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New liquidity, contingency plan rules in effect for CUs

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ALEXANDRIA, Va. (4/1/14)--New three-tier liquidity and contingency planning regulations for credit unions went into effect Monday. Under the new rule, credit unions with less than $50 million in assets must maintain a basic written emergency liquidity policy, but will not be required to take further action.

Also under the National Credit Union Administration final rule:
  • Credit unions with assets of $50 million or more are now required to develop contingency funding plans describing how their credit union would address liquidity shortfalls in emergency situations; and
  • Credit unions with assets of $250 million or more must have access to a backup federal liquidity source for emergency situations.
Credit unions have two options to ensure a federal liquidity source for emergency situations: Becoming a member of the NCUA's Central Liquidity Facility (CLF) by subscribing to CLF stock or accessing the Federal Reserve's discount window.

In its Letter to Credit Unions 14-CU-05, the NCUA included a supervisory letter and examination questionnaire for examiners to use when reviewing liquidity risk management at credit unions. The Credit Union National Association has developed an eGuide section on the emergency liquidity rule. Use the links below to access these resources.

CUNA represents CUs at White House GSE reform meeting

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WASHINGTON (4/1/14)--In a meeting at the White House complex yesterday, Credit Union National Association General Counsel Eric Richard urged Obama administration officials to consider field-of-membership limitations on credit unions as the officials review issues relating to credit accessibility for borrowers of varying incomes.

The meeting was one of a series that White House staff have held to discuss housing finance policy issues with myriad stakeholders as the Senate Banking Committee prepares to consider the Johnson-Crapo housing finance reform bill (S. 1217) on April 29.
In fact, just last week CUNA Chief Economist Bill Hampel and General Counsel Eric Richard represented credit unions in another such stakeholders' session investigating reform options.

At Monday's meeting, Deputy General Counsel Mary Dunn recommended that the administration facilitate the extension of loans that do not fit the qualified mortgage provisions if the Ability-to-Repay factors have been met and consider incentives for credit unions to continue making high-performing mortgages.

CUNA urges the U.S. Congress and the Obama administration, as they consider comprehensive housing finance reform, to ensure that credit unions and other community financial institutions continue to have access to the secondary mortgage market.

CUNA has highlighted many credit union priorities for reform, including:
  • Allowing credit unions to continue to offer mortgage products with predictable payments, like the 30-year fixed-rate mortgage; and
  • Ensuring the transition to a new system is smooth.

Housing finance reform is a huge issue in the current Congress, with the Senate Banking Committee markup in the offing on its housing finance reform legislation. Housing finance reform bills have also been released by House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Ranking Minority Member Maxine Waters (D-Calif.).

TILA-RESPA integrated disclosures: A CFPB small-entity guide

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WASHINGTON (4/1/14)--An overview of the upcoming Truth-in-Lending Act/Real Estate Settlement Procedures Act rule, and details on "issues that small creditors, and those that work with them, might find helpful to consider when implementing the rule," are included in a new Consumer Financial Protection Bureau guide.
 
In the guidance, the CFPB notes that financial institutions may want to review their processes, software, contracts with service providers, or other aspects of business operations in order to identify any changes needed to comply with the rule.

"Changes related to this rule may take careful planning, time, or resources to implement," the CFPB said. The TILA-RESPA rule goes into effect Aug. 1, 2015.
 
Areas addressed in the guidance include:
  • The loan-estimate disclosure;
  • Delivery of the loan estimate;
  • Good faith requirement and tolerances;
  • Revisions and corrections to loan estimates;
  • Timing for revisions to loan estimate;
  • Closing disclosures;
  •  Practical implementation and compliance issues;
  • Delivery of closing disclosures; and
  • Revisions and corrections to closing disclosures.
The rule features integrated mortgage disclosures under Regulation X and Regulation Z, and provides a detailed explanation of how the forms should be filled out and used.
 
For the full CFPB guide, use the resource link.

Probation, gambling treatment ordered for former CU employee

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ALEXANDRIA, Va. (4/1/14)--A former employee of Uncle CU, Livermore, Calif., Rhandy Tabar, is now prohibited by a National Credit Union Administration prohibition order from any future work with a federally insured financial institution. Tabar also is under orders to enter into a gambling addiction treatment program.
 
Tabar recently pleaded no contest to grand theft and embezzlement charges and has been sentenced to five years of probation. As a condition of that probation Tabar will serve the first year in county jail. 
 
The former credit union employee was also ordered to pay $606,541.33 in restitution, according to the NCUA.
 
Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.
 
Use the resource link below to access the agency's archived enforcement orders.
 
 
 

Mayfair FCU of Philly closes, shares assumed by Freedom CU

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ALEXANDRIA, Va. (4/1/14)--The National Credit Union Administration Monday liquidated Mayfair FCU of Philadelphia. Freedom CU, of Warminster, Pa., immediately assumed Mayfair's members and deposits as well as a portion of the loan portfolio and other assets.

Mayfair was placed into conservatorship in 2013 to protect its financial stability and operations. However, the NCUA made this subsequent decision to liquidate and discontinue operations after determining Mayfair was insolvent with no prospect for restoring viable operations.

The new Freedom CU members will experience no interruption in services, and their accounts remain federally insured by the National Credit Union Share Insurance Fund up to $250,000. Administered by NCUA, the fund has the backing of the full faith and credit of the U.S. Government.

Freedom is a state-chartered credit union serving more than 60,000 members and holding nearly $623 million in assets, according to its most recent Call Report. At the time of its liquidation, Mayfair served 1,519 members and had assets of $14.3 million, according its most recent Call Report data. Chartered in 1936, Mayfair served a low-income community in Philadelphia.

Mayfair FCU is the fourth federally insured credit union liquidation in 2014.

