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CUs candidates win one lose one in special elections

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WASHINGTON (9/15/11)--Credit union-backed candidates went one-for-two in House special elections held on Tuesday, as Nevada’s Mark Amodei (R) won, while New York’s Dave Weprin (D) fell to his Republican opponent.
Click to view larger image Nevada Credit Union League employees Jeremy Empol, left, Patty Salazar, Melissa Ameluxen, and Andrea Svoboda, along with Great Basin FCU CEO Dennis Flannigan, support new House member Mark Amodei by canvassing in his district. (Photo: California and Nevada Credit Union Leagues)
Amodei, who has a strong relationship with Nevada credit unions and was backed by credit union canvassers in his home precincts, defeated Democratic opponent Kate Marshall, winning 58% of total votes. The former Nevada state senator won the House seat that was vacated when Rep. Dean Heller (R) took on the Senate seat of scandal-plagued former Sen. John Ensign (R-Nev.). Amodei will need to run again in 2012 if he wishes to hold on to his newly won House seat. Amodei’s win was not shocking, as Nevada’s second district is largely Republican leaning. However, Tuesday’s New York result, which came in a special election to replace disgraced former House member Rep. Anthony Weiner, was a surprise to many. New York State Assemblyman Dave Weprin (D) was upset by Republican Bob Turner in their contest to represent New York’s ninth congressional district, which includes parts of Brooklyn and Queens. Turner won with around 54% of the vote, according to the Associated Press. Weprin has been a vocal credit union advocate and has repeatedly worked with the Credit Union Association of New York on credit union issues. Credit Union National Association (CUNA) Vice President of Political Affairs Trey Hawkins said the Credit Union Legislative Action Council (CULAC) "will continue to be in the game on behalf of credit union-friendly candidates, and will aggressively support credit union friends in the elections next year." The presidency, congressional seats, and state and local positions are all at stake in 2012.

NCUA prohibits five from future CU work

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ALEXANDRIA, Va. (9/15/11)--Five individuals have been the subject of recent prohibition orders issued by the National Credit Union Administration (NCUA) and are thereby prohibited from participating in the affairs of any federally insured financial institution. Four of the prohibition orders followed recent crime convictions. Former Lockheed FCU, Burbank, Calif., employee Milton Callan will serve a 41 month sentence, as well as five years of supervised probation, following an embezzlement conviction. He will also pay $831,763.91 in restitution. Three theft convictions were also tied to former Lockheed FCU employees. The NCUA has reported that:
* Varoujan John Daglian will serve three years of probation and pay $751 in restitution; * Lorraine Lopez will serve three years formal probation and pay $5,808.26 in restitution; and * Victor Jackmon will serve five years of probation and pay $14,263.66 in restitution.
The NCUA also reported that Rhonda Hitt, a former employee of Fort Worth, Texas-based Fort Worth Star-Telegram Employees FCU, consented to a prohibition order and a cease-and-desist order, without admitting or denying fault. Hitt will pay $4,383.49 in restitution as part of the deal. Violation of a prohibition order is a felony offense punishable by imprisonment and a fine of up to $1 million. For the full NCUA release, use the resource link.

FinCEN proposes to make BSA e-filing mandatory

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WASHINGTON (9/15/11)--The Financial Crimes Enforcement Network (FinCEN) is considering making electronic filing of all Bank Secrecy Act (BSA) reports mandatory, starting on June 30, 2012. FinCEN said the switch to all-electronic filing would “improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information.” Increased BSA E-Filing would also help FinCEN provide information relevant to money laundering and terrorist financing investigations to law enforcement “in the quickest manner possible,” shortening the lag time between when BSA reports are filed and when they can be accessed by authorities to two days. Criminal investigators and other officials are forced to wait two weeks to access new paper-filed BSA reports. FinCEN will accept comment on the proposal for 60 days after it is published in the Federal Register. BSA E-Filing, first developed in 2002, is a free, voluntary, Web-based system that is user-ID and password protected. Financial institutions subject to BSA reporting requirements use the system to electronically file a variety of BSA forms, either individually or in batches, through a FinCEN secure network. FinCEN noted that 85% of BSA filings already are made electronically. The following forms are currently available for BSA E-Filing:
*Currency Transaction Reports (CTRs); *Designations of Exempt Persons (DEPs); and *Suspicious Activity Reports (SARs).
Currency and Monetary Instrument Reports, which are usually filed by individuals crossing the border into the U.S., would be exempted from the E-filing obligation, FinCEN said. FinCEN this month provided technical specifications to help staff prepare their institutions for future large filings of SARs and CTRs, and FinCEN has also scheduled a webinar for Sept. 29. For FinCEN’s latest proposal and more on the technical specifications, use the resource links.

