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Top Story Lending Related

03/27/2020

Regulators encourage making small-dollar loans in response to COVID-19

Yesterday, the Federal Reserve, CFPB, FDIC, NCUA, and the OCC issued a joint statement encouraging banks, savings associations and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19. The statement of the agencies recognizes that responsible small-dollar loans can play an important role in meeting customers' credit needs because of temporary cash-flow imbalances, unexpected expenses, or income disruptions during periods of economic stress or disaster recoveries. Such loans can be offered through a variety of structures including open-end lines of credit, closed-end installment loans, or appropriately structured single payment loans.

In addition to yesterday's statement, the agencies are working on future guidance and lending principles for responsible small-dollar loans to facilitate the ability of banks, credit unions, and saving associations to more effectively meet the ongoing credit needs of their customers, members, and communities.

03/27/2020

Bureau extends comment period on FDCPA proposal

On March 3, 2020, the CFPB published a Supplemental Notice of Proposed Rulemaking requesting comment on a proposal to amend Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA) to require debt collector to make certain disclosures when collecting time-barred debts (see our earlier Top Story). The comment period was set to close on May 4, 2020. The Bureau has published a notice in the March 27, 2020, Federal Register extending the comment period through June 5, 2020.

03/26/2020

Agencies to host webinar on working with COVID-19-affected customers

The FDIC has issued FIL-24-2020 announcing it will jointly host with the Federal Reserve, OCC, NCUA and CFPB a 45-minute webinar for bankers to raise awareness of the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. The webinar is scheduled for Friday, March 27, 2020, at 2:00 p.m. EDT.

03/26/2020

House prices increase

The Federal Housing Finance Agency has reported that U.S. house prices rose in January, up 0.3 percent from the previous month, according to the FHFA House Price Index. House prices rose 5.2 percent from January 2019 to January 2020. The previously reported 0.6 percent increase for December 2019 was revised upward to 0.7 percent. For the nine census divisions, seasonally adjusted monthly house price changes from December 2019 to January 2020 ranged from -0.2 percent in the Mountain division to +0.7 percent in the South Atlantic divisions. The 12-month changes were all positive, ranging from +4.1 percent in the Middle Atlantic division to +6.4 percent in the South Atlantic division.

03/26/2020

$40M in HUD grants to fight housing discrimination

HUD has awarded $40 million to fair housing organizations working to confront violations of the Fair Housing Act and help end housing discrimination. The grants are being awarded through HUD’s Fair Housing Initiatives Program (FHIP) and the Fair Housing Assistance Program (FHAP) to help people who believe they have been victims of housing discrimination and to educate the public and housing providers on fair housing laws.

03/25/2020

CFPB lists COVID-19 protection resources for consumers

03/25/2020

Fed adjusting supervision in light of COVID-19

The Federal Reserve Board has provided additional information to financial institutions on how its supervisory approach is adjusting in light of the coronavirus pandemic, issuing a Statement on Supervisory Activities. In particular:

  • The Federal Reserve will focus on monitoring and outreach to help financial institutions of all sizes understand the challenges and risks of the current environment;
  • To minimize disruption and to focus on outreach and monitoring, the Federal Reserve will temporarily reduce its examination activities, with the greatest reduction in activities occurring at the smallest banks;
  • Large banks should still submit their capital plans that they have developed as part of the Board's Comprehensive Capital Analysis and Review, or CCAR, by April 6. The plans will be used to monitor how firms are managing their capital in the current environment; and
  • To allow firms to focus on heightened risks in this current environment and assist consumers, additional time will be granted for resolving non-critical existing supervisory findings.

The Board recognizes that the current situation is significantly affecting areas of the country in different ways and will work with financial institutions to understand the specific issues they are facing.

03/25/2020

Fannie and Freddie prevent more foreclosures

The Federal Housing Finance Agency (FHFA) has released its fourth quarter 2019 Foreclosure Prevention and Refinance Report, which shows that Fannie Mae and Freddie Mac completed 25,930 foreclosure prevention actions in the fourth quarter of 2019, bringing to 4.407 million the number of troubled homeowners who have been helped during the conservatorships of the Enterprises. The report also shows that nearly 40 percent of loan modifications completed in the fourth quarter reduced borrowers' monthly payments by more than 20 percent. The Enterprises' serious delinquency rate remained unchanged from the third quarter at 0.65 percent at the end of the fourth quarter. This compares with 3.47 percent for FHA loans, 1.92 percent for VA loans and 1.76 percent for all loans (industry average). The report also showed a jump in refinances from the third quarter of 540,578 to 728,842 in the fourth quarter.

03/24/2020

Urgent needs grants available from NCUA

The NCUA has posted a press release announcing that federally insured, low-income designated credit unions that experience unexpected costs as a result of COVID-19 can request urgent needs grants. The NCUA’s Office of Credit Union Resources and Expansion can provide grants up to $7,500 to low-income credit unions for:

  • Hardware, software, or other equipment to help them provide financial products and services from remote locations;
  • Consulting services to develop programs and partnerships to assist those affected by COVID-19, such as small businesses or schools; and
  • Developing marketing materials to assure members their insured deposits are safe.

Eligible credit unions also may apply for loans supported by the Community Development Revolving Loan Fund and for grants or loans through the NCUA’s CyberGrants portal.

03/24/2020

FHFA actions in response to COVID-19

The Federal Housing Finance Agency has announced has authorized Fannie Mae and Freddie Mac (the Enterprises) to enter into additional dollar roll transactions. Eligible collateral is limited to Agency mortgage-backed securities and the transactions must be undertaken via an auction or similar mechanism to ensure that they occur at a fair market price. Dollar roll transactions provide mortgage-backed securities investors with short-term financing of their positions, providing liquidity to these investors.

This FHFA's action was taken to ensure the Enterprises fulfill their mission of providing market liquidity during the coronavirus national emergency.

The FHFA also announced it has directed the Enterprises to provide alternative flexibilities to satisfy appraisal and employment verification requirements through May 27.2020.

  • To allow for homes to be bought, sold, and refinanced as our nation deals with the challenges of the coronavirus, the Enterprises will leverage appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages.
  • In the event lenders cannot obtain verbal verification of the borrower's employment before loan closing, the Enterprises will allow lenders to obtain verification via an e-mail from the employer, a recent year-to-date paystub from the borrower, or a bank statement showing a recent payroll deposit. Lenders should continue to utilize sound underwriting judgment to ensure these alternatives are appropriate to the borrower's circumstances.

In a third announcement, the FHFA said the Enterprises will offer multifamily property owners mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of coronavirus. The eviction suspensions will be in place for the entire duration of time that a property owner remains in forbearance. The forbearance is available to all multifamily properties with an Enterprise-backed performing multifamily mortgage negatively affected by the coronavirus national emergency.

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