Filed under: Current Issues in Credit Unions | Tags: credit union iPhone applications, Letters of Understanding, operations, Regulation E, Regulation Z
This month Faith, Hal, Katherine and Rob are joined by Tristam Coffin, CEO of Alternatives Federal Credit Union. Here are the topics:
–Never ending Regulation Z update.
–Operational challenges facing credit unions in 2010.
–Reg E Overdraft Rules Effective 7/1/2010.
–What to do when you get an LUA?
–Big K Roundup (The “Robinhood” Foreclosure; Why do Banks Really Hate Credit Unions; http://www.findacreditunion.com;
Your Credit Union–There’s an app for that–maybe?)
The CIiCU hosts are:
Farleigh Wada Witt,
Attorneys at Law
121 SW Morrison Street, Suite 600
Portland, Oregon 97204
Messick & Weber P.C.
The Madison Building, 108 Chesley Drive
Media, Pennsylvania 19063-1712
American Airlines Credit Union
P.O. Box 619001
DFW Airport, TX
Weltman, Weinberg & Reis Co., L.P.A.
323 W. Lakeside Avenue, Suite 200
Cleveland, Ohio 44113
Subcribe to the show via iTunes Music Store: http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=151785964&s=143441
Filed under: bankruptcy, credit unions, mortgages | Tags: Chapter 13, monthly mortgage payment changes, Western District of Pennsylvania
November 17, 2009
By Holly C. Thurman, Esq.
Effective January 1, 2010, the Western District of Pennsylvania Court Procedure will change regarding notifying the Court and the Debtor of monthly mortgage payment changes. The Chapter 13 Trustee is the acting disbursing agent for ongoing mortgage payments in this district.
Notice of Mortgage Payment Change must be filed with the Court at least twenty-one (21) days prior to the date that the change is to become effective or the Creditor is forever barred from collecting the difference in the change. In order to comply with this deadline, your attorney will need the information and documents as soon as possible after the escrow changes or the interest rate changes.
The Notice of Mortgage Payment Change must include:
- A complete and accurate loan payment history;
- A computation of the payment change “in a format which is readably understandable by the Court and the Parties-in-Interest;” and
- A declaration under penalty of perjury by a competent official of the Creditor substantiating the veracity and accuracy of the requested change
The Notice can no longer simply state what the monthly payment is and the effective date, rather, we will have to compute and accumulate detailed information justifying the change.
If a loan is transferred or sold, the procedure will now require the new owner to file a copy of any applicable lien assignment evidencing the Creditor’s alleged right to payment if the Creditor is not currently a Creditor “of record”. The assignment must also include, on a separate page, a narrative summary of the chain of title evidencing the Creditor’s authority to act and be paid.
After a Notice of Mortgage Payment Change is filed, the Court will issue a standard order requiring the debtor to:
- Amend the chapter 13 plan;
- File a declaration that the existing chapter 13 plan is sufficient to fund the plan with the modified debt; or
- File an objection to the Notice of Mortgage Payment Change as stated and the Court will schedule a hearing on the matter
If a Declaration is filed by the debtor that the monthly plan payment doesn’t need to change, we recommend a review of the Chapter 13 Trustee’s website to be sure that the changed monthly payment amount is disbursed. If an Objection to the Notice of Mortgage Payment Change is filed, additional documentation may be necessary to defend the Notice of Mortgage Payment Change.
If lenders want to be paid post petition fees, expenses or charges, then within 180 days from the date incurred, lenders must file a Notice of Post-Petition Fees, Expenses and Charges. Examples of fees incurred post petition are attorney fees, BPO fees, property inspections and other administrative fees. The notice must include an itemized list of the fees and expenses and when they were incurred. The Court will issue a standard Order giving the Debtor twenty-one (21) days to amend the plan, file a declaration, or object to the Notice.
Lenders must now be very diligent in administering loans secured by real estate and file the required notices with the court on a timely basis, or they will be barred from collecting increases in payments and other expenses. WWR is continuing to monitor these developments and will advise you as procedures change so that you can take the steps necessary to protect yourself while the debtor is in bankruptcy.
The Administrative Order implementing this new procedure can be found on the Western District of Pennsylvania Bankruptcy Court’s website at http://www.pawb.uscourts.gov.
If you have any questions regarding this client advisory, please contact Ms. Holly C. Thurman, Esq. Holly is an associate in the bankruptcy department within the Real Estate Default Group of Weltman, Weinberg & Reis Co., L.P.A., and is located in the Pittsburgh office. She can be reached directly at 412.338.7105 or via e-mail at firstname.lastname@example.org.
Filed under: suspicious activity reports | Tags: "credit union", bank secrecy act, Money Services Businesses, suspicious activity report
Yesterday at my Bank Secrecy Act Seminar in Cleveland, Jim Furman, the CEO of Port Conneaut Federal Credit Union, asked me a question. I’ve known Jim for many years and I’m privileged to be the credit union’s attorney. I also know that when Jim asks a question, I’m going to be in for a treat.
His question was this: does a credit union have to ask a potential Money Services Business whether it is duly licensed as a BSA requirement on the part of the credit union? In other words, if a company has a member business account with the credit union and it’s bringing in a lot of third party checks that it has cashed for customers or exhibiting other behavior indicative of an MSB, does a credit union have to verify whether the business is licensed as such and then, if it isn’t, warn the MSB that it must be and if it persists in non-compliance, file a SAR?
As we discussed this concept together with the group, some of the BSA mainstay concepts come into play. The Customer Identification Program and Member Due Diligence aspects of the credit union’s BSA policy will require it to ask questions about what the potential MSB member is doing. If the member is taking 3rd party checks from its customers and then depositing these checks at the credit union, the credit union should review whether it wants to take 3rd party checks in the first place. I would recommend that credit unions do not take 3rd party checks because the risk of fraud is too great.
So even without checking with FinCEN, a credit union would be asking probing questions about the potential MSB. The answers to these questions could easily put the MSB into High Risk Member territory and require even further due diligence on the part of the credit union.
In the end, however, Jim Furman was right in thinking that FinCEN does indeed have guidance specifically on point. Check out:
At a minimum, if a credit union is dealing with an MSB or thinks it might be dealing with an MSB it must:
• Apply the banking organization’s Customer Identification Program;
• Confirm FinCEN registration, if required;
• Confirm compliance with state or local licensing requirements, if applicable;
• Confirm agent status, if applicable; and
• Conduct basic risk assessment to determine the level of risk associated with the account.
Moreover, if the credit union determines that the MSB is not duly registered under federal, state and local requirements and it should be, FinCEN is unequivocal: “The guidance states that a banking organization should file a suspicious activity report if it becomes aware that a customer is operating in violation of the registration or state licensing requirements.” There is no grace period here or a one time free pass. If the credit union is dealing with an MSB or something that looks like an MSB, it must conduct its due diligence and file a SAR if any irregularities surface. Thanks Jim!