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Top Story Lending Related

12/22/2023

FHFA releases 3rd quarter 2023 foreclosure prevention and refinance report

The Federal Housing Finance Agency has released its third quarter 2023 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac (the Enterprises) completed 43,356 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to 6,861,827 since the start of conservatorships in September 2008.

The report also shows that 33 percent of loan modifications completed in the third quarter reduced borrowers’ monthly payments by more than 20 percent. The number of refinances decreased from 93,952 in the second quarter of 2023 to 83,522 in the third quarter of 2023.

The Enterprises’ serious delinquency rate declined slightly from 0.55 percent to 0.54 percent at the end of the third quarter. This compares with 3.34 percent for Federal Housing Administration (FHA) loans, 1.99 percent for Veterans Affairs (VA) loans, and 1.52 percent for all loans (industry average).

12/22/2023

More on FinCEN's BOI Access Rule

Yesterday, we reported that FijnCEN had issued a final rule regarding access to Beneficial Ownership Information that certain entities will be required to file with FinCEN beginning January 1, 2024.

In connection with its press release announcing the final rule, FinCEN issued two interagency statements to give banks and non-bank financial institutions guidance on the interplay between the final rule and FinCEN’s existing Customer Due Diligence Rule.

FinCEN also issued a Fact Sheet about the final rule.

12/21/2023

FinCEN to publish final rule on BOI data access and safeguards

The Financial Crimes Enforcement Network (FinCEN) has scheduled for December 22, 2023, Federal Register publication a final rule with regulations regarding access by authorized recipients to beneficial ownership information (BOI) that will be reported to FinCEN pursuant to section 6403 of the Corporate Transparency Act (CTA).

The summary of the rule indicates the regulations implement the strict protocols required by the CTA to protect sensitive personally identifiable information (PII) reported to FinCEN and establish the circumstances in which specified recipients have access to BOI, along with data protection protocols and oversight mechanisms applicable to each recipient category. The disclosure of BOI to authorized recipients in accordance with appropriate protocols and oversight will help law enforcement and national security agencies prevent and combat money laundering, terrorist financing, tax fraud, and other illicit activity, as well as protect national security.

The Introduction in the Supplementary Information to be published with the rule states, "Financial institutions with customer due diligence requirements under applicable law will have access to BOI to facilitate compliance with those requirements, as will the Federal functional regulators or other appropriate regulatory agencies that supervise or assess those financial institutions’ compliance with such requirements." It also states "FinCEN will implement the CTA requirement to revise the 2016 CDD Rule [31 CFR 1010.230] through a future rulemaking process. That process will provide the public with an opportunity to comment on the effect of the final provisions of the BOI reporting and access rules on financial institutions’ customer due diligence obligations."

The rule will be effective 60 days after publication (February 20, 2024).

12/21/2023

FFIEC: Agencies release 2022 Small Business, Farm and CD lending data

The Federal Financial Institutions Examination Council (FFIEC) has announced that the Federal Reserve Board, FDIC, and OCC, as members of the FFIEC, have released data on small business, small farm, and community development lending during 2022. The Community Reinvestment Act regulations require the agencies to annually disclose these data.

The FFIEC also prepared aggregate disclosure statements of small business and small farm lending for all of the metropolitan statistical areas and non-metropolitan counties in the United States and its territories. The statements are available here.

12/21/2023

Biden vetoes congressional disapproval of '1071 Rule'

On Tuesday, President Biden sent a veto message to the Senate concerning Senate Joint Resolution 32, which would disapprove of the CFPB’s final rule titled “Small Business Lending Under the Equal Credit Opportunity Act (Regulation B).” The Joint Resolution was passed by the House of Representatives and the Senate under the Congressional Review Act, and, if approved by the president, would have nullified the CFPB's rule and prevented the Bureau from issuing any substantially similar rule.

The Bureau's rule remains subject to an injunction against enforcement issued by the U.S. District Court for the Southern District of Texas.

12/20/2023

Agencies set CRA asset-size thresholds

The FDIC and Federal Reserve have published [88 FR 87895] a final rule in this morning's Federal Register establishing for 2024 the asset-size thresholds used to define “small bank” and “intermediate small bank” in their Community Reinvestment Act regulations. As required, the adjustment to the threshold amounts are based on the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W).

