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CFPB credit card complaint database unveiled

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WASHINGTON (6/19/12)—A comprehensive database of consumer credit card complaints is being unveiled today by the Consumer Financial Protection Bureau (CFPB).

The database will be used to detail an issue that prompted a consumer complaint, the zip code of the consumer that made the complaint, and the company against which the complaint was made. Information on how the complaint was resolved, and whether it was resolved in a satisfactory fashion, is also included.

"Each and every time we hear from American consumers about their troublesome transactions with financial products, it gives us important insight," CFPB Director Richard Cordray said. "By making our data publicly available, initially in the area of credit cards, we hope to improve the transparency and efficiency of this essential consumer market," he added.

The bureau said it will update the database as it receives complaints. Users can search through the database, and reorganize the complaints by their type, issuer, location and date. Complaint data can also be downloaded by site users, the CFPB said.

The agency also released some details of the consumer complaints it has gathered on mortgages, private student loans, and bank products, as of June 1.

Inside Washington (06/18/2012)

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WASHINGTON (6/19/12)--The U.S. Small Business Administration (SBA) on Monday released a revised, more user-friendly version of its electronic application for disaster recovery assistance loans. Under the new online loan application process, users will be provided with simple, electronic versions of home and business loan applications. Under the previous process, users were guided through the application process based on their answers to a series of questions. "Our goal is to provide support for those rebuilding after a disaster, and we wanted to make the process more user-friendly," SBA Administrator Karen Mills said. The application revisions will make the first steps toward disaster recovery "more convenient," she added. Homeowners and renters who suffered damages to their homes and personal property following a declared disaster can apply for help from the SBA…

WASHINGTON (6/19/12)—The FHFA in a release said it has directed government-sponsored enterprises Fannie Mae and Freddie Mac to avoid purchasing mortgages where Property Assessed Clean Energy (PACE) program financing, with priority liens, have been attached to the underlying property. "Such financing moves ahead of the pre-existing first mortgage in lien priority, and thereby subordinates Fannie Mae and Freddie Mac security interests in the property," the release said. The PACE Program allows local governments to fund energy efficiency initiatives through bond initiatives. The bonds are then paid off by the local homeowners and landowners that benefit from the energy efficiency upgrade, according to the U.S. Department of Energy. PACE programs can, however, pose unusual and difficult risk management challenges for lenders, servicers and mortgage securities investors, the FHFA has previously said. The National Credit Union Administration in recent years has encouraged credit union lenders to understand the implications of PACE loan programs which could potentially usurp a lenders senior lien position on a mortgage, undermine the underwriting decisions made by the lender at the time of mortgage origination, and bypass consumer protections required prior to the extension of credit…

WASHINGTON (6/19/12)—As a vote on agricultural policy legislation approaches, bankers have stepped into the debate, encouraging lawmakers not to weaken the federal crop insurance program (American Banker June 18). A number of legislators have proposed bills that would reduce or limit government subsidies paid to farmers, which can total a combined $7 billion in government spending per year. Bankers have claimed many farmers would not be able to afford their crop insurance premiums without government-provided payment assistance. A lack of adequate insurance could result in unpaid loans, if crops are damaged before they can be harvested…

Financial services appropriations to take next step in House

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WASHINGTON (6/19/12)—The U.S. House version of financial services appropriations for the 2013 fiscal year, which would address vital credit union programs and other financial services priorities, is scheduled to be discussed in a House Appropriations Committee markup session this week.

The House version of 2013 financial services and general government appropriations legislation was passed by the House Appropriations subcommittee on financial services earlier this month.

Under that bill, the National Credit Union Administration's (NCUA) Community Development Revolving Loan Fund (CDRLF) program, which provides loans and technical assistance to federal and state credit unions that are designated as low-income credit unions, would receive $500,000 in funding. The House bill would also provide $221 million in funding for the U.S. Treasury's Community Development Financial Institutions (CDFI) fund. The CDFI Fund helps credit unions and other financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit.

The NCUA's Central Liquidity Facility (CLF) would not be changed by the House appropriations legislation. That fund is currently authorized by the Federal Credit Union Act to lend up to 12 times its paid-in capital.

The CLF would also remain unchanged under the Senate version of financial services appropriations legislation, which was approved by the full Senate Appropriations Committee last week.

The Senate bill would also provide $233 million in CDFI Fund backing and $1.19 million in CDRLF funds to the NCUA. The Senate appropriations legislation has been passed on to the full Senate.

Final versions of the House and Senate appropriations bills will be subject to a reconciliation process before they are moved on for final approval by President Barack Obama.

The Obama administration requested $1.19 million in funds for the 2013 edition of the CDRLF and $221 million for the CDFI Fund earlier this year. The administration also requested that the CLF maintain its full authority.

