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NCUA prohibits embezzler from future CU work

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ALEXANDRIA, Va. (6/1/12)--Former SELCO Community CU employee Lenora Jane Colburn has been prohibited from future work at any federally insured financial institution by the National Credit Union Administration (NCUA) following her conviction on embezzlement charges.

Colburn, who recently managed a branch of the Oregon credit union and had served the credit union in various capacities since 1986, stole from the credit union to support a gambling habit, The Register-Guard reported.

The former credit union employee has been sentenced to an unspecified prison term and five years of supervised release. She will pay $146,583.64 in restitution.

SELCO has also sued Colburn, alleging breach of contract. The credit union has sought around $82,000 in damages in that suit, according to The Register-Guard.

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

Use the resource link below to access NCUA enforcement orders online.

Ability-to-repay mortgage rules delayed by CFPB

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WASHINGTON (6/1/12)--The Consumer Financial Protection Bureau (CFPB) has delayed the release of a final version of its ability-to-repay mortgage rule until later this year, and is asking for public comment on new data that could change how the agency designs the final rule.

Under the still developing rule, mortgage originators would be required to consider a homebuyers ability to repay their loan before a loan could be offered. The ability-to-repay rule was scheduled to be released as a final version in July, alongside a number of other CFPB mortgage disclosure and rule changes.

However, the CFPB said it decided to revisit elements of its ability-to-repay rule after the Federal Housing Finance Agency provided information on the performance of loans purchased or guaranteed by Fannie Mae and Freddie Mac between 1997 and 2011. The CFPB said it has also obtained data on other securitized mortgage loans.

This mortgage information can be used for a variety of analyses, such as modeling the relationship between ability to repay and variables such as consumers' ratios of debt to income, the CFPB said.

CFPB Director Richard Cordray in a release said the agency is "committed to gathering solid data to inform this important rule.  This notice gives the public an opportunity to comment on the information we have received so far, as well as an opportunity to submit additional data," he added.

Credit unions and other interested parties can comment on the new data and provide their own information on similar mortgage loans.

The CFPB emphasized that it is only accepting public comment on the new data, and is not accepting comment on the ability-to-repay rule itself. The agency will accept public comment until July 9.

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said CUNA will be working with state credit union leagues, the CUNA Consumer Protection Subcommittee and the CUNA Lending Council to determine what further information could be provided to the CFPB to ensure the impact of the final rule is as minimal as possible on credit union operations.

Revised mortgage applications and mortgage loan closing documents and rules regulating mortgage origination points and fees and addressing mortgage loan originators' qualifications and compensation are being developed by the CFPB, and are set to be released this summer.

NCUA CUNA advise CUs on hurricane season

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WASHINGTON (6/1/12)--With the National Weather Service's National Hurricane Preparedness Week continuing until June 2, and the Atlantic Hurricane Season officially starting today, the National Credit Union Administration (NCUA) has reminded credit unions to "hope for the best, but prepare for the worst."

The National Oceanic and Atmospheric Administration's (NOAA) Jane Lubchenco said this Atlantic hurricane season is expected to be "less active" than those of recent years. NOAA's Climate Prediction Center said atmospheric and oceanic conditions favor a near-normal Atlantic hurricane season, with a 70% chance of nine to 15 named storms. Four to eight of those storms could become hurricanes, and one to three of those hurricanes could become so-called "major storms," with top winds of 111 miles per hour or higher. "But regardless of the outlook, it's vital for anyone living or vacationing in hurricane-prone locations to be prepared," Lubchenco said.

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Two named storms, Alberto and Beryl, have already appeared in the Atlantic, but neither of those storms reached hurricane strength.

The NCUA has consistently urged all federally insured credit unions to review their disaster preparedness and response plans in preparation for the 2012 hurricane season and other potential diasasters, agency public affairs specialist John Zimmerman said Thursday.

