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Inside Washington (09/23/2011)

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* WASHINGTON (9/26/11)--The percentage of refinanced mortgages in the U.S. sold to Fannie Mae and Freddie Mac is greater than previously estimated, according to a report released Thursday by the Federal Reserve Board. The report presented findings from a review of data that mortgage lending institutions reported for 2010 under the Home Mortgage Disclosure Act. About 55% of owner occupied homes refinanced in 2010 were sold to the government-sponsored enterprises (GSEs), an increase from the central bank’s original estimate of 39.6% earlier this year. Initial estimates fell short because mortgages guaranteed by Fannie and Freddie are identified that way only if they are sold directly to the GSEs or placed in a pool during the same year as origination. Therefore, loans originated in the fourth quarter and later sold were not originally included … * WASHINGTON (9/26/11)--The Federal Housing Finance Agency’s (FHFA) Office of the Inspector General (OIG) in a report found significant faults in the agency’s handling of Fannie Mae, saying last week that the FHFA failed to force Fannie Mae to establish “an acceptable and effective operational risk management program despite outstanding requirements to do so.” The FHFA also did not use its broad authority over the government-sponsored entity to “compel Fannie Mae to create and administer an operational risk management program.” The OIG warned that the FHFA “must exercise maximum diligence and take forceful action” to ensure that Fannie Mae properly monitors its own risks. “Otherwise, FHFA’s safety and soundness examination program, as well as its delegated approach to conservatorship management, may be adversely affected,” the OIG said. A separate OIG analysis found faults in the FHFA’s examination coverage, “particularly in the areas of Real Estate Owned and default-related legal services,” and also noted that the agency lacks the examiners needed “to ensure the efficiency and effectiveness of its examination program ...”

NCUA workers rank agency as a good employer

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ALEXANDRIA, Va. (9/26/11)--The National Credit Union Administration (NCUA) received high marks from its employees for its talent management, results-oriented performance culture, and overall employee satisfaction in a U.S. Office of Personnel Management’s (OPM) 2011 Employee Viewpoint Survey. The agency came in fourth place in the OPM’s performance culture rankings, finished sixth in talent management, and tied for fifth place in overall employee satisfaction. The agency in a release said the results of the survey “showed that NCUA employees feel their work is important, feel accountable for achieving results, and know how their work relates to their agency's goals and priorities.” The NCUA did not rank in the top 10 for its leadership and knowledge management, but showed a marked improvement over last year’s ranking. NCUA Chairman Debbie Matz said having the agency “recognized as an employer of choice” was a top goal when she returned to the NCUA in 2009. Matz added that the NCUA’s “extraordinarily talented, dedicated and hardworking” employees are “the agency’s greatest asset.” “The fact that most employees recommend NCUA as a good place to work is a testament to management’s efforts to improve communications at all levels,” Matz added. For the full NCUA release, use the resource link.

Trio of data security bills pass out of Senate committee

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WASHINGTON (9/26/11)--S. 1151, the Personal Data Privacy and Security Act, S. 1408, the Data Breach Notification Act, and S. 1535, the Personal Data Protection and Breach Accountability Act, are likely moving on for consideration in the full Senate after they were passed out of the Senate Judiciary Committee late last week. All three bills passed on separate 10 to 8 votes. S. 1151 would establish national standards for data security and data breach notification, and S. 1408 would establish a data breach notification standard similar to the requirements of S. 1151. S. 1535 addresses many of the same concerns. An amendment that would exempt credit unions and other financial institutions that are in compliance with Gramm-Leach-Bliley notification requirements from portions of S. 1151 that address data breach notification was successfully added to the bill before it moved out of committee. The Credit Union National Association (CUNA) in a letter sent earlier this month warned judiciary panel leaders that S. 1151, and a similar pending bill S. 1408, could create an unnecessary duplicative regulatory burden for credit unions. CUNA in the letter also noted the role credit unions take in protecting their members' personal financial information, saying that "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 seeks comment on agency corporate changes

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WASHINGTON (9/26/11)--The Credit Union National Association (CUNA) is accepting credit union comment on recently proposed National Credit Union Administration (NCUA) technical amendments and clarifying changes to its corporate credit union rule, Part 704. The proposed changes amend NCUA regulations to exclude Central Liquidity Facility (CLF) stock subscriptions from the definition of net assets. The proposal also clarifies that violations of the weighted average life of a corporate's assets are not subject to capital category reclassification. The proposal would require the preparation of investment action plans for such violations. These changes were made to "relieve regulatory burden where warranted" and ease access to liquidity, the NCUA has said. CUNA in its comment call asks for comment on several aspects of the technical changes, including specific changes to the “net asset” definition and the inclusion of credit rating alternatives. CUNA is accepting comments until Sept. 30. For the full comment call, use the resource link.

