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Top Story Lending Related

01/08/2021

DoD reschedules MLA systems upgrade

The Department of Defense has posted a notice on its Military Lending Act (MLA) website that the planned systems upgrade originally scheduled for January 19, 2021, is now scheduled for Thursday, January 14, 2021. As previously mentioned, the MLA v 5.7 release will include enhanced security features and measures. The security measures will include additional input restrictions on answers to the Challenge Questions and User's Information fields in the Account Creation process. Please refer to the MLA 5.6 User Guide for the restriction guidelines.

MLA v 5.7 will also remove the limit on the amount of files users can upload per day. Previously the maximum number of files users could upload per day was 50, now users can upload files without a maximum limit. Users should not experience any interruptions in service during this release.

01/07/2021

SBA issues guidance and rules for new PPP

The Small Business Administration has issued Guidance on Accessing Capital for Minority, Undeserved, Veteran and Women-Owned Business Concerns under the second round of the Paycheck Protection Program. The Guidance indicates that the SBA will accept PPP loan applications only from community financial institutions for at least the first two days when the PPP portal reopens (the reopening date was not provided).

The SBA also issued its first two interim final rules for the second round of PPP loans. The first of the interim final rules amends the existing PPP rules to reflect changes made by Congress, including on fees, borrower eligibility, loan amounts, eligible expenses, reliance on borrower certifications and loan increases, as well as a new registration requirement for all lenders. However, “most of this document restates existing regulatory provisions to provide lenders and new PPP borrowers a single regulation to consult on borrower eligibility, lender eligibility and loan application and origination requirements, as well as general rules on increases and loan forgiveness for PPP loans,” SBA said.

The second interim rule addresses the second-draw loans now available for borrowers with 300 or fewer employees, that saw a 25% or greater revenue drop in 2020 compared to 2019 and that have used the full amount of their first-draw PPP loan.

01/07/2021

HMDA filing platform open for 2020 data

The CFPB opened the filing period for HMDA data collected in 2020 on January 1, 2021. The deadline for timely filing 2020 data is March 1, 2021. Financial institutions can access the HMDA Platform to begin the filing process for data collected in 2020 at https://ffiec.cfpb.gov/filing/.

The Beta Testing Platform, found at https://ffiec.beta.cfpb.gov/filing/, will remain available on an ongoing basis for filers wishing to test their submissions. The Beta Testing Platform is for testing purposes only, and data entered on the Beta Testing Platform will not be considered a HMDA submission for compliance with HMDA data reporting requirements.

01/06/2021

CFPB releases Taskforce report

The CFPB has announced that its Taskforce on Federal Consumer Financial Law has released a report in two volumes [Volume I; Volume II] with recommendations on how to improve consumer protection in the financial marketplace. The Taskforce Report uses five interrelated principles that serve as the foundation for proposed systematic changes to the current legal and regulatory framework: consumer protection, information and education, competition and innovation, regulatory modernization and flexibility, and inclusion and access.

In its report, the Taskforce makes approximately 100 recommendations to the Bureau, Congress, and state and federal regulators to strengthen consumer protection. Among the Taskforce recommendations are:

  • Authorize the Bureau to issue licenses to non-depository institutions that provide lending, money transmission, and payments services;
  • Expand access to the payment system by unbanked and underbanked consumers and ensure consistent treatment by applying the same rules to similar financial products;
  • Identify competitive barriers and make appropriate recommendations to policymakers and regulators for expanding access to the payments systems by non-bank providers;
  • Research and develop policies tailored to the unique challenges of formerly incarcerated people, and work with state and federal authorities to improve protection of this population;
  • Research and develop policies to address problems of financial inclusion in rural communities;
  • Facilitate creditor access to immigrants’ credit information prior to their arrival in the United States in order to use that information in credit decisions;
  • Research consumer reporting issues that arise in connection with a consumer’s bankruptcy;
  • Consider the benefits and costs of preempting state law where conflicts can impede the provision of valuable products and services, such as the regulation of FinTech companies engaged in money transmission;
  • Identify opportunities to coordinate regulatory efforts. For example, the Bureau and prudential regulators should eliminate overlapping examination subject areas and reconcile inconsistent examination standards that unnecessarily expend multiple resources and can cause confusion;
  • Continue to increase dialogue with state regulators to bridge knowledge gaps and streamline regulation;
  • Work with other agencies to create a unified regulatory regime for new and innovative technologies providing services similar to banks;
  • Establish independent review of the Bureau’s regulatory cost-benefit analyses by staffing an office of cost-benefit analysis at the Bureau and or by submitting its analyses to OIRA for review;
  • Evaluate any positive or negative effect on inclusion as part of the Bureau’s cost-benefit analyses as appropriate;
  • Exercise caution (a recommendation for the Bureau, Congress, and other federal and state regulators) in restricting the use of nonfinancial alternative data, which can be very useful indicators of creditworthiness.
  • Clarify the obligations of CRAs and furnishers with respect to disputes under the FCRA;
  • Assess periodically the accuracy and completeness of consumer credit reports.

