Top Story Lending Related

The CFPB has published [82 FR 41158] in today's Federal Register a final rule amending the official interpretations for Regulation Z, which implements the Truth in Lending Act (TILA). The rule revises, as applicable, the dollar amounts for provisions implementing TILA and amendments to TILA. Specifically—

• For open-end consumer credit plans under TILA, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1.00 in 2018.
• For open-end consumer credit plans under the CARD Act amendments to TILA, the adjusted dollar amount for the safe harbor for a first violation penalty fee will remain unchanged at $27 in 2018 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will remain unchanged at $38 in 2018.
• For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2018 will be $21,032. The adjusted points and fees dollar trigger for high-cost mortgages in 2018 will be $1,052.
• For the general rule to determine consumers’ ability to repay mortgage loans, the maximum thresholds for total points and fees for qualified mortgages in 2018 will be
  • 3 percent of the total loan amount for a loan greater than or equal to $105,158;
  • $3,155 for a loan amount greater than or equal to $63,095 but less than $105,158;
  • 5 percent of the total loan amount for a loan greater than or equal to $21,032 but less than $63,095;
  • $1,052 for a loan amount greater than or equal to $13,145 but less than $21,032; and
  • 8 percent of the total loan amount for a loan amount less than $13,145.

The rule will be effective January 1, 2018. The new interpretations paragraphs have been added to sections 1026.32, .43 and .52 in BankersOnline's Regulations pages for Regulation Z.

FDIC FIL-38-2017, issued Tuesday, encourages depositary institutions in Texas and Louisiana to consider all reasonable and prudent steps to assist customers in communities affected by recent storms. The FDIC said that prudent efforts to meet customer's cash and financial needs generally will not be subject to examiner criticism. Among the suggestions in the letter addressed to banks in the two affected states, the agency recommended—

• When consistent with safe-and-sound banking practices, waiving fees, increasing ATM cash limits, easing credit card limits, allowing loan customers to defer or skip payments, and delaying the submission of delinquency notices to credit bureaus.
• Using non-documentary verification methods permitted by the Customer Identification Program requirement of the Bank Secrecy Act for affected customers who cannot provide standard identification documents.

The FIL also included links to additional resources for affected banks and their customers:

• Meeting the Financial Needs of Customers Affected by Hurricane Harvey
• Frequently Asked Questions for Bank Customers in Areas Affected by Hurricane Harvey
• Lessons Learned From Hurricane Katrina: Preparing Your Institution for a Catastrophic Event

HUD has announced it will speed federal disaster assistance to the State of Texas and provide support to homeowners and low-income renters forced from their homes due to Hurricane Harvey. President Trump has issued a disaster declaration for the following counties (more counties may be added as more disaster data becomes available): Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria and Wharton. The president’s declaration allows HUD to offer mortgage/foreclosure relief and other assistance to certain families living in impacted counties.

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and state bank regulators have issued a statement on supervisory practices regarding financial institutions and borrowers affected by Hurricane Harvey. The institutions are encouraged to recognize the serious impact of Hurricane Harvey on the customers and operations of many financial institutions. The agencies will provide regulatory assistance to affected institutions subject to their supervision.

The OCC has announced it will host two workshops at the Indianapolis Marriott East on September 26–27, for directors of national community banks and federal savings associations.

• The Risk Governance workshop on September 26 combines lectures, discussion, and exercises to provide practical information for directors to effectively measure and manage risks. The workshop also focuses on the OCC’s approach to risk-based supervision and major risks in the financial industry.
• The Credit Risk workshop on September 27 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change.

The Federal Reserve Board has requested public comment on a proposal for the Federal Reserve Bank of New York, in cooperation with the Office of Financial Research, to produce three new reference rates based on overnight repurchase agreement (repo) transactions secured by Treasuries. The proposal is issued in response to calls for a new reference rate to replace LIBOR as benchmarks for use in financial transactions. Comments will be accepted for 60 days following publication.

UPDATE: Published at 82 FR 41259 on 8/30/17, with comment deadline of 10/30/17.

An article by the CFPB discusses thing to consider before using a reverse mortgage to delay collecting Social Security and a CFPB report warns that a reverse mortgage can be an expensive way to maximize Social Security benefits.

The FDIC has issued FIL-37-2017 with a series of steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of West Virginia affected by severe storms.

The CFPB has announced it has finalized a temporary increase in the HMDA HELOC reporting threshold for banks and credit unions, and made a number of clarifications, technical corrections, and minor changes to the HMDA regulation (Regulation C, 12 CFR Part 1003). Under the HMDA rules becoming effective on January 1, 2018, financial institutions would have been required to report HELOCs if they made 100 such loans in each of the previous two years. The threshold is temporarily being increased to 500 loans during 2018 and 2019 to give the Bureau time to consider whether to make a permanent adjustment. This change was proposed in mid-July (see our earlier Top Story).

The other amendments finalized by the Bureau include clarifying certain key terms, such as “temporary financing” and “automated underwriting system.” The changes will also, for example, establish transition rules for reporting certain loans purchased by financial institutions. Another change will facilitate reporting the census tract of a property, using a geocoding tool that will be provided on the Bureau’s website. These changes were initially proposed in April 2017.

• Final rule
• Updated Filing Instructions Guide for data collected in 2017
• Updated Filing Instructions Guide for data collected in or after 2018
• Updated HMDA Loan Scenarios
• Executive Summary of the August 24, 2017, changes
• UPDATE: Published 9/13/2017 at 82 FR 43088

HUD and the Census Bureau have released July 2017 statistics on new residential sales.

• New home sales—Sales of new single-family houses in July 2017 were at a seasonally adjusted annual rate of 571,000, according to estimates released by the agencies. This is 9.4 percent below the revised June rate of 630,000, and is 8.9 percent below the July 2016 estimate of 627,000.
• Sales price—The median sales price of new houses sold in July 2017 was $313,700. The average sales price was $371,200.
• For sale inventory—The seasonally-adjusted estimate of new houses for sale at the end of July was 276,000. This represents a supply of 5.8 months at the current sales rate.