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In Congress: April 29 McWatters and GSE reform votes, May 1 for patent reform

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WASHINGTON (4/28/14)--As the U.S. Congress returns to session this week after a two-week district work period, several key credit union items are on the agenda: Mark-ups of housing finance and patent reform bills are likely to be on the schedule, and a confirmation vote on J. Mark McWatters' nomination to join the National Credit Union Administration is also expected.

The Senate Banking Committee markup of housing finance reform legislation has been scheduled for April 29, and while there have been weeks of speculation about a delay of the vote, as of late Friday the date remained steady.  A revised version of reform legislation, known as Johnson-Crapo  after the senators who authored it, could be released today or tomorrow.

As it stands, the bill 425-page draft bill takes significant steps to ensure that credit unions will continue to have access to a functioning, well-regulated, well-capitalized secondary mortgage market. The bill seeks to overhaul the housing finance market and address the issues created by the current government ownership of Fannie Mae and Freddie Mac.

The Credit Union National Association has advocated for credit union priorities on several fronts, including meetings with White House officials, Federal Housing Finance Agency Director Mel Watt and members of Congress. CUNA has encouraged policymakers to be mindful of the existing regulatory burdens of credit unions and other mortgage servicers as discussions on housing finance reform proceed. Legislators and other officials must proceed judiciously and not layer additional regulatory authority on top of existing regulatory regimes that address mortgage servicing, CUNA has said. 

CUNA has also emphasized that a new system must ensure that the housing finance market remains accessible to credit unions and other smaller institutions and that structure must be in place to prohibit domination by the country's biggest banks.

Also on this week's radar--McWatters' nomination will also be voted on during a Tuesday April 29 executive session of the Senate Banking Committee.  The panel will also vote on the Federal Reserve nominations of Stanley Fischer, Jerome Powell and Lael Brainard. The committee will also consider Gustavo Aguilar's nomination to be an assistant secretary for the U.S. Department of Housing and Urban Development.

Also important to credit unions, the Senate Judiciary Committee's bill is scheduled to vote May 1 on its Patent Transparency and Improvements Act (S. 1720), which, in part, would aid credit unions and other businesses that have been targeted by patent "trolls," who manipulate the patent system for their own gain. The markup is scheduled to occur during a May 1 committee executive session.

CUNA encourages CU comment on CFPB remittances plan

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WASHINGTON (4/28/14)--Credit unions have until May 27 to comment on the Consumer Financial Protection Bureau's proposed modifications to its international remittance transfers rule. The Credit Union National Association is encouraging credit unions to comment as the trade association works for improvements to the proposal, including urging an exemption level well over the 100 transfers per year that the CFPB currently provides.

The proposed rule would extend for an additional five years a temporary provision that permits federally insured credit unions and other depository institutions to estimate certain remittance pricing disclosures. This temporary provision is set to expire on July 21, 2015.

Also, the proposal would make several clarifications and technical corrections, including to:
  • Consider whether U.S. military installations abroad should be considered being located in a U.S. state or a foreign country for purposes of the remittance rule;
  • Clarify that transfers from accounts primarily used for personal, family or household purposes would be subject to the remittance rule, but transfers from non-consumer accounts would not be subject to the rule;
  • Clarify that faxes are considered writings and would not be subject to additional requirements for electronic disclosures; and, separately, in certain circumstances, a remittance transfer provider may conduct the transaction orally and entirely by telephone after receiving a remittance inquiry from a consumer in writing (e.g., if a sender physically abroad a U.S. branch of a sender's institution attempts to initiate a transfer by first sending a mailed letter, and further communication by letter may be impractical.); and
  • Clarify that a provider's failure to deliver a transfer by the disclosed date of availability is not an error if such failure was caused by a delay related to a necessary investigation or other action to address Bank Secrecy Act, Office of Foreign Assets Control, or similar requirements; and, separately, to clarify remedies for certain errors.
CUNA continues to advocate to the CFPB to improve the remittance rule for credit unions, and is interested in how these proposed changes would affect the processing of international funds transfers at credit unions, corporate credit unions and other payment providers.

Use the resource link to access CUNA's Comment Call.  CUNA's comment deadline is May 12.

CDFI Fund announces five new 'capacity building' webinars

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WASHINGTON (4/28/14)--There are five new technical assistance webinars being offered to Community Development Financial Institution Minority Depository Institutions (CDFI MDIs) through the U.S. Treasury Department's CDFI Fund.
The CDFI Fund announced Friday that the new webinars will be provided as part of its Capacity Building Initiative's "Preserving and Expanding CDFI Minority Depository Institutions" series and will be presented between May and September.
The webinars will provide targeted online training and are designed to maximize the reach of the CDFI Fund's training series within the CDFI MDI sector, but are appropriate for all CDFIs.
The upcoming webinars include:
  • Creating a Culture of Risk Management, 4 p.m. (ET) May 12;
  • Attracting and Retaining Talent," 3 p.m. (ET) June 9;
  • Socially Aligned Funding for CDFI MDIs Part One: Introduction to Alternative Sources of Investments, 3 p.m. (ET) July 23;
  • Socially Aligned Funding for CDFI MDIs Part Two: Strategies for Communicating Your Story and Demonstrating Your Impact, 2 p.m. (ET) Aug. 27; and
  • CDFI MDI Marketing to Customers, 2 p.m. (ET) Sept. 24.
Use the resource link for more information and to register.

Senators want safeguards in card marketing to college students

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WASHINGTON (4/25/14)--The U.S. Department of Education should use its authority to prevent banks offering school-themed financial products to college students from charging high fees and aggressively marketing those products to students, a group of 23 senators said last week.

In a letter to Education Secretary Arne Duncan, Sen. Elizabeth Warren (D-Mass.) and co-signers noted that many colleges partner with banks to offer debit cards, prepaid cards or other products to students. The letter said student aid dollars in some cases may be diverted away from their intended purpose by high fees and high interest rates associated with these products.

According to the Consumer Financial Protection Bureau, there were 617 agreements between colleges and financial firms in 2012, with the firms paying colleges a combined $50 million. The agreements resulted in more than 1 million accounts being initiated.

The CFPB last September reported that details about college and university-sponsored accounts are often difficult to obtain. Consumers wanting details about these deals might only find them after filing requests under state open records laws.

The bureau called on financial institutions to be more transparent about commercial deals with colleges and universities. The U.S. Governmental Accountability Office has also reported on this issue.

"When colleges partner with financial institutions and push students into putting their federal student aid refunds into high fee accounts, it puts our federal investment at risk. Students should be able to make unbiased choices about the financial products that work best for them. Colleges should be recommending the financial products that provide the best deal to students, not the biggest financial reward for the institution," the senators wrote.

They called on the Department of Education to:
  • Ensure students can deposit aid into personal accounts without delay or penalty;
  • Prohibit colleges from entering into agreements with banks or other firms to offer products that charge fees for the disbursement and use of Title IV student aid;
  • Ensure students receive unbiased information about how to access federal student aid;
  • Ban revenue sharing deals between colleges and financial institutions; and
  • Require colleges to post financial agreements with banks on their websites, and to submit those agreements to relevant authorities for periodic review.
For the full letter, use the resource link.