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#198504 - 06/10/04 03:53 PM
Re: Lessons Learned from the ABA NRCC
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Power Poster
Joined: Nov 2001
Posts: 7,985
FINALLY ABOVE the gnat line
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The FDIC stated that the "relation-back" rule would no longer be followed by them as it applies to HMDA refinances. Tim Burniston stated "we have to do what the Federal Reserve tells us just like you." Apparently they were confusing the Reg. Z definition of refinance (which is affected by state law?) with the HMDA definition.
They also stated that no separate "Intent to Apply" form was necessary under the revised Reg. B. We should do whatever we are comfortable doing.
_________________________
"Once you learn to read, you will be forever free."
- Frederick Douglass
My Opinion Only.
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#198505 - 06/10/04 04:35 PM
Re: Lessons Learned from the ABA NRCC
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Diamond Poster
Joined: Jun 2001
Posts: 1,373
Lido Deck
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The OCC stated the same thing as the Fed regarding refinancings.
Also, for joint intent, it was stated that this can be accomplished orally, via a check box on the app, or through a separate document. It was also confirmed that the OCC agrees with the ABA and the Fed that the Fannie Mae/Freddie Mac 1003 does NOT require additional documentation regarding joint intent.
_________________________
--A bad day at sea is better than a good day at work.
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#198506 - 06/10/04 04:46 PM
Re: Lessons Learned from the ABA NRCC
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Anonymous
Unregistered
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The regulators have a ton of work to do on FACT Act regulations. It is possible that some of the deadlines may slip.
On the risk-based pricing notice, FACTA says the lender has flexibility about the timing of providing it, unless the agency rules specify otherwise. Well, some regulators apparently are lobbying for a requirement that the notice be given contemporaneously with the pricing (rather than at the time of application) so that it has the greatest meaning -- and so that if there incorrect adverse information, the customer can address it and, one would hope, get a better rate. Stay tuned on that one. . .
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#198507 - 06/10/04 06:04 PM
Re: Lessons Learned from the ABA NRCC
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Gold Star
Joined: Jan 2004
Posts: 318
USA
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The FDIC also confirmed that, because of CIP requirements, it is NOT a violation to keep a copy of a drivers license in a loan file.
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CRCM, CAFP, DAD
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#198509 - 06/10/04 09:11 PM
Re: Lessons Learned from the ABA NRCC
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Anonymous
Unregistered
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How is this good if the examiners aren't specialized as you suggested? Seems to me the OTS banks are getting shortchanged by not having specialists examine them.
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#198511 - 06/11/04 08:04 PM
Re: Lessons Learned from the ABA NRCC
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Anonymous
Unregistered
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Quote:
This is good because they won't know how to audit well. OTS supervised banks won't receive tough audits and will get by. If you are looking for a specialist, hire a consultant. Don't look for the ones that can make your life hard to bring you joy.
What kind of advice is this?
Are you saying that banks should be happy and wish for their examiners to perform regulatory misconduct?
Banks use consultants to get them to the point of regulatory acceptance – not the other way around.
What happens if a Bank gets a crappy consultant and a crappy examiner, wait . . . I think we just saw that with Riggs Bank in DC.
While I agree the “risked-based” examination procedures leave a lot to be desired and often times places less experienced examiners in the field, I think it is irresponsible to endorse a complacent mindset that undermines and contributes to increasing the systemic risk to the national banking infrastructure.
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#198512 - 06/11/04 08:22 PM
Re: Lessons Learned from the ABA NRCC
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Gold Star
Joined: Oct 2000
Posts: 470
In a location
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Uh… this has going down a rabbit trail.
Any other Lessons Learned from the ABA NRCC?
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Comments are mine and not those of my employer.
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#198513 - 06/11/04 08:53 PM
Re: Lessons Learned from the ABA NRCC
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10K Club
Joined: Nov 2000
Posts: 18,763
Central City, NE
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Quote:
What kind of advice is this?
Are you saying that banks should be happy and wish for their examiners to perform regulatory misconduct?
Banks use consultants to get them to the point of regulatory acceptance – not the other way around.
What happens if a Bank gets a crappy consultant and a crappy examiner, wait . . . I think we just saw that with Riggs Bank in DC.
While I agree the “risked-based” examination procedures leave a lot to be desired and often times places less experienced examiners in the field, I think it is irresponsible to endorse a complacent mindset that undermines and contributes to increasing the systemic risk to the national banking infrastructure.
