capitol comments
July 2016
WINDOWS ON THE STATE CAPITOL
By Governmental Consultant Services, Inc. - lobbyists for Community Bankers of Michigan

Protect Your Community Bank Franchise-Support Community Bankers PAC

All banks are not the same! Not in Michigan, not across the nation, and certainly not on Wall Street! Now is the time for all good community bankers to come together. Your collective voices can only be heard, both in the legislative halls of Lansing, and on Capitol Hill in Washington D.C., through support of the CBM PAC and ICBA PAC.
 
The primary focus of CBM is to promote and protect community banking. To help in accomplishing our mission, the Community Bankers PAC was established in 2008 as an avenue to gain attention and support of current legislators and future candidates. Community Bankers PAC is a voluntary, nonpartisan political action committee of the Community Bankers of Michigan. This PAC is the only state PAC dedicated exclusively to representing the Michigan community banking industry.
 
The main objectives of Community Bankers PAC are to support the state election of pro-community banking candidates, influence important policy issues, and to raise awareness of the importance of community banks and the crucial role that they play in the villages, towns and cities they serve. The Community Bankers PAC is an essential part of our industry advocacy effort by raising personal, voluntary contributions from CBM members.
 
Community banks are the heartbeat of cities and towns across Michigan and across the nation. Without the help of community banks, many families and small businesses could not thrive and prosper.
 
Working closely with Governmental Consultant Services, Inc., a third-party, multi-client lobbying firm, we have made great strides in reaching our objectives. Please join us in Traverse City for the annual Community Bankers PAC Live Auction Fundraiser held in conjunction with the CBM Annual Convention & Expo.
 
Another Election Takes Shape

Michigan's Primary Election is August 2. Races for Congress, House of Representatives, local county and township races will decide who gets the right to run in the November general election.
 
Here's a look at the major races:
 
Michigan's 1st Congressional District election, 2016 Incumbent Dan Benishek (R), who began serving in Congress in 2010, left his seat open by choosing not to seek re-election in 2016. Republicans Tom Casperson, a state senator, Jason Allen, a former state senator, and Jack Bergman, a retired USMC general, will compete for the nomination. On the Democratic side, Michigan Democratic Party leader Lon Johnson and former Kalkaska County Sheriff Jerry Cannon filed to run.
 
Michigan's 7th Congressional District election, 2016
 
Incumbent Tim Walberg (R) will face Doug North in the Republican primary. The winner will face Gretchen Driskell (D) in the general election.
 
Michigan House of Representatives elections, 2016
 
While the Senate is not facing election this year, all 110 seats in the House Chamber are up for election in 2016.
 
Eleven Democrats and 27 Republicans are ineligible to run due to term limits. The 2016 election took an unexpected turn on July 21 when a Federal Judge put a recent law prohibiting straight ticket voting on hold - allowing straight ticket voting in the November General Election.
 
New Law Standardizes Document Recording Fees
With its focus on simplification of recording legal documents, a package of bills introduced in both the House and Senate emerged from lengthy discussion with key stakeholders: title companies, banks, and county registers of deeds, and was signed into law.
 
The end result modifies the amounts of recording and filing fees in various sections of Michigan law. Senate Bills 599-604 and Senate Bill 737, as well as House Bills 5164-5165, addressed specifics in the current law. Many of the fees for filing documents have been changed to follow the fees required for recording real estate mortgages as found in Senate Bill 599.
 
The outcome of the legislation, now law, would impact counties differently based on the volume, size, and type of applicable documents handled locally. Generally, the new $30 flat fee would increase revenues to counties for certain documents. These include recording of a real estate mortgage, deed, certified copy of an attachment, notice of the pendency of a suit, lien for labor on oil and gas wells, lien on real estate for federal taxes, and lien on real estate for state taxes, judgment or decree affecting title to real property.
 
Proponents argue that the implementation of a flat fee will simplify the often confusing and overwhelming process of recording documents, and ensure that fewer documents are rejected for insufficient fees. According to testimony from the Michigan Association of Register of Deeds, a flat fee will save people money over the course of their lifetime, as they will more often record lengthy documents, such as deeds and mortgages, than one-page documents.
 
Opponents argued that while the implementation of a flat fee would lower the cost to record documents over a certain number of pages, it also represents a substantial increase in cost for people seeking to record only a few pages. Currently, the fee for recording a one-page document ranges from $1 to $14; the bill package will raise the fee to $30.
 
