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10/06/2020

NCUA webinar on minority depository institutions

The NCUA will host a one-hour webinar, “Pathways to Consumer Financial Well-Being: The Importance of Financial Inclusion and Minority Depository Institutions,” on October 21, 2020, at 2 p.m. EDT. Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. The webinar is open to consumers, credit unions, and parties interested in working with credit unions to expand access to safe and affordable financial services in underserved communities. Registration is now open.

10/06/2020

FDIC releases CRA evaluation ratings

The FDIC has released a list of 74 state nonmember banks recently evaluated for compliance with the Community Reinvestment Act and to whom the FDIC assigned evaluation ratings in July 2020. Of the evaluations listed, 68 were rated "Satisfactory." The remaining six evaluations were rated "Outstanding," and we congratulate these banks on that achievement (links are to their evaluation reports):

10/05/2020

Larger small business size standards proposed

The SBA is requesting public comments on two proposed rules that would revise the small business size standards for businesses in eight North American Industrial Classification System (NAICS) sectors to increase small business eligibility for SBA’s loan and contracting programs. The sectors reviewed in the first proposed rule [85 FR 62239] are: Agriculture, Forestry, Fishing, and Hunting; Mining, Quarrying, and Oil and Gas Extraction; Utilities; and Construction. The NAICS sectors reviewed in the second proposed rule [85 FR 62372"] are: Transportation and Warehousing; Information; Finance and Insurance; and Real Estate and Rental and Leasing. The SBA proposes to increase size standards for 113 industries in those sectors. Comments can be submitted on these proposed rules on or before December 1, 2020.

10/05/2020

SBA issues procedural notice on PPP ownership changes

The SBA has issued a Procedural Notice on "Paycheck Protection Program Loans and Changes of Ownership," effective October 2, 2020. A change of ownership for this purpose occurs when—

  1. at least 20 percent of the common stock or other ownership interest of a PPP borrower (including a publicly traded entity) is sold or otherwise transferred, whether in one or more transactions, including to an affiliate or an existing owner of the entity,
  2. the PPP borrower sells or otherwise transfers at least 50 percent of its assets (measured by fair market value), whether in one or more transactions, or
  3. a PPP borrower is merged with or into another entity.

Prior to the closing of any change of ownership transaction, the PPP borrower must notify the PPP Lender in writing of the contemplated transaction and provide the PPP Lender with a copy of the proposed agreements or other documents that would effectuate the proposed transaction.

10/05/2020

FTC updates DNC Registry user fees

The Federal Trade Commission has published a final rule [85 FR 62596] in this morning's Federal Register to amend its Telemarketing Sales Rule by updating the fees charged to entities accessing the National Do Not Call Registry as required by the Do-Not-Call Registry Fee Extension Act of 2007. The revised fees became effective October 1, 2020.

The revised rule increases the annual fee for access to the Registry for each area code of data from $65 to $66 per area code; and increases the maximum amount that will be charged to any single entity for accessing area codes of data from $17,765 to $18,044.

10/05/2020

Flood program extended one year

The president signed H.R. 8337 on Thursday. Section 146 of the "Continuing Appropriations Act, 2021 and Other Extensions Act" postponed the expiration of the National Flood Insurance Program for one year, to September 30, 2021. Language was included to bridge the gap between the September 30, 2020, expiration date and the signing date.

10/02/2020

CFPB assessment of TRID disclosure rule

The CFPB has released a report to Congress on its formal five-year assessment of its Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) Rule (the "TRID Rule"), which took effect October 3, 2015. In its assessment, the Bureau used both its own research and external sources to evaluate the effectiveness of the Rule in meeting (1) the purposes and objectives of the Bureau and (2) the specific goals of the Rule as stated by the Bureau prior to the Rule’s effective date.

Some highlights from Director Kraninger's message covering the report:

  • In laboratory testing, borrower understanding of mortgage transactions has improved due to their receipt of the required disclosures.
  • The TRID Rule appears to have created sizeable implementation costs for lenders and closing companies. Based on the industry surveys, a typical cost for a lender to implement the TRID Rule was $146 per mortgage originated in 2015, or roughly 2.0 percent of the average cost of originating a mortgage. Similarly, a typical cost for a closing company to implement the TRID Rule was $39 per closing in 2015, or about ten percent of the average cost of closing.
  • The TRID Rule’s effects on ongoing costs is less clear. Industry data indicate that mortgage lending costs have steadily increased over the past decade. However, the Bureau does not have any data that demonstrates how much, if any, of these increased costs are attributable to the TRID Rule.
  • The TRID Rule appears to have decreased mortgage originations and increased closing times, but these measures returned to pre-TRID Rule levels in a relatively short period of time.

10/02/2020

OCC Bulletins posted

The OCC yesterday posted two Bulletins:

  • Bulletin 2020-85 - "Current Expected Credit Losses: Final Rule" - announced the rule finalizing the interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of Accounting Standards Update No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (CECL) by banks.
  • Bulletin 2020-86 - "Community Reinvestment Act: Small Bank Compliance Guide" includes a compliance guide for small banks, an initial illustrative list of qualifying activities, and a form to request consideration of items to be added to the list of qualifying activities

10/02/2020

OCC releases CRA ratings

The OCC has released a list of CRA performance evaluations that became public during September. Of the 12 evaluations made public this month, one is rated needs to improve, 10 are rated satisfactory, and one - Inwood National Bank, Dallas, Texas, was rated outstanding.

10/02/2020

OCC 2021 bank supervision operating plan

The OCC yesterday released its bank supervision operating plan for fiscal year 2021. The plan provides the foundation for policy initiatives and for supervisory strategies as applied to individual national banks, federal savings associations, federal branches, federal agencies, and technology service providers. OCC staff members use this plan to guide their supervisory priorities, planning, and resource allocations.

Supervisory strategies for FY 2021 will focus on:

  • credit risk management, commercial and residential real estate concentration risk management, allowances for loan and lease losses, and allowances for credit losses
  • cybersecurity and operational resilience
  • BSA/AML compliance management
  • compliance risk management associated with 2020 pandemic-related bank activities
  • Community Reinvestment Act performance
  • fair lending examinations and risk assessments
  • the impact of a low-rate environment and preparation for the phaseout of LIBOR
  • proper oversight of significant third-party relationships
  • change management over significant operational changes
  • payment systems products and services

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