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| Upcoming Events |
Examiners Education Forum, Newport Beach, CA, November 17-19: A forum for banking department training directors to discuss
trends and needs in examiner training.
Model Examination Guidelines School, Web-Based, December 1, 2008-February 28, 2009:
This new online School, developed by AARMR and CSBS, is designed to assist mortgage
regulators and mortgage industry compliance personnel implement the examination
procedures for the Guidance on Nontraditional Mortgage Product Risks and the Statement on Subprime Mortgage Lending.
Advanced Commercial Credit Analysis, San Luis Obispo, CA, December 1-4: Designed to provide a high level of skill development
for rapidly and effectively evaluating the repayment ability of a commercial business.
All participants will be required to complete and submit a pre-class exercise
that will be reviewed by the instructor and returned prior to the session.
Supervisors Symposium & Media Skills
Training, Tucson, AZ, December
8-11: Media Skills Training will begin Monday morning, December 8 and continue
through Tuesday, December 9. The Supervisors Symposium will begin Wednesday
morning, December 10 and continue through December 11. | |
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"It takes less time to do a thing right than to explain why you did it wrong."
– Henry Wadsworth Longfellow
For sure, our ship of state is steering
uncharted economic waters. It’s been a mere six weeks since the $700 billion
bailout bill was signed into law. The Treasury Department has worked seemingly
around the clock to put the Troubled Assets Relief Program (TARP) funds to work,
opting for capital infusions instead of purchasing "toxic assets" as initially
envisioned. Whether the effort has been successful or not probably remains to
be seen. But one thing’s for sure. Americans are impatient. We want immediate
results. So does Congress, as we witnessed this week, with several committees
holding contentious oversight hearings calling federal policy makers to task for
the market’s downward spiral and the ongoing rise in mortgage foreclosures.
Maybe everyone needs to take a deep breath and exercise a little bit of patience
and throw in a dose of optimism. Milton Friedman might have said that a government
solution to a problem is usually as bad as the problem. Let’s hope he’s
wrong this time. |
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CSBS Files Amicus Brief In Cuomo v
Clearing House Association |
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The Conference of State Bank Supervisors and 49 state attorneys general were
among the parties asking the U.S. Supreme Court to hear a case involving the ability
of states to enforce state laws for national banks. In the case, Cuomo vs. The
Clearing House Association, the U.S. Court of Appeals for the 2nd Circuit held
that the Office of the Comptroller of the Currency has exclusive visitorial authority
over national banks and state attorneys general cannot enforce applicable state
laws against national banks. CSBS argued that the high court should hear the case
because the Courts of Appeals are divided in selecting the appropriate legal approach
for federal preemption determinations. CSBS also argued that the court needs to
address whether federal agencies may, in the absence of a clear congressional
statement, adopt regulations that prohibit the states from enforcing valid state
laws that are not subject to preemption. Briefs in the case may be found here. |
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CSBS Calls For Equal Footing For States
In Consultations On Liquidity Program |
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The
Conference of State Bank Supervisors weighed in on the FDIC’s Temporary
Liquidity Guarantee Program interim rule by submitting a one-page letter decrying
the rule’s references to FDIC consultations with the "appropriate Federal banking agency."
"CSBS is concerned that state supervisors—who are the primary regulators
of the vast majority of financial institutions in the United States—are
overlooked in the interim rule. Therefore, we encourage the FDIC to alter language
in the interim rule from "appropriate Federal banking agency" to ‘primary
regulator,’ " CSBS President and CEO Neil Milner wrote.
"Now more
than ever, cooperation and coordination between the FDIC and state supervisors
is vital as our nation moves through the current economic downturn," he added. |
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Texas Taps Charles Cooper for Banking
Commissioner Post |
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Texas
Finance Commission Chairman John Snider announced that Charles G. Cooper will
be the new Texas Banking Commissioner effective Dec. 1, 2009. Cooper has served
in both the public and private sectors of the banking industry for more than 35
years. He was a bank examiner with FDIC for 12 years, ending his tenure as the
field office supervisor of the Houston Northeast Field Office. His banking experience
includes executive level positions in lending, credit administration and general
management as well as serving as a director of several banks.
"Charles
Cooper brings extensive experience in the financial services and regulatory environment
to this position and a strong commitment to ensuring the safety and soundness
of Texas financial institutions. The commission has great confidence that Charles’
steady leadership during these challenging economic times will benefit Texas financial
institutions and Texas consumers," said Snider. He succeeds Randall S. James,
who served as commissioner since 1999.
