WASHINGTON–The House Financial Services Subcommittee on Oversight and Investigations heard everything from how HMDA is a valuable tool for rooting out unfair lending practices to how HMDA has utterly failed to do just that during a hearing yesterday. A variety of federal financial regulators, including NCUA, outlined how HMDA is used to detect unfair lending practices and suggested the current process is working fine. Indeed, the American Financial Services Association agreed with the federal agencies, suggesting any expansion of HMDA could cause a bevy of problems, not the least of which is a threat to consumer privacy. Not surprisingly, the National Community Reinvestment Coalition took a different view. “As powerful as HMDA data has been in the efforts to stop discrimination, the full potential of HMDA has not been realized because key data elements remain missing from HMDA data,” NCRC CEO John Taylor said, who added “fair lending and consumer protection regulation has failed to protect consumers adequately.”

ALEXANDRIA, Va.–Treasury will sponsor a test of the financial services sector's ability to withstand a bird flu outbreak or other pandemic. The online exercise aims to bring together large and small credit unions with banks, brokers, insurers and other financial services firms to examine contingency plans for a number of areas, including continuity of operations, transportation, telecommunications, human resources and energy. Using a secure website, from Sept. 24 through Oct. 10, the test will simulate development of a potential outbreak. “I encourage credit unions to consider participating in this industry-wide exercise,” NCUA Chairman JoAnn Johnson said in a release. “It will provide an excellent opportunity to test your continuity of operations plan, identify potential areas for improvement and learn from the experience of others.” The exercise is free and voluntary, NCUA said. Participating financial institutions will conduct it anonymously using electronic mail and a secure website. Detailed information about the exercise and registration is available at: http://www.fspanfluexercise.com/ . While registration is open through August 31, 2007, early registration is encouraged.

BEAVERTON, Ore.–Credit unions in Oregon celebrated several successes when the state’s Senate and House recently adjourned. Pamela Leavitt, senior vice president of governmental affairs and public relations for the Credit Union Association of Oregon (CUAO) said in a release, “The 2007 Legislative Session proved to be one of the busiest for credit unions. Besides moving our priority legislation through both the House and Senate, we were asked to serve on work groups for major bills on identity theft, predatory lending, and consumer lending. We participated in several meetings with the Governor on short-term lending bills.”

WASHINGTON–CUNA blasted a Treasury report that suggests repealing the credit union tax exemption as one way to fund reduced corporate income taxes. In a letter to Treasury Secretary Henry Paulson, CUNA CEO Dan Mica cited past Bush Administration statements in support of the credit union tax exemption and said this most recent analysis “wholly contradicts the 2004 letter to CUNA from President Bush” supporting the tax-exempt status of credit unions. “Under this administration, the Treasury has consistently recognized the benefits of credit unions and stated its support for the credit union tax exemption; we urge that position be continued,” Mica wrote. The letter is a response to the “Treasury Conference on Business Taxation and Global Competitiveness Background Paper” that was released in advance of the Treasury’s upcoming conference. The letter also was distributed to House Financial Services Committee Chairman Barney Frank and House Ways And Means Committee Chairman Charles Rangel.

ALEXANDRIA, Va.–At its monthly board meeting today, NCUA will introduce a proposed rule that would allow credit unions to create investment vehicles that use foreign currency. The Advance Notice of Proposed Rulemaking is aimed at helping credit unions help members who live abroad, allowing them to make investments using foreign currency. Other issues on the agenda include: the quarterly insurance fund report, reprogramming the agency’s operating budget and a final rule on Catastrophic Act Reporting and Records Preservation.

WASHINGTON–The latest round of advertisements by America’s Credit Unions features a General Accountability Office report noting taxpayers are subsidizing the banking industry by $1.3 billion to $1.9 billion each year, despite the fact banks are the U.S.’s most profitable industry since 2000. It warns: “Now the banks want to tax 90 million Americans who are credit union members.” The ad, which began publication today and will continue running through next week, is being printed in The Hill, Roll Call and Congress Daily, according to CUNA Spokesperson Pat Keefe. America’s Credit Unions is a joint project by CUNA and NAFCU.

FEDERAL WAY, Wash.–The credit unions of Washington state have elected three new directors and re-elected one incumbent director to the Washington CU League board of directors. Four of the nine board director seats were up for election this year. Terry Belcoe, president/CEO of North Coast CU of Bellingham, will replace outgoing director Terri McKee, president/CEO of Industrial CU of Whatcom County. Tom Graves, CEO/president of Prevail CU in Seattle, will take the seat of Robert Harvey, president/CEO of Seattle Metropolitan CU and outgoing board chairman. President/CEO John Bechtholt of TAPCO CU ran uncontested as incumbent for his district. And, Mina Worthington, SVP/COO of Yakima Valley CU, will replace Paul Regimbal, president of Yakima’s Catholic CU. All incoming directors will be officially seated at the WCUL’s Annual Business Meeting Sept. 14 in Spokane.

