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Top Story Lending Related

11/20/2020

OCC enforcement orders

The OCC has released a list of enforcement actions against national banks, federal savings associations and individuals now or formerly affiliated with such institutions.

  • First Abu Dhabi Banks USA N.V. was assessed a $5 million civil money penalty for BSA/AML compliance program deficiencies and violations. An earlier consent order against the bank was terminated.
  • A former director and the former senior compliance and BSA officer of a New Jersey bank were assessed penalties totaling $39,000 (and the compliance/BSA officer was issued a prohibition order) for their involvement in the bank's seriously deficient BSA/AML compliance program while the bank's management was soliciting high-risk businesses as customers.
  • A former senior vice president of a Sallisaw, Oklahoma, bank was issued a default order with an order of prohibition, a cease and desist order requiring restitution of $2.3 million, and civil money penalty of $250,000. The order indicates it has been appealed to a federal court.
  • The former VP of commercial lending and chief lending officer of a Charleroi, Pennsylvania, bank has been issued a consent order to cease and desist and to pay a $12,000 civil money penalty, for inappropriately approving large overdrafts and waiving overdraft fees; and failing to ensure that the bank's credit underwriting process properly assessed the borrower's ability to repay.

11/20/2020

BSA due diligence for charities and non-profits clarified

The Federal Banking Agencies and FinCEN have issued a joint fact sheet to provide clarity to banks and credit unions on how to apply a risk-based approach to charities and other non-profit organizations. The fact sheet highlights the importance of ensuring that legitimate charities have access to financial services and can transmit funds through legitimate and transparent channels, especially during the current COVID-19 pandemic. It also reminds banks to apply a risk-based approach to customer due diligence requirements when developing the risk profiles of charities and other non-profit customers, and reaffirms that the application of a risk-based approach is consistent with existing customer due diligence and other Bank Secrecy Act/Anti-Money Laundering compliance requirements.

11/20/2020

FDIC updates RMS Manual

The FDIC has issued a November 2020 update to its Risk Management Manual of Examination Policies (RMS Manual). The November updates were made to section 3.2 (Loans) of the Manual, and include revised instructions for assessing environmental risk programs; updated residential appraisal thresholds; including effective dates for lease accounting; instructions on assessing bank-to-bank credit; assessing payday lending programs; Current Expected Credit Loss (CECL) updates; and other minor technical edits.

With the issuance of the November updates, the FDIC has moved to inactive status FIL-14-2005 (Payday Lending Programs Revised Examination Guidance), and FIL-52-2015 (FDIC Clarifying its Approach to Banks Offering Products and Services, such as Deposit Accounts and Extensions of Credit, to Non-Bank Payday Lenders). Also, the Guidelines for an Environmental Risk Program are being removed from the FDIC Statements of Policy section of the FDIC Law, Regulations, and Related Acts webpage. The two FILs and the Guidelines document are addressed in the RMS Manual.

The RMS Manual can be downloaded as ZIP files.

11/19/2020

Final Capital Rule for Fannie and Freddie

The Federal Housing Finance Agency (FHFA) has announced it has approved a final rule that establishes a new regulatory capital framework for Fannie Mae and Freddie Mac (the Enterprises).

The final rule fulfills Congress's Housing and Economic Recovery Act of 2008 mandate that FHFA establish risk-based capital requirements for the Enterprises. The rule is intended to ensure the safety and soundness of the Enterprises by increasing the quantity and quality of the Enterprises' regulatory capital and reducing the pro-cyclicality of the aggregate capital requirements. A Fact Sheet on the rule was also released.

The rule will become effective 60 days after publication in the Federal Register.

11/19/2020

No change for small loan HPML appraisal exemption

The Consumer Financial Protection Bureau, Federal Reserve Board, and Office of the Comptroller of the Currency today announced that the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans in section 34.203(b)(2) (OCC), section 226.43(b)(2) (Board) and section 1026.35(c)(2)(ii) (Bureau) during 2021 will remain unchanged at $27,200.

The BankersOnline page for Bureau Regulation Z section 1026.35 has been updated.

11/19/2020

Unchanged thresholds for Regs M and Z

The Consumer Financial Protection Bureau and the Board of Governors of the Federal Reserve System have announced that the dollar thresholds for exemptions from coverage in section 1013.2(e) of Regulation M (Consumer Leasing), section 226.3(b) of the Board's Regulation Z (Truth in Lending), and section 1026.3(b) of the Bureau's Regulation Z (Truth in Lending) will remain unchanged at $58,300 for calendar year 2021.

The BankersOnline pages for sections 1013.2 and 1026.3 of Bureau regulations M and Z have been updated.

11/18/2020

2021 multifamily loan caps for Fannie and Freddie

The Federal Housing Finance Agency (FHFA) has announced that the 2021 multifamily loan purchase caps for Fannie Mae and Freddie Mac (the Enterprises) will be $70 billion for each Enterprise. At least 50 percent of the Enterprises multifamily loans are required to be used for affordable housing. Additionally, for the first time, affordable housing manufactured housing communities (MHC) must either be resident/government/nonprofit-owned or must have tenant pad lease protections to be counted as mission-driven, affordable housing.

FHFA also requires at least 20 percent of the Enterprises’ multifamily business be affordable to residents at 60 percent of areas median income (AMI) or below. to ensure that the Enterprises' multifamily businesses have a strong and growing commitment to affordable housing finance, particularly for residents and communities that are most difficult to serve.

11/17/2020

FHFA Performance and Accountability Report

The Federal Housing Finance Agency has released its annual Performance and Accountability Report, which details FHFA's activities as regulator of the Federal Home Loan Bank System and as regulator and conservator of Fannie Mae and Freddie Mac during fiscal year 2020.

For the twelfth consecutive year, FHFA received an unmodified audit opinion on its FY 2020 financial statements from the U.S. Government Accountability Office. Included in the unmodified opinion, GAO noted no material weaknesses or significant deficiencies in FHFA's internal controls. GAO also found no instances of reportable noncompliance with the applicable laws and regulations it tested.

The Report also identified key management challenges and priorities the FHFA it must address going forward. It listed—

  • Finalizing FHFA's Capital Rule and issuing a proposed rule on Capital Planning
  • Transitioning away from LIBOR
  • Responsibly ending the conservatorships of the Enterprises
  • Developing resolution-related rulemaking to be prepared if one of its regulated entities should fail
  • Finalizing and publishing the Enterprise Liquidity Rule

11/16/2020

CFPB and Colorado AG to hold joint virtual office hours

The CFPB has announced it will hold joint, virtual office hours on December 2, 2020, as part of the American Consumer Financial Innovation Network (ACFIN). Joint office hours provide innovators with the opportunity to discuss issues such as financial technology, innovative products or services, and other matters related to financial innovation with officials from the CFPB and state partners. CFPB Director Kathleen L. Kraninger and Colorado Attorney General Philip Weiser will participate in this event.

Innovators interested in participating in a meeting during the joint, virtual office hours should request the meeting and describe the topic(s) they would like to discuss during their session. Requests must be received by November 23, 2020. A confirmation for the specific meeting time will then be provided to the requester.

11/16/2020

FDIC guidance to facilitate recovery on Puerto Rico

The FDIC has issued FIL-105-2020, offering guidance to FDIC-supervised financial institutions on steps intended to provide regulatory relief and to facilitate recovery in areas of Puerto Rico affected by severe storms and flooding.

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