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Washington Archive

Washington

Congress is back in session A busy week ahead

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WASHINGTON (9/7/11)--As the House and Senate return to session in Washington this week, both chambers will be busy with a full slate of scheduled hearings and a late week economic address by President Barack Obama. The House Financial Services Committee subcommittee on capital markets and government sponsored enterprises has scheduled a Wednesday New York City-based field hearing entitled "Facilitating Continued Investor Demand in the U.S. Mortgage Market Without a Government Guarantee.” Bills addressing data security and data breaches are slated for Senate Judiciary Committee markups on Thursday, and the House Financial Services Committee subcommittee on international monetary policy and trade has set its own hearing that day related to the U.S. housing finance system. Another House Financial Services subcommittee on Thursday will study the future roles of the Federal Housing Administration, the Rural Housing Service, and the Government National Mortgage Association. The Senate Banking Committee may also take up a bill that would reauthorize the National Flood Insurance Program on Thursday. The House and Senate are expected to be in session until a week-long break starting on Sept. 26, and both houses of Congress will take separate week-long breaks in October and then return until the Thanksgiving break. Congress’ targeted adjournment date for the year is currently Dec. 9, but the Credit Union National Association (CUNA) notes that Congress could remain in session until Dec. 23. The first meeting of the Congressional Joint Select Committee on Deficit Reduction is set for Thursday, and that group will meet to make opening statements and to consider proposed committee rules during that meeting. CUNA Vice President of Legislative Affairs Ryan Donovan said CUNA will be following the activity of this joint select committee closely because of the possibility, currently viewed as remote, that the credit union tax status could be discussed. Congressional committees must make their deficit-cutting recommendations to the committee by Oct. 14, and the deficit reduction committee must vote on its final reduction plan by Nov. 23. The committee’s final report on deficit reduction, and related legislation, must be provided by Dec. 2, and that legislation must be voted on by Dec. 23. For prior News Now coverage of the deficit committee, use the resource link.

Corporates future rests on reasoned approach CUNA to NCUA

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WASHINGTON (9/7/11)--The Credit Union National Association’s (CUNA) Corporate Credit Union Next Steps Working Group urged the National Credit Union Administration (NCUA) to work with credit unions to help ensure the best solutions for payment and settlement services for credit unions will continue during a recent meeting. The working group, which is chaired by VyStar CU President/CEO Terry West, met with NCUA Office of Corporate Credit Unions Director Scott Hunt, Director of Examination and Insurance Larry Fazio, and Senior Strategic Communications and External Relations Advisor Buddy Gill. The group raised a number of credit union concerns during the meeting, and said the meeting was productive. The NCUA during the meeting said that a top NCUA priority is providing uninterrupted service for natural person credit unions. The agency last week moved to implement contingency plans after the Payments Network FCU organizing council, which includes representatives from many of the nation's corporates, elected to continue working cooperatively to create partnerships that allow uninterrupted products and services to credit unions rather than charter a new corporate credit union to replace U.S. Central Bridge Corporate FCU. Western Bridge Corporate FCU will also continue its operations after its members’ attempt to reach the capital subscriptions goal of $200 million, which was required by the NCUA for the credit union to establish a new charter for replacement corporate United Resources FCU, fell short. The NCUA has said it has no immediate plans to shutter the operations of either corporate, and added it is committed to an orderly and timely resolution that ensures uninterrupted service to all member credit unions. For prior coverage of these corporate developments, use the resource links. CUNA Chief Economist Bill Hampel said that the majority of corporate credit unions did meet their recapitalization threshold, and added that credit unions that are members of the corporates that did not capitalize would retain the option of working either with a group solution developed by NCUA or any other vendor they chose.

