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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:

03/09/2020

Bureau announces steps to prevent consumer harm

The CFPB has announced three steps it is taking to advance its strategy for preventing consumer harm:

  • Implementing an advisory opinion program to provide clear guidance to assist companies in better understanding their legal and regulatory obligations through advisory opinions;
  • Amending and reissuing its responsible business conduct bulletin, which articulates that the Bureau intends to provide credit to entities for their responsible conduct based on its extent and significance; and
  • Engaging with Congress to advance proposed legislation that would authorize the Bureau to award whistleblowers who report violations of federal consumer financial law.

Under the advisory opinion program, parties will submit requests for an advisory opinion to the Bureau via its website. To increase transparency and to provide regulatory certainty to all regulated entities and other stakeholders, the Bureau will publish the responding advisory opinion in the Federal Register and on its website. The opinion will include an interpretation of the Bureau’s existing rules.

The revised responsible business conduct guidelines list four categories of responsible conduct -- self-assessing, self-reporting, remediation, and cooperation -- that can be considered with other factors in addressing violations of consumer financial law in supervisory and enforcement matters.

The proposed whistleblower provisions would provide incentives for employees to report wrongdoing to the Bureau that can assist in advancing enforcement cases, especially fair lending cases.

UPDATE: Responsible Business Conduct Bulletin 2020-01 was published at on 3/30/2020.

03/09/2020

FATF guidance on Digital IDs

The Financial Action Task Force (FATF) has issued a Guidance on Digital ID, which reports the number of digital transactions are growing at an estimated 12.7 % annually. By 2022, an estimated 60% of global GDP will be digitized. In any financial transaction, knowing your customer is essential to ensure that the funds involved are not linked to crime and terrorism. However, in a digital context, traditional verification tools do not apply. The FATF has developed the guidance to help governments, financial institutions, virtual asset service providers and other regulated entities determine whether a digital ID is appropriate for use for customer due diligence.

03/09/2020

CRA analytics data tables

The Federal Reserve Board has released a series of Community Reinvestment Act Analytics Data Tables. This data resource is intended to provide insight into the historical relationship between bank lending activity and regulatory assessments. The tables combine HMDA data, CRA small business and small farm loan data, and manually extracted data from CRA performance evaluations. Bank attributes, deposit, branching, demographic, and other third-party vendor data supplement the tables.

03/06/2020

Regulators postpone conference due to coronavirus concerns

The Federal Reserve, FDIC, and OCC have issued a joint press release announcing their decision to postpone the 2020 National Interagency Community Reinvestment Conference (NICRC) scheduled for March 9–12 in Denver after careful consideration of the growing public health concerns associated with the coronavirus (COVID-19). The NICRC planning team is working to confirm a date to reschedule the conference as soon as possible later this year.

03/05/2020

FDIC releases CRA evaluation ratings

The FDIC has issued a list of banks whose evaluation ratings under the Community Reinvestment Act were released in December. Of the 67 banks listed, two received evaluation ratings of Outstanding, 61 received ratings of Satisfactory, three were rated Needs to Improve, and one was said to be in Substantial Noncompliance. The two banks with Outstanding ratings were:

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