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Hyland NCUA coordination with state rulemakers must continue

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ALEXANDRIA, Va. (8/24/09)--National Credit Union Administration (NCUA) board member Gigi Hyland late last week said that the “strong, collaborative working relationship” between state credit union supervisors and the NCUA “must continue” as regulators and credit unions “work through these difficult economic circumstances.” Speaking before the National Association of State Credit Union Supervisors (NASCUS) State System Summit, Hyland also encouraged credit union representatives to closely review and comment on upcoming changes to the rules that govern corporate credit unions, which are widely expected to be released this fall. Hyland, according to an NCUA release, also said that she is planning to present a white paper that would lay out the qualities that supplemental capital sources must have in order to “align with the credit union cooperative financial business model.” Hyland is planning to present the paper to the NCUA Board for consideration, according to the release. Hyland also discussed the recent changes to the Central Liquidity Facility and legislation aimed at addressing the member business lending cap. (See related story: NCUA's Hyland Suggests Phase in of MBL Authority, Aug. 21.)

CDFIs to get enhanced assistance training

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WASHINGTON (8/24/09)--The U.S. Treasury’s Community Development Financial Institutions (CDFI) Fund on Friday announced that it is expanding its technical assistance and training endeavors with CDFIs in an effort to help them better “deliver financial products and services to underserved communities nationwide.” To complete the planned expansion, the CDFI Fund has issued a Request for Proposals (RFP) to collect bids from contractors that could aid the CDFI Fund in its future initiatives. The new Capacity-Building Initiative will provide increased specialized technical assistance and also will provide training resources, which will cover issues related to affordable housing, business lending, portfolio management, risk assessment, foreclosure prevention, training in CDFI business processes, and assistance with liquidity and capitalization challenges, the release added. The CDFI will also offer “direct on-site technical assistance and individualized capacity-building plans” through the Capacity-Building Initiative. CDFI Fund Director Donna Gambrell said this type of expansion would “not only ensure that the CDFI Fund is best positioned to lead CDFIs through the financial crisis, but also position the entire CDFI industry to expand their lending activities and spur economic growth in distressed communities.” Under the RFP, the CDFI Fund specifically requests contractors that can complement existing foreclosure prevention programs by helping identify resources and best practices related to foreclosure prevention, including the development of financial products and the implementation of post-purchase housing and foreclosure prevention counseling programs. The CDFI Fund is also seeking contractors with expertise in risk assessment, liquidity, and capitalization. Eligible contractors will be hired in fall of this year, and technical assistance and training should be made available to CDFIs by spring 2010. For the full CDFI Fund release, use the link.

CUNA asks Fed to clarify short compliance period

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WASHINGTON (8/24/09)--The Federal Reserve Board has authority to provide grater relief to credit unions from the requirements of the 21-day rule under the new Credit CARD Act a they apply to open end credit, the Credit Union National Association (CUNA) has again advocated in a comment letter on the agency's interim final rule it filed Thursday, August 20--the effective date of the interim final rule. In light of the "formidable obstacles" to compliance that credit unions are facing, CUNA has urged the Board "to do what it has done in the past to facilitate compliance with Truth-in-Lending (TILA) requirements -- invoke its authority under Section 105 of TILA to limit the scope of these requirements or provide more time to comply, " CUNA Senior Vice President and Deputy General Counsel Mary Dunn wrote to the Board. The comment letter is the most recent of a series of CUNA communications with Board officials following the law's enactment. Under the interim final rule, creditors must adopt reasonable policies and procedures to ensure periodic statements for open-end accounts are mailed or delivered to borrowers at least 21 days before the payment is due. Otherwise, if the payment is made after that time frame, the creditor may not treat it as late for any purpose, including charging a late fee, reporting the account as delinquent to credit bureaus, or imposing a penalty interest rate. While the Board has declined to provide the relief CUNA urged, CUNA's letter notes that the Board has allowed credit unions "for a short period of time" to prominently disclose on or with the periodic statement that the member's payment will not be considered late if received within 21 days after the statement is mailed or delivered and that this alternative will facilitate compliance for some credit unions. Dunn urged the Board to clarify that "short period of time" is "the amount of time it takes for a credit union to be in compliance with the provisions of the rule, as long as the credit union is proceeding in good faith to meets its obligations within a reasonable amount of time." This time period will likely vary among credit unions and could be up to six months or longer, CUNA said. "In any event, we urge the Board to refrain from any action that would undermine this reasonable interpretation, " Dunn wrote. The letter also encouraged the Board to provide guidance on permissible collection activates and to clarify that permissible, legal actions to collect an underlying debt would not be in violation of the final rule. The Fed should also clarify whether or not posting periodic statements on the financial institution's website at least 21 days before the payment is due will be considered sufficient if consumers choose to manage their accounts electronically. The rule does not currently state whether or not a separate email that notifies the consumer that his or her account statement has been posted is needed to comply with the rule, and CUNA also sought clarification on this matter. CUNA further argued that the 21 day rule should not apply to short-term open-end lending products offered by some credit unions. CUNA will file a second comment letter to detail other concerns regarding the interim final rule, such as the application of the 45-day change-in-terms notice requirements, in the next few weeks. CUNA also continues to work with key congressional offices to narrow the reach of the 21-day rule or extend the compliance date. To view the most recent comment letter in full, use the resource link.

Inside Washington (08/27/2009)

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* WASHINGTON (8/24/09)--The U.S. is only beginning to emerge from a recession, and more challenges lie ahead, Federal Reserve Board Chairman Ben Bernanke said at a symposium in Jackson Hole, Wyo., Friday. The role of liquidity in systemic events indicates that a more systemwide or macroprudential approach to regulation also is needed, he said. Bernanke also discussed the nation’s financial crisis and regulators’ response to it, re-iterating the central bank’s work to prevent the failure of more financial firms. “As severe as the economic impact has been, however, the outcome could have been decidedly worse. Unlike in the 1930s, when policy was largely passive and political divisions made international economic and financial cooperation difficult, during the past year monetary, fiscal and financial policies around the world have been aggressive and complementary,” he said ... * WASHINGTON (8/24/09)--Small businesses won a record $93.3 billion in federal prime contracts for fiscal year 2008, an increase of almost $10 billion from 2007, the Small Business Administration said last week. Small disadvantaged businesses, women-owned businesses and service-disabled veteran-owned businesses increased their share of federal contracting dollars by at least $1 billion to $3 billion ...
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