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NCUA shuts tiny South Carolina CU chartered in 2006

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ALEXANDRIA, Va. (8/6/08)--The National Credit Union Administration (NCUA) said yesterday it placed the Port Trust FCU of Charleston, S.C. into liquidation. NCUA in a release said it made the decision to liquidate the credit union and discontinue its independent operations after determining that “the credit union is insolvent” and had “no prospects for restoring viable operations.” At the time of liquidation, the credit union served 260 members and had assets of approximately $460,915. NCUA chartered Port Trust FCU in 2006 to serve persons who live, work, worship, attend school in, and businesses and other legal entities located in a community within Charleston and North Charleston, S.C. NCUA will issue checks to individuals holding verified share accounts in the credit union within one week.

Inside Washington (08/05/2008)

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* WASHINGTON (8/6/08)--Disaster victims can go online to file an application for recovery assistance from the U.S. Small Business Administration through its new electronic loan application. The application aims to simplify filing and deliver aid more quickly. Homeowners and renters who suffered damages to their homes and personal property following a declared disaster can apply for help. The disaster must be declared by President Bush or the SBA administrator. Businesses and non-profits can apply for assistance to cover losses to real estate and property, and economic injury ...

Compliance Shared branchings BSAAML issues

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WASHINGTON (8/6/08)—Shared branching is great, bringing the ability to serve members from thousands of locations nationwide. But increased opportunity comes with increased responsibility, especially with Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance issues, says Mary-Lou Heighes, president of Compliance Plus, Lakewood, Calif. Heighes, in the August issue of Credit Union Magazine, writes that while shared branching provides opportunities for money laundering activities that otherwise would be limited, following specific rules for shared branching will alleviate most confusion. Heighes notes that there are special BSA/AML rules for shared branching being familiar with them is the key to avoid compliance headaches. The rules address these separate areas:
* Currency transaction; * Transfers between credit unions; * Office of Foreign Asset Control (OFAC) verifications’ *Monetary instruments; and * Suspicious activities.
Heighes also advises that credit unions participating in shared-branch systems must include this activity in their BSA/AML and OFAC risk assessments to ensure they have proper procedures in place and staff have adequate training. “By following the operating guidelines and regular due diligence in handling shared-branching transactions, credit unions can fulfill their regulatory responsibilities while providing members with access to their accounts wherever they may be,” assures Heighes. Use the resource link below to read Heighes’ complete advice.

CUNA supports a careful crack down on unfair practices

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WASHINGTON (8/6/08)—The Credit Union National Association (CUNA) supports a federal regulatory proposal to crack down on unfair and deceptive credit card practices, but warned in a recent comment letter that there are operational and practical concerns associated with the current plan. CUNA's comments followed a letter CUNA President/CEO Dan Mica sent last week to Rep. Carolyn Maloney (D-N.Y.), chairwoman of the House Financial Services subcommittee on financial institutions and consumer credit regarding legislation that contains provisions similar to those in the regulatory proposal. If adopted, the regulatory proposal would prohibit or limit seven practices relating to credit card practices and two practices regarding overdraft protection plans. It was issued jointly by the National Credit Union Administration (NCUA), Federal Reserve Board, and Office of Thrift Supervisions under the Federal Trade Commission Act which authorizes these agencies to regulate unfair and deceptive practices. CUNA will send it comments to all three regulators. CUNA wrote, “As the only consumer owned cooperatives in the financial marketplace, credit unions have a strong tradition of protecting consumer interests.” The letter added that regulatory action on these issues is necessary and appropriate because some in the financial marketplace have been subjecting consumers to predatory practices. “We commend the regulators for developing the proposal,” wrote CUNA Deputy Counsel Mary Dunn. However, Dunn warned that CUNA has operational and practical concerns about how some of the provisions will be implemented and whether they will result in unintended, negative consequences for credit unions and their members. “We feel it is reasonable for Congress and the regulators to consider how best to shield consumers but without continually adding new requirements that fail to recognize the existing level of regulatory burden,” the letter said. CUNA took the opportunity in its comment letter to recommend a “modified pay-go” approach for all new regulations, meaning that whenever an additional burden is imposed, it must be paired with an existing requirement that the regulators may eliminate or that Congress will review for removal. CUNA noted that its comments on the credit card and overdraft proposals reflect broad participation from the credit union system. The top issue of concern, measured by the number of comments, addressed the provisions on overdraft protection plans. Specifically, the plan’s opt-out rights, disclosures and overdrafts due to debit holds, received the most comments from CUNA members. CUNA recommended that two consumer-oriented practices in which a number of credit unions engage in should not be covered by all of the provisions of the proposal. These are overdraft accommodations and opt-in protection plans. If these practices are covered by the proposal’s full notice and disclosure requirements, “which were designed to prevent consumer abuses that do not exist with these accommodations,” they will likely be discontinued, in which case credit union members will be disadvantaged, CUNA wrote. CUNA also raised concerns about the prohibition on changing the interest rate on outstanding balances. While CUNA noted that, "(c)redit unions do not want to raise interest rates to gouge their members," Dunn noted that the prohibition does raise concerns about its impact on asset liability management, "particularly at a time when examiners are focusing increased attention on ALM." CUNA urged the regulators to take these considerations into account when developing the final rule. Use the resource link below to read CUNA’s complete comments.