The Texas Department of Banking
regulates and supervises 329 state-chartered banks that control approximately
$153 billion in banking assets. The department also supervises trust companies
with approximately $29 billion in fiduciary assets, foreign bank agencies and
branches with $50 billion in assets, prepaid funeral licensees, money services
businesses, perpetual care cemeteries and private child support enforcement agencies
with assets totaling $78.9 billion. |
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CSBS Seeks Vendor For Testing/Education
Services As Required By S.A.F.E. Mortgage Licensing Act |
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The Conference of State Bank Supervisors (CSBS) this week released a
Request for Proposal (RFP) which seeks vendors that can provide services primarily
related to the testing and education requirements of Title V, the S.A.F.E. Mortgage
Licensing Act of the Housing and Economic Recovery Act, Public Law 110-289. The
RFP describes services in four main areas:
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Test Development
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Test Administration
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Education Management, and
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Applicant
and Licensee Testing and Education Management
The RFP can be found at this link on the CSBS web site. Proposals will be accepted through December 8, 2008. |
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| Around The States |
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Florida, Texas: Banks in Texas and
California were
closed on Friday, Nov. 7, with the FDIC being named receiver in both cases. The
California Department of Financial Institutions (DFI) closed Security Pacific
Bank, Los Angeles,
citing inadequate capital. The Texas Department of Savings and Mortgage Lending
closed Houston-based Franklin Bank, S.S.B. Pacific Western Bank of Los Angeles assumed all of Security Pacific Bank's
$450 million in deposits, and the bank's four offices reopened Saturday as branches
of Pacific Western, with no disruption in service. Prosperity Bank, El Campo, Texas,
assumed all of Franklin Bank's $3.7 billion in deposits, including brokered deposits,
for a premium of 1.7 percent. Prosperity Bank also agreed to acquire about $850
million of Franklin's
assets. The failed bank's 46 offices have reopened as branches of Prosperity Bank.
Nineteen banks have closed so far in 2008. Additional information about the bank
closings may be accessed on the FDIC’s Web site.
Maryland: Maryland
Governor Martin O'Malley recently announced agreements with six mortgage servicing
companies to create a streamlined and transparent loss mitigation process for
distressed Maryland
homeowners. The companies -- HSBC, Ocwen, GMAC ResCap, Litton Loan Servicing,
AmeriNational Community Services and Citi -- service 23 percent of the home mortgages
in Maryland.
Under the agreements, the lenders pledged to abide by a predetermined timeline
for loss mitigation that will ensure homeowners have an answer within 75 days
from the time they submit loss mitigation packages. The firms generally will halt
foreclosure actions and waive penalties. The servicers also agreed to establish
or continue internal policies that offer incentives for loan modifications, and
to refrain from offering incentives that encourage foreclosures. Governor O'Malley
also announced the "Bridge to HOPE" Loan Program, which provides small gap loans
at 0 percent interest to homeowners facing difficulty, giving them time to get
back on their feet or find a solution. More information may be found here.
Michigan: Gov. Jennifer Granholm said Thursday she'll release
$150 million from the state treasury for banks and credit unions to loan to businesses
and consumers to help spur economic recovery throughout the state. The state will
purchase $150 million in certificates of deposits from state banks and credit
unions and get competitive interest on the CDs. The banks and credit unions, in
turn, would use the state money to provide loans, 80 percent to Michigan businesses. She also asked for quick
legislative consideration of the newly-introduced Michigan Home Foreclosure Prevention
Act, which would help homeowners with subprime mortgages avoid foreclosure by
providing greater outreach to borrowers who are in need of help. Gov. Granholm
said the law, modeled after a successful North
Carolina program, would also authorize the Office of Financial
and Insurance Regulation (OFIR) commissioner to provide up to a 90-day freeze
on foreclosure proceedings to allow the homeowner and the lender to work out terms.
For additional information, go here. |
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| Around The Agencies |
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FDIC: FDIC issued guidance recently describing the potential
risks associated with relationships with firms that process payments for telemarketers
and other merchant clients. The agency said these types of relationships pose
a higher risk and require additional due diligence and close monitoring. Account
relationships with these companies could expose financial institutions to increased
strategic, credit, compliance, transaction and reputation risks. The guidance
outlines risk management principles for this type of higher risk activity. For
example, the guidance calls for financial institutions to be alert to consumer
complaints that suggest a payment processor's merchant clients are inappropriately
obtaining personal account information. FDIC also said financial institutions
should act promptly when they believe fraudulent or improper activities have occurred
related to a payment processor. See guidelines here.