Cordray hearing highlights hurdles ahead

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WASHINGTON (9/7/11)--Tuesday’s Consumer Financial Protection Bureau (CFPB) nomination hearing “was a formal step forward in the confirmation process” for potential agency director Richard Cordray, but Credit Union National Association (CUNA) Senior Vice President of Legislative Affairs Ryan Donovan added that Cordray’s nomination “still faces several obstacles.” Cordray, who has been serving as the CFPB's assistant director for enforcement and has also served as the attorney general of Ohio and that state's treasurer, was questioned about his qualifications for the director’s position by members of the Senate Banking Committee on Tuesday. He was introduced by committee member Sen. Sherrod Brown (D-Ohio), and Ohio Credit Union League General Counsel John Koslowski was among Cordray’s guests at the hearing. In his opening statement, Cordray noted that the CFPB “will find many opportunities to streamline regulations and disclosures” and would remain accountable to Congress as it does its work, which includes rulemaking, market guidance, consumer education and empowerment, enforcement, and supervision and examination of large banks and many nonbank institutions. The committee’s ranking Republican member, Sen. Richard Shelby of Alabama, called the hearing “premature,” noting that changes needed to be made to the CFPB. However, committee chairman Tim Johnson (D-S.D.) said “the stability of our financial system” depended on having a CFPB director in place. CUNA’s Donovan said “it is not clear whether Cordray’s nomination will be approved by the Senate,” adding that “over 40 Senators have said they will not vote to confirm any CFPB nominee unless changes to the CFPB are enacted.” Those proposed changes include increasing CFPB leadership from a single director to a five-member commission, reforming some operational rules, and adjusting the voting threshold needed for the Financial Stability Oversight Council (FSOC) to set aside or stay a CFPB issued rule to a simple majority. Expanding the FSOC's review authority of CFPB rules has also been proposed. This CFPB related legislation passed on a bipartisan 241-173 House vote in late July, but the Senate prospects for the legislation are in doubt. CUNA has encouraged Cordray to "consider ways in which the bureau can help minimize regulatory requirements for credit unions and other financial institutions" and has also encouraged the CFPB to establish an Office of Regulatory Burden Monitoring to help the agency "track, consider, and help mitigate the cumulative regulatory burden under which credit unions and others must operate."

Inside Washington (09/06/2011)

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* WASHINGTON (9/7/11)--The Department of Housing and Urban Development (HUD) has completed its investigation of illicit foreclosure practices by mortgage servicers and provided the results to state attorneys general, a spokesman for Iowa Attorney General Tom Miller said. States and large mortgage servicers are negotiating charges that banks were robo signing---sign off on foreclosure documents without properly reviewing them--in the processing of thousands of mortgages (American Banker Sept. 6) . But state attorneys general do not know the full scope of the banks’ robo-signing practices, or how many homeowners were affected by the practices. Although neither HUD nor the attorneys general would discuss the report, Geoff Greenwood, a spokesman for Miller’s office said the findings were the key to the states’ negotiating position … * WASHINGTON (9/7/11)--The Credit Union National Association has released its analysis of the National Labor Relations Board’s (NLRB) final rule that would require most non-government employers to inform employees of their rights under the National Labor Relations Act (NLRA) through a poster mounted in the workplace. The NLRB said that the rule, which will become effective on Nov. 14, "will increase knowledge of the NLRA among employees, in order to better enable the exercise of rights under the statute." Credit unions will be subject to the rules, but CUNA staff added that credit unions that already comply with Labor Dept. posting requirements will be in compliance with the new NLRB rule… * WASHINGTON (9/7/11)--The term “abusive”--the standard in the Dodd-Frank Act under which Consumer Financial Protection Bureau (CPFB) can prohibit certain acts and practices by banks--has yet to be defined. Bankers and lawyers argue that the term gives the CFPB too much flexibility (American Banker Sept. 6). As described by Dodd Frank, the CFPB can determine a practice or product to be abusive if it “materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or takes unreasonable advantage of a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service; the inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service; or the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.” Bankers worry that the bureau will determine that certain products are inherently abusive, said Suzanne Garwood, a lawyer with Venable LLP …