The parties negotiating this standardization of fees considered a number of options, including a two- or three-tier system based on the number of pages in a document, but they ultimately decided that a single flat fee was the simplest, easiest option. The $30 flat fee is the lowest in any of the states which have implemented a flat fee.
AROUND THE AGENCIES
Joint Federal Agency Issuances
Agencies announce distressed or underserved nonmetropolitan geographies

The Federal Reserve, OCC, and FDIC announced the availability of a list of distressed or underserved nonmetropolitan middle-income geographies, where revitalization or stabilization activities are eligible for CRA consideration as community development.
Final revisions to CRA Q&As released

The federal bank regulatory agencies with responsibility for Community Reinvestment Act rulemaking today published final revisions to " Interagency Questions and Answers Regarding Community Reinvestment ". The Questions and Answers document provides additional guidance to financial institutions and the public on the agencies' CRA regulations.
The new and revised guidance addresses questions raised by bankers, community organizations, and others regarding the agencies' CRA regulations in the following areas:
  • Availability and effectiveness of retail banking services.
  • Innovative or flexible lending practices.
  • Community development-related issues, including: (i) economic development; (ii) community development loans and activities that revitalize or stabilize underserved nonmetropolitan middle-income geographies; and (iii) community development services.
  • Responsiveness and innovativeness of an institution's loans, qualified investments, and community development services.
The final revisions are being issued by the Federal Reserve, FDIC, and OCC. The notice will be published in the Federal Register.
Joint agencies publicize host state loan to deposit ratios

The Federal Reserve, the FDIC, and the OCC made public the
host state loan-to-deposit ratios that the agencies will use to determine compliance with the prohibition from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. The Gramm-Leach-Bliley Act amended coverage to include any branch of a bank controlled by an out-of-state bank holding company.

To determine compliance, the appropriate agency first compares a bank's estimated statewide loan-to-deposit ratio to the estimated host state loan-to-deposit ratio for a particular state. If the bank's statewide loan-to-deposit ratio is at least one-half of the published host state loan-to-deposit ratio, the bank has complied. A second step is conducted if a bank's estimated statewide loan-to-deposit ratio is less than one-half of the published ratio for that state or if data are not available at the bank to conduct the first step. The second step requires the appropriate agency to determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank's interstate branches.
CFPB Actions
CFPB announces annual Reg. Z adjustments     

The CFPB announced its annual adjustments to the dollar amounts of various thresholds under the Truth in Lending Act regulations that will apply to certain consumer credit transactions in 2017. The adjustments are based on the percentage change in Consumer Price Index.

Comment: Among the mortgage servicing problems observed by CFPB examiners:
  • Information about loan modifications is late, incorrect, or deceptive due to technological breakdowns or malfunctions
  • Consumers get the runaround when loans transfer to a new servicer with incompatible computer systems
Technology failures and process breakdowns cause mortgage servicing violations
 
CFPB released a special edition supervision report focused specifically on mortgage servicers. The report found that some mortgage servicers continue to use failed technology that has already harmed consumers, putting the company in violation of the CFPB's new servicing rules. In its examinations covering numerous mortgage servicers since the new CFPB rules took effect in January 2014, CFPB examiners have found violations because of deficient technology and process breakdowns. Specifically, examiners have observed problems with loss mitigation and servicing transfers. To spur industry in its general compliance with CFPB rules, the CFPB is also releasing an updated mortgage servicing exam manual .

Comment: CFPB examiners have observed mortgage servicing problems including:
  • Late, incorrect, or deceptive information about loan modifications because of technological breakdowns or malfunctions.
  • Consumers getting the runaround when loans transfer to new servicers with incompatible computer systems.
Mortgage services should note that there will be a greater emphasis in exams on:
  • Complaint handling and requests by troubled borrowers.
  • Discrimination issues.
CFPB releases monthly complaint snapshot

The CFPB released a monthly complaint snapshot highlighting complaints about consumer loans including vehicle loans and leases, installment loans, title loans, and pawn loans. The report shows that consumers continue to complain about issues managing their loans and problems they encounter when they are unable to pay off the loans. This month's report also highlights trends seen in complaints coming from Arkansas. As of June 1, 2016, the Bureau has handled approximately 906,400 complaints across all products.