Effective January 1, 2024, “small bank” will mean a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.564 billion, and “intermediate small bank” will mean a small bank with assets of at least $391 million as of December 31 of both of the prior two calendar years and less than $1.564 billion as of December 31 of either of the prior two calendar years.

12/19/2023

FDIC advisory on managing commercial real estate concentrations

FDIC Financial Institution Letter FIL-64-2023, Managing Commercial Real Estate Concentrations in a Challenging Economic Environment, issued yesterday, is an advisory to reemphasize the importance of strong capital, appropriate credit loss allowance levels, and robust credit risk-management practices for institutions with commercial real estate (CRE) concentrations. It also conveys several key risk management practices for institutions to consider in managing CRE loan concentrations in the current economic environment. Additionally, the advisory reemphasizes the importance of effectively managing liquidity and funding risks, which can compound lending risks, particularly for CRE-concentrated institutions. This advisory replaces the 2008 advisory: Managing Commercial Real Estate Concentrations in a Challenging Environment (issued March 17, 2008).

Institutions with significant CRE concentrations are advised to consider the risk management principles discussed in the joint Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices (issued December 6, 2006), and the Interagency Policy Statement on Allowances for Credit Losses (Revised April 27, 2023).

12/19/2023

CFPB issues HMDA and TILA exemption threshold inflation adjustments

The CFPB has announced the asset-size exemption thresholds for depository institutions under Regulation C. The Bureau also announced the asset-size exemption thresholds for certain creditors under the escrow requirements and small creditor portfolio and balloon-payment qualified mortgage requirements, and the small creditor exemption from the prohibition against balloon-payment high-cost mortgages under Regulation Z.

These adjustments are effective on January 1, 2024, consistent with relevant statutory or regulatory provisions.

  • The HMDA (Regulation C) asset-size exemption in comment 2(g)-2 will increase to $56 million from $54 million.
  • The Regulation Z exemption threshold in § 1026.35(b)(2)(iii) for the escrow requirement for HPMLs will increase to $2,640,000,000 from $2,537,000,000. The adjustment to the escrows asset-size exemption threshold also will increase the threshold for small-creditor portfolio and balloon-payment qualified mortgages under Regulation Z.
  • The EGRRCPA asset-size exemption from escrow requirements for smaller federally-insured depository institutions and credit unions will be increased to $11.835 billion from $11.374 billion.

The BankersOnline Regulations pages have been updated to reflect these increases.

12/18/2023

CFPB shuts down medical debt collector for violations

The CFPB on Friday announced it had taken action against a medical debt collector, Commonwealth Financial Systems, for illegally trying to collect unverified medical debts after consumers disputed the validity of the debts. Under the stipulated order issued Friday, the company will cease operations and pay a $95,000 penalty to the CFPB’s victims relief fund. Commonwealth is also required by the order to request all consumer reporting companies to whom it previously furnished information about any consumer to delete all collection accounts for such consumers.

Commonwealth Financial Systems is a nonbank corporation with its principal place of business in Dickson City, Pennsylvania. Commonwealth is a third-party debt collector that specializes in the collection of past-due medical debts and furnishes information about consumer collection accounts to consumer reporting companies.

Commonwealth’s actions violated the Fair Credit Reporting Act because the company failed to conduct reasonable investigations of disputed debts and failed to inform consumer reporting companies that certain information was being disputed. Commonwealth also violated the Fair Debt Collection Practices Act because it continued to attempt to collect disputed debts without substantiating documentation.

In a related development, New York State Governor Kathy Hochul on Thursday signed into state law legislation prohibiting hospitals, health care professionals and ambulances from reporting an individual's medical debt to credit agencies.

12/14/2023

Fed issues FOMC Statement and economic projections

The Federal Reserve Board has issued the Federal Open Market Committee Statement following the Committee's Meeting on December 12–13, 2023. An excerpt follows:

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of any additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.”

The Board and the Committee also released the economic projections made by participants at the Committee meeting.

In the Implementation Note that accompanied the Statement, it is noted that the Board of Governors voted unanimously to maintain the interest rate paid on reserve balances at 5.4 percent, effective December 14, 2023, and voted unanimously to approve the establishment of the primary credit rate at the existing level of 5.5 percent.

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