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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 and FDIC CRA exam schedules

The schedules of Community Reinvestment Act evaluations to be conducted by the OCC and FDIC in the third and fourth quarters of 2019 have been released.


Mortgage rates decrease

The Federal Housing Finance Agency has released its April 2019 index which shows that, nationally, interest rates on conventional purchase-money mortgages decreased from March to April, according to several indices of new mortgage contracts.

  • The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.15 percent for loans closed in late April, down 21 basis points from 4.36 percent in March.
  • The average interest rate on all mortgage loans was 4.20 percent, down 24 basis points from 4.44 in March.
  • The average interest rate on conventional, 30-year, fixed-rate mortgages of $484,350 or less was 4.39 percent, down 22 basis points from 4.61 in March.
  • The effective interest rate on all mortgage loans was 4.31 percent in April, down 20 basis points from 4.51 in March.
  • The average loan amount for all loans was $334,700 in April, up $9,600 from $325,100 in March

The FHFA also reported that, due to dwindling participation, its monthly interest rate survey will be discontinued, and yesterday's announcement is the final monthly release.


US and UK establish FIP

the Treasury Department has announced the establishment of a Financial Innovation Partnership (FIP) between the United States and the United Kingdom to build on and deepen bilateral engagement on emerging trends in financial services innovation, which will include encouraging collaboration in the private sector, sharing information and expertise about regulatory practices, and promoting growth and innovation. The FIP will focus on two main areas:

  • Regulatory Engagement: Dialogue between authorities and with the private sector is critical to identify and address potential regulatory synergies, share lessons, and develop closer working relationships. The United States and United Kingdom will build on existing regulatory cooperation by discussing regulatory developments and sharing experiences on technical issues related to innovation in financial services.
  • Commercial Engagement: The FIP also seeks to promote a dynamic private sector that supports entrepreneurs and new business models – a necessary driver of financial innovation. It will provide enhanced and regular opportunities for the private sector in one country to engage with industry associations, and market participants in the other country. Through the FIP, the U.K. Department for International Trade (DIT) will bring U.K. firms to the United States and the U.S. Commerce Department will coordinate trade promotion missions to the United Kingdom..


Texas mortgage servicer settles with CFPB

The Consumer Financial Protection Bureau has reached a settlement with BSI Financial Services (BSI), a mortgage servicer headquartered in Irving, Texas. BSI Financial Services is the operating name for Servis One, Inc.

The Bureau had determined that BSI violated the Consumer Financial Protection Act of 2010, the Real Estate Settlement Procedures Act, or the Truth in Lending Act by:

  • Handling mortgage servicing transfers with incomplete or inaccurate loss mitigation information. This resulted in failures to recognize transferred mortgage loans with pending loss mitigation applications, in-process loan modifications, and permanent loan modifications;
  • Handling mortgage servicing transfers with incomplete or inaccurate escrow information resulting in untimely escrow disbursements;
  • Inadequately overseeing service providers, resulting in untimely escrow disbursements to pay borrowers’ property taxes and homeowners' insurance premiums;
  • Failing to promptly enter interest rate adjustment loan data for adjustable rate mortgage (ARM) loans into its servicing system, resulting in BSI sending monthly statements to consumers that sought to collect inaccurate principal and interest payments; and
  • Maintaining an inadequate document management system that prevented BSI’s personnel or consumers from readily obtaining accurate information about mortgage loans.

The Consent Order requires that BSI, among other provisions, pay a civil money penalty of $200,000 and pay restitution estimated to be at least $36,500. It must also establish and maintain a comprehensive data integrity program to ensure the accuracy, integrity, and completeness of the data for loans that it services, and implement an information technology plan to ensure BSI’s systems are appropriate give the nature, size, complexity, and scope of BSI’s operations.


FEMA suspending communities in 6 states

FEMA has published [84 FR 24726] in this morning's Federal Register a rule identifying communities in six states where the sale of flood insurance has been authorized under the National Flood Insurance Program that are scheduled for suspension on June 7, 2019, for noncompliance with the floodplain management requirements of the program.