SAN ANTONIO — Security Service Federal Credit Union (SSFCU) said it has expanded its line of business loan products to include the new Small Business Administration Patriot Express Pilot Loan for military members, veterans and their spouses interested in expanding or establishing small businesses.

GASTONIA, N.C.–Police here captured a robbery suspect as he was crawling through a credit union's heating and air conditioning ducts seeking to escape. The suspect, who was not identified, was found in the air ducts of Carolina Cooperative FCU at 3:30 a.m. by police who had been alerted by the credit union's alarm system. An officer on the roof heard the suspect inside the ducts and waited for him to emerge from the air conditioning unit of a nearby building. The suspect was unsuccessful in breaking into the safe. Police said they believe the man may have been responsible to two similar burglaries at the credit union.

WASHINGTON–The United States Mint recently launched the Presidential $1 Coin Program—a new series of circulating $1 coins featuring former presidents in the order they served. The first coin in the series, the George Washington $1 Coin, arrived at U.S. financial institutions and retailers and in the hands of consumers Feb. 15. The newest Presidential $1 Coin, featuring Thomas Jefferson, will go into circulation Aug. 16. In preparation for the expected consumer demand, retail merchants and financial institutions may begin pre-ordering the new Thomas Jefferson $1 Coin on Aug. 2. The coin will be available in unmixed quantities until Sept. 13. Promotional materials are available free of charge at www.usmint.gov/$1coin.

SARASOTA, Fla.–Six people have been arrested here as part of a check kiting scheme alleged to have involved more than $140,000 and a credit union. The six were charged with felonies as part of an alleged plot to defraud the Publix grocery store chain and its CU. According to authorities, the group deposited and cashed $140,000 worth of bad checks into the Publix FCU's branch here and used debit cards to make cash or money order withdrawals and purchases along the west coast of Florida. They then made purchases with the proceeds. The arrests followed an eight-month investigation; a seventh suspect is being sought.

WASHINGTON–Financial institutions are calling on Congress to make the FDIC’s one-year moratorium on industrial loan company (ILC) applications permanent. The issue came to a head when several large retailers–in particular, Wal-Mart–applied for ILC charter, the so-called “back-door bank charter.” In a joint letter to Senate Banking Committee Chairman Chris Dodd (D-CT), the American Bankers Association, America's Community Bankers, and Independent Community Bankers of America all called on the presidential hopeful to do what he can to get moving on this legislation, which has been on the backburner since May.

WASHINGTON–Several consumer and civil rights groups are slamming a Federal Trade Commission report on the use of insurance credit scoring, calling the study “defective” and “biased insurance industry propaganda.” At issue is the use by insurers of consumers’ credit reports for determining insurance eligibility and premiums. The FTC issued its report in response to a congressional request, but groups that include the Consumer Federation of America say the report is based upon data provided by insurers and, as such, concludes incorrectly that the practice is not harmful. “The FTC study also confirms that, despite growing reliance on credit-based insurance scores, scant evidence exists to prove there is a meaningful connection between a consumer’s score and auto insurance losses,” the groups said in a jointly released statement. “The relationship between insurance credit scores and race is so strong that even though the FTC used data handpicked by the industry, it found that credit scoring discriminates against low income and minority consumers, and that insurance scoring was a proxy for race.”

CHICAGO–The Center for Financial Services Innovation said it has established the CFSI Catalyst Fund, a private equity limited partnership created to cultivate new financial services companies and solutions focused on the underbanked. “It is unique in its exclusive focus on early growth stage companies with the potential for broad scale, near term profitability, and dramatic impact on the underbanked market segment,” CFSI said in a statement. KeyBank and the Ford Foundation are among the initial investors in the fund.

SAN ANTONIO–Security Service Federal Credit Union (SSFCU) said it has expanded its line of business loan products to include the new Small Business Administration Patriot Express Pilot Loan for military members, veterans and their spouses interested in expanding or establishing small businesses. The Patriot Loan program will allow the $4 billion CU to offer business loans up to $500,000 that can be used for start-up, expansion, equipment purchases, working capital, inventory or business-occupied real-estate purchases. “We are excited to add the Patriot Loan program to our line of business products–especially a product like this one that will assist the military community and veterans with their small business needs,” John Worthington, senior vice president for SSFCU, said in a release. SSFCU said it is the first credit union in Texas to be approved by the SBA to offer this loan product, and added it already has closed its first Patriot Express loan.

