reform Committee examining regulatory impediments to job creation on Thursday. That job creation focus will also be evident during a Wednesday House Financial Services Committee subcommittee on domestic monetarypPolicy and technology hearing on the Federal Reserve’s role in job creation. The House Financial Services Committee will markup its oversight plan on Thursday, and that committee’s capital markets subcommittee will examine potential reforms to government-sponsored enterprises Fannie Mae and Freddie Mac on Wednesday. Witnesses for that hearing will include the Cato Institute’s Mark Calabria, American Enterprise Institute resident fellow Alex Pollock, the Reason Foundation’s Anthony Randazzo, and Sarah Wartell of the Center for American Progress. Several other GSE hearings have been planned, subcommittee Chair Scott Garret (R-N.J.) said. More generally, the state of the U.S. economy will be covered as Federal Reserve Chairman Ben Bernanke appears before the House Budget Committee on Wednesday.

Inside Washington (02/07/2011)

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* WASHINGTON (2/8/11)--As federal agencies remain deadlocked over new loan servicing rules, more observers are calling for Congress to settle the debate (American BankerFeb. 7). Regulators cannot decide whether to use the authority granted by Dodd-Frank legislation to create the new rules or direct other vehicles to mandate the handling of foreclosures. With the issue unresolved, some observers say Congress is most likely to create a single solution, or at least get the process started. What regulators do agree on is the need for loan servicing standards, created by servicers’ poor handling of foreclosures, modifications and buyback requests and other issues related to the mortgage crisis. The Federal Deposit Insurance Corp. advocates making standards part of risk retention rules for securitized loans, which are mandated by Dodd-Frank. But other agencies are opposed to that approach. Though observers agree that Congress should be involved on some level, it remains to be seen if any legislation could garner enough votes for passage. Spencer Bachus (R-Ala.), chairman of the House Financial Services Committee, has yet to clarify his position on the issue. But Barney Frank (D-Mass.), the former committee chair, said he fears Republicans will give low priority to the issue … * WASHINGTON (2/8/11)--Michael H. Krimminger has been named the Federal Deposit Insurance Corp.’s (FDIC) new general counsel. The FDIC general counsel is in charge of the legal division, which is responsible for legal work on regulatory issues, and FDIC transactions, litigation, and corporate and commercial claims. The legal division has more than 800 employees nationwide. As deputy to the chairman for policy at the FDIC since 2009, Krimminger has served as the chairman’s advisor and has directed policy initiatives on banking and financial institution crisis and resolution, mortgage finance, international coordination, capital markets, and legal issues … * WASHINGTON (2/8/11)--Deposit insurance will climb and bonus pay sink for top executives under two regulations approved on Monday by the Federal Deposit Insurance Corp. The new large bank pricing system will result in higher assessment rates for banks with high-risk asset concentrations, less stable balance sheet liquidity, or potentially higher loss severity in the event of failure. Over the long term, large institutions that pose higher risk will pay higher assessments when they assume these risks rather than when conditions deteriorate. The compensation rule requires that at least 50% of incentive-based payments be deferred for a minimum of three years for designated executives. Moreover, boards of directors of these larger institutions must identify employees who individually have the ability to expose the institution to substantial risk, and must determine that the incentive compensation for these employees appropriately balances risk and rewards according to enumerated standards … * WASHINGTON (2/8/11)--The Federal Deposit Insurance Corporation (FDIC) Monday issued a Notice of Proposed Rulemaking intended to improve consumer awareness of deposit insurance coverage. The proposed rule would require certain bank staff to receive annual training on the basic principles of deposit insurance coverage with the FDIC providing the materials--a computer-based module--with no recordkeeping required of the insured institution. The rule would limit the required training to those employees who open accounts or are authorized by the bank to answer deposit insurance questions. The rule achieves the balance of minimizing regulatory burden while ensuring that depositors are better informed, according to an FDIC release …