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Top Story Lending Related

03/16/2020

SBA amends loan program rules

The Small Business Administration has published a final rule [85 FR 14772] amending its business loan program regulations (13 CFR parts 120 and 134) to implement the Small Business 7(a) Lending Oversight Reform Act of 2018 and make other amendments that will strengthen SBA's lender oversight and ensure the integrity of the business loan programs. The key amendments in this rule codify SBA's informal enforcement actions, new civil monetary penalties and certain appeal rights for 7(a) Lenders, clarify certain enforcement actions for Microloan Intermediaries, and adopt statutory changes to the credit elsewhere test. The rule also makes other technical amendments, updates, and conforming changes including clarifying oversight and enforcement related definitions.

The amendments will become effective April 15, 2020.

03/13/2020

OCC revises Deposit-Related Credit booklet

OCC Bulletin 2020-14, issued yesterday, announces a full revision of the "Deposit Related Credit" booklet of the Comptroller's Handbook, which is prepared for use by OCC examiners in connection with the examination and supervision of national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.

Version 3.0 of the booklet replaces the booklet of the same title and rescinds OCC Bulletin 2018-28, “Deposit-Related Credit: Updated Comptroller’s Handbook Booklet,” which transmitted version 2.1 of the booklet in September 2018. The newest version:

  • reflects relevant OCC issuances published since this booklet was last issued
  • reflects changes to laws and regulations that occurred since this booklet was last issued
  • clarifies applicability of references to covered savings associations
  • includes clarifying edits regarding supervisory guidance, sound risk management practices, or legal language
  • revises certain content for general clarity

03/13/2020

CFPB Market Snapshot

The Bureau has released a new Market Snapshot that explores first-time homeownership. For households attempting to transition from renting to owning, shifts in the housing and mortgage markets can play a large role in whether they can afford to buy a home. The report investigates the prevalence and ease of first-time homeownership today by comparing current and historical market trends.

03/13/2020

Regulators statement following Tennessee tornadoes

The OCC, Federal Reserve, FDIC, NCUA and the Tennessee Department of Financial Institutions have issued a joint press release stating they recognize the serious impact of tornadoes in Tennessee on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities. A complete list of affected disaster areas can be found at http://www.fema.gov/.

The release offers information on:

  • Lending
  • Use of temporary facilities
  • Publishing requirements relating to branch closings, relocations and temporary facilities
  • Regulatory reporting requirements
  • Community Reinvestment Act consideration for financial institutions' actions
  • Investments

The FDIC has also issued FIL-16-2020 with steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Tennessee affected by severe storms, tornadoes, straight-line winds and flooding.

03/12/2020

FHFA strengthens Duty to Serve eval criteria

The Federal Housing Finance Agency announced yesterday it is strengthening the evaluation criteria of the Duty to Serve (DTS) Underserved Markets program through updated Evaluation Guidance for Fannie Mae and Freddie Mac (the Enterprises). The updated guidance will ensure the Enterprises' DTS programs have a significant impact in underserved communities.

The revised guidance—which takes effect with the 2021-2023 plan cycle—establishes four new ratings to describe the GSEs’ performance, replacing the previous five-tiered ratings framework. It also establishes higher scoring expectations and increases the threshold for determining compliance from 70% to 80%. In addition, the revisions require a minimum concept score of 30 for each objective, rather than the previous requirement that the concept scores of all objectives average a 30, in order for a proposed plan to receive a non-objection from FHFA.

03/11/2020

FHFA Director Calabria statement on coronavirus

FHFA Director Calabria issued a statement yesterday on the coronavirus:

  • “To meet the needs of borrowers who may be impacted by the coronavirus, last week Fannie Mae and Freddie Mac (“the Enterprises”) reminded mortgage servicers that hardship forbearance is an option for borrowers who are unable to make their monthly mortgage payment. For borrowers that may be experiencing a hardship, I encourage you to reach out to your servicer. The Enterprises and the Federal Home Loan Banks continue to provide support to the secondary mortgage market, and the UMBS [Uniform Mortgage Backed Securities] market continues to operate at its normal level.”

03/10/2020

Fifth Third sued by CFPB

The CFPB has announced its filing of a complaint in federal district court in the Northern District of Illinois against Fifth Third Bank, National Association, Cincinnati, Ohio.

The Bureau alleges that for several years Fifth Third, without consumers’ knowledge or consent, opened deposit and credit-card accounts in consumers’ names; transferred funds from consumers’ existing accounts to new, improperly opened accounts; enrolled consumers in unauthorized online-banking services; and activated unauthorized lines of credit on consumers’ accounts. The Bureau specifically alleges that for years and continuing through at least 2016, Fifth Third used a “cross-sell” strategy to increase the number of products and services it provided to existing customers; used an incentive-compensation program to reward selling new products; and conditioned employee-performance ratings and, in some instances, continued employment on meeting ambitious sales goals. The Bureau further alleges that, despite knowing since at least 2008 that employees were opening unauthorized consumer-financial accounts, Fifth Third took insufficient steps to detect and stop the conduct and to identify and remediate harmed consumers.

The Bureau's complaint seeks injunctive relief, redress for affected consumers, and a civil money penalty, but is not a finding or ruling that Fifth Third has violated the law.

03/10/2020

Regulators encourage financial institutions to meet needs of virus victims

The Federal Reserve Board, CFPB, FDIC, NCUA, OCC, and the Conference of State Bank Supervisors have issued a joint press release encouraging financial institutions to meet the financial needs of customers and members affected by the coronavirus. The agencies recognize the potential impact of the coronavirus on the customers, members, and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. Regulators note that financial institutions should work constructively with borrowers and other customers in affected communities. Prudent efforts that are consistent with safe and sound lending practices should not be subject to examiner criticism.

The release noted that the agencies understand that many financial institutions may face current staffing and other challenges. In cases in which operational challenges persist, regulators will expedite, as appropriate, any request to provide more convenient availability of services in affected communities. The regulators also will work with affected financial institutions in scheduling examinations or inspections to minimize disruption and burden.

03/10/2020

Fed updates rates in Regs A and D

The Federal Reserve Board has published in this morning's Federal Register final rules reducing the interest rate for primary credit at each of the Federal Reserve Banks and the rate of interest paid by those banks for reserve and excess reserve balances.

  • Effective March 10, but applicable beginning March 4, 2020, Regulation A is amended [85 FR 13723] to reflect an interest rate of 1.75 percent for primary credit (and, by formula, an interest rate of 2.25 percent for secondary credit).
  • Also effective March 10, and applicable beginning March 4, 2020, Regulation D is amended [85 FR 13724] to reflect an interest rate of 1.10 percent paid on required and excess reserve balances.

These changes will be posted to BankersOnline's Regulation A and Regulation D pages shortly.

03/10/2020

February Fed CRA evaluation ratings

Our check of the Federal Reserve Board's list of Community Reinvestment Act evaluation ratings reveals that the Fed made 13 ratings public in February 2020. Eleven of the banks whose evaluations were made public received "Satisfactory" ratings. Congratulations to the two banks that received "Outstanding" ratings:

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