ALEXANDRIA, Va.–NCUA Chairman JoAnn Johnson and National Association of State Credit Union Supervisors Chairman Linda Jekel Tuesday signed a Document of Cooperation, symbolizing federal and state regulators’ continued commitment to cooperatively ensure the safety and soundness of federally insured, state-chartered CUs. The Document of Cooperation is the formal agreement between NASCUS, on behalf of state regulatory agencies, and NCUA, as the federal regulator and administrator of the National Credit Union Share Insurance Fund. NCUA and NASCUS collaborated on revisions to the Document of Cooperation, last signed in 1998. “As partners in maintaining a safe, secure system of credit unions throughout the United States, NCUA and NASCUS underscore our resolve and collective sense of responsibility in signing this Document of Cooperation,” Johnson said in a press release. “The document solidifies and clarifies the elements, tools and interaction NASCUS and NCUA use day after day to ensure our nation’s credit unions remain safe, secure financial institutions, ready and able to serve their millions of members nationwide.” Jekel, who also is the director of the Washington Division of Credit Unions, said: “NASCUS and state regulators are pleased that we could sign an updated Document of Cooperation to formally recognize our continued commitment to the safety and soundness of credit unions and consultation between state and federal regulators. This agreement demonstrates the value of a cooperative relationship to the health of federally insured, state-chartered credit unions and to the insurance fund.”

WASHINGTON–NAFCU is using today’s hearing on HMDA data to highlight how credit unions can be part of the solution to serving the underserved. NAFCU Director of Legislative Affairs Brad Thaler sent a letter to key members of the House Financial Services Committee’s Subcommittee on Oversight comparing credit unions’ record on mortgage loans to that of banks based on the recently released 2005 HMDA data. “An analysis [of the data] shows that credit unions are making smaller mortgage loans than banks and thrifts and have a higher percentage of their mortgage loans going to low- and moderate-income borrowers,” Thaler wrote. “Furthermore, an analysis of the HMDA data shows that 18.8% of credit unions’ loans went to households with less than $40,000 in income, compared to 16.1% at banks and 12.4% at thrifts.” The letter goes on to point out that in comparing these types of loans, credit unions tended to charge better rates than did their banking brethren. “We believe that credit unions are part of the solution in providing those with lower incomes and minorities with more reasonable mortgage loans that will enable them to achieve the American dream of homeownership,” Thaler concluded.

WASHINGTON–A small provision in a big patent reform bill could make a big difference to the financial services industry at the expense of a small patent holder that claims broad rights over the process of creating and storing check images. According to an American Banker article, an amendment to the bill, which the Senate Judiciary Committee approved Thursday night, would protect financial institutions against infringement claims regarding imaging methods. A version of the bill that cleared the House Judiciary Committee last week does not include such an amendment. The legislation now goes to the floor of each chamber for further debate, and whether the check-clearing provision, which the financial industry broadly supports, will survive remains an open question. Broad efforts to reform patent law have been made in recent years only to be snuffed out at the committee level. That changed when a Supreme Court ruling in April raised the standard for granting patents for innovations that stem from "prior art." The banking industry has been supporting the reform effort, which also would make it harder to get so-called "business method" patents.

LOS ANGELES–In a move that leverages its newspaper-based heritage to appeal to a broader audience, Los Angeles Times FCU has changed its name to Cityside FCU. The name, Cityside, draws on a newspaper industry term for the city or metropolitan desk that covers local news. The 73-year-old CU said the move away from the Los Angeles Times name also reflects an expanded FOM open to most anyone in central Los Angeles.

DAYTON, Ohio—With the summer push on auto loans in full gear, Day Air Credit Union has developed a new auto loan that also helps members save money. "There is a real concern that people do not save anymore," Day Air’s Colleen Scott said. "Many people do not have down payments for cars or car repairs that unexpectedly come up. To help prevent this problem we created the Auto Loan Plus." The Auto Loan Plus in an auto loan with a built-in savings account. "We do it because we are so used to the money just being taken out of our [paychecks],” Scott offered. “The Auto Loan Plus works in the same manner. We set-up your payment for the loan incorporating your savings amount." For example, if your car payment is $250 and you want $20 to go to your savings each month, your payment will actually be $270. This money goes into a high dividend earning account and can be available for unexpected car repairs or to save money for a down payment on the next new car.