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OCC releases CRA evaluations

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public in November. The list includes national banks, federal savings associations, and insured federal branches of foreign banks that have received ratings.

Of the 17 evaluations made public last month, 13 were rated satisfactory. We congratulate these four, which were rated outstanding:


Belarusian regime targeted

On Thursday, the Treasury Department announced that OFAC, in response to the Lukashenka regime’s blatant disregard for international norms and the wellbeing of its own citizens, has designated 20 individuals and 12 entities and identifying three aircraft as blocked property pursuant to Executive Orders (E.O.) 14038 and 13405.

As part of yesterday’s action, Treasury also imposed restrictions on dealings in new issuances of Belarusian sovereign debt in the primary and secondary markets, aligning with actions recently taken by allies and partners. OFAC has issued a new Belarus-related directive to hold the Lukashenka regime accountable for its actions and align with recent actions by U.S. partners and allies. Directive 1 under E.O. 14038 prohibits transactions in, provision of financing for, or other dealings by U.S. persons or within the United States in new debt with a maturity of greater than 90 days issued on or after December 2, 2021, by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus. OFAC also issued eight new FAQs and updated another in connection with yesterday's actions.

For links to Directive 1, a new Belarus General License, and the new and revised FAQs, plus identity information on the individuals, entities and aircraft designated by OFAC, see the December 2, 2021, BankersOnline OFAC Update.


Bureau report on overdraft fees studies

The CFPB has released research on overdraft and non-sufficient funds revenue, which reached an estimated $15.47 billion in 2019. Three banks (JPMorgan Chase, Wells Fargo, and Bank of America) brought in 44% of the total reported that year by banks with assets over $1 billion. The CFPB also found that while small institutions with overdraft programs charged lower fees on average, consumer outcomes were similar to those found at larger banks. The research also notes that, despite a drop in fees collected, many of the fee harvesting practices persisted during the COVID-19 pandemic.

Previous CFPB research has shown that overdraft presents serious risks to consumers, with under 9% of consumer accounts paying 10 or more overdrafts per year, accounting for close to 80% of all overdraft revenue.

The first data point, Overdraft/NSF Fee Reliance Since 2015 – Evidence from Bank Call Reports, shows that banks’ revenues from overdraft and NSF fees have been stable, especially before the COVID-19 pandemic. From the beginning of reporting in 2015, aggregate overdraft and NSF fee revenues reported in Call Reports for banks with assets over $1 billion saw a small but steady annual increase of around 1.7% per year to $11.97 billion in 2019. Complementing the Call Report data with data on small institutions, CFPB researchers estimate that the overall market revenue from overdraft and NSF fees was $15.47 billion in 2019. These overdraft and NSF fees made up close to two-thirds of reported fee revenue, emphasizing banks’ heavy reliance on such fees.

The second data point, Checking Account Overdraft at Financial Institutions Served by Core Processors, provides the most detailed and wide-ranging quantitative historical data the Bureau or others have collected on overdraft policies, practices, and outcomes at small financial institutions [in 2014]. The data point looks at institution-level data from several core processors on the way credit unions and smaller banks set up their overdraft programs, and reviews data on consumer overdraft use and fee revenue for a 12-month time period predominantly covering 2014. CFPB researchers report that 92.9% of smaller banks and 60.9% of credit unions had an overdraft program, making such programs less common at these institutions than among large banks. The smaller institutions were also less likely to offer the option to opt in to debit card overdraft, with two thirds of institutions with overdraft offering this option. And, while overdraft and NSF fees were 13 to 19% lower at small banks and credit unions than at large banks, credit unions and small banks with an overdraft program earned $42.33 and $40.37 in annual overdraft revenue per account, respectively, which was just 6% and 11% less than large banks, respectively.

The CFPB said it will be enhancing its supervisory and enforcement scrutiny of banks that are heavily dependent on overdraft fees. In recent years, the CFPB ordered TD Bank to pay $122 million in penalties and customer restitution, and TCF Bank to pay $30 million in penalties and restitution.

BOL's John Burnett will present a webinar—Overdrafts: A Current View—on February 22, 2022.


Consumers defrauded by Lifewatch to receive refunds

The Federal Trade Commission has announced it is sending 71,899 checks for $25.15 (totaling more than $1.8 million) to consumers, including many older Americans, tricked into paying for supposedly free in-home medical alert devices. The money comes from a settlement with New York-based Lifewatch, Inc.

A complaint filed by the FTC jointly with the Florida Attorney General’s Office alleged that the defendants bombarded consumers with at least a billion unsolicited robocalls to pitch supposedly “free” medical alert systems. These pre-recorded messages claimed that Lifewatch’s medical alert system was endorsed or recommended by reputable organizations like the American Heart Association. The company’s telemarketers often told consumers that a medical alert system had been purchased for them, and they could receive it “at no cost whatsoever.” Consumers eventually learned that they were responsible for monthly monitoring fees and that it was difficult to cancel without paying a penalty.

