Let’s Talk Compliance
Still trying to get a clear understanding of Reg Z changes for the Credit Card Act of 2009 and open-end credit; or Reg E opt-in or no fee; overdraft protection programs; or Reg CC? If your head is spinning with all of the compliance deadlines and the challenges they present, the upcoming Compliance Town Meetings will provide some relief with explanations and ideas on how to comply.
The Association is holding two Compliance Town Meetings next week: March 23 at Penn State FCU in Bellefonte, and March 25 at Association headquarters in Harrisburg.
Registration begins at 12:30 p.m.; the meeting begins at 1:00 p.m. and will conclude by 4:00 p.m. Each member credit union is entitled to one free registration. The fee for each additional individual to attend is $50.
The State College program will be presented by John Kilduff, VP, Credit Union Services, and Joanne Broderick, Compliance & Operations Officer.
The Harrisburg program will be presented by Kilduff and Compliance & Operations Officers Angelique Pattillo and Elaine Royer.
Register for Compliance Town Meeting
Sign Up For Audio Session: Pending Escrow Rules
There’s still time to register for the March 24 free conference call, sponsored by the Association, to discuss escrow rules for higher-priced mortgage loans.
The one-hour call begins at 11:00 a.m. and will include Association staff Rick Wargo and Laurie Kennedy, along with Jeff Balestrini of Service 1st FCU, and Ron Celaschi of Clearview FCU.
This session is a follow-up to the Reg Z compliance workshops held in December, 2009.
We want to share some compliance information, and most importantly, discuss operational solutions. Your thoughts, comments, and observations will be highly valuable.
Member credit unions may join the call by registering at registrations@pcua.coop. Once you register, we will send you the call coordinates. To accommodate as many members as possible, registration is limited to one phone line per credit union. You are welcome to gather around the speaker phone.
What Will The Fed Say Today?
The Federal Open Market Committee meets today, a meeting that occurs as consumers are gradually starting to spend again and the economy continues to improve. Although an interest rate hike is the last lever the Fed wants to pull, is this the meeting in which the “exceptionally low levels ... for an extended period” language starts to get tweaked?
Bankrate.com suggests a cautious tone and pace from the Fed is to be expected, considering all the uncertainty about the sustainability of consumer spending and economic growth. The lingering question is, where is the economic growth going to come from? We need the growth to create the jobs that spurs the spending. The path of the housing market is susceptible to any substantive rise in mortgage rates, likely expiration of the homebuyer tax credit, and the ever-expanding inventory of foreclosed homes.
The Fed is in no hurry to raise interest rates and it may not even want to hint at it by tweaking the language of its statement. Some believe there won’t be any changes until the April meeting, allowing the Fed more time to evaluate mortgage rates and the job market.
Fifth Third Plans 10 New Branches In Pittsburgh Area
The Pittsburgh Business Times reports that Fifth Third Bancorp plans to add “at minimum” 10 Pittsburgh-area bank branches over the next 18 months, bringing the total number to 25 and taking employment from 140 to around 250. The announcement was made by Jay Ferguson, President and CEO of the Cincinnati-based bank’s Western Pennsylvania region.
Ferguson said, “We’re looking for strategic locations but also in terms of serving some of the underserved markets in low and moderate income neighborhoods.”
Fifth Third wants to have branches in Monroeville, Hampton Township, and on McKnight Road in Pittsburgh’s North Hills.
Frauds & Scams
Members Report Phone Scam
Members of Washington Community FCU report they received phone calls this weekend purportedly from "Credit Union Security." The caller advised the members that they needed to verify their debit card information by providing requested personal information. One member reportedly responded to the questions. The credit union cancelled the member’s card on Monday to prevent any losses or problems.