01/06/2021

FHFA announces "Duty to Serve" Enterprise plans

The Federal Housing Finance Agency has announced the 2021 Underserved Markets Plans for Fannie Mae and Freddie Mac (the Enterprises) under the Duty to Serve (DTS) program. The Plans became effective January 1, 2021. FHFA issued a final rule in 2016 that implemented the DTS provisions as mandated by the Housing and Economic Recovery Act of 2008. The statute requires the Enterprises to serve three specified underserved markets—manufactured housing, affordable housing preservation, and rural housing—by increasing the liquidity of mortgage financing for very low-, low-, and moderate-income families.

Under ordinary circumstances, each Enterprise would have submitted a three-year Plan for 2021-2023 in accordance with the DTS mandate. Due to potential market disruption and uncertainty as a result of the COVID-19 pandemic, FHFA instructed the Enterprises to submit Plans for one year (2021) only, as an extension of their 2018-2020 Plans. The activities outlined by the Enterprises to achieve Plan objectives will remain subject to FHFA review and approval to ensure compliance with the Enterprises' Charter Acts, safety and soundness measures, and other conservatorship and regulatory requirements.

01/05/2021

FDIC releases CRA ratings

The FDIC has released a list of banks examined for compliance with the Community Reinvestment Act whose evaluation ratings were assigned in October, 2020. Of the 66 banks listed, these eight banks received evaluation ratings of "Outstanding":

The remaining 58 banks on the list received evaluation ratings of "Satisfactory."

01/05/2021

OCC proposes rule on permissible bank premises

The OCC has issued and invited comments on a proposed rule to codify permissibility standards for real estate used a national bank or federal savings association premises. The proposed rule would clarify standards for determining when real estate is necessary for the transaction of an institution's business. Comments on the proposal will be accepted for 45 days following its Federal Register publication.

01/04/2021

IRS relief for certain energy projects

The Treasury and the IRS have announced the IRS has issued guidance providing an extension of the safe harbor for taxpayers developing renewable energy projects offshore or on federal land. Renewable energy projects constructed offshore or on federal land are ordinarily subject to significant delays that can result in project completion times of up to twice as long as other renewable energy projects. These delays threaten taxpayers’ ability to satisfy requirements to claim the production tax credit and the investment tax credit.

The Treasury Department and the IRS have determined that it is necessary to extend the safe harbor period to up to 10 calendar years after the year in which construction of the project began. By extending the safe harbor for these projects, Notice 2021-5 will provide flexibility for taxpayers constructing renewable energy projects offshore or on federal land to satisfy the beginning of construction requirements despite ordinary course delays that threaten their ability to claim tax credits.

12/31/2020

Military lender pays $2.175M to settle CFPB charges

The CFPB has announced it has issued a consent order against Omni Financial of Nevada, Inc. (Omni). The Bureau found that Omni violated the Military Lending Act (MLA), Electronic Fund Transfer Act (EFTA), and Consumer Financial Protection Act of 2010 (CFPA) in connection with making installment loans. Omni, which has its principal place of business in Las Vegas, Nevada, and operates using the names Omni Financial and Omni Military Loans, specializes in lending to consumers affiliated with the military. It originates tens of thousands of loans each year, with individual loans typically ranging from $500 to $10,000.

The consent order requires that Omni pay a $2.175 million civil money penalty and imposes injunctive relief to stop ongoing violations and prevent future violations. For additional details, see "Omni Financial fined $2.175M for violations of Military Lending Act, EFTA and CFPA," in BankersOnline's Penalties pages.

12/31/2020

EIDL application deadline extended by SBA

The SBA has announced that the deadline to apply for the Economic Injury Disaster Loan (EIDL) program for the COVID-19 Pandemic disaster declaration has been extended to December 31, 2021. The deadline extension comes as a result of the recent bipartisan COVID-19 relief bill passed by Congress and enacted by the President on December 27, 2020. Loans are offered at very affordable terms, including a 3.75% interest rate for small businesses and 2.75% for non-profit organizations, a 30-year maturity, and an automatic deferment of one year before monthly payments begin. Every eligible small business and non-profit is encouraged to apply to get the resources they need.

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