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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.)

Top Story Lending Related


Payday rule guide updated

The CFPB has updated its Small Entity Compliance Guide for the Payday Lending Rule to reflect the changes made by the Delay Final Rule announced on June 6.


FDIC prohibition orders released

The FDIC has released a list of enforcement actions executed in May 2019. Included were five Removal/Prohibition Orders issued to:

  • a former branch sales manager of Tri-State Bank of Memphis, Memphis, Tennessee, who was found to have embezzled funds from customers' dormant accounts
  • a former branch manager of Great Western Bank, Sioux Falls, South Dakota, who was found to have made multiple unauthorized withdrawals from customer accounts, made off-book loans using customer funds, diverted bank and customer funds to her own use and benefit, and falsified bank records and documents
  • a former vice president and branch manager of Apple Bank fo Savings, Manhasset, New York, who was found to have falsified bank records to establish lines of credit for uncreditworthy borrowers, secure those lines of credit with deposits of other Apple Bank customers without authorization; and to have diverted funds from one bank customer's account to another unrelated bank customer
  • a former employee of American Exchange Bank, Henryetta, Oklahoma, found to have embezzled $177,375 from the bank for her own use
  • a former employee of Ocean Bank, Miami, Florida, found to have made unauthorized withdrawals totaling $10,390 from the accounts of two bank customers


FTC issues free credit monitoring rule for servicemembers

The Federal Trade Commission has published a final rule [84 FR 31180] to implement the credit monitoring provisions applicable to active duty military consumers in section 302 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amends the Fair Credit Reporting Act (“FCRA”). That section requires nationwide consumer reporting agencies (“NCRAs”) to provide a free electronic credit monitoring service to active duty military consumers, subject to certain conditions. The final rule defines “electronic credit monitoring service,” “contact information,” “material additions or modifications to the file of a consumer,” and “appropriate proof of identity,” among other terms. It also contains requirements on how NCRAs must verify that an individual is an active duty military consumer. Further, the final rule contains restrictions on the use of personal information and on communications surrounding enrollment in the electronic credit monitoring service.

The amendments are effective July 31, 2019. However, compliance is not required until October 31, 2019.


FDIC cleans out more transitional regs

The FDIC has published [84 FR 31171] in today's Federal Register a final rule to rescind and remove the “Lending and Investment” regulations because they are unnecessary, redundant, or duplicative of existing FDIC regulations; to amend certain sections of existing FDIC regulations governing real estate lending standards to make them applicable to all insured depository institutions for which the FDIC is the appropriate Federal banking agency; and to rescind and remove “Registration of Residential Mortgage Loan Originators” regulations because supervision and rulemaking authority in this area was transferred to the CFPB by the Dodd-Frank Act. The amendments will be effective July 31, 2019.


June 2019 SCOOS

The Federal Reserve Board has released the results of the June 2019 Senior Credit Officer Opinion Survey on Dealer Financing Terms (SCOOS), a quarterly survey providing information about the availability and terms of credit in securities financing and over-the counter (OTC) derivatives markets. The SCOOS collects qualitative information on credit terms and conditions in securities financing and OTC derivatives markets, which are important conduits for leverage in the financial system.


$300M to clean up housing hazards

HUD has announced a record $330 million in grants to clean up lead-based paint hazards and other housing-related health and safety hazards in low-income housing. These grants are provided through HUD's Lead Hazard Reduction and Healthy Homes Production for Tribal Housing grant programs and will direct critical funds to qualifying cities, counties, states and Native American tribal governments to eliminate dangerous lead paint hazards. Additionally, HUD has added a category of cities and counties that have "high impact neighborhoods" with high concentrations of both pre-1940 housing, low-income families, and high rates of young children with elevated blood lead levels.


CFPB extends comment period

The Bureau has announced that it is extending the comment period on its May 2, 2019, Advance Notice of Proposed Rulemaking (ANPR), which solicits comment on certain data points in the Bureau’s October 2015 final rule that were added to Regulation C or revised to require additional information, and on coverage of certain business- or commercial-purpose loans. The comment period will be extended from July 8, 2019 to October 15, 2019.The extension will give interested parties an opportunity to review the Bureau’s annual overview of residential mortgage lending based on the HMDA data financial institutions collected in 2018, as requested by a variety of stakeholders.

UPDATE: Published at 84 FR 31746 on 7/3/19.


Mortgage performance improves slightly

The OCC has issued its Mortgage Metrics Report, First Quarter 2019, which indicates 96.2 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 95.6 percent a year earlier.The report also showed that servicers initiated 27,610 new foreclosures during the first quarter of 2019­, a 6.5 percent decrease from the previous quarter and a 26 percent decrease from a year ago. Servicers completed 17,561 mortgage modifications in the first quarter of 2019, and 72.6 percent of the modifications reduced borrowers’ monthly payments.


FDIC hosts Minority Depository Institutions Conference

The 2019 Interagency Minority Depository Institution and CDFI Bank Conference was hosted by the FDIC in partnership with the Federal Reserve Board and the Office of the Comptroller of the Currency. The two-day conference, held June 25–26, 2019, included discussions on a wide range of topics related to minority depository institutions (MDIs), such as innovation, supervision, cybersecurity, and federal programs supporting MDIs.

A new research study of Minority Depository Institutions was also released. A key conclusion of this study is that MDI financial performance has significantly improved over the past five years, particularly in terms of revenue generation and loan performance. Between 2001 and 2018, the number of Asian-American, Hispanic-American, and Native-American MDIs increased; the number of African-American MDIs declined by more than half to 15 percent of all MDIs at year-end 2018. Reflecting an overall industry trend in consolidation, the number of MDIs declined 31 percent, but consolidated more gradually overall compared to community banks, which declined by 33 percent.

The study also found that, despite this consolidation, more than three-fourths of the assets of merged MDIs and 86 percent of the assets of failed MDIs, remained with surviving MDIs. In addition, the study concludes that MDIs originate a greater share of mortgages than non-MDIs to borrowers in low- and moderate-income census tracts and in census tracts with larger shares of minority populations. The same is true for MDI origination of guaranteed Small Business Administration 7(a) loans.


House price index up

U.S. house prices rose in April, up 0.4 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.1 percent increase for March 2019 remained unchanged. From April 2018 to April 2019, house prices were up 5.2 percent.

For the nine census divisions, seasonally adjusted monthly house price changes from March 2019 to April 2019 ranged from -0.6 percent in the West North Central division to +1.2 percent in the Mountain division. The 12-month changes were all positive, ranging from +4.0 percent in the Middle Atlantic division to +7.8 percent in the Mountain division.

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.


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