Comment: Student complaint volume rose 61% in March to May 2016 compared with March to May 2015. During that same period, consumer loan complaints rose 27% and bank account/services complaints rose 18%
. 
CFPB proposal should lessen burden of privacy notices  

CFPB proposed an amendment to reflect Congress' intent in the Fixing America's Surface Transportation Act (FAST Act), which amended the Gramm-Leach-Bliley Act on December 4, 2015. This amendment, titled Eliminate Privacy Notice Confusion, added new GLBA section 503(f), which provides an exception under which financial institutions that meet certain conditions are not required to provide annual privacy notices to customers. To qualify for the exception, a financial institution must not share nonpublic personal information about customers except as described in certain statutory exceptions. Additionally, a financial institution must not have changed its policies and practices with regard to disclosing nonpublic personal information from those that the institution disclosed in the most recent privacy notice sent.

The proposed amendment would provide timing requirements for delivery of annual notices when a financial institution that qualified for this annual notice exception later changes its policies or practices in a manner that causes it to no longer qualifies for the exception. The proposal would also remove the provision allowing use of the alternative delivery method for annual privacy notices. Comments will be received until August 10, 2016.

Comment: If adopted, this amendment will allow financial institutions that meet the conditions of the exemption to forgo providing annual privacy notices. This will save them both time and money. In a time of industry consolidation and depressed lending markets, community banks are always grateful for sensible regulatory relief that saves time and money. The clarification regarding timing for annual notices in the event the exemption is no longer applicable is very helpful. Providing that the first annual notice should not be given until the following year and no later than December 31 is sensible. Finally, the clarification regarding posting the notice on an institution's web page is also helpful - such posting is not needed as an alternative delivery device where the annual notice is no longer required. However, it is certainly a good practice to post.
 
CFPB announces redlining settlement     

The CFPB and Department of Justice announced a joint action against BancorpSouth Bank for discriminatory mortgage lending practices that harmed African Americans and other minorities. The  complaint filed by the CFPB and DOJ alleges that BancorpSouth engaged in numerous discriminatory practices, including illegally redlining in Memphis; denying certain African Americans mortgage loans more often than similarly situated non-Hispanic white applicants; charging African-American customers for certain mortgage loans more than non-Hispanic white borrowers with similar loan qualifications; and implementing an explicitly discriminatory loan denial policy. If the proposed consent order is approved by the court, BancorpSouth will pay $4 million in direct loan subsidies in minority neighborhoods in Memphis, at least $800,000 for community programs, advertising, outreach, and credit repair, $2.78 million to African-American consumers who were unlawfully denied or overcharged for loans, and a $3 million penalty.

Comment: In the
complaint, the CFPB and DOJ alleged that BancorpSouth illegally redlined, discriminated in underwriting certain mortgages, and implemented an explicitly discriminatory denial policy. Click here to access maps from the complaint.

Action: Each bank with branches should check the minority populations of the neighborhoods in its service area, the minority populations of the neighborhoods where it has branches, the percentage of loans it makes to minorities and in predominantly minority neighborhoods, and whether the bank's advertising is focused in majority-White neighborhoods. If a bank can afford it, it might also employ minority mystery shoppers who present themselves to loan officers as being from predominately minority neighborhoods. Lastly, audit your loan portfolio to see if the bank charged higher rates or consistently rejected minority applicants at a significantly higher rate than similarly situated White applicants.
CFPB issues Summer 2016 Supervisory Highlights

In the Summer 2016 Supervisory Highlights , the CFPB reports examination findings in the areas of auto originations, debt collection, mortgage origination, small-dollar lending, and fair lending. As in past editions, this report includes information about recent public enforcement actions that were a result, at least in part, of the CFPB's supervisory work. The report also includes information on the CFPB's coordination with state and federal regulators on supervisory matters, as well as information on recently released guidance.
CFBP orders bank to pay $10 million for illegal overdraft practices

The CFPB ordered Santander Bank, N.A. (a national bank with $92 billion in assets and 673 locations), to pay a $10 million fine for illegal overdraft service practices. According to the CFPB's press release, Santander's telemarketing vendor deceptively marketed the overdraft service and signed certain bank customers up for the service without their consent. In addition to paying the civil money penalty to the CFPB, Santander Bank must go back and give consumers the opportunity to provide their affirmative consent to overdraft service, not use a vendor to telemarket its overdraft service, and it must increase oversight of vendors it uses to telemarket consumer financial products or services.
Press release . Consent order .