  • Arkansas: Jacksonville and Little Rock
  • Georgia: Aragon, Canton, Cumming, Dallas, Grovetown, Rockmart, Woodstock, and unincorporated areas of Cherokee, Columbia, and Polk Counties
  • Idaho: Middleton, Notus, Parma, Star, and unincorporated areas of Canyon County
  • New York: Akron, Alden (town and village), Amherst, Angola, Blasdell, Brant, Buffalo, Cheektowaga, Clarence, Colden, Collins, Concord, Depew, East Aurora, Elma, Evans, Gowanda, Grand Island, Hamburg (town and village), Holland, Lancaster, Marilla, Newstead, Orchard Park (town and village), Tonawanda (city and town), Wales, West Seneca, and Williamsville
  • Oklahoma: Enid, Kingfisher, Piedmont, and unincorporated areas of Kingfisher County
  • Washington: Hoh Indian Tribe, Port Townsend, and unincorporated areas of Jefferson County


Agencies issue host state loan-to-deposit ratios

A joint press release from the Federal Reserve Board, FDIC and OCC has announced the issuing of the host state loan-to-deposit ratios that they will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.

In general, section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 109 also prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production. Section 109 provides a process to test compliance with the statutory requirements. The first step in the process involves a loan-to-deposit ratio test that compares a bank's statewide loan-to-deposit ratio to the host state loan-to-deposit ratio for banks in a particular state. The second step requires the appropriate agency to determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank's interstate branches.

A bank that fails both steps is in violation of section 109 and is subject to sanctions by the appropriate agency.


House prices up in first quarter

U. S. House prices rose 1.1 percent in the first quarter of 2019, says the FHFA, according to the agency's House Price Index [1.38 MB PDF]. House prices for the quarter were up 5.1 percent over the first quarter of 2018, and have risen consistently over the last 31 quarters.

Prices rose the most in Idaho, Nevada and Utah; the smallest increases were seen in Maryland, Delaware and Louisiana.


FinCEN Innovation Hours program

FinCEN has announced an Innovation Hours Program to better shape and inform its ongoing engagement with Anti-Money Laundering (AML)/Countering the Financing of Terrorism (CFT) innovators. The Innovation Hours Program will provide financial technology and regulatory technology companies and financial institutions the opportunity to present their new and emerging innovative products and services to FinCEN. Technology demonstrations should highlight how these innovations work and how financial institutions might use them. FinCEN expects to hold events in the Washington D.C. metro area, as well as some regional events that focus on financial services-related innovation.

UPDATE: FinCEN published [84 FR 25120] a notice that the program will become effective on May 30, 2019, inviting meeting requests, which can be submitted via the Innovation Initiative webpage.


OCC to host workshops in Denver

The OCC will host two workshops at the Embassy Suites Denver - Stapleton in Denver, June 25-26, for directors of institutions supervised by the OCC.

  • The Risk Governance: Improving Director Effectiveness workshop on June 25 combines lectures, discussion, and exercises to provide practical information for directors to effectively measure and manage risks. The workshop also focuses on the OCC’s approach to risk-based supervision and major risks in the financial industry.
  • The Credit Risk: Directors Can Make a Difference workshop on June 26 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change.


Refunds in rate reduction robocall scam

The Federal Trade Commission will mail 305 checks totaling $314,945 to consumers who paid up-front for worthless credit card interest rate reduction programs pitched by Payless Solutions using illegal robocalls. The complaint filed by the FTC and Florida Office of Attorney General, the Orlando-based defendants illegally called thousands of consumers nationwide—including many seniors—and claimed their program would save them at least $2,500 and enable them to pay off their debts more quickly. After convincing consumers to provide their credit card information, the defendants then charged between $300 and $4,999 up-front for their worthless service. The agencies also alleged that in some cases the defendants illegally charged consumers without their consent. The FTC is providing full refunds, which average more than $1,000 each, to consumers who lost money, as identified by the defendants’ records or by complaints the consumers filed with the FTC or any agency that submits complaints to the FTC’s Consumer Sentinel Network.


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