I believe you are completely twisting my words. I never said that the examiners would perform misconduct. How you could assume that is beyond me. What I said is that if the examiner doesn't spot a violation because they aren't as good as auditing or don't know the rules, then isn't the bank better off? The bank can use the consultant to "get them to regulatory acceptance" (as you say), but I don't want to rely upon examiners to point out my problems.
If a bank gets a "crappy consultant" they should look again and not be satisfied. If they get a "crappy examiner" they should be happy.
I didn't make up the rule that said that the OTS was going to make this move, I simply made a comment that OTS banks would be better off because of it.
Any OTS regulated bankers out there upset about this change? If so, why? I doubt it.
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#198514 - 06/11/04 09:41 PM
Re: Lessons Learned from the ABA NRCC
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Gold Star
Joined: Jan 2004
Posts: 318
USA
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I agree with Anonymous to a point. If you get an examiner who is inexperienced, yes they may miss some violations, but they may also try to cite you for violations that really aren't violations. In which case you have to waste time proving them wrong and even going up the chain of command if necessary. I've seen "crappy examiners" and they didn't make me happy. I think we are all better off if the examiners know what they are doing.
_________________________
CRCM, CAFP, DAD
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#198515 - 06/14/04 12:34 AM
Re: Lessons Learned from the ABA NRCC
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Power Poster
Joined: Apr 2001
Posts: 4,828
Between the lines
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OCC comments-- Consumer complaints: have a process and expect an increase in complaints after Check 21 is implemented due to disappearance of float, strongly suggested brochures/stuffers to educate consumers. Bounce Protection: read the proposal and comment. HMDA: can double count refi loans. This seemed to be the biggest shocker in the meeting, probably because we have had it drilled into us that you can not double count a loan on the CRA and HMDA LARs (except multi-family). Joint Intent: pick a method and document the procedure, could be notation to file, signed application, etc. --- document the procedure. Enjoyed meeting many of you  Us cat people did feel that we were being dogged in one of the sessions 
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NOLA is my Beach!
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#198516 - 06/14/04 02:11 PM
Re: Lessons Learned from the ABA NRCC
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Anonymous
Unregistered
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The OTS combined S&S/Compliance exam is not new (at least in the Midwest Region). We had a "melded" exam in the Fall of 2002 and another one earlier this year. There is one Examiner-in-Charge of the overall exam, but the examiner team still includes complinace "specialists". It is true that examiners who previously did not do compliance exams are now being trained by the OTS to become knowledgeable in compliance. But, the compliance portion of the exam will still be done by an examiner who is prepared for the job. In fact, OTS examiners must pass the CRCM exam prior to being put in charge of the compliance part of the exam. One significant change is that the OTS examiners are doing much less transaction testing and are looking more at the bank's compliance program and procedures. As a result, the examiners probably will not find those incorrect APRs or Reg. CC hold notices. They expect the bank to have procedures in place to find and correct those kinds of things. So, in that respect, I guess you might say we are "lucky" because the examiners will spend less time in our shop.
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#198517 - 06/14/04 06:21 PM
Re: Lessons Learned from the ABA NRCC
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Anonymous
Unregistered
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Our last exam 02/03 with the OCC was also a combined S&S and Compliance I think this is the way of the future.
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#198518 - 06/14/04 06:51 PM
Re: Lessons Learned from the ABA NRCC
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Anonymous
Unregistered
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What is the size of your bank? We have had separate SS, Compliance and IT exams for years. We are >$5B.
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#198519 - 06/15/04 01:40 PM
Re: Lessons Learned from the ABA NRCC
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10K Club
Joined: Nov 2000
Posts: 18,763
Central City, NE
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Quote:
Enjoyed meeting many of you
Us cat people did feel that we were being dogged in one of the sessions
I enjoyed meeting you as well SoccerMom. If you remember, there was one picture of a cat during our presentation. I hope the Lending Update session was educational and well as fun.
For the rest of you that didn't attend (or didn't attend the Lending Update session that I co-presented), we tried to have some fun with it. We played "Who let the dogs out" music before and after the session. We had pictures of funny looking dogs on each Power Point slide (there was one cat to be fair to the cat lovers) and we had LOTS of dog puns. Our goal was to make it fun while informative.
