Source: https://nafcucomplianceblog.typepad.com/nafcu_weblog/colombia/
Timestamp: 2019-04-19 02:33:01+00:00

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BSA/AML Violations Can Cost You!
Government Agencies and Maturity Limits – Where Do GSEs Fall?
Elizabeth LaBerge, Senior Regulatory Compliance Counsel on What Does the CHOICE Act Mean for Credit Unions?
DJ on What Does the CHOICE Act Mean for Credit Unions?
CFPB Warns Credit Card Companies Against Deceptively Marketing Promotional Offers. In a bulletin released last week, the Consumer Financial Protection Bureau (CFPB) warned credit unions, and other credit card issuers, against deceptively marketing interest-rate promotions. The CFPB issued the bulletin because of the Bureau’s concerns regarding the marketing practices of some card issuers, especially with regards to promotional rates and balance transfer offers.
In addition to the bulletin and the press release, the CFPB also hammered home their perspective with a consumer-facing post on the Bureau’s blog. The blog post warned consumers to be on the lookout for deceptive advertisements regarding promotional rates, and also warned consumers on the implications of losing the protections of the grace period.
Free Kick. My wife and I just got back from a great week on vacation in the city of my birth – Cartagena, Colombia. While there, we were lucky to get to watch Colombia’s friendly against Brasil on television. Sadly, Neymar found enough magic on a free kick to give Brasil a 1-0 victory. That being said, watching the match at a restaurant in Cartagena reminded me of why I fell in love with football. It may have only been a friendly, but it seemed like every other person was wearing a national team jersey and the city came to stop for those two hours while people were glued to the game cheering on their Seleccion Colombia. It was an absolutely wonderful way to cap off a summer that brought me so much joy after having not seen Mi Seleccion in a World Cup since 1998. I can’t wait to see wait the next four years under Jose Pekerman bring to Colombia. In the meantime, here are two videos from Colombia’s World Cup opener that still give me goose bumps: Colombian National Anthem and Caracol Highlights.
Farewell. This will be my final blog post here at the NAFCU Compliance Blog. While I have decided to leave the NAFCU Compliance team in order to head back to the government relations field, I have thoroughly enjoyed these past eight months of covering compliance hot topics and providing my take on the wonderful world of football. It has also been a pleasure providing compliance advice to the many of you that have called or emailed with compliance questions. I leave behind some great colleagues here at NAFCU Compliance, and I thank them for sharing their knowledge, thus making me a better attorney. Lastly, I also want to thank all of the readers of this blog. It has been so much fun interacting with you and trading perspectives on the beautiful game and sharing in the excitement of a truly incredible World Cup.
“As HELOCs transition from their draw periods to full repayment, many borrowers will have the financial capacity to pay as agreed. Some borrowers, however, may have difficulty meeting higher payments resulting from principal amortization or interest rate reset, or renewing existing loans due to changes in their financial circumstances or declines in property values.
Appropriate segmentation and analysis of end-of-draw exposure in allowance for loan and lease losses (ALLL) estimation processes.
Ensuring that control systems provide adequate scope and coverage of the full end-of-draw period exposure.
As is stated in several places in the document, the guidance should be applied in a manner commensurate with the size and risk characteristics of a financial institution’s HELOC portfolio. Therefore, NCUA, through their examination process, may look for how credit unions have applied some or all portions of the guidance.
Free Kick. And then there were four. After a riveting 60 matches, we are down to the final week of the World Cup. Left standing are Brasil, Germany, Argentina, and the Netherlands. All four have had their moments of brilliance, but they have also had moments of true concern in this tournament. There are no doubt several plot twists left over the final four games of this tournament, but what I do know right now is that the eventual champion will have earned it. This has been a tournament full of parity, surprises, and great play. But it also has been a tournament that has seen controversy and injury strike. In the end, though, this tournament has been a celebration of the beautiful game, and it will be sad to say goodbye to Brasil 2014 this Sunday afternoon.
As a very proud Colombian-American, this tournament has also filled me with much joy and pride. Both the U.S. and Colombian teams acquitted themselves superbly throughout the course of this tournament. It was sad to see them both bid farewell to this celebration of football this past week, but I will be comforted with amazing memories, especially the stalwart goalkeeping displayed by Tim Howard and the simply sublime playmaking abilities of James Rodriguez. Both teams have bright futures ahead, and I look forward to seeing them, hopefully, take the next step over the next four years and in Russia in 2018!
Forwards – Arjen Robben (NED) and Thomas Muller (GER).
SBA Announces New Business Credit Score Model. The Small Business Administration (SBA) is currently in the final phases of preparation before launching a new predictive business credit scoring model. SBA Administrator Maria Contreras Sweet made this announcement as part of a speech on June 10, at the Center for American Progress in Washington, D.C. The new model will produce a score based upon a combination of an entrepreneur’s personal and business credit scores, and it will be made available to all SBA lending partners for loans of $350,000 or less starting in July.
