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Six banned by NCUA from credit union work

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ALEXANDRIA, Va. (4/4/12)—Six former credit union employees—three from New York, one from Hawaii, one from Kansas, one from North Carolina—have been banned from  participating in the affairs of any federally insured financial institution by the National Credit Union Administration (NCUA).

The NCUA issued prohibition orders to the following individuals:

  • Cynthia Vaughan, a former employee of Rockland Employees FCU, Spring Valley, N.Y., who was convicted of bank fraud.  The NCUA said Vaughan was sentenced to 18 months in prison; three years supervised probation, and ordered to pay restitution in the amount of $150,000;
  • Daniel Mahiai, a former employee of Molokai Community FCU, Kaunakakai, Hawaii, was convicted of embezzlement. Mahiai was sentenced to 27 months in prison; five years supervised probation, and ordered to pay restitution in the amount of $168,280.39, according to the NCUA;
  • Jason J. LaPierre, a former employee of Hudson Community CU, Corinth, N.Y., was convicted of grand larceny and, according to the agency release, was sentenced to a minimum of three to nine years in prison;
  • Joyce Ann Outlaw, a former employee of Shuford CU, Granite Falls, N.C., was convicted of embezzlement. The NCUA said Outlaw was sentenced to 36 months of supervised probation and ordered to pay restitution in the amount of $5,000;
  • Melinda K. Riddle, a former employee of Leavenworth Teachers & Community CU, Leavenworth, Kan., was convicted of theft. Riddle was sentenced to two years supervised probation and ordered to pay restitution in the amount of $66,192.22, the NCUA said; and
  • Nathaniel Ham, a former employee of NY Team FCU, Hicksville, N.Y., was convicted of conspiracy to launder money and engage in monetary transactions involving criminally derived funds.  The NCUA said Ham was sentenced to 32 months in prison; three years supervised probation, and ordered to pay restitution in the amount of $1,136,034.

Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million.

Use the resource link to see NCUA enforcement orders online.

iComp Blogi roundup Latest on NCUA CFPB changes

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WASHINGTON (4/4/12)--In the March edition of the Credit Union National Association's CompBlog Monthly Wrap Up, CUNA presents a new list of compliance questions that credit union CEOs should ask members of their staff.

Among the items addressed in this month's list are:

  • Forms and notices that credit unions will need changes if they do mortgage lending, provide risk-based price notices, offer credit cards, and file currency transaction reports or suspicious activity reports;
  • Concerns about how employees and volunteer credit union board members handle confidential information; and
  • The compliance burden of new remittance transfers rules--and a possible exemption.
The March update also highlights some notable upcoming events, including an upcoming Senate vote on legislation that would increase the credit union member business lending cap. The CompBlog update urges all credit unions – even those not involved in MBLs – to make their voices heard in Congress about the need to allow credit unions to better serve businesses.

The CompBlog update also notes some Letters to Credit Unions that are expected to be issued in the near future, as well as a recent NCUA Letter to Credit Unions (No. 12-CU-03) that reminds credit unions that the Temporary Corporate Credit Union Share Guarantee expires on Dec. 31, 2012.

As a result, effective Jan. 1, 2013, National Credit Union Share Insurance Fund coverage on deposits in corporate credit unions will once again be limited to the standard maximum amount of $250,000.

The monthly wrap-up also features effective dates, various new requirements, important compliance articles, and upcoming CUNA training programs.

For more of CUNA CompBlog's monthly wrap up, and other compliance gems, use the resource links.

Inside Washington (04/03/2012)

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  • WASHINGTON (4/4/12)--The Federal Reserve Board has revised the proposed requirements that will determine when a nonbank financial company falls under Federal Reserve supervision as "systematically important." The Dodd-Frank Act specified the Financial Stability Oversight Council can designate a company as "systematically important" if 85% of the company's assets or revenues are related to financial activities. The Federal Reserve issued a draft of the related rule on financial activities in February 2011 but has since revised that rule based on comment letters. The updated proposal issued this week specifies certain activities that are considered "financial," including lending; providing investment or financial advisory services; or exchanging or transfering of money and securities (American Banker April 2). Comments on the proposal are due by May 25 …
  • WASHINGTON (4/4/12)--Thomas Curry will officially become the comptroller of the currency on Sunday. Curry was nominated in June 2011 to lead the Office of the Comptroller of the Currency. Action by the Senate was delayed by political wrangling over nominees for financial regulatory posts, with the appointment confirmed in late March. The previous comptroller, John Dugan, completed his term in August 2010, with the position filled during the interim by Acting Comptroller John Walsh (American Banker April 2). A member of the Federal Deposit Insurance Corp. (FDIC) board since January 2004, Curry previously served as Massachusetts commissioner of banks from 1990 to 1991 and from 1995 to 2003 and is chairman of the board of NeighborWorks America, a non-profit that aids community-based neighborhood revitalization. The Senate also confirmed the nominations of Martin Gruenberg, Thomas Hoenig and Jeremiah Norton to serve on the FDIC board …
  • WASHINGTON (4/4/12)--Democrats on the Senate are pressing the Federal Housing Finance Agency (FHFA) to make further efforts to allow refinancing by homeowners with Fannie Mae and Freddie Mac mortgages (American Banker April 3). In a letter to FHFA Acting Director Edward DeMarco, the 12 Democrats on the committee said the recently announced expansion of the Home Affordable Refinance Program, known as HARP 2.0, falls short in assisting troubled homeowners. The two-page letter makes three specific suggestions: reducing or eliminating loan-level price adjustments for HARP refinances where Fannie and Freddie already carry credit risk; streamlining the refinance process for homeowners with more than 20% equity in their homes; and reducing the risk that Fannie and Freddie will put back mortgages to the loan originator, thereby removing disincentives to refinancing …
  • WASHINGTON (4/4/12)--The Consumer Financial Protection Bureau (CFPB) recently said that, in its interpretation, financial institutions may contribute to qualified profit sharing, 401(k), and stock ownership plans ("qualified plans") for employees and loan originators, if employer contributions to such plans are derived from profits generated by mortgage loan originations. The agency in CFPB Bulletin 2012-02 noted it had received a number of questions regarding the payment of compensation to loan originators under Regulation Z. That rule prohibits payments to loan originators, including mortgage brokers and loan officers, based upon the terms or conditions of the loan such as the interest rate. The CFPB said the compensation rules do not expressly address whether the loan origination provisions apply to contributions made to so-called "qualified plans." The CFPB said it would soon issue a proposed rule on loan origination provisions, and would also address how the compensation rules apply to profit-sharing arrangements/plans "that are not in the nature of qualified plans." ...