MBL bill to get House subcommittee hearing next month

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WASHINGTON (9/26/11)--Credit union member business lending, and the potential benefits that lifting the MBL cap could provide for an ailing economy, will be front and center at a scheduled October hearing before the House Financial Services subcommittee on financial institutions and consumer credit. The Credit Union National Association (CUNA) has emphasized lifting the MBL cap to 27.5% of assets as another way that business owners could access the money needed to hire new workers and expand their businesses. Lifting the credit union MBL cap from the current 12.25% of assets restriction would inject more than $13 billion in new funding into the economy, at no cost to taxpayers, creating 140,000 new jobs in the first year after enactment. CUNA and credit unions continue the push to garner additional support for H.R. 1418 and S. 509, both of which would lift the MBL cap to 27.5% of assets. The MBL cap lift bills have been suggested as one small piece that could be added to the Obama administration's larger plan to reinvigorate the ailing economy. CUNA President/CEO Bill Cheney this month also encouraged members of the House Financial Services subcommittee on capital markets and government-sponsored enterprises to add lifting the credit union member business lending cap to any discussion on capital creation. H.R. 1418, which was introduced by Rep. Ed Royce (R-Calif.), has a total of 61 co-sponsors. The Senate bill, S. 509, was introduced by Sen. Mark Udall (D-Colo.) and has the backing of 21 senators. Credit union leagues and representatives from individual credit unions are working to gather even more congressional backing for the MBL cap lift during CUNA’s 2011 Hike the Hill, which continues into next month. Around 450 credit union representatives from more than 20 states are taking part in this year’s hikes.

NEW NCUA announces Western Bridge bidders teleconference

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ALEXANDRIA, Va. (UPDATE 9/22/11, 3:07 p.m. ET)—Following a similar announcement involving U.S. Central Bridge Corporate FCU by a few hours, the National Credit Union Administration (NCUA) has announced it will host a teleconference at 1:00 P.M. (ET) on Wednesday, Oct. 5, for corporate credit unions that are interested in acquiring Western Bridge Corporate FCU’s (Western Bridge) operations. A letter from NCUA Office of Corporate Credit Unions (OCCU) Director Scott Hunt said the agency’s primary goal as it goes forward with contingency plans to Western Bridge is to find a solution that minimizes disruption to Western Bridge’s members. “Our preference is to seek an acquirer that can absorb the operations in whole while also minimizing costs to the stabilization fund,” Hunt wrote. NCUA previously announced subscriptions raised to capitalize the proposed United Resources Federal Credit Union fell short of member-driven goal. To participate in the bidder’s teleconference, interested parties must agree to a confidentiality agreement with the NCUA no later than 12 p.m. Oct. 4. To request an introductory information packet, including the required agreement, contact OCCU at Calling instructions for the teleconference will be provided to the list of attendees prior to the date of the meeting. Earlier today NCUA announced that parties wishing to acquire U.S. Central Bridge Corporate FCU operations will have an opportunity to learn about the corporate's operations, and the overall process for submitting a proposal to acquire those operations, in a meeting with the NCUA at 1:00 p.m. (CT) on Oct. 3. The NCUA has tentatively set that meeting to take place in the Kansas City, Mo., area.

NEW NCUA to hold Oct. 3 meeting on U.S. Central acquisition

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ALEXANDRIA, Va. (UPDATED: 10:45 A.M. ET, 9/31/11)--Parties that wish to acquire U.S. Central Bridge Corporate FCU operations will have the opportunity to learn about the corporate’s operations, and the overall process for submitting a proposal to acquire those operations, in a meeting with the National Credit Union Administration (NCUA) on 1:00 p.m. CT on Oct. 3. The NCUA has tentatively set the meeting to take place in the Kansas City, Mo., area. NCUA Office of Corporate Credit Unions Director Scott Hunt said the meeting “is an important first step” for potential acquirers. Hunt added that the agency is seeking “a solution that minimizes disruption to U.S. Central Bridge members and their downstream credit union members, while minimizing costs to the Corporate Stabilization Fund.” For more on the meeting, use the resource link.