Top Story Lending Related

A complaint has been filed by the Federal Trade Commission against the Louisiana Real Estate Appraisers Board alleging that the board is unreasonably restraining price competition for appraisal services in Louisiana, contrary to federal antitrust law. The FTC alleges that the Louisiana appraisers board limits the freedom of individual appraisers and their customers to engage in bona fide negotiations to set appraisal fees for real estate appraisals in Louisiana. According to the FTC’s complaint, the 2010 Wall Street Reform and Consumer Protection Act, popularly known as the “Dodd-Frank Act,” required appraisal management companies to pay “a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.” The FTC alleged in its complaint that the appraisal board’s regulations exceeded the scope of the federal mandate. Specifically, the board required appraisal fees to equal or exceed the median fees identified in survey reports commissioned and published by the board. The board then investigated and sanctioned companies that paid fees below the specified levels. The complaint alleges that Dodd-Frank neither requires nor authorizes the restrictions that the board placed on appraisal fees.

The OCC and the FDIC have issued their lists of institutions scheduled for a CRA examination during the third and fourth quarters of 2017. Both regulators announced they will publish quarterly the next two quarters of scheduled exams, to be more responsive and transparent to the public, and to afford the public more time to offer comments on the CRA performance of the institutions to be examined.

OCC announcement
OCC exam third- and fourth-quarter schedule
FDIC third quarter schedule
FDIC fourth quarter schedule

In response to concerns over the limited availability of state-certified and -licensed appraisers, particularly in rural areas, a joint press release has been issued by the FRB, FDIC, NCUA, and OCC announcing an interagency advisory that highlights two options to help insured depository institutions and bank holding companies facilitate the timely consideration of loan applications:

• Temporary practice permits may allow appraisers credentialed in one state to provide their services on a temporary basis in another state experiencing a shortage of appraisers, subject to state law. The advisory also discusses reciprocity, in which one state allows appraisers that are certified or licensed in another state to obtain certification or licensing without having to meet all of the state's certification or licensing standards.
• Temporary waivers would set aside requirements relating to the certification or licensing of individuals to perform appraisals under Title XI of FIRREA in states or geographic political subdivisions where certain conditions are met. Temporary waivers may be granted when it is determined that there is a scarcity of state-certified or -licensed appraisers leading to significant delays in obtaining an appraisal.

FDIC FIL-19-2017
OCC Bulletin 2017-19

The Board of Governors has announced the release of the full and summary versions of the May 2017 issue of the Beige Book.

OFAC has announced its designation of four Colombian nationals as Specially Designated Narcotics Traffickers (SDNTs) under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) because of their links to previously designated SDNTs Juan Santiago Gallon Henao, Pedro David Gallon Henao, and La Oficina de Envigado (“La Oficina”). Also designated were five Colombian companies, identified by OFAC as being ultimately owned, controlled, or directed by Juan Santiago Gallon Henao through the help of some of the individuals designated today. See our OFAC Update for additional information.

The minutes of the discount rate meetings from March 27 through May 3, 2017, have been released by the Federal Reserve.

The March 2017 G.20 Finance Companies report has been released by the Federal Reserve Board.

The Federal Housing Finance Agency (FHFA) index indicates that nationally, interest rates on conventional purchase-money mortgages decreased from March to April 2017, according to several indices of new mortgage contracts.

• The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 3.97 percent for loans closed in late April, down 15 basis points from 4.12 percent in March.
• The average interest rate on all mortgage loans was 3.98 percent, down 14 basis points from 4.12 in March.
• The average interest rate on conventional, 30-year, fixed-rate mortgages of $424,100 or less was 4.04 percent, down 20 basis points from 4.24 in March.
• The effective interest rate on all mortgage loans was 4.10 percent in April, down 15 basis points from 4.25 in March.
• The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
• The average loan amount for all loans was $311,600 in April, down $1,100 from $312,700 in March.

The FDIC has issued a list of orders of administrative enforcement actions taken against banks and individuals in late March and in April and a Final Decision and Order issued in 2016. The administrative orders included one consent order, five removal and prohibition orders, five Section 19 orders, and four civil money penalties.

The 2016 Order involves a Louisiana bank that received an extensive cease and desist order affecting its directors, CEO, CFO, senior lender, BSA officer and entire compliance program, and an order to pay a $500,000 civil money penalty. There was also a $6,000 CMP assessed on an Iowa bank for violations of the Flood Disaster Protection Act.

There were two CMPs totaling $75,000 assessed on institution-affiliated individuals of an Elkhart, Texas, bank and one for $3,444 on a centennial, Colorado, bank. None of those three CMP orders cited reasons for the penalties.

The CFPB announced yesterday a plan to assess the effectiveness of the Ability-to-Repay/Qualified Mortgage rule (ATR/QM rule). The Bureau is asking the public to comment on the plan, to suggest sources of data, and generally to provide information that would help with the assessment. Comments will be due within 60 days following publication of the request in the Federal Register.

UPDATE: Published at 82 FR 25246 on June 1, 2017, with comments due by July 31, 2017.