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Tracy FCU liquidated members served by Valley First CU

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ALEXANDRIA, Va, (4/28/10)-- Tracy FCU, of Tracy, Calif., was liquidated by the National Credit Union Administration Tuesday and its $25.4 million in assets, as well as its loans and shares, were purchased and assumed by Valley First CU, of Modesto. In announcing the supervisory actions, the NCUA stated they were taken due to Tracy FCU’s “declining financial condition.” Tracy FCU’s declining financial condition led to its closure and subsequent purchase and assumption. At closure, Tracy FCU had $25.4 million in assets and served 5,973 members. At its closing, Tracy served 5,973 members. The NCUA announcement said Valley First CU is a full service credit union and members have access to a broad array of financial services. With assets of $317.1 million and seven branch locations, the credit union serves approximately 47,273 members who live, work, worship, or attend school in Fresno, Madera, Mariposa, Marced, San Joaquin, Stanislaus, Tuolumne Counties, or work for one of the companies in its field of membership. The NCUA reminds that member accounts are insured to at least $250,000 by the National Credit Union Share Insurance Fund, a federal insurance fund backed by the full faith and credit of the U.S. government. This is the sixth federally insured credit union liquidation in 2010.

NCUA FLEC promote financial literacy

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WASHINGTON (4/28/10)--The 2010 edition of Congressional Financial Literacy Day, which was again backed by the National Credit Union Administration (NCUA), showcased the NCUA’s newly created Office of Consumer Protection while also highlighting NCUA and credit union efforts to strengthen financial education. Senators Daniel Akaka (D-Hawaii) and Michael Enzi (R-Wyo.) both served as co-hosts of the observance of financial literacy day, which was also attended by congressional staffers, media members, and representatives from many federal agencies. “If there’s one clear and obvious bright spot in the recent economic turmoil, it’s the rededication of NCUA and the credit union industry to financial education,” NCUA Chairman Debbie Matz said, adding that “credit unions demonstrate a natural affinity for making real-world, practical and useful financial literacy tools available to their members.” Another outlet for enhanced financial education is the Financial Literacy and Education Commission’s (FLEC) recently redesigned MyMoney.gov website, which was re-launched on Tuesday. The newly redesigned version contains “enhanced interactive features and utility to provide more resources to Americans seeking information that can inform their personal financial decisions.” The new site also includes tailored resources for “teachers, service members, women, parents, youth, employers,” and others and background information on how to financially plan for certain life changes or future plans, such as college. Savings calculators, budget worksheets, and checklists are also included on the site, and the FLEC said that they would continue to improve the site in the future. U.S. Treasury Deputy Secretary Neal Wolin said that the new site will provide consumers with a “critical resource to help Americans find free, reliable and unbiased information that can help inform their daily financial decisions and plan for the future." Financial Literacy Month continues through the end of the month, and the Credit Union National Association took part in National Credit Union Youth Week between April 18 and 24 and also promoted its own National Youth Saving Challenge.

NCUA adds items to closed portion of board meeting

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WASHINGTON (4/28/10)—The National Credit Union Administration (NCUA) has added discussions of supervisory activities and internal personnel matters to the agenda of its next board meeting, which will take place tomorrow. Those topics, which were added on Tuesday, will take place during the closed portion of the meeting. Other items on the NCUA agenda include discussions of short-term payday loans and waivers under certain provisions of its corporate credit union regulation. The NCUA’s monthly report on the status of the National Credit Union Share Insurance Fund will also take place during the meeting. These discussions will take place during the open portion of the meeting.

Reg reform debate again held back by Senate

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WASHINGTON (4/28/10)--Senate debate on H.R. 3217, the Restoring American Financial Stability Act, was again held back on Tuesday after Senate Republicans, along with one Democrat, united to defeat a cloture vote on regulatory reform legislation. A similar measure to begin debate failed by a 57 to 41 vote on Monday. Sixty votes are required to move forward with debate, according to Senate rules. The Senate is expected to continue to work behind the scenes to reach a compromise on the bill, which could then be brought to the Senate floor. Public debate could still take place this week, and Senate Majority Leader Harry Reid (D-Nev.) late Tuesday said that he would continue to reintroduce the bill for cloture votes as the week goes on. The Credit Union National Association (CUNA) has urged the U.S. Congress not to limit the National Credit Union Administration's oversight of credit unions to credit unions with under $10 billion in assets, as the legislation currently sets forth. CUNA has also asked legislators to narrow the legislation's definition of remittances, as the current definition is "overly broad" and would make it far more difficult for credit unions to continue to offer any form of international electronic fund transfer services to their members.

FinCEN warns of home equity conversion fraud schemes

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WASHINGTON (4/28/10)--The Financial Crimes Enforcement Network (FinCEN) has warned of increased incidences of the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) program being used to perpetuate financial crimes against senior citizens. Home Equity Conversion Mortgages (HECMs) are federally insured reverse mortgages backed by the U.S. Department of Housing and Urban Development. Specifically, FinCEN has warned financial institutions to be aware of new fraud trends, including “the theft of a senior’s HECM loan proceeds through cross selling of financial products” that violate the rules of the Department of Housing and Urban Development or the outright theft of reverse mortgage proceeds by family members, caretakers, or loan officers. FinCEN has also noted cases where a family member or other individual with power of attorney over the senior’s finances used that power to “apply for and close HECM loans without the full knowledge or participation of the victim.” “The most troubling aspect of HECM fraud is that it takes advantage of senior citizens who have worked hard over their entire lives to own their homes,” FinCEN Director James Freis, Jr. said, adding that FinCEN is “working closely” with HUD and the Secret Service to “proactively identify hot-spots of suspected HECM and other mortgage fraud activity and directly provide to law enforcement a more defined battleground to direct their resources.” FinCEN has also requested that financial institutions “use certain key words” in their Suspicious Activity Reports (SAR) to “assist law enforcement in identifying and prosecuting these crimes.” For the full FinCEN release, use the resource link.

Inside Washington (04/27/2010)

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* WASHINGTON (4/28/10)--Sen. Carl Levin (D-Mich.) Monday pressed for tougher limits on financial institutions’ abilities to participate in proprietary trading. Levin said the issue should be included in Senate Banking Committee Chairman Christopher Dodd’s (D-Conn.) regulatory reform bill. Levin said an investigation of Goldman Sachs Group proved the firm bet against the mortgage market even when it encouraged clients to invest in it--indicating why stricter rules are needed. Goldman’s risky trading has been viewed by financial observers as a contributing factor in the housing market’s troubles (American Banker April 27) ... * WASHINGTON (4/28/10)--The National Commission on Fiscal Responsibility and Reform should focus on putting the nation on a path to fiscal sustainability, Federal Reserve Board Chairman Ben Bernanke said in a speech to the commission Tuesday. One criterion for sustainability should be to stabilize the ratio of federal debt held by the public to national income. This can be achieved by bringing spending, excluding interest payments, in line with revenues, he said. “Most projections suggest that we are far from this goal, and that without significant changes to current policy, the ratio of federal debt to national income will continue to rise sharply.” Congress, the Obama administration, and Americans will have to choose among making modifications to entitlement programs such as Medicare or Social Security, restraining federal spending on everything else, accepting higher taxes or some combination thereof, he added. Click to read the full text of Bernanke’s speech ...