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LICUs are national trendsetters NCUAs Matz says

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ATLANTA, Ga. (6/18/12)--Low-income credit unions (LICUs) are national trendsetters that are leading other lenders in loan growth while simultaneously strengthening their safety and soundness, National Credit Union Administration (NCUA) Chairman Debbie Matz said in a Friday speech before the National Federation of Community Development Credit Unions' annual conference.

Matz in her speech said that LICUs, which serve 6.6 million Americans, are lending more than other types of financial institutions, having expanded their loans by $11 billion between December 2007 and March 2012. This represented a 57.6% increase. Loans made by banks and thrifts declined, overall, by 6.3% during that same period, Matz noted.

LICU lending has increased steadily over the last four quarters, increasing by 4.6% in the first quarter of 2012, Matz added. Loan balances at banks and thrifts declined by 0.8% during the same time, she said.

Many of the key financial indicators for LICUs have also improved recently, and they posted a net worth ratio of 10.25% in the first quarter of 2012. Return on average assets has nearly doubled, charge-offs have fallen by around 30%, and delinquencies have held steady since late 2009, she added.

"The collective success of low-income credit unions demonstrates that credit unions can do well while serving people of modest means," Matz said.

She also highlighted NCUA's work to buttress the efforts of LICUs, including providing more strategic planning consulting, offering a wider range of assistance, revamping loan and grant programs, and extending the reach of the agency's Office of Small Credit Union Initiatives (OSCUI).

The OSCUI also supports small credit unions by offering grants and loans to eligible credit unions, Matz said.

The 1,119 designated low-income credit unions can still apply for up to $25,000 in grants and $300,000 in loans to help support their financial literacy, staff and board member training, internship, and tax prep assistance efforts through the agency's Community Development Revolving Loan Fund (CDRLF).

The NCUA will continue to accept CDRLF applications until June 29. A total of $1.3 million in funds is available for grants this year. Eligible credit union loans will be disbursed from a pool of $11 million.

Remittance more highlight Tuesday CUNA conference

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WASHINGTON (6/18/12)--Frequently asked questions regarding remittance regulations will be among the topics covered in a June 19 Pressing Compliance Issues audio conference.

Credit Union National Association (CUNA) Director of Compliance Information Valerie Moss covered one such remittance question in a recent CompBlog post.

In her post, Moss advised that credit unions will not be considered to be acting as remittance transfer providers when they perform activities as an "agent" on behalf of a remittance transfer provider, such as MoneyGram.

Regulation E, Electronic Fund Transfers, defines the term "agent" as "an agent, authorized delegate, or person affiliated with a remittance transfer provider, as defined under state or other applicable law, when such agent, authorized delegate, or affiliate acts for that remittance transfer provider," Moss explained.

Thus, remittance transfer providers are responsible for the acts of their agents, and will be liable for any rule violations when the agent is acting for the provider, she added.

CUNA Senior Vice President for Compliance Kathy Thompson, Senior Compliance Counsel Mike McLain and Federal Compliance Counsel Colleen Kelly will join Moss to lead this week's hour-and-a-half long CUNA compliance audio conference, which is scheduled to begin at 2 p.m. ET on Tuesday.

The audio conference will also address:

  • The National Credit Union Administration's examination questionnaire for the new interest rate risk regulation;
  • New U.S. Internal Revenue Service nonresident alien reporting rules;
  • New Bank Secrecy Act requirements; and
  • Other compliance issues.
Registration is still open for the conference. To register, use the resource link.

Strong CU support will continue CDFI says

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WASHINGTON (6/18/12)--Credit unions demonstrate that America "can be stronger when we include those that have been excluded, and when we seek to build institutions that are both sustainable and just," Donna Gambrell, director of the U.S. Treasury's Community Development Financial Institutions (CDFI) Fund, said Friday.

The CDFI Fund's support for community development credit unions has been strong and is getting stronger, she added in her speech before the National Federation of Community Development Credit Unions' annual conference in Atlanta, Ga.

This support was demonstrated by the 100% increase in CDFI funds awarded to eligible credit unions between 2010 and 2011, she said. A total of 25 credit unions received a combined $25.6 million in financial and technical assistance awards in the 2011 funding round, more than double the $12 million total that was awarded in 2010, Gambrell noted. The number of CDFI-certified credit unions also continues to grow, with the 221 certified credit unions accounting for 22.7% of all registered CDFIs as of March 31. (See related News Now story: CU Strategic Planning led increase in CDFI grants won)

A total of 403 credit unions, banks, loan funds, venture capital funds, thrifts and holding companies have requested a combined $395.7 million in CDFI Fund awards for the 2012 round of the fund. However, only $123 million in funds will be disbursed this year.

Gambrell said awards for the 2012 program will be announced by early August. The 2013 round of the CDFI Fund will open this fall.

Funding for the 2013 CDFI Fund is still to be determined. The Senate Appropriations Committee last week approved $233 million in CDFI Fund spending last week as part of a larger financial services appropriations bill. That legislation has been passed on to the U.S. Senate.

However, under a House financial services appropriations bill, CDFI Fund spending would remain at 2012's total of $221 million.

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. Credit unions that are certified to take part in the CDFI program may apply for as much as $2 million in funding to help maintain their credit union's presence in the community. CDFI fund distributions are merit-based.

Inside Washington (06/15/2012)

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  • WASHINGTON (6/18/12)--Fannie Mae and Freddie Mac have completed more than 2.3 million foreclosure prevention actions since the start of their conservatorship in 2008, including 1.1 million permanent loan modifications, the Federal Housing Finance Agency (FHFA) announced Friday. These actions, designed to help borrowers stay in their homes, are detailed in the FHFA's first quarter 2012 Foreclosure Prevention Report, also known as the Federal Property Manager's Report. The report also indicates that nine months after modification, less than 15% of loans modified in the second quarter of 2011 had missed two or more payments. Half of all borrowers who received loan modifications in the first quarter had their monthly payments reduced by more than 30%, and one-third included principal forbearance. The report features an interactive Borrower Assistance Map for Fannie Mae-and Freddie Mac-owned mortgages, with information as of March 31 on delinquencies, foreclosure prevention activities, Real Estate Owned (REO) properties and refinances in each state …
  • WASHINGTON (6/18/12)--The Senate Appropriations Committee Thursday approved a $308 million budget for the Commodity Futures Trading Commission (CFTC). The funding bill was approved along party lines in a 16-14 vote. The spending package is about a $103 million increase from the CFTC's current $205 million budget. Last week the House Appropriations Committee approved a $180.4 million budget for the CFTC (American Banker June 15). The Senate appropriations bill also includes $1.57 billion in funding for the Securities and Exchange Commission. That figure represents $245 million increase from the agency's current budget, and $200 million more than the House Appropriations Committee approved. Last week, CFTC Chairman Gary Gensler said the agency needs the additional funding to oversee the swaps market, which is eight times larger than the futures market it has traditionally overseen. "At this funding level, the CFTC will have sufficient cops on the beat to promote swap market transparency, to lower risk to the financial system, and to help protect the American people from future bailouts of the financial industry," Gensler said …