Comment: Santander used a third party telemarketer to call consumers to persuade them to opt-in to the overdraft service. Telemarketers were rewarded for hitting specific sales targets. Some telemarketers misinformed customers and signed customers up for overdraft service without their consent. Santander was cited by the CFPB for failing to identify and stop the deceptive and improper tactics.

Community bankers can learn important vendor management lessons from this enforcement action. One of the most important lessons is that you must know what your third party vendors are doing. Banks should ensure that third party marketers and their own customer service representatives are provided a script, well-trained, and kept on message. Conversations should be monitored to assure compliance - we've all heard the "this call may be recorded for quality assurance." Well, it is a good idea to record or listen to calls for compliance assurance.
CFPB's Cordray survives challenge to recess appointment

The
CFPB prevailed in a court challenge to the President's 2012 recess appointment of director Richard Cordray. The U.S. District judge in the case has not ruled on constitutional questions related to the CFPB's powers.

Comment: Contrary to the thoughts of many in banking, this opinion is actually good for community banks. If the court had overturned Cordray's recess appointment, then all CFPB rules would be unauthorized and the language of Dodd-Frank would control many transactions - going back to the effective date of the Act - without many of the exemptions the CFPB adopted for small banks, small remittance transferors, mortgage loans in rural areas, and mortgage loans in underserved areas. That would've been a huge problem!

FDIC Actions   

FDIC announces revisions and burden reducing changes to Call Report

The FDIC announced ( FIL-44-2016 ) that the FFIEC approved revisions to the Call Report that will take effect September 30, 2016, and March 31, 2017. These Call Report revisions were proposed by the three federal banking agencies, under the auspices of the FFIEC, in September 2015 (see FIL-39-2015 , dated September 18, 2015). The proposed revisions included certain burden-reducing changes, several new and revised Call Report data items, and a number of instructional clarifications. After considering the comments received on the proposal, the FFIEC and the agencies are proceeding with most of the proposed reporting changes, with some modifications. The U.S. Office of Management and Budget must approve the revisions to the Call Report before they can be implemented.

In
FIL-45-2016 , the FDIC announced that, as part of its community bank Call Report burden-reduction initiative, the FFIEC approved a number of burden-reducing changes to the Consolidated Reports of Condition and Income (Call Report) as well as certain new and revised data items and instructional revisions. Subject to approval by the U.S. Office of Management and Budget, these Call Report revisions will take effect September 30, 2016, or March 31, 2017, depending on the change.

Comment: According to FIL-45-2016:
  • As another part of this initiative, the FFIEC and the agencies have considered options for further streamlining the Call Report for community institutions. Publication of a proposal for a streamlined, less burdensome Call Report for eligible small institutions is anticipated later in 2016.
  • After considering the comments received on the September 2015 proposal, the FFIEC and the agencies are implementing most of the proposed revisions, with some modifications.
  • The Call Report revisions approved by the FFIEC include:
    • Deletions of certain existing data items in five schedules;
    • Increases in existing reporting thresholds and the establishment of a new threshold for certain data items in six Call Report schedules;
    • Instructional revisions pertaining to the reporting of gains (losses) on certain equity securities and the custodial bank deduction for assessment purposes; and
    • New and revised data items and information, some of which are of limited applicability. These revisions involve Chief Executive Officer contact information, the Legal Entity Identifier, preprinted captions for itemizing components of certain data items, extraordinary items, time deposit data, external auditing programs, fair value option loans, trading revenue, "dually payable" deposits in foreign branches, and supplementary leverage ratio data.
Information Technology Risk Examination Program

The FDIC updated its information technology and operations risk (IT) examination procedures to provide a more efficient, risk-focused approach. This enhanced program also provides a cybersecurity preparedness assessment and discloses more detailed examination results using component ratings.
FIL-43-2016 .

Comment: Send this to your CEO, Chief Information Security Officer, and Chief Information Officer.
FAQs on identifying, accepting and reporting brokered deposits

The FDIC is finalizing updates to its Frequently Asked Questions regarding identifying, accepting and reporting brokered deposits. In November 2015, the FDIC released for comment proposed updates to the FAQs that were originally issued in January 2015. After consideration of the comments received, the FDIC retained a majority of the proposed updates, with certain clarifications and new FAQs.
FIL-42-2016 supersedes  FIL-2-2015 and FIL-51-2015 .

