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Congress Introducing Bill for Financial Products
Commission
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Members of the House and Senate announced plans to
introduce legislation creating a Financial Products Safety Commission
to approve mortgage products and provide consumers with financial
advice. Sens. Charles Schumer (D-N.Y.) and Richard Durbin (D-Ill.) and
Reps. Bill Delahunt (D-Mass.) and Brad Miller (D-N.C.) will discuss
their legislation today.
Harvard Professor Elizabeth Warren, who chairs the TARP oversight
panel, has been calling for such a panel, and House Financial Services
Chairman Barney Frank (D-Mass.) has indicated his support.
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ICBA Seeks HUD Guidance for Servicers
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ICBA urged HUD to take the position that mortgage services
are not subject to the Secure and Fair Enforcement for Mortgage
Licensing Act of 2008 (SAFE) In a joint letter, ICBA expressed
concerns that without HUD guidance, states could enact a patchwork of
laws requiring servicers to be licensed and registered under the law.
ICBA notes SAFE was designed to establish a nationwide licensing and
registration system for individual loan originators, lenders and
mortgage brokers, not servicers. The letter says servicers should be
exempt even if they negotiate and amend the terms, and it suggests a
definition of "servicer" for this purpose.
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House Passes "Cramdown"
Legislation
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The House approved legislation with a provision that would
allow bankruptcy judges to "cram down" mortgage debt and
modify loan terms. ICBA has repeatedly urged members of Congress to
remove the provision from H.R. 1106. However, ICBA supports a section
of the bill that would increase the FDIC's borrowing authority from $30
billion to $100 billion, which FDIC Chairman Sheila Bair said is needed
to reduce the 20-cent emergency special assessment approved last week.
ICBA continues to urge community bankers to tell their members of
Congress to oppose the cramdown provision. Thanks to ICBA and community
bank outreach, the legislation contains constructive changes. However,
it is still too broad and does not follow the president's
recommendations for making the cramdown option a last resort.
ICBA also supports measures in the bill to permanently increase deposit
insurance coverage to $250,000, boost participation in the Hope for
Homeowners program and protect mortgage servicers from investor
lawsuits on loan modifications.
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ICBA Urges Member Action Against Special Assessment
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ICBA continues urging community bankers to send comments
to the FDIC expressing outrage at the unfair and misguided 20-cent
special assessment approved last week. The FDIC is accepting comments
on the special assessment until April 2. Bankers may e-mail comments to
comments@fdic.gov
(reference "Assessments, RIN 3064-AD35"). The ICBA homepage also features
an Action Alert
button with a link to the address.
ICBA is preparing model language and sample letters to help community bankers
and state executives develop comments and communicate their concerns
with the assessment. Information will be added to the ICBA Web site as
soon as it is available, so check back often.
Community bankers can also easily pull up contact information for their
members of Congress via the ICBA Web site by typing in
their ZIP code or selecting their state. ICBA thanks all the community
bankers who have already communicated their views to us, the FDIC
and/or Congress thus far. Please send a copy of your comments to ICBA
at info@icba.org.
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ICBA to Congress: Narrow TILA
Provision
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ICBA expressed concerns with a provision in the
House-passed Omnibus Appropriations Act of 2009 that dramatically
expands the ability of states to bring civil actions against a
community bank under the Truth in Lending Act for any TILA violation.
In a letter to Senate leaders, ICBA said the bill should be narrowed to
permit enforcement actions for TILA violations by state attorneys
general only against non-depository institutions.
"Community banks are regularly and thoroughly examined for
compliance with TILA, and are subject to enforcement actions by bank
regulators-including restitution to borrowers-should any violation be
found," the letter says. "Adding an extra layer of
bureaucracy only adds to the disproportionately high level of regulatory
burden faced by community banks."
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