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NCUA outlines late-filer civil money penalty process

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ALEXANDRIA, VA. (7/23/14)--The civil money penalty process and how it applies to late call-report filers are detailed in the July issue of The NCUA Report , which was published Tuesday. More than 100 credit unions filed their quarterly call reports late in the first quarter of this year, which could result in penalties of varying amounts.

According to the NCUA, 104 credit unions filed late in the first quarter of 2014. The represents and 80% decrease in late filers from the previous quarter.

After the filing deadline for each quarter's call reports, the NCUA generates a report identifying credit unions that missed the deadline, how many days late each institution is, and whether the credit union has been late previously.

Agency staff then manaully verifies the list of late filers, consulting with NCUA regions and state supervisory authorities for state-chartered credit unions. This helps to identify whether any extenuating circumstances contributed to missing the filing deadline.

Once an institution is confirmed, the civil money penalty matrix is applied. The agency's Office of Examination and Insurance sends letters to each credit union with the proposed civil money penalties. The letters are accompanied with legal documents allowing a late-filing credit union to consent to paying a reduced fine to avoid litigation, as well as contact information for an NCUA program officer who will listen to appeal from institutions that believe there are valid reasons for missing a deadline.

Examples of circumstances that may warrant a waiver of penalties include failure of a credit union's core processing system, natural disaster or incapacitation of a key employee.

A penalty is not final until a credit union has signed a consent order agreeing to pay a reduced penalty or an administrative judge has ruled in the NCUA's favor. The names of credit unions paying civil money penalties, along with the amount paid, will be made public, as mandated by federal law. These will be published approximately 11 weeks after the quarterly filing deadline.

All civil money penalties go to the U.S. Treasury, per federal law. No funds are retained by the NCUA for its own use.

According to the NCUA, the hope is that the process will allow examiners to spend time on safety and soundness, as opposed to chasing down late filers.

The deadline for second quarter call reports is Friday. Use the resource link below to access the June NCUA Report .

CUNA: Affordable mortgages bill brings reg relief, mortgage access

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WASHINGTON (7/23/14)--Rep. Blaine Luetkemeyer's (R-Mo.) bill known as the Access to Affordable Mortgages Act would provide regulatory relief for heavily burdened credit unions and increase access to mortgage credit for middle- and low-income borrowers, the Credit Union National Association said in a letter of support for H.R. 5148.

"By providing an exemption from the Truth in Lending Act appraisal requirements for properties with transaction values of $250,000 or less for loans held on portfolio for at least three years, the bill would provide both regulatory relief to mortgage lenders as well as increase access to mortgage credit availability for borrowers purchasing lower cost dwellings," the letter reads. "The bill would also amend the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to exempt this same category of higher-risk mortgages from the standards prescribed by the federal interagency appraisal requirements, as long as such mortgage loans are held on a lender's portfolio for at least three years."

CUNA supports this bill because it would allow credit unions that offer mortgage loans secured by covered properties to better serve middle to lower income members.

The letter reiterates points made by CUNA witness Doug Fecher, president/CEO of $2.8 billion-asset Wright-Patt CU, Beavercreek, Ohio, at a hearing held by the House Financial Services subcommittee on financial institutions and consumer credit last week. CUNA has testified more than a dozen times in the past three years to fight for regulatory relief for credit unions.

Use the resource link below for more information.

CFPB plans to bring on more staff

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WASHINGTON (7/23/14)--A study from George Washington University's Regulatory Studies Center estimates that the Consumer Financial Protection Bureau will add 462 new employees this year and another 172 in 2015.

The study, which reviewed budget requests from President Barack Obama for fiscal year 2015, also estimates that the bureau will increase its budget to $622 million in fiscal year 2015, up from $481 million in fiscal year 2014. The 27.1% increase from 2014 to 2015 is less than the 32.7% increase to 2014 from 2013, according to the study.

The bureau has grown steadily over the past few years, with more of an emphasis on becoming fully staffed. This study indicates that the Obama administration is contemplating additional growth over the next two years.

