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Inside Washington (07/16/2010)

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* WASHINGTON (7/19/10)--The National Credit Union Administration (NCUA) announced minor and organizational changes in the maintenance and protection of the records it must keep that contain names of individuals. There is a 30-day comment period on the changes, as required by the federal Privacy Act of 1974. NCUA plans to implement the changes August 16 unless comments received warrant more revisions. NCUA has 17 categories of records covering not only employee records--such as security investigations, payroll and grievances--but also records covering Freedom of Information requests, consumer complaints, litigation and liquidated credit unions. NCUA’s notice contains an appendix explaining the standard uses of its records ... * WASHINGTON (7/19/10)--A “corrections” bill could be needed to clean up the financial regulatory reform bill, according to American Banker (July 16). The Senate approved the bill Thursday. Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said last month that typically 2,000-page bills--like the regulatory reform bill--needs a corrections bill. The reform bill’s provisions are effective in a year, so there’s time to re-visit some things, he told reporters after the conference committee wrapped up last month. Rep. Barney Frank (D-Mass.) hinted that there may be some drafting errors, but acknowledged that those who worked on the regulatory reform bill did a complicated job well. He agreed a minor corrections bill would be needed ... * WASHINGTON (7/19/10)--Nominees to fill three seats on the Federal Reserve Board said the Fed made mistakes in the past and overlooked some threats alluding to the financial crisis. They also noted challenges the Fed will face when its powers are expanded under the regulatory reform bill, which the Senate approved Thursday. Janet Yellen, president of the Federal Reserve Bank of San Francisco and nominee to succeed Fed Vice Chair Donald Kohn, said the Fed and regulators should have acted earlier on the crisis. Sarah Bloom Raskin, Maryland commissioner of financial regulation, said the Fed should have noted the risks through its monetary policy responsibility (American Banker July 16). Peter Diamond, professor at the Massachusetts Institute of Technology, said the Fed has large responsibilities under the regulatory reform bill, and must step up to and use its new powers to serve “the greater good.” Under the reform bill, the Fed will conduct stress tests for systemically important companies, and implement the Volcker Rule, which will ban proprietary trading at banks ... * WASHINGTON (7/19/10)--The Commodity Futures Trading Commission (CFTC) is ready to draft financial reform regulations, the commission said Thursday at a conference (American Banker July 16). The commission plans to hold public meetings in September, and has assigned team leaders for 30 areas. It will be responsible for swaps--regulating swap dealers, commission merchants and swap data repositories ...

Flood insurance gets House vote for five-year extension

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WASHINGTON (7/19/10)—Congresswomen Maxine Water’s (D-Calif) legislation about ways to improve the National Flood Insurance Program (NFIP) was passed last week by the U.S. House. The bill reauthorizes the program for another five years, to Sept. 30, 2015, and improves the program by adding a Flood Insurance Advocate and also raising the maximum coverage limits. Waters said of her bill, “This legislation restores stability to NFIP, which it lacked while subject to lapses and only temporary extensions. During lapses in the flood insurance program over the past year, FEMA was not able to write new policies, renew expiring ones or increase coverage limits.” It was passed 329-90. Last month both the House and Senate passed legislation (H.R. 5569) to extend NFIP until Sept. 30, which was the most recent of several short-term extensions and which followed a one-month lapse of program authority during which new policies were not issued. Waters, in a press release, said the National Association of Mutual Insurance Companies estimated that 1200 homebuyers a day were unable to close on their homes while NFIP program was suspended. Next week the House is scheduled to take up H.R. 1264, the Multiple Peril Insurance Act of 2009. It amends the National Flood Insurance Act of 1968 to require the national flood insurance program to enable the purchase of multi-peril coverage and optional separate windstorm coverage.