In addition to imposing the monetary penalty to provide consumer refunds, the order settling the FTC’s charges bans the Lifewatch defendants from telemarketing and prohibits them from misrepresenting the terms associated with the sale of any product or service.


December Beige Book

The December 1, 2021, issue of the Beige Book has been released by the Federal Reserve Bank of Chicago.

Overall Economic Activity
Economic activity grew at a modest to moderate pace in most Federal Reserve Districts during October and early November. Several Districts noted that despite strong demand, growth was constrained by supply chain disruptions and labor shortages. Consumer spending increased modestly; low inventories held back sales of some items, notably light vehicles. Leisure and hospitality activity picked up in most Districts as the spread of the Delta variant ebbed in many areas. Construction activity generally increased but was held back by scarce materials and labor. Nonresidential real estate activity increased widely, while residential real estate activity grew in some Districts but declined in others. Manufacturing growth was solid across Districts, though materials and labor shortages limited expansion. High freight volumes continued to strain distribution systems. Energy activity was generally higher, growth in professional and business services varied widely, and demand for education and health services was largely unchanged. Loan demand increased in almost all Districts, though some reported declines in residential mortgages. Agriculture saw improved financial conditions overall and rising land values. The outlook for overall activity remained positive in most Districts, but some noted uncertainty about when supply chain and labor supply challenges would ease.

Employment and Wages
Employment growth ranged from modest to strong across Federal Reserve Districts. Contacts reported robust demand for labor but persistent difficulty in hiring and retaining employees. Leisure and hospitality and manufacturing contacts reported an uptick in employment, but many were still limiting operating hours due to a lack of workers. Contacts in several other sectors also noted labor-related constraints on meeting demand. Childcare, retirements, and COVID safety concerns were widely cited as sources that limited labor supply. Many Districts noted concerns that the federal vaccination mandate could exacerbate existing hiring difficulties. Nearly all Districts reported robust wage growth. Hiring struggles and elevated turnover rates led businesses to raise wages and offer other incentives, such as bonuses and more flexible working arrangements.

Prices rose at a moderate to robust pace, with price hikes widespread across sectors of the economy. There were wide-ranging input cost increases stemming from strong demand for raw materials, logistical challenges, and labor market tightness. But wider availability of some inputs, notably semiconductors and certain steel products, led to easing of some price pressures. Strong demand generally allowed firms to raise prices with little pushback, though contractual obligations held back some firms from increasing prices.


$41M in HOPWA grants awarded

HUD’s Office of HIV/AIDS Housing has announced it will award $41 million in Housing Opportunities for Persons With AIDS (HOPWA) competitive grants to 20 local governments and non-profit organizations through the HOPWA: Housing as an Intervention to Fight AIDS funding opportunity.


OCC announces 2022 fees and assessments

OCC Bulletin 2021-58, issued Wednesday, announced to national banks, federal savings associations, and federal branches and agencies of foreign banks the fees and assessments to be charged by the OCC in calendar year 2022.

  • For the 2022 assessment year, there will be no inflation adjustment to assessment rates.
  • The OCC assesses institutions that enter the federal banking system in the time between assessment cycles. Under current policy, the OCC will assess these new entrants to the federal charter on a prorated basis using call report information as of December 31 or June 30 depending on the date the institution enters the federal banking system. Institutions that enter the federal banking system in the time between assessment cycles and have not previously filed call reports will be assessed a prorated fraction of the lowest tier of the general assessment fee schedule, plus any additional assessments due under other assessment categories in 12 CFR 8. The OCC adopted this policy to ensure that supervisory efforts and resources are allocated and aligned once an institution is subject to the jurisdiction of the OCC. This proration policy is in line with the OCC’s refund policy for institutions that leave the federal banking system.
  • The OCC is increasing the hourly fee for special examinations and investigations to $155 from $150. The increase is to ensure adequacy in recovering the cost of conducting special examinations and investigations.

Details can be found in Bulletin 2021-58.


Fed Board approves fee schedule for Fed services

The Federal Reserve Board has announced the approval of fee schedules, effective January 3, 2022, for payment services the Federal Reserve Banks provide to depository institutions, known as priced services.

Overall, the Reserve Banks estimate that the price changes will result in a 3.7 percent average price increase. Increases in the fee schedule for 2022 are generally similar to previous years, except 2021 where fees other than the Check Services Participation Fee remained flat. The 2022 fee schedule for each of the priced services is available on the Federal Reserve Banks' financial services website at

  • Notice for Federal Register publication


FFIEC BSA/AML exam manual updated

The Federal Financial Institutions Examination Council (FFIEC) has updated sections and related examination procedures in the FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual.

The sections affected include:

The sections remind examiners that no specific customer type automatically presents a higher risk of money laundering, terrorist financing, or other illicit financial activity.

Banks that operate in compliance with applicable BSA/AML requirements and reasonably manage and mitigate risks related to the unique characteristics of customer relationships are neither prohibited nor discouraged from providing accounts or services to any specific class or type of customer.

