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FHFA seeks comment on mortgage database expansion

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WASHINGTON (4/21/14)--The Federal Housing Finance Agency is considering expanding the scope of a planned national mortgage database, and is seeking public comment on the potential expansion, Politico reported last week.
 
The database expansion would provide space for specific loan information and details on mortgage borrowers.
 
The FHFA will accept comment on the database expansion until May 16. The agency plans to begin collecting the additional loan and borrower information on May 27, but that date could be moved back, Politico said.
 
The FHFA and Consumer Financial Protection Bureau joined to develop the National Mortgage Database in late 2012, saying it would be the first comprehensive repository of detailed mortgage loan information.
 
The database, once completed, will primarily be used to support the two agencies' policymaking and research efforts and to help regulators better understand emerging mortgage and housing market trends. The designers said it will include information spanning the life of a mortgage loan from origination through servicing and include a variety of borrower characteristics.
 
Specifically, the database will include loan-level data about the mortgage including:
  •  A borrower's financial and credit profile;
  • The mortgage product and terms;
  • The property purchased or refinanced; and
  • The ongoing payment history of the loan.
Data will be updated on a monthly basis and track as far back as 1998.
 
The agencies have said that the database will not contain personally identifiable information and that precautions will be taken to ensure that individual consumers cannot be identified through the database or through any datasets that may be made available to researchers or the public.

Lawmakers seek colleagues' backing on RBC plan changes

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WASHINGTON (4/21/14)--Two members of the House Financial Services Committee, Reps. Peter King (R-N.Y. ) and Gregory Meeks (D-N.Y.), are circulating a letter among House colleagues urging the National Credit Union Administration to consider changes to its proposed risk-based capital (RBC) regulations. The letter expresses the concern that any final RBC rule should not unduly burden credit unions and should not adversely affect healthy credit unions' ability to meet the financial services needs of their members.

The letter notes several concerns that must be addressed before the NCUA adopts a rule. The legislators plan to forward the letter to the agency once congressional signatures are collected.

The letter encourages the NCUA to:
  • Take into account the cost and burden of implementing new risk-based capital requirements beyond the current leverage ratio;
  • Provide justification and more clarity as to why the proposed risk weights differ from those applied to other community financial institutions; and
  • Give credit unions more time than the proposal's allotted 18 months to come into compliance after it is finalized.
"During the financial crisis, natural person credit unions served as an important source of liquidity in local communities and the overwhelming majority of them successfully weathered the downturn. These cooperatives did not engage in the risky lending practices that led up to the crisis and nearly all maintained their well-capitalized status," the letter notes. It adds that the crisis did not provide evidence for greater capital reserves for natural person credit unions, and the NCUA's across-the-board approach seems burdensome and raises concerns.

At a congressional hearing earlier this month, many lawmakers' expressed interest in the RBC proposal.

"We have urged Congress to take a particular interest in the proposed risk-based capital rule, and clearly the issue has piqued interest," Credit Union National Association President/CEO Bill Cheney said following the hearing. The questions during the hearing about the risk-based capital proposal reflect "a level of concern in Congress that the proposal is in need of significant improvements," he added.

Comments on the RBC plan are due to the agency by May 28. CUNA and the National Association of Federal Credit Unions last week repeated their call on the agency to extend the comment deadline by 90 days.

CUNA has extensive resources for credit unions regarding the RBC plan. Use the resource link.

CUNA: New data breach shows need for improved merchant security standards

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WASHINGTON (4/21/14)--A data breach at Michaels Stores and associated business Aaron Brothers may have impacted 2.6 million cardholders, the arts and crafts retailer confirmed late last week.
 
The security breach was created by "criminals using highly sophisticated malware that had not been encountered previously by either of the security firms," Michaels said in a statement. The retailer said the incident has been contained. This is the second such incident that has occurred at Michaels since 2011.
 
The Credit Union National Association is pressing federal lawmakers to address data security relative to merchants, who are not held to the same standards of security as credit union and other financial institutions.
 
In particular, CUNA maintains that all payments system participants must be held to comparable levels of federal data security requirements; those responsible for the data breach should be responsible for the costs of helping consumers; and those responsible should ensure consumers know where their information was breached.
 
The newest Michael's breach took place between May 8, 2013, and Jan. 27, 2014, according to reports. The 2.6 million cards that were potentially impacted represent 7% of cards that were used at Michaels stores during that time period. Another 400,000 cards may have been impacted at Aaron Brothers stores between June 26, 2013, and Feb. 27, 2014.
 
"There was no evidence that data such as customers' name or personal identification number were at risk," Michaels Stores said in their release.
 
In March, the National Credit Union Administration launched a new resource for credit unions--a webpage that provides links to cybersecurity and data security resources. Use the resource link.