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CUNA, NAFCU join to seek 90-day extension of RBC comment deadline

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WASHINGTON (3/3/14)--The 90 days given for public comment on the National Credit Union Administration's (NCUA) controversial risk-based capital plan is not enough and should be at least doubled, the Credit Union National Association and the National Association of Federal Credit Unions told the regulator in letter sent Friday.

The current comment deadline is May 28. A 90-day extension would give credit unions until Aug. 26 to submit their comments on the proposal.

"The risk-based capital is the most significant proposed rulemaking that credit unions will face this year and likely for years to come," the joint letter declared. "Such an extension of the comment period will allow credit unions much needed additional time to review the provisions in the proposal in detail and analyze thoroughly the impact of such provisions on their current operations and plans for the future."

The extension would also allow the agency to include the comments, data and recommendations received at this summer's scheduled NCUA listening sessions to be considered and included in the administrative record.

CUNA has produced a video segment with tips on how to write effective comment letters on the proposal, and has also launched the Risk-Based Capital Action Center, which will allow CUNA members to directly write NCUA in a quick and efficient way and submit their comments electronically with the click of a mouse.

The proposal would restructure NCUA's current prompt corrective action regulation to include calculation of a capital-to-risk-assets ratio, analogous to Basel III for community banks. The risk weights would be substantially different, and the proposal would impose higher capital requirements for credit unions with higher concentrations of assets in real estate loans, member business loans, longer term investments and some other assets.

The proposal would apply to credit unions with assets of more than $50 million.

CUNA estimates that the rule, if made final and implemented, would lead to credit unions needing to hold as much as $7.3 billion in additional capital.

For the CUNA comment tool and more on the proposed rule, use the resource link.

McWatters nominations, data security scrutiny, reg burden impact

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WASHINGTON (3/3/14)--The Senate Banking Committee Tuesday will be scrutinizing the nomination of Mark McWatters to become a member of the National Credit Union Administration (NCUA) board.

There are only two steps left, after the nomination hearing, on McWatters' path to replacing NCUA board member Michael Fryzel.  Fryzel's  term ended Aug. 2, but the one-time chairman has continued to serve until his replacement could be installed.

After tomorrow's hearing, the banking panel will decide whether or not to move McWatters' name forward for a confirmation vote; an affirmative vote is widely expected. If the committee then votes to confirm the nomination,  a vote is then taken by the full Senate.
If all goes smoothly, McWatters could take a seat on the NCUA board within weeks.

McWatters is not a stranger to the halls of the U.S. Congress. He served in 2009 as counsel for Rep. Jeb Hensarling (R-Texas), who has been the chairman of the House Financial Services Committee since January 2013. McWatters is currently dean for graduate programs at Southern Methodist University's School of Law in Dallas.

He was a member of the TARP Congressional Oversight Panel in Washington, D.C., from December 2009 to April 2011. TARP--or the Troubled Asset Relief Program--refers to the $700 billion fund established in 2008 to help stabilize the economy after the downturn caused by a burst housing market bubble.

Among other notable events for credit unions in Congress this week: House Financial Services subcommittees will be looking at data security and the impact that the growth of financial regulations has on competition:
  • On Tuesday at 10 a.m. (ET), the subcommittee on oversight and investigation will examine the growing impact of regulations on financial institutions in the U.S.. It will also study the extent to which differences between domestic and foreign regulatory regimes make it  difficult for U.S. financial institutions to compete with foreign-based firms and decrease the attractiveness of U.S. financial markets. Witnesses to be announced.
  • The subcommittee on financial institutions and consumer  credit  on Wednesday will conduct that panel's first investigation into the Target data breach and the overall existing threat to financial privacy and date security. The subcommittee will discuss existing security measures and what types of technologies are on the horizon that will help reduce the risk of future data breaches. The hearing starts at 10 a.m. (ET). Witnesses to be announced.

Watch News Now for legislative calendars updates for the week.

NCUA bans four from future CU work

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ALEXANDRIA, Va. (3/3/14)--The National Credit Union Administration has banned four former credit union employees from participating in the affairs of any federally insured financial institution.

The NCUA said the orders involve the following individuals:
  • Jeannette Abbott, a former Malheur FCU, Ontario, Ore., employee who pleaded guilty to the charge of theft, embezzlement or misapplication by a credit union officer. Abbott was sentenced to four months in prison, three years of supervised release and ordered to pay restitution in the amount of $93,749.40;
  • Carol Ann Ferraro, a former Chaffey FCU, Upland, Calif., employee who pleaded guilty to embezzlement by a credit union employee. Ferraro was sentenced to 30 months in prison, five years of supervised release and ordered to pay restitution in the amount of $1,052,790.56;
  • Justine Martin, a former Leominster CU, Leominster, Mass., employee who admitted to facts sufficient for a finding of guilt to the charge of larceny over $250. Martin was sentenced to five years of supervised probation and ordered to pay restitution in the amount of $17,990; and
  • Nancy Ann Secoda, a former Vons Employees FCU, El Monte, Calif., employee who pleaded no contest to charges of grand theft and willfully obtaining personal information. Secoda was sentenced to five years in prison and ordered to pay restitution in the amount of $712,253.58.
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

NCUA website users can now access a new tool for searching agency administrative actions. Through the new tool, they can search prohibition and administrative orders by name, institution, city, state and year, the agency said.

Use the resource link to access all NCUA enforcement orders.

'Unite for Good' celebrates one-year anniversary with enhanced website

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WASHINGTON (3/3/14)--"Unite for Good," the vision for credit unions to be Americans' best financial partners, is one year old now. Credit Union National Association President/CEO Bill Cheney, who unveiled the vision at the association's 2013 Governmental Affairs Conference, says this year's GAC this past week--with a record number of attendees--made it evident that the credit union movement has embraced the "Unite for Good" initiative.
To mark the success, CUNA has enhanced the "Unite for Good" website (see resource link). Stories and photos are featured more prominently and will allow users to connect, share and comment directly from and to the site.
The site now has a "cooperate blog," which offers ideas and resources to help credit unions engage with "Unite for Good," and to back the movement's work to remove barriers, foster service excellence and create awareness.
The CUNA leader invites and encourages credit unions to visit the enhanced site and share their "Unite for Good" stories.