Newsmakers
Luke Lukashunas, VP of Fraud Security for TruMark Financial Credit Union, has been appointed to the executive board of the International Association of Financial Crimes Investigators (IAFCI). Appointed to the position of international secretary, Lukashunas will serve his term until December 2010. His responsibilities include overseeing IAFCI’s internal communications, its computer network system, and recording minutes at board meetings. The IAFCI works to eradicate fraudulent financial transactions, promote the exchange of criminal intelligence, and apprehend and prosecute lawbreakers. The IAFCI has approximately 4,300 members worldwide, representing all levels of law enforcement, banking, and retail businesses. Lukashunas joined TruMark Financial in 2000 and oversees the credit union’s fraud security department.
White Rose Credit Union, York, supported the 15th annual American Red Cross Charity Bowl on Sunday, March 7, with 18 staff members and family making up four teams for the event. The credit union’s West York Branch won “Most Spirited Team.” A member of the credit union made matching shirts for the team, and among themselves, they raised $1,000 (over and above the candy sales). Each White Rose branch sold candy prior to the event, and the East York Branch sold small flower bouquets for Valentine’s Day. All 18 bowlers presented a check to the American Red Cross for $2,145.90.
National News
In Congress: Dodd leads the week with reform bill
WASHINGTON (3/16/10) – Senate Banking Committee Chairman Christopher Dodd (D-Conn.) on Monday released long-awaited legislation aimed at reforming the financial regulatory structure in response to the financial crisis of 2008-2009.
Dodd's bill incorporates ideas from both Republican and Democratic sides of the aisle, and specifically would allow the Federal Reserve to continue to oversee both large banks and smaller state-chartered banks while also adding authority over some non-bank financial firms to the Fed's list of responsibilities.
Dodd's proposal also allows the National Credit Union Administration to maintain its independence and excludes credit unions with $10 billion or less in assets from the oversight authority of a proposed consumer watchdog. However, Credit Union National Association (CUNA) President/CEO Dan Mica noted that CUNA will advocate for removing all credit unions from the oversight of the new agency.
"We believe a strong case can be made that no credit unions need direct supervision by the new agency," Mica said after Dodd's afternoon press conference.
While the introduction of Dodd's financial regulatory reform bill will likely take top billing for credit unions this week in Congress, there will be plenty of other action on Capitol Hill.
Credit unions may not be closely following the ongoing healthcare debate, but there is some speculation that the budget reconciliation process that is begun by the passage of any healthcare legislation may also be used to eliminate the Department of Education's Federal Family Education Loans Program in favor of a federal direct lending program. CUNA has opposed the elimination of the FFELP program and will continue to monitor this issue closely throughout the week.
One item on the congressional agenda that will not directly affect credit unions, but is still of interest, is jobs legislation, which, after being juggled between the House and Senate, could be returned to the House by the Senate later this week.
Two of the many House hearings taking place this week are scheduled for Wednesday, when the House Financial Services Committee will discuss public and assisted housing revitalization initiatives and the link between the Federal Reserve's bank supervision and monetary policy.
April 14 is comment due date for Fed CARD Act proposal
WASHINGTON (3/16/10) – The Federal Reserve Board's recently issued proposal that would implement the provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act) that come into effect on Aug. 22 was published in the Federal Register Monday.
Although the Fed issued the proposal earlier this month, publication in the Federal Register starts the clock on the 30-day comment period.
The most recent proposal, which follows two earlier CARD Act proposals that are already effective, will prevent card issuers from charging inactivity fees, account closure fees, or multiple penalty fees based on a single violation. Otherwise, the proposal outlines three alternatives for calculating penalty fees that are based on costs to the institution, the ability to deter repeated violations, and a list of "safe harbor" fees that will be provided by the Fed at a later time, after it receives comments on what these fees should be.
Card issuers will also be required to inform consumers of the reasons behind an increased interest rate and must review any rate increases that have been made since the start of 2009.
These rate increases will have to be reviewed every six months and, if applicable, must be reduced.
The Fed release will remain open for public comment until April 14. The Credit Union National Association (CUNA) has also published a comment call on the Fed proposal, and will be accepting comments until April 6. To see the full Fed release, as well as a comment call from CUNA, use the resource links below.
Federal Reserve release
CUNA comment call
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