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NCUA declares disaster policies for Wisconsin

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ALEXANDRIA, Va. (6/18/08)—Responding to an unusual rash of violent weather, the National Credit Union Administration (NCUA)--for the second time in a week—has activated its disaster relief policy to assist credit unions and their members affected by storms, flooding, and tornadoes. In an announcement Tuesday, the NCUA noted that President George W. Bush has declared an emergency exists in the Wisconsin counties of Columbia, Crawford, Milwaukee, Sauk, and Vernon. The NCUA said its disaster policies now apply to those areas. Late last week, the agency invoked its disaster relief rules for Indiana and Iowa, two states also struggling to recover from weather-related disasters. Under its disaster assistance policy, NCUA announced it 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.
The NCUA announcement noted that the agency is working with the Wisconsin state credit union regulator to make certain that all state-chartered, federally insured credit unions in the affected areas are aware of NCUA’s available assistance. Also, NCUA regional examiners are closely monitoring the situation in concert with Wisconsin officials and will provide assistance as requested or needed. During disaster conditions, NCUA personnel operate under three priorities:
* Determine the safety of credit union staff and operational condition of credit unions; * Provide needed material and technical assistance to affected credit unions; and. * Return credit unions to normal operations as quickly as possible.

HOPE NOW tries to speed help to homeowners

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WASHINGTON (6/18/08)—The HOPE NOW mortgage industry coalition, formed late last year to boost efforts to help struggling homeowners keep their homes, announced new guidelines Tuesday that the alliance hopes will speed up help to troubled mortgage borrowers. HOPE NOW unveiled standardized guidelines for workout categories in an attempt to make mortgage servicers’ efforts to help homeowners become more uniform. The guidelines are intended to bolster HOPE NOW’s efforts to increase workouts by eliminating confusion caused by institutions’ varying definitions of such things as loan modification, forbearance, and repayment plan. "The HOPE NOW procedures announced today will allow even more homeowners to get help faster. We are pleased to see the alliance members continually making improvements and expect them to maintain their efforts,” said Treasury Under Secretary for Domestic Finance Robert K. Steel, in a release. “As we have said, there is no one silver bullet to address every housing challenge, but if we continue pursuing a series of measures and initiatives, we can have a maximum impact," he added. It was the U.S. Treasury Department, along with the Department of Housing and Urban Development, that announced the creation of HOPE NOW last October. According to HOPE NOW, its new guidelines will accomplish four goals. They are:
* Expedite—by establishing a uniform, streamlined timetable for action by each mortgage servicer when dealing with a homeowner. This will provide every homeowner who contacts their servicer with deadlines by which action is likely to be taken and a better understanding about their particular situation; * Inform—by including extensive procedures by which mortgage servicers will keep homeowners informed about the status of their request for assistance. It also includes access to free, independent counseling for homeowners who want information about their options. It also sets detailed procedures that servicers will use to reach out to homeowners who may be in danger of losing their home; * Protect—by setting extensive options that mortgage servicers agree to use to help homeowners avoid foreclosure, including loan modifications, repayment plans, partial claims, and temporarily suspending the need to make monthly payments. The agreement also calls on mortgage servicers to delay pending foreclosure proceedings when there is a possibility that other options will allow homeowner to stay in their home; and * Remedy—by including guidelines for dealing with two difficult foreclosure-related issues -- second mortgages and short sales. Because of the guidelines established in this agreement, neither of these should be as difficult for homeowners as they have been in the past.
Use the resource link below for more HOPE NOW information.

CDFI director touts CU involvement

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WASHINGTON (6/18/08)—The director of the U.S. Treasury Department's Community Development Financial Institutions (CDFI) Fund recently noted in a speech that credit unions are one of the largest industry component for CDFI participation, second only to loan funds. Donna Gambrell, addressing the National Federation of Community Development Credit Unions’ 34th Annual Conference for Serving the Underserved, called credit unions “an important part of the CDFI community.” She noted they make up approximately 18% of the more than 800 certified CDFIs. Gambrell reported that in 2007 her organization certified 16 credit unions as new CDFIs, more than double the number certified in 2006. Those 16 represented 38% of all CDFI certifications that year, second only to loan funds at 47%, she said. Three additional credit unions were certified during the first quarter of this year. The CDFI director reminded credit unions that organizations working toward CDFI certification are permitted to apply for technical assistance grants from the CDFI Fund that can help an organization on its path to certification. She said, “To those of you who are not certified CDFIs, we would like you to have the capacity to do more of what you do, and I encourage you to examine if CDFI certification and our funding programs could be beneficial to you.” Gambrell went on to note that credit unions “have been at the forefront of providing many innovative financial products and are proven, low-cost alternatives to payday and predatory lenders.” “Innovative products offered by credit unions include such things as credit building loans, small loans with an automatic savings feature, and first chance accounts, in addition to many others,” she noted, adding, “Many CDCUs developed best practices and I want to encourage all of you to please share these among each other and with the CDFI Fund.”