Along with announcing this new predictive business credit scoring model, SBA Administrator Contreras Sweet also spoke about the SBA One initiative during her speech that was largely focused on how the SBA and its programs need to continue becoming more inclusive of minorities and women. SBA One, when launched, will be an interactive and user-friendly SBA lending platform that aims to save credit unions and other lenders processing time on the agency’s 7(a) loan program by replacing fax machines and paperwork with automated uploads of documents, generation of forms and allows electronic signatures. Contreras Sweet said, “[b]y making the process quicker, cheaper and more intuitive, these reforms will help existing lenders do more small-dollar lending.” There is no launch date yet available for SBA One.
Along with announcing these two initiatives, Contreras Sweet talked about the agency’s focus on getting more loans to qualified business owners. She highlighted three areas that the SBA will be focusing on in this effort. First, the agency is planning to modernize and implement smart systems, so that the SBA is in a position to keep pace with technological advances. Second, the SBA wants to create a more inclusive agency by tailoring programs that embrace the U.S.’s changing demographics and are more responsive to future demographic shifts. Lastly, the agency wants to serve as a market maker for small companies by opening new business channels within the federal government, corporate supply chains, and international commerce.
Free Kick. The group stage is now two-thirds of the way done, and there is not much more than can be said about the quality of play other than - wow! This World Cup has had it all so far: amazing goals (another one); heroic individual efforts; incredible upsets; and uplifting performances. Here is a short primer on where we stand (from my perspective).
In terms of my rooting interests, I am still on a high after Colombia booked its place in the Round of 16 last Thursday. This is the first time that they have made it out of the group stage since 1990, and I think that Los Cafeteros can win a few more games during this tournament. James Rodriguez has been excellent, the defense has been solid, Juan Cuadrado has been an unending creative spark in the midfield, and Jose Pekerman has been expertly pulling the strings both in terms of tactics and personnel. VAMOS COLOMBIA!
The U.S. wins the group if they beat Germany.
They lose against Germany by a score of 3-0, Portugal beats Ghana by a score of 2-0, and the U.S. wins the drawing of lots against Portugal.
Fed to Host TILA/RESPA Integrated Disclosure Webinar. As part of their “Outlook Live” series and in conjunction with their quarterly Consumer Compliance Outlook, the Federal Reserve Board of Governors will be a hosting a webinar regarding the TILA/RESPA Integrated Disclosure Rule on Tuesday, June 17. The webinar will take place from 2:00 to 3:00 pm EDT, and will be presented by staff members from the CFPB. This webinar will be the first of a recurring series of webinars to address the new rule, and it will provide an overview of the final rule and the new disclosures, plus address a few basic compliance questions. Subsequent webinars will address specific implementation and interpretive questions about the rule. Credit unions interested in viewing the webinar may register for free.
Registration for all three stops is free, but spaces are limited. Therefore, if your credit union is interested in attending one of the sessions, please be sure to register as soon as possible in order to assure your entrance to the event (the links above will take you to the individual registration webpages for each session).
Free Kick. We are now just three days away from Brasil and Croatia kicking off in Sao Paulo to begin the World Cup festivities. Over the last two months, I have been providing previews on each of the groups in this year’s tournament. Today, my group previews come to an end with a look at Groups C and G. Here are links to the previous previews: Groups A & B; Groups D & E; and Groups F & H.
Group C: This group is likely the most evenly matched group out of all of the groups in this year’s tournament. When the draw occurred back in December, I saw Colombia as the clear favorite. Now that Radamel Falcao Garcia and Luis Amaranto Perea have been ruled out for the Colombians due to injury, I could see any of the four teams advancing to the knock-out stages. That said, I am going with my heart on this one and I will still give a slight edge to Los Cafeteros. They have an extremely creative midfield and attacking options that should still be able to find ways to score goals without Falcao up front. The Colombians will need to tighten up their defensive play, though, and they will need a strong showing from their captain Mario Alberto Yepes in order to accomplish that. The other squad that I believe is just slightly strong than the rest is the Ivory Coast. The window for Ivory Coast’s golden generation is coming to a close, but I think that they have one good showing left in them, and after two straight appearances of being drawn into a difficult group, they finally have a group where I believe they can shine and move into the Round of 16. Greece, as usual, will be solid defensively, but I don’t think that they can score enough goals to keep up with the top two sides in this group. Japan is a bit of an enigma. They have some very talented and creative players in the midfield, but their results have been quite inconsistent. Ultimately, I believe that this group will be decided by which two teams can shake off the nerves the quickest and get off to a strong start in their opening match.
Key matches: Colombia v. Greece, June 14 (12:00 pm EDT) and Ivory Coast v. Japan, June 14 (9:00 pm EDT).