HUD: The Department of Housing and Urban
Development issued final rules on Wednesday to govern the Real Estate Settlement
Procedures Act, which the agency said should save consumers nearly $700 in closing
costs. The rules call for lenders and mortgage brokers to provide consumers with
a standard “Good Faith Estimate” to disclose clearly key loan terms
and closing costs. HUD received approximately 12,000 comment letters on its proposal
and said the final rules reflect considerable modifications to the original plan.
For example, HUD originally proposed that settlement agents read a closing script
at the closing with a copy of the script provided to borrowers. HUD discarded
the script in favor of a new page on the HUD-1 Settlement Statement that allows
consumers to compare their final loan terms and closing costs with those listed
on their Good Faith Estimate. HUD will require the new standardized disclosure
forms beginning in Jan. 1, 2010. The agency also said the rules require lender
payments to mortgage brokers to be disclosed in a more meaningful way. Another
provision gives lenders and settlement services 30 days from the date of closing
to correct errors or violations and repay consumers any overcharges. More information here.
NCUA: The National Credit Union Administration
recently announced the approval of a federal credit union charter for the members
and employees of the National Association of Realtors. The Realtors FCU will operate
as an Internet credit union without physical branch locations. The credit union
plans to offer a wide range of products and services, such as share drafts, automated
teller machine cards and debit cards, Internet banking, mortgage and home equity
loans, and an audio response system. The credit union will have a national field
of membership. NCUA Chairman Michael E. Fryzel praised the formation of the credit
union, calling it a commendable and valuable service to NAR members.
Treasury: The Treasury Department announced
last week that it is revoking the "U-turn" license for Iran
to eliminate the last general entry point for Iranian banks – both state-owned
and private – to the U.S.
financial system. U-turn transactions allowed U.S.
banks to indirectly process payments involving Iran if they began and ended with a
non-Iranian foreign bank. Treasury Under Secretary for Terrorism and Financial
Intelligence Stuart Levey said there is now “a global consensus that Iran
poses an unacceptable threat to the international financial system.” He noted that the Financial Action Task
Force, which has members representing 32 jurisdictions, issued its fourth warning
on Iran last month, calling for countries worldwide to strengthen measures to
protect their financial sectors from this threat. Levey said the action does not
affect otherwise permissible payments, such as for shipments of food and medicine,
family remittances, and the export of informational materials to Iran. |
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| Upcoming Events |
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November 14-15 – World leaders will meet in Washington to address the global financial crisis.
The meeting will be attended by leaders of the Group of 20, which includes leading
industrial and developing economies.
November 17-18 – The Conference of State Bank Supervisors District
II fall meeting will take place at the Canterbury
Hotel, Indianapolis, Ind.
November 17-19 – CSBS holds its Examiner Education Forum in Newport Beach, Cal.
November 18 – The House Financial Services Committee will hold
an oversight hearing on the Troubled Asset Relief Program (TARP) program being
managed by the Treasury Department and related initiatives taken by the Federal
Reserve Bank and the FDIC in response to the turmoil in domestic and global financial
markets. – 10 a.m., 2128 Rayburn House
Office Building.
November 19 – The Cato Institute holds its annual monetary conference.
– 8 a.m.-6 p.m., Washington,
D.C.
November 18 - The House Financial Services Committee will hold a hearing
entitled "Oversight of Implementation of the Emergency Economic Stabilization
Act of 2008 and of Government Lending and Insurance Facilities; Impact on Economy
and Credit Availability". - 10 a.m., 2128 Rayburn House
Office Building.
November 19 - The House Financial Services Committee will hold a hearing
entitled “Stabilizing the Financial Condition of the American Automobile
Industry". - 10 a.m., 2128 Rayburn
House Office
Building.
MARK YOUR CALENDAR
May 19-21, 2009
-: The 2009 CSBS Annual Meeting & Conference will be held at the Rancho Bernardo
Inn, San Diego, Cal.
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Closing Comments
"As I was preparing
this speech against the background of recent fast-moving events in the financial
markets, I couldn’t help but think of Bob Dylan’s song “It’s
Alright, Ma (I’m Only Bleeding)." One of my favorite lyrics in that song
is: “Money doesn’t talk, it swears.” Financial institutions have been bleeding, and the markets have
been cussing up a blue streak lately...." - Richard W. Fisher, president and CEO
of the Federal Reserve Bank of Dallas,
from a speech given Sept. 25 to the Money Marketeers of New York University.
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