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FDIC announces July 8 as Bairs departure

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WASHINGTON (5/10/11)—Federal Deposit Insurance Corporation (FDIC) Chairman Sheila Bair will officially step down as head of that agency on July 8. The FDIC said that the announcement is consistent with previous statements in which Bair said that she would leave the regulator at the end of her current term. The agency’s July board meeting will be Bair’s final in charge. She took on the role of the FDIC’s 19th chairman in 2006, and saw the agency and the broader banking sector through the recent financial market troubles. Bair previously served as the U.S. Treasury’s assistant secretary for financial institutions and briefly led the Commodity Futures Trading Commission as acting director. The FDIC leader recently publicly questioned whether a proposed exemption that would shield issuers with $10 billion or less in assets from the terms of an interchange fee rate cap. Bair has also chaired the Federal Financial Institutions Examination Council (FFIEC), which earlier this year named National Credit Union Administration (NCUA) Chairman Debbie Matz as its new leader.

NCUA releases loan lease loss webinar agenda

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ALEXANDRIA, Va. (5/10/11)--Allowance for loan and lease losses (ALLL) exam issues and ALLL interagency supervisory policies will be addressed during a May 26 National Credit Union Administration (NCUA) webinar. The free webinar will begin at 2:00 P.M. ET. The NCUA in a release said that the webinar will also cover how to identify and address current ALLL exam issues with qualitative and environmental factor adjustments. Current economic trends will also be addressed during the webinar. NCUA Chief Economist John Worth, Senior Economist Ralph Monaco, and regional problem case officer Elizabeth DiNapoli will take part in the interactive webinar. Participants will have the opportunity to ask questions of the NCUA experts. Noting that credit unions have worked to understand how qualitative and environmental adjustments can better inform their estimates of inherent losses existing in their loan portfolios, the agency said that its presenters would “benchmark best practices in this area.” For more on the webinar, use the resource link.

Cheney urges Congress to continue CDFI funding

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WASHINGTON (5/10/11)--Credit Union National Association President/CEO Bill Cheney has urged House Appropriations Committee leadership to enact the Community Development Financial Institutions (CDFI) Fund’s full $227 million funding level, as proposed in the Obama administration’s fiscal 2012 budget. The request was made in a letter to Rep. JoAnn Emerson (R-Mo.), who heads the House Appropriations subcommittee on financial services, the subcommittee’s ranking member. Rep. Jose Serrano (D-N.Y.) Cheney in the letter called on the legislators to help ensure that the CDFI Fund “is appropriately funded so that it may continue to help credit unions provide financial services to distressed communities.” A continuing resolution that was approved last month would provide the CDFI Fund with $227 million in funds, a $23 million cut from the amount proposed for fiscal 2011. The administration sought $250 million in CDFI funding for FY 2011. The CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit. According to the Treasury Department in January, credit unions represent 13% of the total applicant pool for the 2011 round of the CDFI Fund program. For the full letter, use the resource link.

Southern flooding prompts NCUA response

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ALEXANDRIA, Va. (5/10/11)--Severe flooding continues to threaten areas of Tennessee, Mississippi, Kentucky and Louisiana, and the National Credit Union Administration (NCUA) has responded by activating its disaster relief policy for those areas. The agency also has expanded its disaster relief response in Iowa after more heavy storms there. While press reports yesterday said it appeared the Mississippi River could rest Monday night--earliuer than previously expected--it will take some time for the predicted 48 feet of water to recede. The NCUA’s disaster relief policy is intended to assist credit unions and their members to deal with potential losses caused by disasters, such as this current flooding, which has threatened to match historic highs reached in 1927 when collapsed levees caused widespread flooding. The NCUA noted in a release that the river’s tributaries have been dumping more than twice their normal volume into the Mississippi since April 25. In response, the NCUA noted, President Obama last week declared that a major disaster exists in Louisiana and ordered federal aid to supplement state and local efforts. The president’s actions make federal funding available for the following affected parishes: Avoyelles, Ascension, Assumption, Catahoula, Concordia, East Carroll, Iberia, Iberville, LaSalle, Madison, Pointe Coupee, East Baton Rouge, St. Charles, St. James, St. John, St. Landry, St. Martin, St. Mary, Tensas, Terrebonne, West Baton Rouge, and West Feliciana. Also last week, the president declared that a major disaster exists in Mississippi, Tennessee and Kentucky because of the flooding. In Mississippi, the following counties are affected: Adams, Bolivar, Claiborne, Coahoma, DeSoto, Issaquena, Jefferson, Tunica, Warren, Washington, and Wilkinson. In Tennessee, the following counties are affected: Dyer, Lake, Shelby, and Stewart. In Kentucky, the following counties are affected: Boone, Bracken, Campbell, Carroll, Carter, Fleming, Gallatin, Kenton, Lawrence, Morgan, Nicholas, Oldham, Owen and Washington. Federal assistance is also available on a cost-sharing basis for hazard mitigation measures throughout Kentucky. After severe storms hit Iowa April 9 and10, Obama declared the following counties a disaster area: Buena Vista, Cherokee, Ida, Monona, Pocahontas, and Sac. Under the NCUA’s disaster assistance, the agency will, where necessary:
* Encourage credit unions to make loans with special terms and reduced documentation to affected members; *Reschedule routine examinations of affected credit unions if necessary; *Guarantee lines of credit for credit unions through the National Credit Union Share Insurance Fund; and *Make loans to meet the liquidity needs of member credit unions through the Central Liquidity Facility.
NCUA examiners will survey credit unions operating in flood- and storm-affected counties and parishes. Most credit unions remain open, although some branches affected by the disaster may have curtailed hours or services. During natural disasters, NCUA works with individual state league organizations and state regulators to ensure all federally insured credit unions know of NCUA’s available assistance. The agency’s examiners will therefore remained in close contact with the affected local credit unions to offer advice and assistance. During disaster conditions, NCUA personnel operate under three priorities:
* Ensure the safety of credit union staff; * Keep facilities and operations available to members; and *Provide material and technical assistance, as needed, to affected credit unions.
Federal credit unions may also provide assistance to other credit unions and non-members in the affected areas, under certain conditions:
* A federal credit union may provide services to persons who are members of another credit union under their correspondent services authority. * Emergency financial services for non-members, including check cashing, access to ATM networks, or other services to meet short-term emergency needs of individuals in the areas affected by the storms, can be provided under the authority to engage in charitable activities. *Federal credit unions providing services on a charitable basis may not impose charges for services that exceed their direct costs.
Credit unions and credit union members in Iowa and Louisiana needing help because of these declarations may contact NCUA’s Region IV office in Austin at (512) 342-5600 during normal business hours. Credit unions and their members needing help in Kentucky, Mississippi and Tennessee may contact NCUA’s Region III office in Atlanta at (678) 443-3000.