Group G: Let’s just dispense with the obvious – Germany is the class of this group, and I fully expect them to win the group. The Germans are coming in with some injury and chemistry question marks, but I have no doubt that they will overcome both. That leaves us with three teams fighting for one last spot in the knock-out round. When the groups were drawn, I immediately thought that Portugal would be that team because Cristiano Ronaldo is just too good. In the past week, though, there have been reports that Ronaldo’s leg injury may impact his fitness level during the tournament. Furthermore, a witch doctor in Ghana has stated that he put a curse on Ronaldo. Without a relatively healthy Ronaldo, I think that Portugal, the U.S., and Ghana are about even in terms of quality. The United States will be without Landon Donovan at this World Cup, and I think that’s addition by subtraction, so I will give Jurgen Klinsmann’s squad the slight nod to join Germany in advancing out of the group.
NAFCU has been beating the drum loudly on data security, and calling for action to ensure that merchants are properly protecting consumer information and actively working to prevent data breaches. While the most recent and far-reaching problems have occurred at the merchant level, credit unions are not immune from cyber-attacks. And that is the message that NCUA Chairman Debbie Matz delivered earlier this week.
Proper patch management and network monitoring.
Chairman Matz didn’t stop with credit unions and other financial institutions. She reiterated that in order for the system to be properly protected, merchants must be held to a higher standard. NAFCU is in absolute agreement with Chairman Matz’s observation that data protection requirements for retailers are inadequate, and appreciates her strong call for tighter data security standards for retailers.
Colombia v. Tunisia (1:00 pm EST). Those that have read my previous posts know that I was born in Colombia. Anytime that Colombia takes the pitch, I am transfixed. Outside of my usual devotion to the Cafeteros, I am particularly interested in seeing how Colombia begins to plot a strategy for playing without Radamel Falcao Garcia. While there is still hope that Falcao will play in Brasil, Colombian manager Jose Pekereman will be looking to find attack options to take Falcao’s place should the striker’s knee not heal in time for the World Cup.
Ukraine v. United States (2:00 pm EST). The core of the U.S. Men’s National Team is pretty much set, but this match could go a long way in determining the last five or six spots on the roster. With Jurgen Klinsmann set to use a primarily-European based squad, I’ll be keeping my eye on the battle for the last couple of defensive spots. It’ll be interesting to see if Tim Ream, John Brooks, or Oguchi Onyewu can make a favorable impression. Outside of the football, this match will be interesting to watch because of the political unrest that has engulfed the Ukraine (the match has been moved to Cyprus to protect the safety of all the players involved). How will the Ukrainian players react, and will we see some inspired play from the highest-ranked team not heading to Brasil?
Belgium v. Ivory Coast (2:45 pm EST). Neither of these squads is going to catch anybody off-guard in Brasil, as they are extremely talented squads full of players from top European clubs. Furthermore, both have their squads pretty much set. What makes this match interesting is the off-the-pitch rivalry that is starting to boil over between Belgium’s top two keepers (Liverpool’s Simon Mignolet and Atletico Madrid’s Thibaut Courtois). Mignolet has been vocal in his displeasure of being demoted to the back-up role by manager Marc Wilmots. This has infuriated Courtois, and has led to an ongoing battle being fought in the press by both keepers and other members of the squad.
Spain v. Italy (4:00 pm EST). Anytime these European powerhouses face off, it’s a must watch fixture. Each brings a distinctive style and flair to the pitch, and even in a friendly, it’s a pleasure to watch.
Mexico v. Nigeria (8:30 pm EST). El Trí endured their worst qualifying campaign in decades, yet they still find themselves heading to Brasil. After a rocky 2013 that saw three different managers get sacked, I am intrigued to see if manager Miguel Herrera can put the pieces back together and form a squad that more closely resembles the Mexican national teams that we have been accustomed to seeing. He has made some progress by getting some of the higher-profile players back into the squad, but there is still a lot of work left to do.
Lastly, with a little over 100 days left until the World Cup kicks off, ESPN has been kind enough to give us ample time to plan out our work and DVR schedules by releasing the television schedule for the entire tournament.
Webcast. Fair Lending: The Indispensable Essentials.
Save time on common conundrums; we’ll answer the most frequently asked Fair Lending questions NAFCU receives. Plus explore the fundamentals of Fair Lending and the recent rise of enforcement actions and litigation. Register by Mar. 11 to save $100.
At their January monthly board meeting, the NCUA Board of Directors approved Proposed Rule: Prompt Corrective Action; Risk-Based Capital (Part 702) with a 90-day comment period. I am going to keep my analysis of the rule at a 30,000 foot level. That said, the proposed rule goes into extreme detail as to how the risk-based capital ratio would be calculated and the different risk weights that would be used if the proposed rule were to go into effect. So, some of you that are fascinated by numbers may really enjoy sifting through those sections of the proposed rule.
