National News

Fed resets disclosure trigger fee for mortgages The Federal Reserve reset the trigger fee for additional Truth in Lending disclosure requirements to $583. The new fee goes into effect on January 1, 2009 and is adjusted annually based on the Consumer Price Index. The Home Ownership and Equity Protection Act of 1994 restricts credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed the fee-based trigger or 8 percent of the total loan, whichever is larger..ABA: Most survey respondents went a year without overdraftsEight hundred of 1,000 respondents in an annual American Bankers Association survey had not paid overdraft fees during the 12-month period covered by the survey. Sixty-three percent of respondents who reported paying fees had paid for three or fewer overdrafts during the year. More than 70 percent of respondents said their banks covered the checks or debits that overdrew their accounts. Eighty-five percent of respondents who had paid fees said they were glad their banks had covered overdraft items. The survey was conducted for the ABA by Ipsos-Reid..FOMC votes not to raise federal funds rate Ten of the committee's 11 members voted to keep the fed funds rate at 2 percent during the August 5 meeting. The committee cited a softening labor market, stressed financial markets, tight credit, the contracting housing market and high energy prices as factors weighing against growth in consumer spending and exports. It also noted that upside risks of inflation are "of significant concern to the committee." The FOMC lowered rates this year in January, March and April. In June, as in August, the committee decided to leave rates alone. FDIC to expedite access to covered bond collateral As the U.S. Treasury talks up covered bonds as an alternative to securitization in the mortgage markets, the FDIC clarified how such bonds would be treated in the event of a bank failure. The new policy is meant to facilitate the creation of a covered bond market in the United States. The FDIC will expedite access to covered bond collateral when insured depository institutions are placed in receivership or conservatorship as a result of failure, provided that certain criteria are met. Expedited access will be offered if the FDIC remains in monetary default on covered bonds for 10 business days after receiving notice of default or if the FDIC does not pay statutory damages within 10 business days after the effective date of repudiation. FDIC consent is generally required for access or liquidation of pledged collateral for the first 45 days or 90 days after it is appointed as conservator or receiver, respectively.