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'Fuzzy logic' improves OFAC search tool

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WASHINGTON (2/8/13)--The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) has released an improved search tool for its Specially Designated National (SDN) list.

The new tool employs "fuzzy logic" so a user's search terms can be approximate rather than fixed or exact.  In addition to returning exact matches, the SDN Search can also provide a broader set of results using fuzzy logic.

The tool is in a beta test phase and will run in parallel with the older exact-character-match SDN search tool for approximately 30 days. It will then replace the older search tool.

Use the resource link for more information.  Feedback and suggestions about OFAC's new fuzzy logic tool can be sent to O_F_A_C@do.treas.gov.

NEW: NCUA to stop separate exams in NC

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WASHINGTON (2/8/13, UPDATED 4:55 p.m. ET)--The National Credit Union Administration and the North Carolina Credit Union Division (NCCUD) have agreed to resume a joint examination schedule going forward. The NCUA discontinued its coordinated examinations with the NCCUD last year after the state regular allowed Raleigh, N.C.-based State Employees' CU to disclose its state-issued CAMEL score.

NCUA Chairman Debbie Matz said today that after meeting in-person with NCCUD Acting Administrator Rose Conner, NCUA and NCCUD have agreed to re-establish a joint examination program in 2013.

"Administrator Conner has given me her word that NCCUD's affirmative policy moving forward will not authorize any public release of confidential examination information, especially CAMEL ratings," said Matz. "With this new commitment and policy from the state regulator, we look forward to resuming joint examinations, training, and open communications with NCCUD."

NCCUD and NCUA will begin working out the details of their joint arrangement on Monday. Ordinarily, the NCUA routinely conducts joint safety and soundness examinations with state regulators.

The NCUA said the dual exams in North Carolina after the release of the CAMEL ratings information were necessary to protect the National Credit Union Share Insurance Fund and the credit union system.

North Carolina Credit Union League President John Radebaugh welcomed the regulators' decidion and said, "The league welcomes today's announcement. The dual examinations of state-chartered credit unions represented an unwelcome and unnecessary burden in an already complex regulatory environment.

"We are grateful to both agencies for working through their differences in an effort to best serve the interests of credit unions and their members."

The Credit Union National Association also had urged the NCUA and NCCUD to work quickly to resolve differences regarding disclosure of a credit union's CAMEL rating and the use of dual exams.

CUNA Deputy General Counsel Mary Dunn commended the regulators' action and said, "This is a positive development that reflects a willingness from both sides to reach an agreement that will be better for credit unions." CUNA also thanked the North Carolina Credit Union League for its efforts in pursuing a favorable outcome.

CFPB starts consumer hotline pilot program

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WASHINGTON (2/8/13)--Thanks to a new pilot program, consumers in the Newark, N.J., area need only to dial 4311 on their phones to have their financial product questions or complaints answered by the Consumer Financial Protection Bureau's Office of Consumer Response. Newark residents already could access certain non-emergency city services by calling 4311.

"Through this coordination, we will be able to reach and to help consumers who may not have found us otherwise," CFPB Director Richard Cordray said Thursday.

The CFPB said that citizens living outside of Newark can reach the consumer response office by:
  • Visiting consumerfinance.gov/Complaint;
  • Calling the toll-free phone number at (855) 411-CFPB (2372) or TTY/TDD phone number at (855) 729-CFPB (2372);
  • Faxing the CFPB at (855) 237-2392; or
  • Mailing a letter to P.O. Box 4503, Iowa City, Iowa 52244.
The Office of Consumer Response screens consumer financial complaints, and in some cases sends the complaints on to the applicable financial institutions. The agency said it has received more than 130,000 consumer complaints since it began accepting them in 2012.  Companies are required to respond to the complaints within 15 days and in many cases must address the issues outline in the complaints within 60 days.

Consumers can monitor the status of their complaint to the conumser response team on the CFPB's homepage. Complaints received outside of the CFPB's direct examination and supervision authority are transferred to the appropriate prudential regulators for processing.

For the full CFPB release, use the resource link.

Senate Banking announces Wall Street reform review

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WASHINGTON (2/8/13)--"Wall Street Reform:  Oversight of Financial Stability and Consumer and Investor Protections" is the subject of a Feb. 14 hearing scheduled by the Senate Banking Committee.

The committee will hear testimony from:

  • Federal Reserve Board Governor Daniel Tarullo;
  • Consumer Financial Protection Bureau Director Richard Cordray;
  • Treasury Under Secretary for Domestic Finance Mary Miller;
  • Federal Deposit Insurance Corp. Chairman Martin Gruenberg;
  • Comptroller of the Currency Tom Curry;
  • Securities and Exchange Commission Chairman Elisse Walter; and
  • Commodity Futures Trading Commission Chairman Gary Gensler.
The witnesses have been invited to discuss the state of implementation of 2010 Wall Street reform laws.

The hearing will be webcast live and testimony and an archived video will be available after the hearing on the committee website.

CFPB: Financial institutions must be able to make non-QM loans

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WASHINGTON (2/8/13)--Financial institutions should be allowed to make mortgages that don't meet qualified mortgage (QM) standards under the new ability-to-repay rules. That is what Consumer Financial Protection Bureau Director Richard Cordray said Thursday in response to a Credit Union National Association question during a financial industry briefing on mortgage rules.

Cordray said it was never the intention of the CFPB that all mortgages should have to meet the QM standards. He added that the agency will be working with prudential regulators to encourage responsible lending for non-QM loans in addition to loans that do meet the QM requirements. Under the ability-to-repay/QM rule, mortgage loans that meet the criteria for a QM will be afforded a higher degree of legal protection than other mortgages, should a lender be sued by a consumer for noncompliance with the ability-to-repay provisions.