Critically Undercapitalized (Net worth ratio of less than 2%).
Credit unions with $50 million or less in assets at the end of the previous quarter would be exempt from the risk-based capital ratio requirements.
So, how will the risk-based ratio be calculated under the new rule? Under the proposed rule, the risk-based ratio would be determined by the percentage of a credit union’s net worth available to cover losses, divided by the credit union’s defined risk-weighted asset base. The risk-weighted asset base is determined by subtracting a credit union’s NCUSIF deposit and goodwill/other intangibles from the credit union’s risk-weighted assets. For a general overview of how to calculate all of those components, view this slideshow prepared by the NCUA’s Office of Examination and Insurance. For a more detailed explanation of the calculations, see the proposed rule.
Along with these new risk-based capital standards, the NCUA has indicated that individual credit unions may be required to maintain higher levels of risk-based capital if the agency raises additional supervisory concerns.
The NCUA has estimated (based on June 2013 call report data) that in excess of 90% of credit unions that would be affected by the changes would be considered either well or adequately capitalized under the proposed rule. Unfortunately, an estimated 199 credit unions that are currently considered well capitalized would see their status drop under the proposed rule, with 10 of those credit unions being deemed undercapitalized. Credit unions that are interested in seeing how the proposed rule’s changes would affect them, can view that information using the NCUA’s On-Line Calculator for Proposed Risk-Based Capital Rule.
The NCUA believes that it needs to make these proposed changes in order for the risk-based capital requirements for natural person credit unions to be more in line with the requirements for FDIC, Federal Reserve, and OCC-regulated institutions, as well as more closely resembling the requirements for corporate credit unions. That being said, this proposal is just the latest example of how the NCUA (and its other regulatory brethren) is unable to properly address many of the issues facing credit unions under the current, flawed regulatory framework. NAFCU has called on the NCUA to join in advocating for legislative fixes that will give the agency the proper framework to effectively protect credit union members.
Furthermore, as NAFCU CEO Dan Berger pointed out in his January 28 letter to the NCUA, “[NAFCU] question[s] whether the risk weighting proposed actually matches real risk in the system. The proposed rule assigns rigid risk-weights to many investments that when properly examined represent much less risk than the assigned risk-weights.” Therefore, it will be important for credit unions to take part in the comment process to, hopefully, show the NCUA that some of their preconceived notions regarding risk are not applicable and should be weighted differently or, even better, allow for varying risk-weights based on different programs that individual credit unions have implemented to mitigate risks.
Finally, let me take a moment to express some concern regarding the NCUA’s On-Line Calculator for Proposed Risk-Based Capital Rule. I understand that the agency is attempting to make it easier for individual credit unions to understand how the proposed rule would affect them, but the NCUA is actually oversimplifying a very complex measure. Having the calculator publicly available could lead to unfair reputational harm and general misunderstandings of a credit union’s health, especially for those credit unions that would see a drop in their capitalization classification.
Free Kick. After a 16-year absence, Colombia will be returning to the World Cup this summer. Los Cafeteros put together an impressive qualifying run, finishing second to Argentina in the South American region. So impressive was their play that many pundits have tipped them as a team to watch in Brasil. But could their dream be over before it even begins?
During a Coupe de France match on January 22 against Monts d'Or Azergues of France’s third division, Colombia and AS Monaco’s Radamel Falcao Garcia was stretchered off the field in the 40th minute with what turned out to be a torn ACL in his left knee. Following a successful surgery in Portugal on Saturday, doctors have given the Colombian striker a 50-50 chance of being available to play for Colombia at the World Cup. Falcao, for his part, has said that he will take the recovery day-by-day, and will work his hardest to keep his World Cup dream alive.
Many have written that the loss of Falcao would be a crushing blow to Colombia’s hopes. I disagree. Call me a homer (I was born in Cartagena, Colombia), but I believe that Colombia has many quality attacking options should Falcao be unavailable to play in Brasil. This current generation of Colombian football has been blessed by many quality (though young or unproven) attacking players. From F.C. Porto’s Jackson Martinez and Juan Quintero to Udinese’s Luis Muriel and River Plate’s Teofilo Gutierrez, Jose Pekerman (Colombia’s manager) should have several options to fill Falcao’s role up front, should the AS Monaco forward not recover in time for the tournament. A bigger problem for Colombia would be a loss in the midfield or center-back positions, as they do not have as much depth in those roles.
That said, it would be a shame if Falcao did end up missing the tournament because he is one of the most exciting strikers in today’s game and is a large part of the reason for Colombia’s return to the World Cup. Such a talent deserves the chance to show off his skills on the world’s biggest stage. FUERZA TIGRE!!!
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