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#198520 - 06/15/04 02:43 PM
Re: Lessons Learned from the ABA NRCC
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Anonymous
Unregistered
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Did anyone attending the conference get a sense from any of the agencies of:
1. The likelihood of getting the small bank/large bank definition changed from $250MM to $500MM and;
2. The timing of when the announcement would be made (whether the large bank threshold is staying at $250MM or being increased to $500MM).
Thanks.
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#198521 - 06/15/04 03:09 PM
Re: Lessons Learned from the ABA NRCC
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Gold Star
Joined: May 2004
Posts: 274
New England
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David's point regarding the juxtaposition of safety and soundness with compliance is that ultimately there will be a melding of the disciplines, a kind of "watering down" if you will. This may be true. On the other hand, what we hope won't occur is that examiners who are not entirely familiar with compliance issues will over-compensate for this level of insecurity and arbitrarily apply standards that don't exist. This problem also occurs in the same manner when generic safety/soundness examiners conduct technology risk assessments/IT examinations.
David's point about hands-on consultants who are involved intimately and passionately in the same subject matter actually are the best sources -- which is why they become subject matter experts, so to speak.
From the session on AML/BSA that was jointly lead by the OTS woman (sorry, I forgot names), OTS assistant director, and an OTS compliance examiner, I got the distinct feeling that not only are they going to be aggressive on BSA/AML/OFAC, but they are going to expect institutions to broaden their account opening, CTR filing, and SAR filing safeguards. For example, although it's not cited as a requirement in the regs, the OTS compliance examiner stated that institutions should be obtaining the places of employment (income source) for all new accounts, and should get multiple telephone numbers and backup numbers (not just cell phones). Also, for monetary instrument logs, he mentioned that institutions should not just show the dates and amounts of instruments, but instead should also show factors which would help in determining if a transaction looks suspicious -- e.g., showing the date the customer's account was opened (i.e., is it a long-term customer, or a newer customer?), and showing the account balance after the monetary instruments were issued.
We are being asked to think outside the proverbial box.
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#198522 - 06/15/04 03:27 PM
Re: Lessons Learned from the ABA NRCC
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10K Club
Joined: Nov 2000
Posts: 18,763
Central City, NE
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Quote:
Did anyone attending the conference get a sense from any of the agencies of:
1. The likelihood of getting the small bank/large bank definition changed from $250MM to $500MM and;
2. The timing of when the announcement would be made (whether the large bank threshold is staying at $250MM or being increased to $500MM).
Thanks.
I spoke with John Rasmus from the ABA about this. He thought that the threshold would increase from $250M to $500M but could not guess a time for this announcement.
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#198524 - 06/15/04 03:37 PM
Re: Lessons Learned from the ABA NRCC
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10K Club
Joined: Nov 2000
Posts: 18,763
Central City, NE
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Quote:
David's point regarding the juxtaposition of safety and soundness with compliance is that ultimately there will be a melding of the disciplines, a kind of "watering down" if you will.
That's exactly what I was trying to state.
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#198525 - 06/15/04 04:26 PM
Re: Lessons Learned from the ABA NRCC
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10K Club
Joined: Oct 2000
Posts: 27,754
On the Net
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My own opinion is that this is a pendulum and it is swinging back. Many years ago there was little emphasis on regulatory compliance. Then came new rules and emphasis on BSA, CRA and TISA was new. Examiners trained just for compliance and the pendulum swung hard in our favor. Now that pendulum is swinging back again and there will be emphasis on some of our staples, BSA, flood and perhaps CRA, but less elsewhere as it isn't as newsworthy. What is important in my mind is that the compliance officer keep management and the board up to date on the changes in our environment in order to retain the resources needed for maintaining compliance with all the other regs we have to deal with. If it isn't in the news and the regulators give it less emphasis, their importance may seem to fall. The responsibility here is in compliance management and it has to be addressed. Otherwise the cases of the erroneous examiner cites will increase and we won't be able to correct it.
I spoke with a banker at the conference whose examiner had problems with the timing of the RESPA "hello/goodbye" letters. He refused to believe the CO who then showed him the law. "That is outdated" the examiner said, but he promised to follow up. He did and he admitted his mistake. He didn't cite the bank (how could he) but he did go over every flood cert they had. He also commented that he has been citing banks for years, yes plural, on that RESPA cite. What is worse, banks are working under artificial guidance that is inaccurate, or they were cited when they shouldn't have been? We're all human and we all err. That is why we have to keep a high skillset level and network with those who have varied expertise. This applies to both sides of the regulatory fence.
(Getting off my soapbox.) Thank you.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell
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