Hawaii Credit Unions Must Comply with State Elder Financial Abuse Law

ALEXANDRIA, Va. — Federal credit unions located in Hawaii must comply with the requirements of the Hawaii Financial Abuse Act that requires federal credit unions to report suspected financial abuse of an elder, according to an NCUA legal opinion.

The Aug. 6 legal opinion letter (07-0745), addressed to Mary Beth Wong of the law firm Ashford & Wriston, LLP who made the inquiry on behalf of some credit unions in Hawaii, stated that NCUA's regulations do not exempt credit unions from the law's requirements and that federal consumer privacy laws do permit the disclosures provided for in the state law.

Wong said that the credit unions were seeking clarification from NCUA after a similar, but voluntary, state elder abuse law raised issues in Wisconsin.

According to NCUA's letter, Hawaii state law requires financial institutions to report suspected financial abuse against an “elder,” someone age 62 or older. The suspected abuse must be reported to Hawaii's Department of Human Services. If the DHS does not have jurisdiction, the institution is required to then notify the police.

The privacy provision of the Gramm-Leach-Bliley Act includes a general prohibition against disclosing nonpublic personal information about a member to a nonaffiliated third party unless the institution first provides the member notice and a “reasonable opportunity” to opt out and the member does not opt out. “Neither GLBA nor the Federal Credit Union Act permit NCUA to preempt a state law that requires FCUs to disclose nonpublic personal information,” the federal regulator explained. “To the contrary, the requirement for notice to members and opting out do not apply when FCUs disclose nonpublic personal information to protect against or prevent fraud, unauthorized transactions, claims, other liability, or to comply with state law.”

Bloom Raskin Named New Commissioner of Financial Regulation in Maryland

BALTIMORE — Sarah Bloom Raskin has been appointed the new Maryland commissioner of financial regulation, effective Aug. 28.

“Sarah is bringing her vast experience and passion as a 'bank doctor,' working with domestic and international institutions on preventive maintenance, responding to problems and helping institutions establish charters in states, to the department,” Maryland Department of Labor, Licensing and Regulation Secretary Thomas Perez said. “I look forward to Sarah joining the DLLR team and continuing the tradition of professionalism and excellence established by retiring Commissioner [Charles] Turnbaugh.”

Bloom Raskin was serving as managing director of Promontory Financial Group where she works with banks and other financial institutions on a wide range of regulatory, governance, ethics, consumer and other issues. In addition, she served as counsel to the Senate Committee on Banking, Housing and Urban Affairs, under former Senator Paul Sarbanes (D-Md.). She also served as a member of the Consumer Council of the Maryland Attorney General under former Attorney General Joe Curran.

Sarah graduated magna cum laude in economics from Amherst College and has a Juris doctor from Harvard Law School. Sarah lives in Takoma Park with her husband Jamie and their three children.

Navy Veteran Receives First SBA Patriot Express Loan

WASHINGTON — Matthew J. Lattig, a Navy veteran and small businessman, was recently presented with a loan check for $350,000 from the Small Business Administration and SunTrust Bank through the agency's new Patriot Express Pilot Loan Initiative.

Launched in June, the loan program assists veterans and members of the military with starting or expanding small businesses. In the past month, more than 400 lenders including more than 20 credit unions have been approved nationwide to make Patriot Express loans and approximately 50 loans have been approved since Charter Advisory Partners' approval, according to SBA.

“We expect this first loan guarantee will be just one of many more Patriot Express loans to America's service men and women who are starting or expanding their businesses,” SBA Administrator Steven Preston said. “This initiative builds on the more than $1 billion annually in loans SBA guarantees for veteran-owned businesses, and the counseling assistance and procurement support it provides each year to more than 100,000 veterans, service-disabled veterans and Reserve members.”

Patriot Express loans may go up to $500,000 and qualify for SBA's maximum guaranty of up to 85% for loans of $150,000 or less and up to 75% for loans above $150,000 to $500,000. For loans above $350,000, lenders are required to take all available collateral to secure the loan and may obtain collateral for smaller loans depending upon individual bank requirements.

Pictured in the photo are from left to right, Steven Preston, Administrator, SBA; Stephanie A. Watkins, SBA Regional Administrator; Congressman Frank Wolf (R-Va.); Fred Brennan, executive vice president, SunTrust Bank; Matthew Lattig, managing member, Charter Advisory Partners, LLC; and Sen. Charles J. Colgan (D-Va.).

NCUA: Ga. Law on Check Cashing Fees Does Not Apply to FCUs

ALEXANDRIA, Va. — NCUA has pre-empted a Georgia state law prohibiting charging fees to non-accountholders for cashing share drafts on federal credit unions in a recent legal opinion.

Federal credit unions must comply with state law unless specifically pre-empted, which it is in this case, according to NCUA Associate General Counsel Sheila Albin in legal opinion letter 07-0743 to Georgia Banking and Finance Commissioner Robert Braswell. The letter was in response to a query by Georgia Credit Union Affiliates attorney Richard Kessler.

“The Georgia law at issue, by its terms, prohibits a financial institution, including an FCU, from charging a fee for cashing a check or share draft drawn on it…Amendments to the Act adopted in 2006 grant explicit authority for FCUs to cash checks for persons in the field of membership “for a fee.” In addition, FCUs have “such incidental powers as shall be necessary or requisite to enable. . . [them] to carry on effectively the business for which…[they are] incorporated. NCUA regulations implementing the Act's authority expressly permit FCUs to determine the fees, charges and other matters affecting the opening, maintaining and closing of a share, share draft or share certificate account and expressly states that “[s]tate laws regulating such activities are not applicable to federal credit unions.'”

Albin cited a recent federal court decision pre-empting the law for national banks as supporting NCUA's determination. “We conclude FCUs may cash checks drawn by a member on the FCU's account and payable to a nonmember and charge the nonmember payee a fee because the Georgia statute discussed above is preempted by federal law,” the letter read.

NAFCU Nominates UNFCU, Truliant Attorneys for Fed Consumer Advisory Council

ARLINGTON, Va. — NAFCU announced that it has nominated two credit union officials to serve on the Federal Reserve Board's Consumer Advisory Council.

NAFCU has recommended United Nations Federal Credit Union's Vice President and General Counsel John Lewis, who also serves as the assistant secretary of the UNFCU Board and is the ethics officer, to the council. UNFCU has $2.4 billion in assets, 75,000 members, and provides a wide array of products and services to consumers.

NAFCU also nominated Joseph P Clark, general counsel for Truliant Federal Credit Union. Chartered in 1952, Truliant serves a membership of almost 200,000 with assets nearing $1.1 billion.

“NAFCU strongly believes that each of these nominees will bring a unique credit union perspective to the council,” said NAFCU President Fred Becker. “Coupled with their extensive experience with consumer financial services, community service and consumer protection regulations, we believe both nominees would be extremely valuable contributors to the CAC.”

American Airlines Federal Credit Union General Counsel Faith Anderson currently serves on the council with a term ending in October.

The CAC was established in 1976 to advise the Federal Reserve Board on the exercise of its duties under the Consumer Credit Protection Act and other financial services matters. The council is comprised of consumer, community and the financial services representatives with 10 new members to be appointed to three-year terms beginning January 2008.