Top Story Lending Related

The Department of Housing and Urban Development has published [83 FR 28560] an advance notice of proposed rulemaking to invite public comment on possible amendments to HUD's 2013 final rule implementing the Fair Housing Act's disparate impact standard, as well as the 2016 supplement to HUD's responses to certain insurance industry comments made during the rulemaking. HUD is reviewing the final rule and supplement to determine what changes, if any, are appropriate following the Supreme Court's 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., which held that disparate impact claims were cognizable under the Fair Housing Act and discussed standards for, and the constitutional limitations on, such claims. Comments are due by August 20, 2018.

The Federal Reserve Board has published amendments to Regulation A [83 FR 28526] to increase the interest rates for primary and secondary credit at Reserve Banks and Regulation D [83 FR 28527] to revise the rate of interest paid on balances maintained to satisfy reserve balance requirements and on excess balances maintained at Reserve Banks. The amendments to both regulations are effective today, June 20, 2018, and applicable as of June 14.

On Friday, the OCC issued Bulletin 2018-17, to inform national banks, federal savings associations, and federal branches and agencies about clarifications to OCC supervisory policies and processes affecting how examiners evaluate and communicate bank performance under the CRA. The agency also restated its commitment to an effort to modernize the CRA.

The Federal Reserve Board has released May 2018 G.17 Industrial Production and Capacity Utilization data. Industrial production edged down 0.1 percent in May after rising 0.9 percent in April. Manufacturing production fell 0.7 percent in May, largely because truck assemblies were disrupted by a major fire at a parts supplier. Excluding motor vehicles and parts, factory output moved down 0.2 percent. The index for mining rose 1.8 percent, its fourth consecutive month of growth; the output of utilities moved up 1.1 percent. At 107.3 percent of its 2012 average, total industrial production was 3.5 percent higher in May than it was a year earlier. Capacity utilization for the industrial sector decreased 0.2 percentage point in May to 77.9 percent, a rate that is 1.9 percentage points below its long-run (1972–2017) average.

The OCC has released a list of recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. Included were:

• A consent order for a $7,500 civil money penalty (CMP) and order to cease and desist issued to a former Illinois banker for taking pending loan applications to another lender from whom she had accepted employment
• A $10,000 CMP and order of prohibition issued to a former SVP and regional president of a Nebraska bank for issuing unauthorized bank stock, accepting loans from his loan customers and "other loan misconduct."
• A $12.5 million CMP issued to the New York Branch of the Bank of China for deficiencies in its BSA and OFAC compliance program
• Removal and prohibition orders issued to two individuals formerly affiliated with PNC Bank, NA, and one individual with Santander Bank, both of Delaware, for theft of depositor funds
• A removal and prohibition order issued to a former loan officer, SVP and director of Security National Bank of Omaha, Nebraska, for forgery of documents and misapplication of bank funds.

The Federal Reserve Board has announced its approval of a rule to prevent concentration of risk between large banking organizations and the counterparts. The final rule applies credit limits that increase in stringency as the systemic footprint of a firm increases. A global systemically important bank holding company, or GSIB, would be limited to a credit exposure of no more than 15 percent of the GSIB’s tier 1 capital to another systemically important financial firm. Consistent with the recently passed Economic Growth, Regulatory Reform, and Consumer Protection Act, the limits in the final rule will apply only to GSIBs and bank holding companies with at least $250 billion in total consolidated assets. The Board will consider the extent to which additional standards, including credit exposure limits, should apply to holding companies with total consolidated assets between $100 billion and $250 billion at a later date. GSIBs will be required to comply by January 1, 2020.

The Federal Reserve's Board of Governors announced it has approved the action by the Board of Directors of the Federal Reserve Bank of New York increasing the FRB-NY discount rate from 2-1/4 percent to 2-1/2 percent effective immediately.

Treasury and the IRS have announced the final round of Opportunity Zone designations for four additional states. In total, the program designated areas in all 50 states, the District of Columbia and five U.S. possessions.

The Federal Emergency Management Agency has published in today's Federal Register a rule suspending communities in six states from the National Flood Insurance Program effective on June 20, 2018, for noncompliance with the floodplain management requirements of the program. The communities to be suspended are:

• FL: City of Orlando
• NC: Autryville, Beulaville, Clayton, Clinton, Four Oaks, Goldsboro, Pine Level, Wallace, Warsaw, and unincorporated areas of Cumberland, Duplin,Sampson and Wayne Counties
• NJ: Little Silver, Long Branch, Middletown, Monmouth Beach, Oceanport and Shrewsbury
• OH: Fort Jennings, Gilboa, Glandorf, Kalida, Ottowa, Ottoville, Pandora and unincorporated areas of Putnam County
• OR: Cannon Beach, Gearhart, Seaside, Warrenton, and unincorporated areas of Clatsop County
• WA: Unincorporated areas of San Juan County

The BCFP has announced that Security Group Inc., a South Carolina corporation and its subsidiaries are, under the terms of a consent order barred from certain collections practices and will pay a $5 million civil money penalty for violations of the Consumer Financial Protection Act by making improper in-person and telephonic collection attempts on consumer installment loans and retail sales installment contracts.