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Predatory mortgage hearing set for next week

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WASHINGTON (4/17/09)—There will be a hearing April 23 on H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 200, according to an announcement Thursday by the House Financial Services Committee. The bill was introduced in March by Reps. Brad Miller and Mel Watt, both Democrats from North Carolina, and is intended to curb predatory lending practices. Specifically, according to the co-sponsors at the time of its introduction, the new measure would strengthen restrictions on compensation paid to mortgage loan originators and brokers that is based on a loan's interest rate and terms—known as yield-spread premiums. It also includes stronger language on "assignee liability," intended to make mortgage securitizers, who package home loans into securities, more liable for fraudulent loans. A key element of the legislation would ban lenders from underwriting loans that consumers do not have a reasonable ability to repay and prohibit practices that increase the risk of foreclosure for consumers. The bill also encourages the mortgage market to make it the norm to write 30-year, fixed-rate, fully documented loans, and move away from growth of "exotic" mortgages, which were a major factor in the current housing and foreclosure crisis. The Credit Union National Association (CUNA) strongly supports congressional action to protect consumers from abusive and deceptive lending practices. Yet, CUNA has advised federal lawmakers that credit unions' long history of favorable lending practices, and the range of regulation under which the movement operates, makes some provisions of such legislation more appropriate for the mortgage brokerage industry.

SBA announces leadership management team

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WASHINGTON (4/17/09)--The U.S. Small Business Administration (SBA) has appointed several members on its leadership and management team of Administrator Karen Mills, who was confirmed April 3. SBA appointees include:
* Meaghan Burdick, White House liaison; * Christopher Chan, special assistant to the administrator and scheduler; * Darryl K. Hairston, associate administrator of the Office of Management and Administration; * Subash S. Iyer, special assistant to the administrator; * Joseph G. Jordan, associate administrator of government contracting and business development; * Ginger E. Lew, counselor to the administrator and liaison to the National Economic Council; * Sara D. Lipscomb, general counsel; * Ana M. Ma, chief of staff; * Toby J.G. McGrath, associate administrator for the Office of Field Operations; * Kimberly A. Peyser, confidential assistant to the administrator; * Penny K. Pickett, senior adviser to the administrator, and acting associate administrator for the Office of Entrepreneurial Development; * Jonathan L. Swain, assistant administrator for Communications and public liaison; and * Eric R. Zarnikow, associate administrator for capital access.
The Credit Union National Association (CUNA) has emphasized that credit unions are ready to help the nation’s small businesses revive the economy and has worked with the SBA on issues affecting credit unions. CUNA is currently monitoring provisions of President Barack Obama’s economic stimulus package regarding SBA lending. SBA 7(a) and 504 lending would benefit from a provision in the package that would raise the percentage of a loan that the SBA can guarantee to 90% from 85%. Credit unions benefit from the increase because the guaranteed portion of such loans does not count toward the member business lending cap of 12.25% (News Now Feb. 10).

NCUA Agenda for FCU Act event set

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WASHINGTON (4/17/09)--The agenda for a symposium marking the 75th anniversary of the Federal Credit Union Act is available, the National Credit Union Administration (NCUA) announced Wednesday. The event is scheduled for June 9-10 at the Hyatt Regency Washington, D.C. It aims to celebrate 75 years of federal credit union history and provide a forum to discuss federal credit unions’ futures. Rep. Paul Kanjorski (D-Pa.) will give keynote address at 9 a.m. June 9. Two panels, “Is the Cooperative Financial System Still Relevant?” and “Other Financial Service Models” will follow. John Hope Bryant, founder, chairman and CEO of Operation HOPE is scheduled to give a luncheon address. Two more panels, “The Future of the Corporate Credit Union System,” and “Perspectives on Supplemental Capital for Credit Unions” will follow the luncheon. On June 10, the event will offer a fifth panel, “Sustainability, Innovation, Collaboration and Growth.” For more information, use the link.

Inside Washington (04/16/2009)

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* WASHINGTON (4/17/09)--Bankers indicate that they are most concerned with the overall economy and the effect of increasing premiums on Federal Deposit Insurance Corp. (FDIC)-insured institutions, according to the FDIC’s Ombudsman Report to the Industry, released Wednesday. The report covers July 1, 2008 to Dec. 31, 2008. About 643 bankers contacted the Office of the Ombudsman requesting assistance. Staff spoke with 65 industry representatives about banking matters through telephone calls, conferences and outreach visits. During the reporting period, FDIC resolved 21 bank failures ... * WASHINGTON (4/17/09)--Mortgages and refinancings at large financial institutions are rising, but consumer lending is dropping, according to a survey conducted by the Treasury Department (American Banker April 16). The survey included large financial institutions receiving funds from the Troubled Asset Relief Program (TARP). Sixteen of the 21 firms surveyed said the number of mortgage originations increased, and two said originations decreased. Home equity line lending rose by 18%. Industrial and consumer lending weakened in all categories. Survey participants said their commercial and industrial lending dropped by 4% and origination of those loans dropped 13%. The Treasury stated that the drop in lending results from low demand ... * WASHINGTON (4/17/09)--Sen. Christopher Dodd (D-Conn.), chairman of the Senate Banking Committee, is balancing a number of responsibilities and may need to re-focus, according to financial industry observers. Dodd will need to spend time campaigning in Connecticut and talking to voters, said Stuart Rothenberg, political analyst. At the same time, he has committee responsibilities. Former Rep. John LaFalce said Dodd could run as a populist--on the consumer side--and focus on overdraft fees, derivative regulation or predatory lending, instead of regulatory reform, though reform is a key priority for President Barack Obama and Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. Dodd told American Banker (April 16) that he is focusing on helping Obama build a new financial system that protects consumers and investors. He also is working to crack down on abusive card practices, evidenced by legislation he introduced--S.414--which was approved by the Senate Banking Committee (News Now April 1) ... * WASHINGTON (4/17/09)--Fannie Mae and Freddie Mac modified 24,000 loans during the fourth quarter of 2008--a 76% increase over the third quarter, the Federal Housing Finance Agency (FHFA) said in a release Wednesday. The FHFA also instituted a suspension on foreclosures from Nov. 26 to Jan. 31, which reduced the number of foreclosures in the quarter by 27%. Modifications represented 34% of fourth-quarter loss mitigation actions, compared with 22.2% in the third quarter, FHFA said ...