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Washington Archive

Washington

Inside Washington (08/04/2008)

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* WASHINGTON (8/5/08)—First Priority Bank, Bradenton, Fla., offices opened Monday as part of the Atlanta-based SunTrust Bank network after the Florida bank was closed Friday by state regulators and the Federal Deposit Insurance Corp. (FDIC) was named receiver. The FDIC announced that SunTrust Bank assumed the failed bank’s insured deposits for no premium. In addition, SunTrust has agreed to purchase approximately $42 million of First Priority’s assets, comprised mainly of cash, cash equivalents and securities. The FDIC, however, said it entered into a separate agreement with LNV Corp., Plano, Tex., to purchase $14 million in First Priority's assets. LNV Corp. is a subsidiary of Beal Bank Nevada, Las Vegas. The FDIC will retain the remaining assets for later disposition. Over the weekend, First Priority customers were able to access their money via check, ATM or debit card. The FDIC reported that as of June 30, First Priority had total assets of $259 million and total deposits of $227 million. The bank closing was the third in two weeks and the eighth this year … * WASHINGTON (8/5/08)--Lenders and mortgage servicers are being encouraged by Congress and lawmakers to halt foreclosing on borrowers in an effort to help them refinance (American Banker Aug. 4). On Friday, San Diego City Attorney Michael Aguirre asked Bank of America Corp. to place a voluntary moratorium on mortgages from Countrywide Financial Corp. Rep. Barney Frank (D-Mass.) also has requested that lenders slow foreclosures for borrowers that are eligible for a refinancing program expected to begin in October. Consumer groups have suggested a blanket moratorium should be issued, while others say the loan modifications need to be performed individually. Scott Talbot, senior vice president for government affairs at the Financial Services Roundtable, said modifications are done on a case-by-case analysis ...

Risk mitigation for CUs summit Aug. 7 in Chicago

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ALEXANDRIA, Va. (8/5/08)—This Thursday’s Risk Mitigation Summit in Chicago is set to offer six sessions on tools, strategies and trends for reducing hazards that can be associated with some credit union products or services. National Credit Union Administration Vice Chairman Rodney Hood, who is host of the one-day interactive program, announced the following agenda, in addition to his own opening remarks:
* Enterprise Risk Management: Trends, Tools, and Turbulence – A Practitioner’s Perspective, Nate Wuerffel, vice president of Operational Risk Management and Business Continuity, Federal Reserve Bank of New York; * Value Creation Through Dynamic Strategic Management, Leo Tilman, president, L.M.Tilman & Co., and adjunct faculty, Columbia University; * Reputation Risk, John Bryant, founder and chairman/CEO, Operation Hope Inc.; * Capital for Credit Unions Serving Distressed Community, luncheon speaker Donna Gambrell, director of the Treasury Department’s Community Development Financial Institutions Fund; * ERM – A Challenging and Rewarding Journey, Christopher Copeland, director of Corporate Risk Management, CUNA Mutual Group; and * Credit Union National Risk Trends, John Kutchey, director of the Division of Risk Management, NCUA Office of Examination and Insurance.
This is Hood’s second risk mitigation summit, following a January 2007 session in Washington, D.C. where nearly 100 participants attended. Hood said of this week’s session, “The 2008 Summit is well-timed, given the dislocations in the financial markets and the attendant interest in the credit union community in the identification and management of risk.” “As with our previous summit in January 2007, I intend to continue to proactively work to provide whatever regulatory and supervisory tools necessary to assist credit unions in this crucial area.”

Push for reg relief for CUs stays strong says Magill

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WASHINGTON (8/5/08)—The Credit Union National Association’s (CUNA) lobbying efforts while Congress is in recess will focus on meetings with Senate staffers to promote passage of the Credit Union, Bank and Thrift Regulatory Relief Act (CUBTRRA). And while CUNA keeps the heat on in Washington to try to get CUBTTRA on the Senate suspension calendar before yearend, credit unions and the leagues are encouraged by CUNA to use the lawmakers’ time in their home districts to keep up the drive for the more comprehensive Credit Union Regulatory Improvements Act (CURIA). That bill has 151 official backers in the House, including Rep. Doug Lambourn (R-Colo.), the most recent supporter to sign on to the bill. The Senate bill has four co-sponsors in addition to Sen. Joseph Lieberman (I-Conn.), who introduced the bill in that chamber in May. CUNA’s John Magill, senior vice president of legislative affairs, said Monday of CUNA’s CUBTTRA push that he believes there is a shot for final passage this year. “We will be working to keep CUBTRRA on the minds of lawmakers and I believe we have a shot of at passage by unanimous consent in the Senate despite a very tight legislative calendar,” Magill said. “The thing to remember is that with unanimous consent, just one Senator can stop the progress of a bill, and that always can make a precarious situation for a bill,” he warned. Both houses of Congress are back in session on Sept. 8, but then recess for the year on Sept. 26. As its name suggests, CUBTRRA contains measures that would benefit credit unions, as well as banks and thrifts. Among provisions for credit unions, the bill proposes to:
* Allow all federal credit unions to apply to serve underserved areas, reversing the effect of a banker lawsuit that has prevented community and single-sponsor credit unions from reaching out to underserved areas; * Provide increased MBL ability by exempting MBLs made in underserved areas from a statutory 12.25%-of-assets cap; CUNA estimates more than 40% of the nation's census tracts are located in underserved areas; * Grandfather previously approved underserved fields of membership for credit unions; and * Allow short-term payday loan alternatives within a credit union's field of membership.
The more comprehensive CURIA also proposes a risk-based capital system for credit unions and an increased cap on member business lending, among other things.

CUNA urges action on pending NCUA proposals

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WASHINGTON (8/5/08)—The Credit Union National Association (CUNA) identified Bank Secrecy Act (BSA) compliance as remaining significant among all the regulatory challenges faced by credit unions. CUNA, commenting on a National Credit Union Administration routine review of its regulations, urged the federal regulator to encourage the U.S. Congress to conduct hearings on the struggles credit unions and other financial institutions face in their efforts to comply with BSA requirements. Those hearing, CUNA said, should address the scope of the regulations and the costs and problems associated with compliance. They should also look at the magnitude of financial institutions' attempts to satisfy examiners. “This will bring more congressional attention to these issues and encourage lawmakers to develop meaningful legislation to help streamline requirements,” CUNA said in its letter. Each year the NCUA and other federal financial regulators review one-third of their regulations to identify areas that could be simplified and made less burdensome. In addition to BSA rules, NCUA requested comment on its rules implementing the national flood insurance program, the Freedom of Information Act, and records preservation. (CUNA’s complete comments on these issues are available below.) In addition to the subjects listed by the agency for its review, CUNA urged the NCUA to consider action on some important proposals that are pending board action. For instance, CUNA urged the federal regulator to take up its field of membership proposal, which has been pending for more than a year, as a means to provide more flexibility for community federal credit unions. The proposal would streamline the charter application process for areas that meet a new “presumption” definition, giving community credit unions more latitude to plan their growth. CUNA also asked the NCUA to move forward on a plan to allow federal credit unions to make investments in foreign currency. The group also asked the agency to use its legal opinion letters to form a commentary to its regulations similar to that provided by other federal financial regulators. By way of comparison CUNA wrote, “As you know, commentaries issued by the Federal Reserve Board to Regulation Z, Truth-in-Lending, are proposed as a regulation with comments from stakeholders considered when the final commentary is developed.” For CUNA’s complete comments, use the resource link below.