The Manual itself does not establish requirements for financial institutions; such requirements are found in statutes and regulations. Financial institutions should not interpret the updates as new instructions or an increased focus on certain areas; instead, the updates are intended to offer further transparency into the examination process and support risk-focused examination work.

New and revised Manual sections are identified by a 2021 date on the FFIEC BSA/AML InfoBase.

Related links:


CFPB explains FDCPA rule

The CFPB has posted information for consumers on understanding its Debt Collection Rule. The Fair Debt Collection Practices Act makes it illegal for debt collectors to harass or threaten debtors when trying to collect on a debt. On November 30, 2021, the CFPB’s new Debt Collection Rule became effective. This rule clarifies how debt collectors can communicate with debtors, including what information they’re required to provide at the outset of collection about the debt, a debtor's rights in debt collection, and how a consumer can exercise those rights.


NCUA issues prohibition orders

The National Credit Union Administration has reported it issued two prohibition orders in November to individuals who are now banned from participation in the affairs of any federally insured financial institution:

  • Hector Andres Aleman, formerly employed by Pima Federal Credit Union in Tucson, Arizona
  • Elizabeth Ann Oliver, formerly employed by Lancaster Red Rose Credit Union in Leola, Pennsylvania

The Credit Union Times yesterday reported that Aleman, who worked for Pima FCU as a teller, obtained loans at the credit union in the name of two member victims without their knowledge, keeping the proceeds for himself; stole funds from members' savings, money market and IRA accounts, and falsified probate documents to divert a deceased member's estate assets to himself. Aleman pleaded guilty to one count of attempted fraudulent scheme, and was sentence to 28 months in prison, and ordered to pay restitution totaling $181,415.

According to the Times article, Oliver was employed by Lancaster Red Rose CU as a loan officer. She had been sentenced to probation after pleading guilty last year to theft by deception, identity theft, and tampering with records. She had taken a cash advance of over $14,000 on a fraudulent credit card account in the name of a couple's one-year-old son, and three years later, created a fraudulent car loan for over $26,000 using the wife as the borrower.


IRS warning on fake charity scams

The Internal Revenue Service and Security Summit partners issued a warning yesterday (Giving Tuesday) to taxpayers to be wary of fake charities used by scammers to get money as well as sensitive financial and personal information from victims. Donors should always check to make sure they are giving to a legitimate charity and can easily do so by using a special IRS tool for checking an organization's eligibility to receive tax-deductible contributions.


Fed FAQs on transition away from LIBOR

The Federal Reserve Board's Supervision and Regulation Letter SR 21-12, revised in November, provides answers to frequently asked questions on the transition away from LIBOR. The November FAQs attached to the letter provide insight into how examiners will view actions of Board-supervised (state-chartered member) banks and holding companies with respect to LIBOR-linked transactions.


FDIC issues January–June CRA exam schedules

The Federal Deposit Insurance Corporation (FDIC) has issued the lists of institutions scheduled for a Community Reinvestment Act (CRA) examination during the first quarter 2022 and second quarter 2022.

No specific target dates are listed for the examinations.


FHFA: Conforming loan limits for 2022

The Federal Housing Finance Agency (FHFA) has announced the conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2022. In most of the U.S., the 2022 limit for one-unit properties will be $647,200, an increase of $98,950 from $548,250 in 2021.

The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit for the Enterprises be adjusted each year to reflect the change in the average U.S. home price. FHFA yesterday published its third quarter 2021 FHFA House Price Index report, which includes statistics for the increase in the average U.S. home value over the last four quarters. According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 18.05 percent, on average, between the third quarters of 2020 and 2021. Therefore, the baseline conforming loan limit in 2022 will increase by the same percentage. ​

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting a "ceiling" at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2021, which increased their conforming loan limit. The new ceiling loan limit for one-unit properties will be $970,800, which is 150 percent of $647,200.

Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $970,800 for one-unit properties.

Due to rising home values, the conforming loan limit will be higher in all but four U.S. counties or county equivalents.


House prices up 18.5 percent year-to-year

The Federal Housing Finance Agency reports that U.S. house prices rose 18.5 percent from the third quarter of 2020 to the third quarter of 2021 according to the agency's House Price Index (FHFA HPI). House prices were up 4.2 percent compared to the second quarter of 2021. FHFA’s seasonally adjusted monthly index for September was up 0.9 percent from August.

House prices rose in all 50 states and the District of Columbia between the third quarters of 2020 and 2021. The five states with the highest annual appreciation: 1) Idaho 35.8 percent; 2) Utah 30.3 percent; 3) Arizona 27.7 percent; 4) Montana 26.0 percent; and 5) Florida 24.8 percent. The areas showing the lowest annual appreciation: 1)District of Columbia 8.0 percent; 2) North Dakota 10.5 percent; 3) Louisiana 10.9 percent; 4) Maryland 12.5 percent; and 5) Iowa 13.0 percent.

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