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NEW House set to vote Tuesday on CURRA

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WASHINGTON (2/25/08, UPDATED 9:00 a.m. ET)--The House has scheduled a vote next Tuesday on the Credit Union Regulatory Relief Act (CURRA), H.R. 5519. The measure is expected to be paired with a regulatory relief bill for banks. CURRA was introduced in March by Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) The CURRA bill would offer regulatory relief in 12 areas, though does not go as far as the Credit Union Regulatory Improvements Act (CURIA), H.R. 1537. CURRA does propose to permit federal credit unions to add service to underserved areas regardless of original field of membership. It does not contain language to increase the credit union member business lending ceiling or transform prompt corrective action into a more risk-based system. It would, however, omit MBLs to underserved areas from counting toward the current cap. “We will continue to work for CURIA longer term, but we will also seize this opportunity to gain some meaningful regulatory relief for credit unions in the near term with House passage of CURRA,” said John Magill, CUNA senior vice president-legislative affairs. The CURRA bill is expected to come up on the House suspension calendar, a procedure designed to expedite passage by allowing for a voice vote with no amendments or a two-thirds favorable recorded vote. The CURRA bill would:
* Permit the purchase of investment grade securities by federal credit unions; * Permit federal credit unions offer payday loan alternatives to nonmembers in their fields of membership; * Increase the investment limit in credit union service organizations; * Exclude from the member business lending cap any loans to nonprofit religious organizations; * Allow the National Credit Union Administration (NCUA) to establish longer maturities for certain credit union loans; * Give the NCUA greater flexibility in responding to market conditions; * Permit, under certain circumstances, a federal credit union converting to a community charter to continue to serve groups outside the community; * Enable credit union participation in the Small Business Administration's 504 programs; * Permit federal credit unions to provide for short-term payday loan alternatives for nonmembers within a the credit union’s field of membership; * Permit a federal credit union to expel a member for cause, and to institute term limits for board members if it so chooses; * Encourage small business development in underserved urban and rural communities by providing for the exclusion of member business loans made in underserved areas from the business lending cap; and * Provide an exemption from pre-merger notification of the Clayton Act.

Inside Washington (04/25/2008)

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* WASHINGTON (4/28/08)--The Office of the Comptroller of the Currency (OCC) has settled with Wachovia Bank, the agency announced Friday. The bank will make restitution to consumers harmed by its relationships with several telemarketers and third-party payment processors. The estimated maximum amount of potential claims is $125 million. Wachovia also will pay $8.9 million to consumer education programs for the elderly and a $10 million civil money penalty to the U.S. Treasury. Friday’s settlement was reached when the OCC concluded that Wachovia engaged in unsafe practices with payment processors and telemarketers that affected thousands of consumers, many of whom were elderly. Wachovia profited from the activities because it collected fees and balances maintained at the bank by the processors and telemarketers. The OCC also has updated its guidance for national banks regarding the need for effective due diligence, underwriting and monitoring of entities ... * WASHINGTON (4/28/08)--Lenders need to come up with a solution to fix the housing market, Treasury Secretary Henry Paulson said Wednesday during a private meeting with lenders and servicers (American Banker April 25). Congress is working to create a plan to help borrowers nearing foreclosure, but the legislative process is slow, Paulson said. It’s also hard to know how many lenders have been successful with loan modifications, he added. Attendees of Paulson’s meeting were: Robert Steel, Treasury undersecretary of domestic finance, and executives representing Citigroup, Washington Mutual, JPMorgan Chase and Co., Bank of America, Ocwen Financial Corp., Wells Fargo, Indymac Bancorp and Residential Capital ...

June 24 set for NCUA FOIA rule comments

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WASHINGTON (4/28/08)—Credit unions have until June 24 to comment on a recent National Credit Union Administration (NCUA) proposal to streamline its system for complying with freedom of information and privacy laws. The proposed changes were largely prompted by recent amendments to the Freedom of Information Act (FOIA) addressing several procedural issues concerning fee practices, time limits for complying with requests, and new reporting requirements. The NCUA’s own revision plan embraces both housekeeping changes and other more substantive ones:
* Regarding FOIA, the NCUA would amend regulations to identify more precisely the agency's Information Centers and addresses, and describe required content for request letters; * On the privacy issue, the agency proposal would abolish present language that permits persons to submit telephone requests because of difficulties in enforcing the regulation's identification requirements.
The proposal was approved for comment at an NCUA April 17 open board meeting. At that time the agency indicated that contemplated housekeeping changes in the privacy area include correcting cross-references, grammar and punctuation; a change in nomenclature and additional definitions to improve understanding of rights and requirements, and more exact definitions for "system manager" and "working day." The NCUA also said the proposed language on privacy would clarify that requests must be submitted in writing to the appropriate system manager or to other staff as specified. For more on the agency plan, use the resource link below.

Compliance Check out new foreign payments rule

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WASHINGTON (4/28/08)—Credit unions are reminded that NACHA wants all financial institutions to begin studying a new ACH international payments rule scheduled to become effective March 20 of next year. It requires these payments be identified as “international ACH Transactions” using a new Standard Entry Class Code: IAT. “NACHA urges all institutions to familiarize themselves with the new rule and begin assessing its impact on operations well in advance of the mandatory compliance date next fall,” the Credit Union National Association (CUNA) compliance staff points out in the April Compliance Challenge. The rule is intended to help institutions comply with the Office of Foreign Assets Control (OFAC) regulations by enabling them to easily identify all international payments flowing through the ACH network, and all parties involved in these transactions. Among other things, the new rule will require that IAT payments include specific data elements, now mandatory for wire transfers under the Bank Secrecy Act’s “Travel Rule.” These are:
* Originator name, address, account number; * Originator’s depository institution name, and payment amount; and * Receiver name, address, account number, and 4. the receivers financial institution.
Use the resource links below for detailed information on the new rule available on the NACHA website and for more compliance gems from CUNA.