Hill staff briefed on interchange issues by CU CEO

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WASHINGTON (6/18/08)—The CEO of a small Maryland credit union briefed a large group of Capitol Hill staffers Tuesday on just what the current system of interchange fees means to her cooperative and the negative impact government interference could have on her credit union and consumers. Cindy Prestandrea of Prince George’s Community FCU in Upper Marlboro told legislative staffers that interchange rates today are established “with a delicate balance in mind.” “Too low, and issuing institutions like my credit union cannot make ends meet. Too high, and merchants will refuse to accept the card,” Prestandrea said. The briefing was held amid anticipation that the House Judiciary Committee may vote next week on a bill that would enable the government to intervene in what is now a free-market process—setting the rate that a merchant’s bank pays a customer’s bank when debit or credit cards are used for purchases. A companion bill has been introduced in the Senate. All congressional staff were invited to attend the briefing, and the U.S. House and Senate Judiciary and Banking committees were heavily represented among the approximately 75 attendees. Prestandrea explained to the group that the balance to which she referred brings stability to the marketplace. “Merchants will argue about being able to ‘negotiate’ interchange,” she said, but she then asked the Hill staffers to picture her small credit union opposing some retail giant in an interchange “negotiating” session. “Being able to ‘negotiate’ assumes equal negotiating power or stature,” she said. She added tjat the same imbalance would exist between a large retailer and a three-person government tribunal, as envisioned in House and Senate legislation. Proponents such legislation sometimes claim the card fees are excessive. Detailing her own experience, Prestandrea said her Maryland credit union currently offers debit cards to members, but not credit cards because the administrative support for those is too high. “Credit card interchange couldn’t make it work for us given our size and resources,” she said, However, she added that her credit union would be harmed if it lost the fees associated with member debit card use, which represents 16% of monthly income. More generally, she said, interchange accomplishes three things for credit unions:
* It allows credit unions to compete with largest financial institutions; * It gives credit unions the ability to offer credit and debit products in relationships with members; and * Interchange revenue covers costs of system (fraud, overhead, etc.) for the credit union.
Also represented at the briefing were Visa, MasterCard and the Independent Community Bankers Association.

Inside Washington (06/17/2008)

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* WASHINGTON (6/18/08)--A hearing focusing on how payday lending can harm Social Security recipients is scheduled for June 24. The Subcommittee on Social Security of the House Committee on Ways and Means announced the event yesterday. A Credit Union National Association (CUNA) witness, Darwin Brokke, CEO of Citizens Community CU, Devils Lake, N.D., recently testified at a hearing focusing on how payday lending affects Native American communities ... * WASHINGTON (6/18/08)--The Senate yesterday was scheduled to discuss legislation to help the foreclosure crisis and reform regulation of Fannie Mae and Freddie Mac (American Banker June 17). The bill, which is being pushed by Senate Banking Committee Chairman Christopher Dodd (D-Conn.) was approved last month and is being modified to align with the House version. The measure has not yet been scheduled for a Senate vote, said a spokesman for Senate Majority Leader Harry Reid (D-Nev.) ... * WASHINGTON (6/18/08)--The Internal Revenue Service (IRS) is extending tax payment deadlines for those affected by severe storms and flooding in 10 states, the agency announced Monday. The deadline for the payments was Monday. “At a time like this, taxes should be the last thing on the minds of these unfortunate victims,” said IRS Commissioner Doug Shulman. The IRS has provided tax relief to counties in Iowa, Indiana and Wisconsin. Earlier this spring, the agency provided similar relief to Arkansas, Colorado, Georgia, Maine, Mississippi, Missouri and Oklahoma. Due dates of new deadlines vary, depending upon location ... * WASHINGTON (6/18/08)--The Federal Deposit Insurance Corp. (FDIC) has announced steps to provide regulatory relief to financial institutions and to facilitate recovery in areas of Indiana affected by severe storms and flooding in a financial institution letter published yesterday ...