Mayors join broad coalition of MBL support

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WASHINGTON (6/19/12)--The U.S. Conference of Mayors has encouraged members of the U.S. Senate to support "efforts to strengthen small businesses and local economies" by voting in favor of the Credit Union Small Business Jobs Act (S. 2231), which would increase the credit union member business lending (MBL) cap.

A resolution supporting S. 2231 was offered by Madison, Wisc. Mayor Paul Soglin, Seattle, Wash. Mayor Mike McGinn, Portland, Ore. Mayor Sam Adams and Pembroke Pines, Fla. Mayor Frank Ortis, and was approved during the conference. The mayoral conference was held in Orlando, Fla., between June 13 and 16.

S. 2231, which could come up for a Senate vote at any time, would increase the MBL cap to 27.5% of assets. The Credit Union National Association (CUNA) has estimated that lifting the MBL cap to 27.5% of assets, from 12.25%,  would create 140,000 jobs and inject $13 billion in new funds into the economy during the first year after enactment. Both benefits come at no cost to taxpayers. S. 2231 currently has 22 Senate co-sponsors.

The mayors' resolution noted a recent joint Small Business Majority, Main Street Alliance and American Sustainable Business Council report that found that 90% of small businesses are having difficulty accessing credit, and said S. 2231 would allow credit unions to partner with local businesses to create jobs and strengthen neighborhoods and cities.

The resolution highlighted that the MBL cap adjustment, and the additional capital provided to small business owners, would come at no cost to taxpayers.

The "extraordinarily broad range of support" for S. 2231, which encompasses conservative think tanks as well as progressive community and minority advocacy organizations, was also noted in the resolution.

CUNA to testify on small biz lending Thursday

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WASHINGTON (6/19/12)—Brett Martinez, Credit Union National Association (CUNA) board member and president/CEO of Santa Rosa, California's Redwood CU, will discuss the regulatory burdens faced by credit unions and credit union involvement in some of the U.S. Small Business Administration's (SBA) financial assistance programs in a Thursday House Small Business investigations, oversight and regulation subcommittee hearing.

Martinez is also expected to address the benefits that increasing the credit union member business lending (MBL) cap to 27.5% of assets could provide to small businesses and the economy in general. CUNA has estimated that increasing the MBL cap, which currently stands at 12.25% of total assets, would inject $13 billion in new funds into the economy and create 140,000 new jobs, at no cost to taxpayers.

The hearing, entitled "Small Business Lending: Perspectives from the Private Sector," is scheduled to begin at 10:00 a.m. ET. The hearing will focus on the regulatory burdens faced by small business lenders, and how SBA loan program management could be improved, the subcommittee said in a release.

Robert Marquette, president/CEO of Members 1st FCU, Mechanicsburg, Penn., and banking industry representatives are also scheduled to testify during the hearing.

Eligible credit unions are currently able to participate in the SBA's Small Loan Advantage and Community Advantage programs, which are aimed at increasing the number of lower-dollar SBA 7(a) loans going to small businesses and entrepreneurs in underserved communities.

The SBA's 7(a) government-guaranteed loans can be used for variety of general business purposes, including working capital and purchases of equipment and real estate. The guaranteed portion of SBA loans does not count toward the credit union MBL cap.

CUNA in past testimony has encouraged the SBA to simplify some 7(a) loan documentation and processing requirements.

Longer NFIP extension could soon be debated

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WASHINGTON (6/19/12)—Debate over the National Flood Insurance Program (NFIP), and how long to extend that program, will be one of many items credit unions should keep an eye on in Congress this week.

The U.S. Senate is expected to take up S. 1940, which would extend the NFIP until Sept. 30, 2013, after debate on the Agriculture Reform, Food, and Jobs Act of 2012 (S. 3240) is complete. However, legislation that could extend the NFIP for five years is also reportedly being discussed in the Senate.

The NFIP is set to expire on July 31, and Congress will need to move on legislation before then to prevent the NFIP from lapsing. The NFIP lapsed three times in 2010, and the Credit Union National Association (CUNA) has noted that lapses in NFIP authorization have caused significant disruption in the mortgage underwriting process for thousands of prospective homeowners.

In the U.S. House, credit unions will want to watch for a Thursday House Small Business investigations, oversight and regulation subcommittee hearing on small business lending. Redwood CU, Santa Rosa, California, President/CEO and CUNA Board Member Brett Martinez is scheduled to testify during the hearing. (See related News Now story: CUNA to testify on small biz lending Thursday)

CUNA will also submit a statement for the record ahead of a Wednesday House Financial Services insurance, housing and community opportunity subcommittee hearing on the Consumer Financial Protection Bureau's recent mortgage loan disclosure work.

The House Financial Services Committee has also scheduled a Tuesday hearing on J.P. Morgan Chase's recent $2 billion trading loss, and a House Financial Services consumer credit subcommittee hearing on money service business regulations is scheduled for Thursday morning.

The House and Senate are both expected to remain in session until a one-week recess begins on July 2.