Dodd-Frank tax reforms on Congressional agenda

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WASHINGTON (5/10/11)—Credit unions will again want to pay particular attention to Senate and House hearings this week. The first relevant hearing of the week will take place on Tuesday when the Senate Banking Committee reviews the final report of the Financial Crisis Inquiry Commission, created by the government in 2009 and charged with investigating the causes of the country’s 2007 financial crisis, the shock waves of which continue. The Senate’s banking panel will again be active on Thursday when it discusses Dodd-Frank Wall Street Reform Act implementation. U.S. Treasury Deputy Secretary Neal Wolin, Federal Reserve Chairman Ben Bernanke, outgoing Federal Deposit Insurance Corp. Chairman Sheila Bair, Securities and Exchange Commission Chairman Mary Schapiro, Commodity Futures Trading Commission Chairman Gary Gensler, and Acting Comptroller of the Currency John Walsh will testify during that hearing. The related housing, transportation and community development subcommittee will discuss national mortgage servicing standards on Thursday. In the House, a Financial Services monetary policy subcommittee will discuss the ties between the Fed and government debt on Wednesday, with the full financial services committee following that with a Thursday markup session on legislation that would alter the composition of the planned Consumer Financial Protection Bureau. Legislation that would extend the implementation deadline for derivatives-related portions of the Dodd-Frank Act and reauthorize the National Flood Insurance Program will also be marked up. The House Ways and Means Committee has also planned a Thursday hearing on tax reform’s potential to aid corporate competition and create jobs. While the House will recess until May 23 at the end of this week, the Senate will remain in session. The Senate’s Small Business Reauthorization bill, which has been on the floor for several weeks, remains pending, and the Credit Union National Association’s (CUNA) Vice President of Legislative Affairs Ryan Donovan said that the outlook for this legislation, as well as the Senate version of legislation that would delay the implementation of an interchange fee rate cap, remains unknown.

Inside Washington (05/09/2011)

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* WASHINGTON (5/10/11)--Republicans are considering multiple strategies to block a recess appointment of the Consumer Financial Protection Bureau director position. A recess appointment was virtually guaranteed when 44 Republican senators last week signed a letter declaring their intention to block any nominee, without several significant changes to the bureau. However, Republican lawmakers are considering tactics to prevent a recess appointment or make it much less appealing to President Barck Obama. Republicans may hold short sessions during which no business is conducted, known as pro forma sessions, which prevent the Senate from being considered in recess. Or, if Obama made a recess appointment for the CFPB director, Republicans could hold up any other financial services nominees. Among the nominations still to be named are the heads of the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency …

Ad shows interchange caps domino effect

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WASHINGTON (5/10/11)—The Credit Union National Association and associated Electronic Payments Coalition partners are showing consumers the ‘domino effect’ that pending interchange fee rate cap legislation could have on their own financial situations via a new 30-second ad. The ad will continue to run in the Washington, D.C. area until July, and will be seen during Sunday morning political talk shows such as NBC’s Meet the Press and Fox News Sunday. The ad is also airing during weekly nightly news broadcasts and other events. A brief online only version of the ad is also being circulated. The ad was shot with over 5,000 real dominoes and several miniatures. Nothing in the commercial was computer generated. Fellow EPC members the Independent Community Bankers of America, the National Association of Federal Credit Unions, and the American Bankers Association have also sponsored the ad.