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Banker's Toolbox, Inc., leaders in compliance solutions for financial institutions, announced the acquisition of Georgia-based MainStreet Technologies (MST). MST is an industry leader in the loan risk management space. This acquisition adds to a strong and growing portfolio of compliance-related solutions and will continue to enhance the value Banker's Toolbox brings to both their customers and the industry. (Read full press release here.)

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OCC lists enforcement actions

The OCC has released a list of enforcement actions taken in March, April and May against OCC-supervised institutions and individuals affiliated with them.

  • A Cease and Desist Order was issued against the former President, CEO, Director, and Loan Officer of First National Bank of Woodsboro, Woodsboro, Texas, found to have received a personal loan from a bank customer while he was the loan officer for that customer, without disclosing the loan to the bank's directors.
  • Flood insurance-related Civil Money Penalty Orders against MidFirst Bank, Oklahoma City, Oklahoma, and Colonial Savings, F.A., Fort Worth, Texas.
  • A personal Cease and Desist and Prohibition order was issued to a former officer of Northwestern Bank, N.A., Dilworth, Minnesota, related to certain nominee loans by the bank from which he or companies associated with him received significant proceeds without his being identified as a borrower.
  • A Removal/Prohibition Order was filed against a former teller of Bank of America, N.A. Charlotte, NC. who misappropriated $49,172 from his cash box.


Federal Reserve enforcement actions

The Federal Reserve Board has announced two enforcement actions:

  • A consent order of prohibitions against a former employee of Fayette County Bank, Saint Elmo, Illinois, for unsafe and unsound lending practices.
  • A consent order of assessment of a $69,000 civil money penalty against an Ogallala, Nebraska, bank for unspecified violations of the National Flood Insurance Act and § 208.25 of Federal Reserve Board Regulation H.


Fed posts G.20 Finance Companies data

The Federal Reserve Board has posted its G.20 Finance Companies data for March 2019. The data cover owned and managed receivables outstanding; auto loans: terms of credit and owned; and managed receivables outstanding.


FinCEN reactivates real estate GTOs in 12 markets

On Wednesday, FinCEN announced it is reissuing its real estate Geographic Targeting Orders (GTOs) for 12 metro areas. The GTOs require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate. The purchase amount threshold remains $300,000 for each covered metropolitan area. The orders provide FinCEN valuable data on the purchase of residential real estate by persons possibly involved in various illicit enterprises. Reissuing the GTOs will further assist in tracking illicit funds and other criminal or illicit activity, as well as inform FinCEN’s future regulatory efforts in this sector.

The GTOs cover certain counties within the following major U.S. metropolitan areas: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle. They are effective beginning May 16, 2019, and ending November 11, 2019, but can be renewed.

FinCEN also posted an FAQ about the GTOs, which don't directly affect banks..


FEMA suspending communities in 4 states from Flood Program

FEMA has published a notice [84 FR 22049] in today's Federal Register identifying communities in four states that the agency has scheduled for suspension TODAY, May 16, 2019, from the National Flood Insurance Program for noncompliance with the floodplain management requirements of the program. As listed in the notice, the communities are:

  • Arkansas: Clarksville, Coal Hill, Hartman, and unincorporated areas of Johnson County
  • Illinois: Beardstown and unincorporated areas of Cass County
  • Michigan: Bay, Charlevoix, Eveline, Marion, South Arm
  • Oklahoma: Bethel Acres, Calvin, Checotah, Citizen Potawatomi Nation, Dustin, Eufaula, Holdenville, Kickapoo Tribe of Oklahoma, McLoud, Oklahoma City, Tecumseh, Wetumka, and unincorporated areas of Hughes, Lincoln, McIntosh, and Pottawatomie Counties


Seven states to receive $1.5B for 2018 disaster recovery

HUD has announced that seven states have been awarded a total of nearly $1.5 billion to support recovery from major disasters that occurred in 2018, including Hurricane Michael, Hurricane Florence, devastating wildfires, and, yes, an erupting volcano. The funds, which are provided through HUD’s Community Development Block Grant - Disaster Recovery program, will address seriously damaged housing, businesses and infrastructure in hard-hit areas of California, Florida, Georgia, Hawaii, North Carolina, South Carolina, and Texas.