NCBA urges members to call for MBL bill support

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WASHINGTON (4/4/12)--The National Cooperative Business Association (NCBA) has asked members of the cooperative community to communicate the crucial funding needs of small businesses, and the importance of supporting credit union member business lending (MBL) cap legislation, to members of the U.S. Congress.

"By allowing credit unions to make more business loans, we'll be putting more Americans to work and improving our economy," NCBA Interim President/CEO Liz Bailey said in a release. The NCBA release cited Credit Union National Association (CUNA) estimates that show that lifting the MBL cap from 12.25% to 27.5% of assets would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers.

The NCBA release noted that 90% of small business owners that responded to a recent survey said they were having issues accessing credit, with 61% adding that it is harder to get loans today than it was a few years ago. The release asks NCBA members to reach out in support of S. 2231, the MBL cap increase legislation, and adds that one of the easiest ways to help small businesses gain access to the credit they need and start hiring is to lift the credit union member business lending cap.

The National Council of Textile Organizations, the American Small Business Chamber of Commerce, the National Farmers Union, the National Association of Realtors, the Realtors Land Institute, the Small Business Majority, the Society of Industrial and Office Realtors, the CCIM Institute, Americans for Tax Reform, the American Consumer Institute, the Hardwood Federation, the Institute of Real Estate Management, NCB Capital Impact MultiFunding, the National Association of Home Builders, the National Association of Professional Insurance Agents, AMT--The Association for Manufacturing Technology, the U.S. Women's Chamber of Commerce, and the Heartland Institute have also supported increasing the MBL cap in recent weeks.

For the full NCBA release, use the resource link.

CUNA President/CEO Bill Cheney also touted the benefits of an MBL cap increase in a Tuesday Daily Caller editorial. (See related story: CUNA in Daily Caller: MBLs are all about small business)

CUNA in iDaily Calleri MBLs are all about small business

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WASHINGTON (4/4/12)--Lawmakers should cast aside bankers' objections to increasing the credit union member business lending (MBL) cap and recognize that supporting MBL legislation is all about helping small businesses, Credit Union National Association (CUNA) President/CEO Bill Cheney wrote in a Daily Caller blog post Tuesday.

Increased lending to small businesses "shouldn't be about banks versus credit unions," Cheney said.

Legislation that would increase the MBL cap for credit unions from 12.25% of assets to 27.5% of assets is active in both the U.S. House and the Senate, and a vote on S. 509, the Senate bill, is expected to take place once Congress returns from its spring recess. Cheney said "the reality is that credit unions have money to lend, their track record is considerably better than the banks, and freeing up credit unions to do more will enhance competition and marketplace choice."

Banks have kicked their opposition into high gear in advance of this vote, with American Banker Association-backed radio ads playing frequently in Washington, D.C.-area radio markets. The ads, Cheney said, feature bankers grumbling about credit unions but show no concern about what banks would do for small business. "It's not like they haven't had a chance to do something," he said.

Cheney noted that banks currently control 95% of the small business lending market, but said many would think that number was actually 0.95% "the way they have been carrying on in opposition to a bipartisan bill that would let credit unions do more small business lending." Bankers have also continued to complain about the credit union nonprofit tax status during this debate, but those complaints "strike an incredibly false note given the enormity of the taxpayer bailouts that went to their industry," Cheney said.

Credit unions hear all the time from small business owners who have received no help from banks on the credit front, Cheney said, citing a Small Business Majority surveys that in February found 60% of small businesses say it's still too difficult to get a loan. Cheney also noted a January National Federation of Independent Business (NFIB) report that showed a 9% increase in the amount of small businesses that wished to borrow from financial institutions, but no corresponding change in the number of small businesses obtaining credit. NFIB concluded that "the more competition that exists, the more likely small-business owner customers will receive sympathetic consideration for their loan requests, favorable rates (and terms and conditions), and better service, other factors equal."

More competition is sure to ensue if Congress passes S. 2231, the Credit Union Small Business Jobs Act, and Cheney said credit unions are currently working to convince their legislators to lift the cap and let them help their local businesses. Approval of MBL legislation would free up credit unions to make $13 billion in new loans to small businesses in just the first year, giving these businesses the wherewithal to create an estimated 140,000 new jobs, all by simply raising a cap — no expense to the U.S. taxpayer involved, Cheney said.

The Daily Caller is an online news and opinion site co-founded by 20 year print and broadcast journalist Tucker Carlson. For the full post, use the resource link.

Pro-MBL editorials also appeared in the Wisconsin Corporate Report and the Huffington Post on Tuesday. (See related story: HuffPo, Wis. op eds: MBL bill to help small biz grow).