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12/10/2019

CFPB consumer tips on store credit cards

The Bureau has posted tips for consumers who are offered or receive a retail store credit card to protect themselves against fraud.

12/10/2019

OCC on key risks for federal banking system

The OCC's National Risk Committee has issued its Semiannual Risk Perspective for Fall 2019, which indicates operational, credit, and interest rate risks are among the key themes for the federal banking system. Report highlights include:

  • Operational risk is elevated as banks adapt to a changing and increasingly complex operating environment. Key drivers elevating operational risk include the need to adapt and evolve current technology systems for ongoing cybersecurity threats.
  • Credit risk has accumulated in many portfolios. Banks should prepare for a cyclical change while credit performance remains strong. Preparation includes maintaining robust credit control functions, particularly credit review, problem loan identification and workout, collections, and collateral management.
  • Recent volatility in market rates has led to increasing levels of interest rate risk. The complexity of asset/liability management is exacerbated by the recent yield curve inversions.
  • The London InterBank Offered Rate (Libor) will likely cease to be an active index by the end of 2021. Accordingly, the OCC is increasing regulatory oversight of this area to evaluate bank awareness and preparedness.
  • Banks face strategic risks from non-depository financial institutions, use of innovative and evolving technology, and progressive data analysis capabilities.

12/09/2019

Consumer credit increases

The Federal Reserve Board has released Consumer Credit G.19 data indicating that in October 2019 consumer credit increased at a seasonally adjusted annual rate of 5-1/2 percent. Revolving credit increased at an annual rate of 8-3/4 percent, while nonrevolving credit increased at an annual rate of 4-1/4 percent.

12/06/2019

OCC lists 10 Outstanding CRA evals

The OCC yesterday released a list of Community Reinvestment Act (CRA) performance evaluations that became public in November. Of the 22 evaluations listed, 12 are rated "Satisfactory" and these ten are rated "Outstanding" (links are to their evaluations):

12/06/2019

Mnuchin discusses FSOC report with House Financial Services Committee

Treasury Secretary Mnuchin presented the Financial Stability Oversight Council (FSOC) 2019 annual report and other priorities of the Treasury Department to members of the House Committee on Financial Services yesterday. He noted that, since the publication of the Council’s last annual report in December 2018, the U.S. economy has continued to perform extremely well. Economic growth in the United States far exceeds that of U.S. G7 trading partners, and unemployment rates are near a 50-year low, including unemployment levels at or near all-time lows for African Americans, Hispanic Americans, Asian Americans, and women. Wages are rising faster for hardworking families; corporate and consumer delinquency and default rates are low; and financial conditions remain stable. He also stated, “The report also provides a strong message to market participants about the need to prepare for the transition away from LIBOR as a reference rate. Failure to prepare adequately could cause significant disruptions across financial markets and to borrowers, given the widespread use of LIBOR in financial instruments.”

12/05/2019

FDIC lists CRA eval ratings

The FDIC has issued a list of 71 state nonmember banks to which the FDIC assigned Community Reinvestment Act evaluation ratings in September 2019. A bank in Connecticut received a "Needs to Improve" rating. The other 70 banks received "Satisfactory" ratings.

12/04/2019

Major disaster support continued by HUD

HUD has announced the allocation of over $2.3 billion to support the long-term disaster recovery process in hard-hit areas in fifteen states, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, American Samoa and the Commonwealth of the Northern Mariana Islands through its Community Development Block Grant-Disaster Recovery (CDBG-DR) program.

12/04/2019

Statement on use of alternative data in credit underwriting

Five Federal financial regulatory agencies—the Fed, the CFPB, the FDIC, the OCC and the NCUA— have issued an "Interagency Statement on the Use of Alternative Data in Credit Underwriting" by banks, credit unions, and non-bank financial firms.

The statement notes the benefits that using alternative data may provide to consumers, such as expanding access to credit and enabling consumers to obtain additional products and more favorable pricing and terms. The statement explains that a well-designed compliance management program provides for a thorough analysis of relevant consumer protection laws and regulations to ensure firms understand the opportunities, risks, and compliance requirements before using alternative data.

Alternative data includes information not typically found in consumers’ credit reports or customarily provided by consumers when applying for credit. Alternative data include cash flow data derived from consumers’ bank account records.

12/04/2019

Agencies clarify guidance for banking hemp-related businesses

On Tuesday, December 3, the Board of Governors, FDIC, FinCEN, OCC, and the Conference of State Bank Supervisors jointly released a statement, "Joint Guidance on Providing Financial Services to Customers Engaged in Hemp-Related Businesses," clarifying the legal status of hemp growth and production, and the relevant requirements under the Bank Secrecy Act for banks providing services to hemp-related businesses. The statement—

  • emphasizes that banks are no longer required to file SARs for customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if signs of suspicious activity warrant filing.
  • provides banks with background information on the legal status of hemp, the USDA's interim final rule on the production of hemp, and the BSA considerations when providing banking services to hemp-related businesses.
  • indicates that FinCEN will issue additional guidance after further reviewing and evaluating the USDA interim final rule.

12/03/2019

FHFA report on non-performing loan sales

The Federal Housing Finance Agency has released its latest report on the sale of non-performing loans by Fannie Mae and Freddie Mac. The report includes information about NPLs sold through June 30, 2019, and reflects borrower outcomes on NPLs sold through December 31, 2018, and reported through June 30, 2019. The report shows that, through June 30, 2019, the Enterprises sold 117,466 NPLs with a total unpaid principal balance of $22.2 billion. While the Enterprises conducted NPL sales in the first half of 2019, none of the sales settled by the end of the reporting period.

  • NPLs sold had an average delinquency of 3.0 years and an average loan-to-value ratio of 92 percent.
  • NPLs in New Jersey, New York and Florida represented nearly half (45 percent) of the NPLs sold. These three states accounted for 47 percent of the Enterprises' loans that were one year or more delinquent as of December 31, 2014, prior to the start of NPL program sales in 2015.
  • Fannie Mae sold 78,281 loans and Freddie Mac sold 39,185 loans.

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