* WASHINGTON (9/7/10)--There are signs that banks’ loan standards are loosening, according to a report released Thursday by the Office of the Comptroller of the Currency. That’s good for credit markets, provided banks have sound underwriting and don’t compromise their standards because of competitive pressures, said Dave Wilson, deputy comptroller for credit and market risk. Examiners noted that risk in commercial and retail portfolios increased for the third consecutive year, and they expect portfolio risk to increase over the coming year. The increase was due to the combined effects of loans previously underwritten with more liberal standards and continued economic weakness. This year’s survey also indicated that most banks use the same underwriting standards regardless of whether they intend to hold or distribute credits. The OCC’s survey
is a compilation of examiner observations and assessments of credit underwriting standards at the largest national banks. The 2010 survey included 51 of the largest national banks and covered the 12-month period ending March 31. The aggregate total of loans was $4 trillion, which represented more than 93% of all outstanding loans ... * WASHINGTON (9/7/10)--Members of the Financial Crisis Inquiry Commission challenged Federal Reserve Board Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair over whether the regulatory reform law will eliminate future government bailouts. Both Bernanke and Bair said there will be no more government bailouts. Bair said that the Financial Stability Oversight Council, created by the regulatory reform law, which was enacted July 21, will be held accountable. Some panelists were not convinced that there would be no more bailouts, and asked if the stability council was any different than the President’s Working Group. Bair said the group is different and will be a more “robust, comprehensive” effort (American Banker
Sept. 3). The group also has the authority to break up a risky institution and order that an institution without a living will be divested, Bernanke and Bair said ...
WASHINGTON (9/7/10)--The Credit Union National Association (CUNA) has announced the development of a new website, entitled "Exam and Supervisory Issues," to respond to the supervisory concerns of credit unions nationwide. CUNA President/CEO Bill Cheney said that CUNA has long supported “strong but reasonable” supervision. The site, which will be accessible through the "Top Initiatives" section of CUNA's home page, will include an incident reporting form. The incident reporting form, which credit unions may complete online, will allow credit unions to detail their most recent examination experiences and problems they may have encountered with their examiners. Ohio Credit Union League President and Chairman of CUNA's Supervisory Issues Working Group Paul Mercer has said that the addition of the incident reporting form will "enable CUNA and the leagues to help document issues credit unions are raising regarding examination concerns and to provide summary information to regulators that will document these concerns with concrete information and examples." Credit unions' confidentiality will be protected and only summaries will be provided to regulators, without identifying individual credit unions, he added. Cheney noted that the Exam and Supervisory Issues site will be expanded in coming weeks to include a Credit Union Bill of Examination Rights, as well as a policy addressing reasonable expectations for credit unions, examiners, and regulators regarding supervisory and related issues. The policy, which is still under development, and the Bill of Rights will both reflect broad input from CUNA’s Governmental Affairs Committee and its Supervisory Issues Working Group, including league attorneys serving on the group. The CUNA Board will review the policy later this month. The site also will include a 'commentary' report on the scope of credit unions' concerns, regulators' responsibilities and credit unions' authority to provide alternative solutions in response to examiner directives. "Credit unions want their regulators to do their jobs and to help contain National Credit Union Share Insurance Fund costs, but credit union officials also need to be able to do their jobs. Sometimes there is a fine line between credit unions being able to exercise their business judgments and examiners' expectations of how issues should be addressed," he added. "Working with the leagues, we want to make sure that credit unions have the resources and support they need to raise questions, as appropriate, to their examiners and receive reasonable answers, including the legal authority for examiner directives, and be able to offer alternative approaches the credit union feels are in the best interests of its members," Cheney stated.
WASHINGTON (9/7/10)--Credit unions can be an integral part of the Obama Administration’s plans to “do everything (it) can” to aid small businesses if the current cap on member business lending (MBL) is lifted, Credit Union National Association President/CEO Bill Cheney wrote late last week. In a letter sent to the White House, Cheney applauded the Obama administration for its commitment to small business, and reminded the administration that U.S. Treasury Secretary Timothy Geithner earlier this year publicly backed lifting the MBL cap in a letter to Congress. Geithner also encouraged the administration to include MBL language in future economically oriented legislative packages. The MBL measure “will help and should not be left off the table,” Cheney added. MBL legislation, which has been introduced into the Senate by Mark Udall (D-Colo.), would lift a credit union's total MBL cap from 12.25% to 27.5% of assets. Similar legislation, which has over 100 co-sponsors, has been introduced by Rep. Paul Kanjorski (D-Pa.) Increasing the lending cap imposed on credit unions would inject an additional $10 billion in new capital into small businesses nationwide during the first year following enactment, capital that would create over 100,000 new jobs, according to CUNA estimates. This funding would be provided at no cost to taxpayers. For the full letter, use the resource link.
WASHINGTON (9/7/10)--Freedom of information Act (FOIA) regulation revisions that would improve access to records and “provide clearer guidance to requesters on how to obtain records under the FOIA” are being considered, the agencies that comprise the Federal Financial Institutions Examinations Council (FFIEC) announced late last week. The FFIEC acts as a coordinating body for the National Credit Union Administration and other federal financial regulators. While it serves as the coordinating body, the individual credit union, bank and thrift agencies have their own sets of FOIA rules. Specifically, the FFIEC changes, if approved, would bring the FFIEC’s existing regulations in-line with FOIA amendments contained in the Electronic Freedom of Information Act Amendments of 1996 and the OPEN Government Act. These changes would increase the current time limit for FOIA request responses and provide for “expedited processing of FOIA requests under certain conditions.” The FFIEC revisions will also “further clarify” FOIA request processing policies and procedures and improve overall FOIA operations. The FFIEC has released its proposal for public comment. Comments on the proposal must be submitted to the FFIEC by Oct. 4. For the full proposal, use the resource link.