NCUA reports to Congress on diversity gains

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ALEXANDRIA, Va. (4/1/14)--The National Credit Union Administration continues to make progress in increasing the diversity of its workforce and its vendors, according to a report to Congress released Monday. However, the rate of increase in minorities collectively represented in the NCUA workforce slowed from the significant increase of the year prior.
 
The report indicates that minorities collectively represented 26.8% of the agency's workforce in 2013. The NCUA notes that that is a 1.6 percentage point increase from 2011, but it is up just 0.1 percentage point from 2012.
 
"NCUA is absolutely committed to developing a stronger, more diverse workplace where everyone's talents are recognized and opportunities abound," said NCUA Chairman Debbie Matz in a release. "We take this responsibility very seriously as part of the overall effort to make the agency an employer of choice. We are likewise committed to expanding the opportunities for minority- and women-owned companies to do business with NCUA."

The report notes that total dollar awards to women- and minority-owned businesses was $8.3 million in 2013, a 137% increase from 2012, and that amount represented 22% of all reportable contracts.

Among the report's other findings for 2013:
  • Women represented 43.7% of all employees in 2013, and 42.6% of senior staff. The year priot women in senior staff positions increased to 41% from 24% , which represented a 17% increase;
  • African Americans represented 14.5% of all employees and 7.4% of senior staff;
  • Hispanic Americans represented 4.4% of all employees and 3.7% of senior staff; and
  • Asian Americans, including Native Hawaiians or Pacific Islanders, represented 5.8% of all employees and 3.7% of senior staff.
The percentages of minority employees remained stable from 2012 or showed slight increases.

In its release the NCUA notes that the agency is regularly recognized by the Partnership for Public Service as a desirable place for women and minorities to work, earning high marks for leadership, diversity, fairness and employee empowerment. Among mid-sized federal agencies, the NCUA ranked first in 2013 with Hispanics and African Americans in the Partnership for Public Service's Best Places to Work in the Federal Government.

Established Jan. 21, 2011, the Office of Minority and Women Inclusion is responsible for all agency matters relating to measuring, monitoring and establishing policies for diversity in NCUA's management, employment and business activities. OMWI is also responsible for assessing the diversity policies and practices of NCUA's regulated entities, excluding the enforcement of statutes, regulations and executive orders pertaining to civil rights.

Ways & Means' Camp will not seek re-election

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WASHINGTON (4/1/14)--House Ways and Means Committee Chairman Dave Camp (R-Mich.) announced Monday that when his term ends in nine months, he will not seek re-election.  On Feb. 26, Camp released a much-anticipated tax reform plan and at the time pundits predicted Camp intended it to be the signature piece of legislation of his career.
 
"During the next nine months, I will redouble my efforts to grow our economy and expand opportunity for every American by fixing our broken tax code, permanently solving physician payments for seniors, strengthening the social safety net and finding new markets for U.S. goods and services," Camp said in a release announcing his retirement from the House.

CUNA Executive Vice President of Government Affairs John Magill said of Camp, "He has been among the strongest of supporters of credit unions throughout his career. We look forward to continued conversations with the chairman during the rest of his term, and we of course wish him well in the next chapter of his life."
 
The specific credit union tax status was left untouched in Camp's plan, an outcome for which the Credit Union National Association strongly advocated.  CUNA, the state credit union associations and credit unions together amassed 1.3 million contacts with lawmakers urging them "don't tax my credit union."
 
Late last month Camp notified his Ways and Means colleagues that the committee will move forward with hearings on his tax reform draft in April--first taking on the amorphous area of tax "extenders." The chairman said the committee will go policy-by-policy and, through hearings and markup sessions, determine what extenders should become permanent to the tax code. Specific dates and topics will be forthcoming.

CUNA will continue to monitor the tax reform process as it unfolds.
 
"While credit unions were untouched in the original tax draft, CUNA will continue to advocate for and educate about the credit union tax status as long as the tax reform process is alive," CUNA's John Magill has vowed.

In Congress: Patent bill, data breaches on the agenda this week

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WASHINGTON (4/1/14)--Possible consideration of patent reform legislation and a data breach hearing are two items credit unions can look out for this week in the U.S. Congress.
 
As reported by News Now last week, The Patent Transparency and Improvements Act of 2013 (S. 1720) is on the Senate Judiciary Committee's markup agenda this week, but the action could be pushed back another week depending on other committee priorities.
 
The data breach hearing, titled "Data Breach on the Rise: Protecting Personal Information from Harm," is scheduled to be conducted Wednesday by the Senate Homeland Security and Governmental Affairs Committee.
 
Federal Trade Commission Chair Edith Ramirez, William Noonan of the U.S. Secret Service's cyber operations division, and U.S. Government Accountability Office Director of Information Security Issues Gregory Wilshusen will testify during the hearing's first panel. Financial Services Roundtable CEO Tim Pawlenty, Retail Industry Leaders Association President Sandra Kennedy and iSIGHT Partners, Inc. Senior Vice President and Chief Revenue Officer Tiffany Jones will testify as part of a second panel of witnesses.

Last week--in a separate data security hearing--Sen. Claire McCaskill (D-Mo.) brought attention to the fact that there is public confusion about who is held financially responsible for the costs that occur when a merchant's data is not secure. She noted that the companies collecting consumers' personal information are not held financially responsible for the costs. Instead, she said, credit unions and other financial institutions bear that burden ( News Now March 27).

Other hearings scheduled this week include:
  • A Wednesday House Appropriations financial services and general government subcommittee hearing on the U.S. Treasury's fiscal 2015 budget; and
  • A Wednesday House Financial Services oversight and investigations subcommittee hearing on allegations of discrimination and retaliation against Consumer Financial Protection Bureau employees.