Regulatory and Compliance
WASHINGTON -- Federal banking regulators are claiming progress in the drawn-out battle to implement the Basel II capital standards in the U.S.
The federal banking regulators have approved a final rule implementing Basel II's advanced approach with the standardized approach still to come. The final rule retains the proposal's more stringent transitional floor periods and the Prompt Corrective Action regime of existing law, including leverage ratio requirements, and the agencies will undertake a study during the transition period to assess whether the U.S. Basel framework is working as intended, according to Comptroller of the Currency John Dugan at a recent address during the 2007 RMA Annual Risk Management Conference in New Orleans.
The American Bankers Association applauded the forward movement. "Aligning U.S. capital regulations with the international Basel II accord reduces potential competitive inequities with foreign banks already applying this standard," ABA Executive Director of Financial Institutions Policy and Regulatory Affairs Wayne Abernathy said.
"Chairman [JoAnn] Johnson's view is that any discussion about the modernization of capital standards benefits our overall efforts to get capital reform," NCUA Director of Public and Congressional Affairs John McKechnie stated. A key provision in the Credit Union Regulatory Improvements Act (H.R. 1537) would establish a risk-based capital framework for credit unions.
Congressional Hearing Challenges Bank Regulators' Enforcement of CRA
WASHINGTON -- The House Oversight and Government Reform Subcommittee on Domestic Policy held a hearing entitled Upholding the Spirit of the CRA: Do CRA Ratings Accurately Reflect Bank Practices? late last month.
The hearing, according to the subcommittee's Web site, was set to "expose and explain how Community Reinvestment Act (CRA) exams may not reflect discriminatory practices by regulated banks, including the problems associated with regulatory discretion and new bank structures that were prohibited when Congress enacted the CRA."
The subcommittee, chaired by Congressman and presidential candidate Dennis Kucinich (D-Ohio), stated on its Web site, "Presently, 98% of banks receive a satisfactory or outstanding rating on their CRA exams. Yet evidence of discrimination in lending and other bank practices persists, including a number of Department of Justice prosecutions of banks receiving high CRA ratings."
Witnesses for the hearing included federal bank regulators and consumer advocates.
Bloomberg.com reported Kucinich as saying that regulatory enforcement "hasn't been sufficient to prevent modern-day redlining. This has allowed federal banks to expand even though they have discriminated against the communities they were supposed to serve."
NCUA and IRS Partner to Educate CUs On VITA
ALEXANDRIA, Va. -- NCUA, in partnership with the IRS, will present a live Volunteer Income Tax Assistance (VITA) Partnership Webcast Nov. 14 from 1:00 p.m. to 2:30 p.m. EST.
NCUA hopes the Webcast will help expand financial education opportunities available to credit unions. VITA is an IRS program that helps low- and moderate-income taxpayers complete their tax returns for free. Credit unions and others can receive training to prepare basic tax returns and establish tax preparation sites. The IRS provides the software and training.
The Webcast will be available at: http://www.hud.gov/webcasts/index.
cfm. It will emphasize the benefits to credit unions of partnering with other community organizations to offer the VITA program. The agenda will feature a presentation by the IRS, credit union experiences with the program and tips for partnering with community organizations, and a live question and answer session.
The U.S. Department of Housing and Urban Development is providing the Web site production facilities.
All credit unions can participate in the Webcast and no registration is required.
NCUA External Affairs Deputy Moves To Treasury
ALEXANDRIA, Va. -- NCUA Associate Director of External Affairs Justin Grove was selected to serve on special detail to the Treasury Department.
Grove will advise and assist Treasury officials with task forces and initiatives dealing with financial education and current issues facing the economy. "While we are sorry to be without Justin's services during this detail," NCUA Chairman JoAnn Johnson said, "I am pleased that the priority NCUA has given to financial literacy initiatives, manifested in activities on behalf of MyMoney.gov and the various Treasury conferences on providing financial services to underserved consumers, has received this level of recognition. From his position at the Department of Treasury, Justin will be able to continue his stewardship of these important issues."
Grove served as NCUA's hands-on representative enhancing and refining the www.mymoney.gov Web site, the federal government's primary financial education resource, and development of the NCUA's financial education Web site, http://www.ncua.gov/
FinancialEducation/index.htm. Grove began his tenure at NCUA in November 2005.
Prior to that, he served in the White House from 2001-2005, in the Office of Presidential Correspondence. Grove began his career in the Texas Governor's Office, working for then-Governor George W. Bush.
"The key to progress on financial literacy is cooperation," Treasury's Deputy Assistant Secretary Dan Iannicola Jr. said. "Treasury is grateful to the NCUA for its spirited and consistent support of financial education initiatives throughout the federal government and across the country. Chairman Johnson's action today is an example of that strong support."
As the lead agency for the Financial Literacy and Education Commission, on which Johnson serves, Treasury coordinates the financial education efforts throughout the federal government, supports private sector financial literacy promotion, and encourages alignment between the public and private sectors.
Risk Mitigation Summit for 2008 Announced
CHARLOTTE, N.C. -- NCUA Vice Chairman Rodney Hood has announced plans to hold a second Risk Mitigation Summit next year in Charlotte, N.C. he told a group attending one of NCUA's Small Credit Union Workshops there.
"I look forward to hosting a summit in 2008 focused upon risk mitigation for small credit unions," Hood stated. "I have been a leading advocate for credit unions to adopt the most current and sophisticated risk mitigation techniques. I realize this is easier to do for larger credit unions, which have more resources. Thus, I want to focus this summit on helping smaller credit unions initiate affordable, effective and maintainable risk mitigation practices."
The vice chairman promised more details for his Risk Mitigation Summit at a later date. He held one in Washington, D.C. early this year.
Hood also commended the leadership of the small credit unions and the impact they have on the communities they serve. "Credit unions are making a positive impact on their surrounding communities, but constant advancement does not happen without strong leadership, vision and commitment," Hood added. As industries grow and technology advances, credit unions must be prepared to meet such constant progress, he said. Communication and collaboration are essential to success in the fluid financial services marketplace, he said.
He also touched on two key issues for credit unions: financial education and member business lending. "I encourage small credit unions to continue providing innovative member business lending products and financial literacy programs which help member-owners establish viable businesses that create jobs and sustain local communities," Hood said.