May 13, 2014
Tuesday Edition
House Committee approves Mortgage Choice Act

The House Financial Services Committee approved H.R. 3211, the Mortgage Choice Act last week, which can now be referred to the House floor for consideration. The Mortgage Choice Act amends the Truth in Lending Act’s definition of points and fees by exempting from points and fees any affiliated title charges and escrow charges for taxes and insurance from the qualified mortgage cap on points and fees.

CUNA has strongly advocated for these changes on behalf of credit union mortgage lenders and is hopeful that the bill will be considered by the full House within the next month. Under the current rule, what constitutes “points and fees” remains a hazy area for lenders, and CUNA continues to seek clarification from the CFPB. It is anticipated that the House will consider H.R. 3211 under the suspension of rules procedure, which limits debate and requires two-thirds of the members voting to agree.

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Washington wire

This week the House is on recess, while the Senate remains in Washington. Even with one chamber at home, there are still a number of activities relevant to credit unions taking place on Capitol Hill. Here’s what you need to know about credit unions on Capitol Hill this week:

  • The Senate Banking Committee is expected to resume consideration of the Johnson-Crapo housing finance reform legislation.

  • Reps. Peter King (R-NY) and Gregory Meeks (D-NY) are expected to send a letter to the NCUA regarding the proposed rule on risk based capital. They will be joined on the letter by 322 of their colleagues including 28 from Alabama and Florida.

For more on the above topics, plus this week's floor schedules click here.

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Wash. CU sets standards for serving marijuana businesses

A Washington-based credit union has emerged as the first financial institution in the U.S. to welcome businesses from the marijuana industry to open accounts at its branches--a move meant to bolster public safety. While retailers, or the dispensaries that sell marijuana directly to consumers, are not eligible, businesses that grow or process pot can manage their finances at Numerica CU.

"These businesses are cash-run, which is not good for a community," Kelli Hawkins, Numerica communications manager. "It invites crime, and so we think it's the right thing to do. It's in the best interest of our members and our communities."

Numerica leaders said earlier this year that they were preparing to allow all marijuana businesses, including retailers, to bank at their branches. However, guidelines publicized by the U.S. Justice Department have kept them from moving forward with that plan.

The guidelines place massive regulatory burdens on financial institutions that elect to accept deposits from pot-retailers, such as requiring the institutions to monitor the retail stores so that marijuana is not transferred to states where it is still illegal.

Numerica representatives said they felt they could not fully control such circumstances in order to comply with the federal guidelines.

The processors and growers that can open accounts at Numerica, meanwhile, still face fairly strict rules:

  • Each marijuana business bank account will be limited to $5 million in total deposits.
  • No debit or credit cards can be issued for the accounts.
  • All deposits must be made in person, with no night deposits permitted.
  • Account holders won't be allowed to conduct shared-network banking, a unique service of the credit union industry where members can access their accounts at other credit unions in a shared-branch system, among other restrictions.

To read the full article visit CUNA News Now.

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InfoSight spotlight: Authentication in Internet Banking Environment

In October 2005, the FFIEC Agencies issued guidance that provided a risk management framework for financial institutions offering Internet-based products and services to their members. It stated that institutions should use effective methods to authenticate the identity of customers and that the techniques employed should be commensurate with the risks associated with the products and services offered and the protection of sensitive customer information.

To help your credit union remain in compliance, the Authentication in Internet Banking Environment topic was developed for the ACH/Electronic Payments channel. In addition to a link to the FFIEC’s Supplement to Authentication in an Internet Banking Environment, this topic includes information about the following:

  • Layered Security Programs – Layered security is characterized by the use of different controls at different points in a transaction process so that a weakness in one control is generally compensated for by the strength of a different control. Learn about some of the effective controls that may be included in a layered security program.   
  • Effectiveness of Certain Authentication Techniques – Learn about the effectiveness of device identification; challenge questions; and member awareness and education.

Click here to visit this topic today and help your credit union stay in compliance.

(Be sure to log in to the LSCU website using the gray Site Login box in the upper right corner before you click on the links above.)

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In This Issue
Tuesday Edition
House Committee approves Mortgage Choice Act
Washington wire
Wash. CU sets standards for serving marijuana businesses
InfoSight spotlight: Authentication in Internet Banking Environment
LSCU & Affiliates Media

Risk-Based Capital Presentation
The League is holding risk-based capital meetings across both states ahead of the May 28 NCUA comment due date. This presentation is perfect to show to staff and boards.

Florida Financial Literacy Bill
In 2014, the Florida Legislature considered HB 367 and SB 212 which would require a half credit of financial literacy to graduate. Bill sponsors Sen. Dorothy Hukill and Rep. Heather Fitzenhagen talk about its need and how credit unions can help.

Upcoming Event Deadlines
May 19 Last Day to Register - LSCU Disaster Recovery Conference - Mobile, AL
May 19 Last Day to Register -  LSCU OFAC/BSA Basic & Advanced School - Birmingham, AL
May 21 Last Day to Register - LSCU Disaster Recovery Conference - Jacksonville, FL
June 18 Last Day for Early Bird Rate – LSCU BSA Essentials & Advanced Workshops – Mobile, AL
June 18 Last Day for Early Bird Rate – LSCU BSA Essentials & Advanced Workshops – Huntsville, AL
July 1 Last Day for Early Bird Rate – Southeast Supervisory Committee Conference – Point Clear, AL
July 15 Last Day to Register - LSCU BSA Essentials & Advanced Workshops - Mobile, AL
July 15 Last Day to Register - LSCU BSA Essentials & Advanced Workshops - Huntsville, AL
Upcoming League Events
TODAY - SAS Credit Union Conference
TODAY - Board vs Supervisory Responsibilities
May 14 - Auditing Your Loan Portfolio
May 15 - How to Avoid Lender Liability Claims
May 20 - Disaster Recovery Conference, Mobile AL
May 20 - OFAC & BSA Basic & Advanced School, Birmingham, AL
May 20 - New ACH Security Requirements
May 21 - OFAC & BSA Basic & Advanced School, Birmingham, AL
May 21 - Increasing Regulatory Requirements
May 22 - Disaster Recovery Conf, Jacksonville FL
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