The NCUA has suggested that credit unions:

  • Implement pre-disaster actions to ensure a constant state of readiness and take steps to safeguard assets and vital records if an early warning is received;
  • Communicate disaster preparedness and response efforts before, during, and after an emergency to keep members, volunteers, employees, and regulators fully aware of the situation;
  • Utilize a cross-section of people to develop, test, and implement disaster preparedness and response plans;
  • Ensure back-ups are available for not only data but also personnel, worksites, equipment, vendors, and other resources; and
  • Treat disaster preparedness and response plans as "living documents" to be updated as circumstance change.
Disaster preparation resources are also available through the Federal Financial Institutions Examination Council and the federal government's Ready.gov website, the NCUA noted.

The Credit Union National Association (CUNA) also offers comprehensive disaster preparedness materials, including a checklist that asks credit unions if they have alternate plans to serve their members' needs if their conventional cash source is cut off, if they have the resources needed to keep their credit union open in the event of a power outage, and if they have the ability to deal with short-term relocation, if needed.

The CUNA disaster preparedness page also links to CUNA Strategic Services (CSS), which offers key products and services to assist credit unions in the event a disaster. CSS partner Agility Recovery provides disaster recovery services to credit unions across the country, and that CSS partner will team up with the U.S. Small Business Administration (SBA) to advise business leaders on how to manage crisis situations in a June 12 webinar. Agility and the SBA have also collaborated to develop a disaster preparedness website, preparemybusiness.org, and held a May 29 webinar that addressed hurricane-specific preparations.

CUAid, a natural disaster relief program administered by the National Credit Union Foundation and state credit union leagues, also remains active. The program raises funds through donations from the credit union community, and helps credit union employees, volunteers and members who have suffered unrecoverable losses. CU Aid is collecting donations at this time.

For more on CUNA's disaster preparedness resources, click the link.

Ex-bank customers save at CUs CUNA reminds

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WASHINGTON (6/1/12)--A recent Consumers Union study found that some big banks charge a fee even when an accountholder tries to avoid big bank bank fees by shifting their money away to a smaller institution. The Credit Union National Association (CUNA) took the  opportunity to remind that consumers save more than $6 billion per year in better rates and lower fees by choosing credit unions over banks.

Consumers Union publishes Consumer Reports Magazine, and also operates as a consumer public advocacy group.

Noting that "public outrage over unfair bank practices and rising fees has prompted more and more consumers to consider switching to new financial institutions in search of better deals," the publisher and consumer advocacy organization surveyed bank customers to see why some have remained with their bank. Cost and time constraints were the dominant factors, the survey found.

Overall, closing an account at one of the 10 largest banks in the U.S. could cost as much as $55. The report did not examine fee structures beyond those ten banks.

Consumers Union urged customers that are unhappy with their banks to vote with their dollars, and switch accounts. The consumer group provided several tips for consumers looking to transfer their accounts, including:

  • Opening their new account before closing the existing account;
  • Making a list of all automatic deposits and withdrawals that go into and are taken out of their existing account;
  • Rerouting paychecks into their new account; and
  • Keeping a small amount of funds in their existing account, at least for a short amount of time.
Consumer anger over high bank fees helped drive an increase in credit union membership in 2011 that has carried into 2012, as CUNA statistics showed credit unions gained half a million new members in March, bringing total membership to 95.2 million. The growth spurt indicates the momentum credit unions gained leading up to Nov. 5's  Bank Transfer Day activities is alive and well five months after that  event, and CUNA said credit unions should continue to make the most of that momentum. (See related May 9 News Now story: Member growth spurt: Half a million in March)

For more on the Consumers Union report, use the resource link.

Inside Washington (05/31/2012)

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  • WASHINGTON (6/1/12)--A top economic adviser to Mitt Romney said the Republican presidential candidate will soon offer detailed proposals for health care and financial regulation. Romney's adviser, Glenn Hubbard, told The Wall Street Journal the former Massachusetts governor will offer voters a clear distinction from President Barack Obama's health care and financial regulatory agenda. Among the changes Romney would propose are: replacing the process for winding down failing financial institutions that was created as part of the Dodd-Frank Act; moving or dismantling the Consumer Financial Protection Bureau; and winding down the mortgages and securities in the portfolios at Fannie Mae and Freddie Mac. Romney's budget goals include reducing government spending to 20% of gross domestic product by the end of his first term …