Cordray stressed that some borrowers who are in good financial standing but may not meet the parameters of a QM should nonetheless be allowed to obtain a mortgage.

The CFPB plans to issue plain language guides in written and video format and will being fielding questions on implementing the new rules now to assist in meet the rules' requirements. The CFPB will also offer suggestions for implementation planning purposes of financial institutions and will publish materials to help lenders understand the supervisory process that will be undertaken by them and the prudential regulators.

Consumers will also be informed of their rights under these regulations, which include private rights of action under certain provisions.

NCUA schedules special closed meeting for today

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ALEXANDRIA, Va. (2/8/13)--The National Credit Union Administration has announced a special closed meeting for 12 p.m. ET today.

The agenda refers only to "supervisory activities." News Now will report if the agency makes details public after the meeting.

Later this month, the NCUA's February open meeting is scheduled for 10 a.m. ET on Feb. 21. The agency is expected to release the agenda for that meeting next week. The agency in its semiannual unified agenda indicated that rules addressing Treasury Inflation Protected Securities and rural districts could be finalized this month.

NCUA Chairman Debbie Matz and agency staff this week said a proposed rule on derivatives could be released in the first half of 2013.

  • Also on the 2013 long-range agenda, the agency plans to address clarity in member business lending waivers, and is also developing:
  • A letter that addresses blanket waivers, guarantees and when a waiver is required for a structured or balloon loans;
  • Credit ratings guidance;
  • Troubled debt restructuring guidance; and
  • Guidance that clarifies the agency's expectations for enterprise risk management.
For more on the NCUA closed meeting, use the resource link.

Johnson announces Senate Banking subcommittee chairs

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WASHINGTON (2/8/13)--Senate Banking Committee Chairman Tim Johnson (D-S.D.) Thursday announced the leadership lineup for his panel's subcommittees.

Johnson in a release said the subcommittee chairs have his complete confidence "and they will surely make significant contributions to sustaining and strengthening our economic recovery."

The subcommittee heads are:
  • Robert Menendez (D-N.J.), who will lead the housing, transportation, and community development subcommittee;
  • Jon Tester (D-Mont.), who will lead the securities, insurance, and investment subcommittee;
  • Sherrod Brown (D-Ohio), who will lead the financial institutions and consumer protection subcommittee;
  • Mark Warner (D-Va.), who will lead the national security and international trade and finance subcommittee; and
  • Jeff Merkley (D-Ore.), who will lead the economic policy subcommittee.
Menendez, Brown and Warner led their respective subcommittees in the last Congress.

The full committee is expected to vote on these subcommittee choices next week.

CUNA adds escrow compliance chart as a CFPB resource

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WASHINGTON (2/8/13)--The Credit Union National Association has added an escrow account compliance chart to its list of resources developed to help its member credit unions comply with new Consumer Financial Protection Bureau mortgage rules.

The chart format is designed to help credit unions find the specific information they are looking for quickly. The chart covers the basics of the new rule and more detailed information, including:

  • Effective dates;
  • Exemptions and exceptions;
  • Significant definitions; and
  • What the new rule will change.
More comprehensive compliance summaries with interpretive explanations of the escrow changes are in the works, CUNA added.

CUNA late last month also released a chart covering many new CFPB mortgage regulations and detailing aspects of the CFPB's proposed Truth in Lending Act/Real Estate Settlement Procedures Act mortgage loan integration rule.

The chart, entitled "Mortgage Lending Rules--New CFPB rules finalized in 2013," is divided into three columns:
  • The first column summarizes key requirements in each of the CFPB's mortgage loan final rules;
  • The second column defines the type of mortgage loans covered by each of the final rules; and
  • The third column provides links to the CFPB's final rules and summaries of the rules and will link to CUNA's Final Rule Analyses as they become available.
For the members-only compliance charts, use the resource links.

45 House members call for new FHFA leader

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WASHINGTON (2/8/13)--House Oversight and Government Reform Committee Ranking Member Elijah Cummings (D-Md.) and 44 other U.S. House members have called on President Barack Obama to nominate a permanent Federal Housing Finance Agency (FHFA) director to replace FHFA Acting Director Edward DeMarco.

"Ensuring that FHFA implements congressional directives to support the most liquid, efficient, competitive, and resilient housing finance markets is a matter of national urgency," the members wrote in a Thursday letter. "We strongly urge you to nominate an FHFA director who is ready to fulfill this mission and address the many challenges still facing the nation's housing finance markets," the letter added.

All 45 cosignors are Democrats.

DeMarco has been FHFA acting director since Sept. 1, 2009. Obama in 2011 nominated former N.C. bank commissioner Joseph Smith to serve as full-time director, but that nomination was not confirmed by the Senate.

The FHFA has been directed by Congress to maximize assistance for homeowners and minimize foreclosures. The agency has also been granted explicit authority to modify mortgage loans through loan principal reductions, the letter said.

The letter charged that DeMarco has failed to authorize a loan modification pilot program that would test whether a principal reduction program could save taxpayers money while helping borrowers keep their homes.

DeMarco last year said he objected to allowing Fannie Mae and Freddie Mac to pursue a broad principal forgiveness program for troubled homeowners. He said the debate over this type of relief is "about which tools, at the margin, better balance two goals: maximizing assistance to several hundred thousand homeowners while minimizing further cost to all other homeowners and taxpayers."

For the full letter, use the resource link.