Why You Should Care About Cyprus

March 18, 2013 at 7:29 am Leave a comment

What do you think your members would do if they were told on Saturday that the government might start taxing their credit union accounts on Monday?  Well, this is exactly the situation the citizens of the tiny nation of Cyprus are confronted with and believe it or not, there is now a bank run as people rush to get their money out of accounts before it can be taxed to help pay off another European debt bailout.  Why should you care?

Because if this situation is mishandled, Europe could once again become a drag on economic expansion as the fate of its single currency, the Euro, is again called into question.  Remember that even if a single country were to exit the Euro, it would raise immediate questions as to how much major banks stand to lose, potentially freezing up bank credit and shocking the economy.  Why don’t Europeans simply admit they made a mistake and shelve the idea?  Because elections are getting closer in Germany and the German public is in no mood to bail out Cyprus, which is allegedly a haven for Russian oligarchs.

Hopefully this will just be a tempest in a teapot that will simply send stock markets on a wild ride today, but the last person I remember making a similar prediction was Jamie Diamon and things aren’t going all that well for him lately.  Bottom line, if you want to gauge where the economy is headed, this is one more thing to keep an eye on.

The CFPB Proposes Oversight of Student Loan Servicers

The CFPB proposed regulations this past week to give it oversight of large, non-bank servicers of both private and federal student loans.  The regulation would apply to those entities that service one million or more accounts.  The proposal would have little direct impact on credit unions but expect student lending activities to get more and more scrutiny from the CFPB now that it is working through its mortgage regulations.

Entry filed under: Compliance, Economy, Regulatory. Tags: , , , , .

Whose email is it, anyway? On CAMEL Ratings and ATM Lawsuits

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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