CUNA Merchants poor data security standards negligence cost CUs millions

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WASHINGTON (9/15/11)--Pending Senate data breach legislation may “create an unnecessary duplicative regulatory burden for credit unions,” the Credit Union National Association (CUNA) has warned in a letter sent to members of the Senate Judiciary Committee ahead of today’s scheduled markup session. The markup session will focus on S. 1151, which would establish national standards for data security and data breach notification, and S. 1408, which would establish a data breach notification standard similar to the requirements of S. 1151. CUNA in the letter noted that “credit unions are already subject to very robust data security and data breach notification requirements under the Gramm-Leach-Bliley Act, subject to the supervision and enforcement of the National Credit Union Administration or the state supervisory agencies.” The national standards proposed by S. 1151 and S. 1408 ”would be largely duplicative of current regulatory requirements and increase the cost of compliance to the detriment of credit unions and their members,” the letter adds. The role credit unions take in protecting their members’ personal financial information was also covered in the letter. “Credit unions often absorb not only the actual costs, but also the reputational costs, associated with data breaches caused by merchants and other entities, notifying the member that a breach has occurred, canceling and reissuing debit and credit cards exposed during the breach, and monitoring accounts for fraudulent activity that may have occurred as a result of the breach,” CUNA said. Noting that many of these actions are taken by credit unions to help their members deal with merchant mistakes or neglect, CUNA also encouraged the legislators to consider adding language that would require the entity that is subject to a data breach cover fraud and other costs associated with the data breach. “There may be no better enforcement mechanism to ensure merchant compliance with data security standards than to make it clear that they will pay the costs of those affected by their negligence, including credit unions and their members,” the letter said. For the full letter, use the resource link.

Inside Washington (09/14/2011)

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* WASHINGTON (9/15/11)--Three years after the government seized Fannie Mae and Freddie Mac, lawmakers do not appear close to a formal proposal for reforming the government-sponsored enterprises (American Banker Sept. 14). During a hearing on housing reform--the 10th such hearing since Fannie and Freddie’s seizure--Democrats and Republicans on the Senate Banking Committee spoke in broad outlines about their preferences for reform. U.S. Sen. Tim Johnson (D-S.D.) said he was concerned about the unintended consequences if a government role is eliminated completely from the housing market. U.S. Sen. Richard Shelby (R-Ala.) was critical of the taxpayer dollars that were put at risk and lost under the former system, but he stopped short of calling for a fully privatized solution. Although the meeting included similar disagreement, no comprehensive proposals were offered. The maximum size of loans guaranteed by Fannie, Freddie and the Federal Housing Administration will decrease unless Congress takes action this month … * WASHINGTON (9/15/11)--The final rule that requires the largest financial firms to provide “living wills” will give companies more time to complete their plans than initially proposed. Randy Guynn, a partner and head of Financial Institutions Group at Davis & Polk, said that in showing more flexibility the Federal Reserve Board and Federal Deposit Insurance Corp. (FDIC) listened to the concerns of large financial institutions during the comment process after the initial rule was proposed in April (American Banker Sept. 14). The FDIC voted 3-0 to approve the final rule on Tuesday. The Fed is expected to approve the rule later this month. Living wills are required as part of the Dodd-Frank Act. They are designed to give regulators an outline of how otherwise healthy firms would wind down if they failed. Under the initial proposal, firms would have been required to submit their resolutions plans no later than 180 days after the rule became effective. The final rule provides firms with staggered phase-in periods. The largest, most complex firms will be required to go first, to inform the process, the Banker said … * WASHINGTON (9/15/11)--The Federal Deposit Insurance Corp. (FDIC) Board on Tuesday adopted guidelines outlining the process it will use to make an adjustment to the score used to calculate the deposit insurance assessment rate for large banks. The guidelines apply to institutions with $10 billion or more in assets. The new methodology combines CAMELS ratings and financial measures to produce a score that is converted into an institution’s assessment rate. The FDIC is authorized to adjust an institution’s total score by 15 points. The FDIC said it will primarily consider two types of information in determining whether to make an adjustment: (1) a scorecard ratio or measure that exceeds the maximum cutoff value for that ratio or measure or is less than the minimum cutoff value, along with the degree to which the ratio or measure differs from the cutoff value; and (2) information not directly captured in the scorecard, including complementary quantitative risk measures and qualitative risk considerations …
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