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Corporate stabilization assessment expected on July agenda

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ALEXANDRIA, Va. (6/12/12)--National Credit Union (NCUA) Director of Examinations and Insurance Larry Fazio has acknowledged to the Credit Union National Association (CUNA) that agency staff anticipate presenting a recommendation at the July open board meeting regarding the corporate stabilization fund assessment.

Fazio said the 2012 assessment is expected to be "within the range of 8 to 11 basis points as provided back in November 2011 for credit union budgeting purposes." That compares with 25 basis points in 2011.

Earlier this year, CUNA predicted the corporate stabilization assessment would be around nine bp of insured shares in 2012.

CUNA Deputy General Counsel Mary Dunn said the 2012—standing to be well under half of what it was just one year ago—is a positive welcome development.  She added that CUNA will continue to monitor the agency's management of the legacy assets in which some of the corporates had invested.

Inside Washington (06/11/2012)

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  • WASHINGTON (6/12/12)--Allonhill LLC, one of the consultants hired to determine the extent of foreclosure abuses, was released Friday by Office of the Comptroller of the Currency (OCC), which said the firm had a conflict of interest. The Denver-based consulting firm was the primary independent consultant for Aurora Bank FSB, and had also reviewed Wells Fargo loan files as a subcontractor for Promontory Financial Group, OCC said. Allonhill reported that it had made prior reviews of loans that are part of the same pool of loans in the current review, the OCC said. In April, OCC, the Federal Reserve, and the Office of Thrift Supervision announced enforcement actions against 14 large residential mortgage servicers and two third-party vendors for unsafe and unsound practices related to residential mortgage servicing and foreclosure processing …

Foreign economic woes highlights MBL need CUNA

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WASHINGTON (6/12/12)--As a deepening economic crisis in Europe threatens the fragile economic recovery in the U.S., the Credit Union National Association (CUNA) urges lawmakers to move forward to enact a bill that would enable credit unions to do even more to support the U.S. economy by providing more credit to small businesses.

President Barack Obama "has encouraged Congress to enact a jobs plan to help small businesses weather this impending (European)  threat, and we believe credit unions are in a position to help," CUNA President/CEO Bill Cheney says in a letter that will be sent today to U.S. Senate and House majority and minority leaders.

"Credit unions are not nearly as exposed to the issues in Europe as banks, especially larger banks.  As a result, credit unions are better positioned to lend to small businesses," Cheney writes.

The Credit Union Small Business Jobs Act (S. 2231) would increase credit unions' ability to support small businesses by increasing the cap on member business lending for healthy credit unions with significant business lending experience to 27.5% of assets, up from the current 12.25%.

"During the most recent financial crisis, credit unions increased business lending while banks scaled back lending and, in some cases, withdrew from the market," the CUNA letter notes.

It highlights CUNA's observation that if the MBL legislation became law, credit unions could make $13 billion in additional credit available to America's small businesses in the first year.  It would help to create 140,000 new jobs in that timeframe.  And those economic improvements would come at no cost to the American taxpayer.

Noting bank groups' opposition to the MBL bill, Cheney also highlights hypocrisy in their arguments. For instance, he says, bank groups argue that the MBL would severely harm their member banks; but on the other hand they argue the bill is not needed because it would affect only a small number of credit unions.

"The American economy has not yet fully recovered from the last bank-caused crisis, and storm clouds are forming on the horizon as the crisis in Europe deepens," Cheney writes, and warns that without an increase in the MBL cap credit unions will not be able to help in the same way during the next crisis. CUNA estimates there are about 500 whose lending activity is already affected by the current low cap.

"It's time to say 'no' to those who don't want choice and 'yes' to small businesses" by enacting S. 2231, Cheney concludes the letter.  The CUNA letter is being sent to Senate Majority Leader Harry Reid of Nevada and Senate Minority Leader Mitch McConnell of Kentucky, as well as House Majority Leader John Boehner of Ohio and House Minority Leader Nancy Pelosi of California.

Senate leadership has said there will be a vote this year on the MBL legislation.

HUD reaches resolution with B of A Fair Housing complaint

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WASHINGTON (6/12/12)--The U.S. Department of Housing and Urban Development (HUD) last week announced that Bank of America has agreed to pay up to $161,180 to settle allegations that one of the bank's California branches refused to refinance the mortgage of a woman because she was on maternity leave.

The agreement resolves a Fair Housing Act complaint that had been filed by the Fair Housing Council of Orange County (FHCOC), a non-profit fair housing organization funded by HUD.

According to a HUD release, an Irvine woman told FHCOC that a Bank of America agent offered her a 5% interest rate for a home refinance loan in December 2009, with no costs or fees.  However, it said, the following month, after she had applied for the loan and provided the proper documents, the bank allegedly refused to process the women's application because she was on maternity leave.

HUD said the woman alleged that a bank agent told her that she would have to return to work full-time in order for her loan to be approved. HUD said the woman alleged that the bank would not process her application even after she informed the bank that she received the same rate of pay and benefits while on maternity leave.  

In March 2010, the bank finally approved the woman's application, HUD said, but the interest rate on her loan had increased to 5.25% by that time, driving up the loan payment size.

The HUD release said a Bank of America official said: "We regret our treatment of the applicant. We take our Fair Lending responsibilities very seriously and will work with HUD to ensure our customers on maternity leave are treated appropriately during the mortgage application process."