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Exception Tracking Spreadsheet (TicklerTrax™)
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PPP extended to May 31

President Biden yesterday signed the PPP Extension Act of 2021, extending the Paycheck Protection Program for an additional two months to May 31, 2021, and then providing an additional 30-day period for the SBA to process applications that are still pending.


Fed Board bans former Wyoming bankers

The Federal Reserve Board has announced it has executed Orders of Prohibition against Frank E. Smith and Mark A. Kiolbasa, former institution-affiliated parties of Farmers State Bank, Pine Bluff, Wyoming, for breach of fiduciary duties and engaging in unsafe or unsound practices.

Smith and Kiolbasa were both formerly employed by Central Bank & Trust, a Wyoming state nonmember bank. Kiolbasa had served as a loan officer and president of Central's Cheyenne, Wyoming, branch, with a loan portfolio of about $17.5 million. Smith was Central's chief financial officer, and acted as Central's customer information security officer from about December 2013 until his departure in 2015.

Smith and Kiolbasa used confidential Central Bank & Trust borrower information to relocate to Farmers State Bank, a member bank, by opening a Farmers loan production office in Cheyenne in direct competition with Central, and convincing Kiolbasa's lending clients to move their business via the LPO to Farmers. After Kiolbasa left for his new job at Farmers, leaving Smith at Central, Smith assisted the movement of loans from Central to Farmers by giving Kiolbasa exact payoff figures so that Central had little, if any, warning of impending payoffs and no opportunity to contact their borrowers to convince them to stay. Smith and Kiolbasa even pirated loan-related forms from Central to create similar documents at Farmers.

Smith's and Kiolbasa's actions are detailed in this BankersOnline Penalty Page.


CDC extends rental eviction moratorium

A press release from the Centers for Disease Control and Prevention has announced that CDC Director Dr. Rochelle Walensky has signed an extension to the eviction moratorium further preventing the eviction of tenants who are unable to make rental payments. The moratorium that was scheduled to expire on March 31, 2021 is now extended through June 30, 2021.

In related news, the Federal Trade Commission has issued guidance for consumers and businesses related to the national moratorium on evictions during the pandemic. A recent CFPB report showed that more than 8.8 million Americans are behind on rent payments. The tenants at risk of homelessness are disproportionately people of color, primarily Black and Hispanic families. Consumer Financial Protection Bureau Acting Director Dave Uejio and Federal Trade Commission Acting Chairwoman Rebecca Slaughter issued a joint statement regarding their agencies’ work to help stop illegal evictions and protect American consumers facing economic hardship due to COVID-19.


Agencies ask for info on institutions' use of artificial intelligence

In a joint press release, the Fed, CFPB, FDIC, NCUA, and OCC have announced they are seeking information from the public on how financial institutions use artificial intelligence (AI) in their activities, including fraud prevention, personalization of customer services, credit underwriting, and other operations.

The agencies announced their request for information to gain input from financial institutions, trade associations, consumer groups, and other stakeholders on the growing use of AI by financial institutions. More specifically, the RFI seeks comments to better understand the use of AI, including machine learning, by financial institutions; appropriate governance, risk management, and controls over AI; challenges in developing, adopting, and managing AI; and whether any clarification would be helpful.

Comments will be accepted for 60 days following publication in the Federal Register.

Publication and comment period update: Scheduled for Federal Register publication on 3/31/2021, with comments due by 5/31/2021.


CUSO Rule comment period extended

The NCUA Board has unanimously approved by notation vote a 30-day extension of the comment period for its proposed rule on credit union service organizations (CUSOs) Part 712.

The proposed rule, published at 86 FR 11645 on February 26, 2021, would expand the list of permissible activities and services for CUSOs. Specifically, it would:

  • Expand the list of permissible activities and services for CUSOs to include originating any type of loan that a federal credit union may originate; and
  • Grant the NCUA Board additional flexibility to approve permissible activities and services.

The comment period would have expired today, March 29, 2021. Notice extending the comment period will be published March 31, 2021, with comments now due by April 30, 2021.


OCC Bulletin on Tax Equity Finance transactions

The OCC has issued Bulletin 2021-15 to provide information to banks about written notifications or requests for tax equity finance (TEF) transactions under 12 CFR 7.1025. On December 22, 2020, the OCC issued a final rule codifying the authority of banks to engage in TEF transactions. The final rule is effective April 1, 2021.


Fourth quarter mortgage performance declines

The OCC Mortgage Metrics Report, Fourth Quarter 2020 showed that 93.3 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 96.5 percent a year earlier. The decline is a result of the COVID-19 pandemic and actions taken by banks to comply with the CARES Act.


March SCOOS released

The March 2021 Senior Credit Officer Opinion Survey (SCOOS) on Dealer Financing Terms collected qualitative information on changes in credit terms and conditions in securities financing and over-the-counter derivatives markets between December 2020 and February 2021. In addition to the core questions, the survey included a set of special questions about the transition away from LIBOR (London interbank offered rate) for U.S. dollar-denominated OTC derivatives. The 23 institutions participating in the survey account for almost all dealer financing of dollar-denominated securities to non-dealers and are the most active intermediaries in OTC derivatives markets. The survey was conducted between February 8 and February 22, 2021. The core questions asked about changes between December 2020 and February 2021.


NMLS update scheduled for next week

The NMLS has scheduled an update to release 2021.3 for March 29, 2021. System enhancements can be reviewed in the NMLS 2021-3 Release Notes.


MLA site update scheduled

The News page of the official Department of Defense Military Lending Act records search website has announced that an update to version 5.8 of the research site has been scheduled for April 29, 2021. The update will make the site's password access controls more robust by increasing the number of characters required, requiring that new passwords be used for a minimum of 24 hours and a maximum of 60 days, and requiring more than minimal character alterations at each change. The system upgrade should not interrupt access to the system.


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