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The OCC has reported on the performance of first-lien mortgages in the federal banking system during the third quarter of 2023.

The OCC Mortgage Metrics Report, Third Quarter 2023 showed that 97.3 percent of mortgages included in the report were current and performing at the end of the quarter, the same as the previous quarter. Performance improved compared to third quarter 2022 when 97.2 percent of mortgages were current and performing.

The percentage of seriously delinquent mortgages—mortgages that are 60 or more days past due and all mortgages held by bankrupt borrowers whose payments are 30 or more days past due—was 1.1 percent in the third quarter of 2023, the same as the previous quarter, and a decrease from 1.3 percent a year ago. The percent of seriously delinquent loans has trended down since the third quarter of 2021.

Servicers initiated 8,965 new foreclosures in the third quarter of 2023, an increase from the prior quarter but a decrease from a year earlier. The new foreclosure volume in the third quarter of 2023 is lower than pre-COVID-19 pandemic foreclosure volumes.

Servicers completed 7,436 modifications during the third quarter of 2023, a 13.8 percent decrease from the previous quarter’s 8,623 modifications. Of these 7,436 modifications, 6,367 or 85.6 percent, were “combination modifications”—modifications that included multiple actions affecting the affordability and sustainability of the loan, such as an interest rate reduction and a term extension.

FinCEN has updated its Beneficial Ownership Information (BOI) Reporting Rule FAQs to include 19 new or updated questions on general inquiries, the reporting process, reporting companies, reporting requirements, initial reports, updated reports, compliance and enforcement, FinCEN identifiers, and third-party service providers.

The Office of the Comptroller of the Currency yesterday reported the key issues facing the federal banking system in its Semiannual Risk Perspective for Fall 2023.

The OCC highlighted credit, market, operational, and compliance risks as the key risk themes in the report. The report also highlights artificial intelligence (AI) in banking as an emerging risk.

The Office of the Comptroller of the Currency has issued guidance to OCC-supervised institutions to address the risks associated with "buy now, pay later" (BNPL) lending.

The guidance, included in OCC Bulletin 2023-37 (12/6/2023), focuses on the risk management of BNPL loans, which are payable in four or fewer installments and carry no finance charges. The guidance notes that banks should maintain underwriting, repayment terms, pricing, and safeguards that minimize adverse customer outcomes and should ensure that marketing materials and disclosures are clear and conspicuous.

The OCC expects banks that offer BNPL loans to do so in a manner that is safe and sound, provides fair access to financial services, supports fair treatment of consumers, and complies with applicable laws and regulations.

Our monthly research in the Federal Reserve System's archive of Community Reinvestment Act evaluations found that the Reserve Banks made public 16 evaluations during November. Fourteen of the evaluations listed were assigned ratings of "Satisfactory." We offer congratulations to two banks whose evaluations were rated "Outstanding":

• Washington Savings Bank, Lowell, MA
• Community First Bank of the Heartland, Mount Vernon, IL

The Office of the Comptroller of the Currency has announced its 2024 schedule of free, virtual workshops for directors, senior management, and other key executives of national community banks and federal savings associations. The OCC examiner-led workshops provide practical training and guidance to directors and senior management of national community banks and federal savings associations in a virtual learning environment to support the safe and sound operation of community-based financial institutions.

The workshops will be held from 1 – 4 p.m. EST on the dates indicated:

• January 9: Credit Risk: Recognizing and Responding to Risk
• January 18: Operational Risk: Navigating Rapid Changes
• February 15: Building Blocks: Developing Strong Management
• February 22: Risk Governance: Improving Effectiveness
• March 5: Compliance Risk: Understanding the Rules

Registration is required.

The FDIC has released its December 2023 list of 45 banks recently evaluated for compliance with the Community Reinvestment Act. The list includes two banks — one in Waterloo, Alabama, and one in Philadelphia, Pennsylvania — whose evaluations were rated "Needs to Improve," and 40 banks whose evaluations were rated "Satisfactory."

The following three banks are to be congratulated on receiving "Outstanding" ratings on their evaluations:

• United Citizens Bank of Southern Kentucky, Columbia, Kentucky
• Exchange Bank, Kearney, Nebraska
• First Bank, Ketchikan, Alaska

The OCC has released a list of 42 CRA performance evaluations that became public In November. Of the evaluations listed, 29 are rated satisfactory, and the following 13 are rated outstanding:

• Community West Bank, N.A., Goleta, GA
• San Luis Valley Federal Bank. Alamosa, CO
• Citizens Bank & Trust, Inc., Trenton, GA
• The Citizens National Bank of Quitman,, Quitman, GA
• Central FS & LA, Cicero, IL
• The First National Bank of Ava, Ava, IL
• Home FS&LA of Grand Island, Grand Island, NE
• Valley National Bank, Passaic, NJ
• Pioneer Bank, Roswell, NM
• BNY Mellon, N.A., Pittsburg, PA
• The First National Bank in Sioux Falls, Sioux Falls, SD
• Home Federal Bank of Tennessee, Knoxville, TN
• Skyline National Bank, Independence, VA

The FDIC has issued FIL-62-2023 with guidance to help financiaol institutions and facilitate recovery in areas of Illinois affected by severe storms and flooding from September 17–18, 2023.

The Financial Stability Board (FSB) this morning announced it has published a toolkit for financial authorities and financial institutions for their third-party risk management and oversight.

The toolkit was developed in response to concerns over the extent and nature of financial institutions’ interactions with a broad and diverse ecosystem of third-party service providers, which could have implications for financial stability.

The primary emphasis of the toolkit is on critical third-party services, given the potential impact of their disruption on financial institutions’ critical operations and financial stability. It also looks holistically at financial institutions’ third-party risk management in light of changing industry practices and recent regulatory and supervisory approaches to operational resilience.

The toolkit, which incorporates feedback from a public consultation conducted over the summer, aims to (i) reduce fragmentation in regulatory and supervisory approaches to third-party risk management across jurisdictions and different areas of the financial services sector; (ii) strengthen financial institutions’ ability to manage third-party risks and financial authorities’ ability to monitor and strengthen the resilience of the financial system; and (iii) facilitate coordination among relevant stakeholders (i.e. financial authorities, financial institutions and third-party service providers).

The FSB promotes international financial stability by coordinating national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory and other financial sector policies. It fosters a level playing field by encouraging coherent implementation of these policies across sectors and jurisdictions. Working through its members, it seeks to strengthen financial systems and increase the stability of international financial markets. The policies developed in the pursuit of this agenda are implemented by jurisdictions and national authorities.