FHFA appointments announced

The Federal Housing Finance Agency (FHFA) has announced that Clinton Jones, Lynn Fisher and Matt Grinney will join the Agency. Jones has been named Senior Advisor for Legal Affairs and Policy, Fisher will serve as Senior Advisor for Economics ,and Grinney will be a Senior Communications and Policy Advisor.


CFPB plans for RFA reg reviews

Yesterday, the Consumer Financial Protection Bureau (CFPB) published a notice on how it plans to periodically review regulations under the Regulatory Flexibility Act (RFA) and to request public input. Additionally, the Bureau published a notice requesting public input as part of its first RFA review examining the 2009 Overdraft Rule.

Section 610 of the RFA requires that agencies review certain rules within 10 years of their publication, and consider the rules’ effect on small businesses. The purpose of the review is to minimize any significant economic impact of the rules upon a substantial number of small entities, consistent with the stated objectives of applicable statutes. At the conclusion of each review, the Bureau will determine whether the rule should be continued without change, or should be amended or rescinded. The RFA requires each agency to consider specific factors, including:

  • The continued need for the rule;
  • The nature of public complaints or comments on the rule;
  • The complexity of the rule;
  • The extent to which the rule overlaps, duplicates, or conflicts with federal, state, or other rules; and
  • The time since the rule was evaluated or the degree to which technology, economic conditions, or other factors have changed the relevant market.

The public will have 61 days to comment on the CFPB’s plan after publication in the Federal Register.

The CFPB is also announcing the launch of its first such review, which is of the Overdraft Rule, which was issued by the Federal Reserve Board in 2009 to limit the ability of financial institutions to assess overdraft fees for paying automated teller machine (ATM) and one-time debit card transactions that overdraw consumers' accounts. The rule amended Regulation E. Yesterday's notice seeks comment on the economic impact of the Overdraft Rule on small entities. The public will have 47 days to comment after publication of the notice in the Federal Register.

UPDATE: Both proposals were published in the Federal Register on 5/15/2019. Comments on the plan for review of rules will be due by 7/15/2019. Comments on the RFA review of the Overdraft Rule will be due by 7/1/2019.


Fed Reserve supervision and regulation report

The Federal Reserve Board has posted its May 2019 Supervision and Regulation Report, which summarizes banking conditions and the Federal Reserve’s supervisory and regulatory activities. The report demonstrates the continued health and soundness of the banking industry. Figures in the report show that industry profitability ratios remain high, driven in part by the industry’s net interest margin reaching a six-year high.

The report also outlined 2019 supervisory priorities for firms in different Fed supervisory portfolios. Regional and community banks will see the Fed focus on credit concentrations in CRE and construction, cybersecurity and AML/BSA compliance. Regional banks will also see a focus on underwriting practices, M&A risks and internal audit. Community banks will experience Fed emphasis on ag lending and liquidity risk.


FHA proposes new lender certificiation requirements

The Federal Housing Administration (FHA) has proposed several revisions to its lender certification requirements with the goal of providing lenders and servicers greater certainty in how to satisfy the agency's compliance requirements. In providing greater certainty to the process, FHA believes the changes will facilitate more competition in the market and result in more financing choices for borrowers, especially first-time and minority homebuyers.

The FHA is proposing significant changes to its loan-level and annual lender-level certifications to provide more precision and needed clarity to compliance documents. Specifically, FHA is proposing revisions to its Addendum to Uniform Residential Loan Application (Form 92900-A) and to its annual lender certification form. In addition, FHA is revising its 'defect taxonomy' to clarify the various loan defect categories and how the agency weighs the severity of each defect.


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