Section 29 of the Federal Deposit Insurance Act (12 U.S.C. §1831f) and Section 337.6 of the FDIC's rules and regulations (12 C.F.R. § 337.6) define the term "deposit broker" and restrict the acceptance of brokered deposits by FDIC-insured depository institutions that are not well capitalized for Prompt Corrective Action purposes. The FAQs are based on the statute, regulation and explanations of the requirements for identifying and accepting brokered deposits provided to the industry through published advisory opinions and the FDIC's Study on Core Deposits and Brokered Deposits issued in July 2011, as well as on comments received since publication of the FAQs. The FAQs provide plain language information about categorizing brokered deposits.

The FDIC will continue to consider each request on a brokered deposits determination on a case-by-case basis and will issue additional advisory opinions as appropriate. The FAQs will be updated periodically on the FDIC's website at https://www.fdic.gov/news/news/financial/.

Comment: Distribute to your CEO and CFO.
FDIC launches small business lending survey

The FDIC
announced the launch of a survey of banks regarding their small business lending practices. The web-based survey of roughly 2,000 randomly selected FDIC-insured banks will begin in late June and will be administered by the U.S. Census Bureau on behalf of the FDIC.

Comment: If your bank was chosen to participate, it should have already been contacted. Results are expected in late 2017.

OCC Actions  

OCC releases semiannual risk report

The OCC reported strategic, credit, operational, and compliance risks remain top concerns in its
Semiannual Risk Perspective for Spring 2016 , released today.

Highlights from the report include:
  • Strategic risk remains high as banks struggle to execute their strategic plans and face challenges in growing revenue.
  • Credit risk is increasing because of strong loan growth combined with easing in underwriting standards. An increase in concentrations and risk layering, continues as banks strive for yield in an increasingly competitive environment. This is particularly evident in indirect auto, commercial and industrial, and commercial real estate.
  • Operational risk concerns include increasing cyber threats, reliance on third-party service providers, and resiliency planning.
  • Banks face challenges meeting the integrated mortgage disclosure requirements and amended Military Lending Act regulatory requirements, the latter of which takes effect on October 3, 2016, and managing Bank Secrecy Act risks.
  • Low energy prices, the potential for rising interest rates, and risks associated with banks partnering with marketplace lending firms are of concern and being monitored, as they may develop into broader system-wide issues.
Comment: The OCC's National Risk Committee is monitoring risks that warrant awareness among bankers and examiners because they may develop into broader system-wide issues and may have already raised concerns at certain banks. They include:
  • Competition for funding due to interest rate risk.
  • Potential compliance, BSA, operational, market, or credit issues with interaction with marketplace lending firms.
  • The economic impact of low energy prices.
  • Allowance for loan and lease loss levels and methods not sufficiently addressing risk.

Federal Reserve Actions 

Fed announces check services pricing changes
 
The Fed announced 2017 changes to check services prices. Key changes will include:
  • Simplifying our deposit services (both FedForward® and FedReturn®) by offering only fully mixed deposit options with varying levels of fixed and variable pricing to best support customers of all sizes
  • Eliminating all current sorted deposit options
  • Maintaining differentiated pricing by deposit deadline
  • Continuing the receiver-based tiered pricing model based on volume, but implementing a set of transparent volume guidelines to define a receiver's tier assignment (guidelines will be updated and published on an annual basis)
  • Eliminating the FedReceipt® deposit discount
  • Reducing the FedReceipt fees (both daily fixed and per item)
Maintaining the current RPPR deposit discount, but applying the discount to each item deposited rather than each item received
Fed releases list of minority owned depository institutions
 
The Fed released a list of minority owned depository institutions and their branches as of March 31, 2016.
Fed releases list of large commercial banks
 
The Fed released a list of insured U.S.-chartered commercial banks that have consolidated assets of $300 million or more, ranked by consolidated assets.
Repeal of Reg. AA and publication of exam procedures for §5 of FTC Act
 
The Board issued CA 16-4 giving notice of the repeal of Regulation AA and publication of examination procedures for Section 5 of the FTC Act.

The Dodd-Frank Act repealed the Board's authority to write rules that address unfair or deceptive acts or practices, which were contained in Regulation AA. Regulation AA included the Board's "credit practices rule," which prohibited banks from using certain practices to enforce consumer credit obligations and from including these practices in their consumer credit contracts. The Dodd-Frank Act provides the CFPB separate authority to promulgate rules to identify and prohibit unfair, deceptive, or abusive acts or practices.