The Credit Union National Association continues to dialogue with the CFPB on many regulatory issues that impact credit unions, and has urged the bureau to exempt credit unions from many overly burdensome regulations designed to push back against the abuses that caused the financial crisis.

CDFIs can sign up for health center financing webinars

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WASHINGTON (7/23/14)--The U.S. Treasury's Community Development Financial Institutions (CDFI) Fund has announced five free webinars starting in August on the topic of financing community health centers (CHCs) in underserved communities.

According to the most recent CDFI Fund report, credit unions represent 177 of 811 CDFIs active at the end of 2013.

The webinars are scheduled as follows:
  • "Trends in Health Care," 2 p.m. (ET) Aug. 6. An overview of the American health care delivery system and the role CHCs play within it. The session highlights the major shifts occurring in the health care industry, including affordability and cost, and the importance of CHCs providing access to affordable health care;

  • "Defining the CHC Landscape," 2 p.m. (ET) Sept. 9. A historical perspective of the CHC movement and the essential elements to be a federally qualified health center. This webinar will help CDFIs understand the types of patients that health centers serve, the services provided, and the types of revenue and funds generated by community health centers;

  • "Primary Credit Needs of CHCs and Sources of Credit," 2 p.m. (ET) Sept. 24. Highlights the primary types and uses of loan products that CHCs request and summarizes the major sources of capital for community health centers, including those provided by public, private and philanthropic entities;

  • "CHC Financial and Operational Metrics and Trends," 2 p.m. (ET) Oct. 7. Provides an overview of community health centers' operating structures, composition of revenue streams and typical expenses (including staffing structures and how they impact revenues and productivity); and

  • "Underwriting CHCs," 2 p.m. (ET) Oct. 22: Highlights common risks and mitigations in lending to community health centers and how CDFIs should incorporate the financial ratios discussed in the "CHC Financial and Operational Metrics and Trends" webinar in the credit analysis process.
The free webinars are open to the general public. Advanced registration is required to access the presentation. Registration may be completed up until the start time listed for each individual session.

Future webinar opportunities will be posted as they are finalized to the "Financing Community Health Centers" webpage.

Use the resource link below to register and for more information.

Atlanta Fed discusses chip-based payment cards

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ATLANTA (7/23/14)--Chip-embedded credit and debit cards are gaining steam for financial institutions card issuers, merchants, acquirers and others, according to a post in the Federal Reserve Bank of Atlanta's Portals and Rails blog.

In October 2015, parties that make investment in deploying Europay-MasterCard-Visa (EMV) cards with embedded chips will be protected from financial liability from card-present counterfeit fraud losses.

The EMV standard would replace the previous cards with magnetic strips, which can leave financial institutions, particularly small ones, more vulnerable to fraud.

The EMV Migration Forum estimates that approximately 100 million EMV cards--9% of the card base--will be issued by the end of 2014. Javelin Strategy and Research estimates that 52% of point-of-sale terminals will be EMV-enabled by the end of 2015.

The Credit Union National Association continues to monitor developments and advocate for credit unions on payments and security issues.

Fin. lit. report highlights CFPB strategies

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WASHINGTON (7/23/14)--Financial literacy has been a core mission of the Consumer Financial Protection Bureau, and the bureau outlined several of its strategies to further this mission in its second annual financial literacy report to Congress.

According to a study conducted by the National Center for Education Statistics, called the Program for International Student Assessment, American 15-year-olds are in the middle of the pack when it comes to financial literacy. Students scored worse than seven countries, better than three countries and "not measurably different" from the other seven countries measures ( News Now July 11)

The CFPB report notes that credit unions have participated in financial literacy by helping combat elder financial exploitation. The National Association of Community Development Credit Unions presented a webinar on elder financial abuse which featured speakers from the Office of Financial Protection for Older Americans, New York County District Attorney's Office and a former director of the Kansas Department of Social and Rehabilitation Services.

The report also discusses how the CFPB has expanded financial literacy programs to schools, libraries, the workplace, social service organizations and the military.

Use the resource link to access the report.