CUNA Tips on third-party due diligence

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WASHINGTON (4/28/08)—The Credit Union National Association (CUNA) is offering a May 13 audio conference to help credit unions with issues surrounding one of federal examiners’ key 2008 priorities--due diligence requirements for third party vendor relationships. The National Credit Union Administration (NCUA) has noted it will direct examiners to look at credit union efforts to assess, monitor, and manage risks associated with outsourced services at all stages of the relationship. The “Due Diligence With Third Party Vendors – Getting It Right” audio conference is intended to help credit unions with oversight and the adoption of careful monitoring and reporting practices. It will examine the requirements and offers solutions and approaches from practitioners that are working for credit unions. CUNA recently created a new task force to help credit unions meet their due diligence responsibilities with third-party vendors and to do so without unnecessary duplication of effort. Also upcoming, credit union professionals will be able to get answers to their pressing compliance questions during a May 29 “Pressing CU Compliance Issues” audio conferences. The second audio session will address some of the most popular hot-topic compliance issues, as determined by comments received from credit unions. Participants may help build the agenda by e-mailing their questions to cucomply@cuna.coop before the conference. Use the resource link below for more information or to register.

House set for CURRA vote tomorrow

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WASHINGTON (4/28/08)—The House is scheduled to take up the Credit Union Regulatory Relief Act (CURRA), H.R. 5519 for a vote tomorrow. The measure is expected to be paired with a regulatory relief bill for banks. CURRA was introduced in March by Reps. Paul Kanjorski (D-PA) and Ed Royce (R-CA) The CURRA bill would offer regulatory relief in 12 areas, though does not go as far as the Credit Union Regulatory Improvements Act (CURIA), H.R. 1537. The Credit Union National Association (CUNA) and the leagues ask credit unions to voice their support of the CURRA package to their federal lawmakers before it comes to the House Floor for a suspension vote. (See related story, CUNA, leagues urges grassroots action on CURRA.) John Magill, CUNA senior vice president of legislative affairs, said Friday, “We hope Congress will hear from a significant number of credit unions before they cast their votes.” CURRA does propose to permit federal credit unions to add service to underserved areas regardless of original field of membership. It does not contain language to increase the credit union member business lending ceiling or transform prompt corrective action into a more risk-based system. It would, however, omit MBLs to underserved areas from counting toward the current cap. "We will continue to work for CURIA longer term, but we will also seize this opportunity to gain some meaningful regulatory relief for credit unions in the near term with House passage of CURRA," said John Magill, CUNA senior vice president-legislative affairs. The CURRA bill is expected to come up on the House suspension calendar, a procedure designed to expedite passage by allowing for a voice vote with no amendments or a two-thirds favorable recorded vote. The CURRA bill would:
* Permit the purchase of investment grade securities by federal credit unions; Permit federal credit unions offer payday loan alternatives to nonmembers in their fields of membership; * Increase the investment limit in credit union service organizations; * Exclude from the member business lending cap any loans to nonprofit religious organizations; * Allow the National Credit Union Administration (NCUA) to establish longer maturities for certain credit union loans; * Give the NCUA greater flexibility in responding to market conditions; Permit, under certain circumstances, a federal credit union converting to a community charter to continue to serve groups outside the community; *Enable credit union participation in the Small Business Administration's 504 programs; Permit federal credit unions to provide for short-term payday loan alternatives for nonmembers within a the credit union's field of membership; *Permit a federal credit union to expel a member for cause, and to institute term limits for board members if it so chooses; * Encourage small business development in underserved urban and rural communities by providing for the exclusion of member business loans made in underserved areas from the business lending cap; and * Provide an exemption from pre-merger notification of the Clayton Act.

Immediate CU grassroots action urged for CURRA

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WASHINGTON (4/28/08)—On the cusp of an important House vote on credit union regulatory relief legislation, the Credit Union National Association (CUNA) and the leagues are urging credit unions to push back banker opposition and help clear the way for H.R. 5519, the Credit Union Regulatory Relief Act (CURRA). The House is scheduled to consider the bill Tuesday (see related story : House set for CURRA vote tomorrow) and the credit union groups urged their members to contact House lawmakers in support of CURRA. “Unfortunately, the bill is facing opposition by the American Bankers Association and other anti-credit union interests. We need your help to secure CURRA’s passage in the House of Representatives,” CUNA and the leagues said in their Friday Action Alert. It added: “The bankers have declared that credit unions can have nothing, not now or ever. We need this win to show them otherwise! “ Credit unions were asked to call or email Congress immediately with the following messages:
* H.R. 5519 should be non-controversial – most of the provisions of bill have already passed the House in 2004 and 2006. The only new provisions within CURRA are targeted to allow credit unions to serve underserved people and areas and were very recently discussed at a hearing before the House Financial Services Committee on March 6. * This is the first major piece of credit union specific legislation to be considered in the House of Representatives since 1998. * CURRA would help credit unions serve people and areas that do not have access to mainstream financial service providers. This is common sense. It is part of the core mission of credit unions to serve consumers, but only multiple group credit unions are eligible to serve the underserved under current law. CURRA makes all federally chartered credit unions eligible to serve the underserved areas. * VOTE YES on H.R. 5519. This is important legislation that will help credit unions serve their members well in the 21st century.
CUNA and the leagues support CURRA, but emphasize that credit unions need additional regulatory relief that are included the provisions in the broader credit union bill, the Credit Union Regulatory Improvements Act (CURIA, H.R. 1537). Use the resource links below for more information.