Consequently, the Board repealed Regulation AA. CA 16-4 also serves as notice that the Board has retired the corresponding Regulation AA examination procedures (Unfair or Deceptive Acts or Practices: Credit Practices Rule). Supervised institutions are reminded that it is the Board's view that the unfair or deceptive acts or practices described in its former credit practices rule could violate the prohibition against unfair or deceptive acts or practices in section 5 of the FTC Act and Title X of the Dodd-Frank Act, even in the absence of a specific regulation governing the conduct.

The Board also published a
revised version of the examination procedures for Section 5 of the FTC Act that reflects the repeal of Regulation AA. These examination procedures -- including the incorporated March 11, 2004 joint statement issued with the Federal Deposit Insurance Corporation, which outlines the standards to be used in determining whether specific acts or practices by state-chartered banks are unfair or deceptive -- are otherwise unchanged.
Other Federal Action and News 
FASB releases CECL standard

After years of formulating the "Current Expected Credit Loss" model, the Financial Accounting Standards Board last week released its
standard   updating the guidance on recognition and measurement of credit losses for financial assets. The standard represents a significant change to the calculation of loss exposure in the asset portfolio. CECL becomes effective in 2020 for SEC registrants and in 2021 for others.

Comment: Each of the federal bank regulators issued something on this: 
FDIC , OCC, Fed. Thankfully, in adopting the standard, FASB recognized the unique challenges faced by community banks in implementing and maintaining a potentially complex new process.
Secret Service Guidance on Ransomware

The Electronic Crimes Task Force provided some
excellent information regarding best practices and mitigation strategies for an increasing level of cybersecurity concerns related to "ransomware".

Publications, Articles, Reports, Studies, Testimony & Speeches   

FDIC Chairman on the impact of post-crisis reforms
 
FDIC Chairman Martin J. Gruenberg delivered a speech regarding the impact of post-crisis reforms on the U.S. financial system. His topics were credit availability, bank profitability, market liquidity, and migration of financial services to nonbanks. The Chairman concluded that: "the economic environment remains challenging for U.S. banks, with narrower net interest margins and modest overall economic growth. Nevertheless, I think an objective look at relevant data suggests that on balance, the reforms that have been put in place since the crisis have made the financial system more resilient and more stable, while strengthening the ability of banking organizations to serve the U.S. economy."

Comment: The Chairman believes that there are significant headwinds, but bank earnings are on a generally favorable trajectory. He also commented that recent research does not support that the post-crisis market liquidity for bonds has declined. The Chairman said that research describes improvement in a number of standard measures of liquidity.
New residential construction and sales activity in May

HUD and the Census Bureau reported on new residential
construction and sales activity in May. 
Comptroller's comments on responsible innovation

Comptroller of the Currency Thomas J. Curry's
  remarks at the OCC's Forum on Responsible Innovation highlighted the OCC's effort to develop a framework for identifying and evaluating responsible innovation.

Comment: The Comptroller defined responsible innovation as innovation that "...meets the changing needs of consumers, businesses, and communities; is consistent with sound risk management; and aligns with the company's business strategy. Said another way, responsible innovation within the federal banking system helps institutions achieve their public purpose without compromising their safety or soundness, and supports their long-term business goals."

HUD study on first time homebuyers education and counseling
 
HUD published early findings from a rigorous, large-scale, random assignment study on the benefits that housing education and counseling provides to first-time homebuyers. Early results from
The First-Time Homebuyer Education and Counseling Demonstration are encouraging and suggest homebuyer education and counseling may lead to favorable results for first-time homebuyers in terms of mortgage literacy and preparedness, homebuyer outcomes, and loan performance.

Comment: According to the HUD press release, the preliminary impacts of the study on the "early enrollee" sample of 2,377 participants include:
  • Improved mortgage literacy. Participants in a treatment group performed better a four-question mortgage literacy quiz than their control group counterparts.
  • Greater appreciation for communication with lenders. Treatment group members are more likely to report that they would contact their lender before missing a mortgage payment. This finding indicates that education and counseling are successfully encouraging participants to engage productively with their lenders in times of distress.
  • Improved underwriting qualifications. Treatment group members are more likely than their control group counterparts to have a credit score of 620 or higher. This finding shows that education and counseling are helping treatment group members correct inaccuracies in their credit reports, reduce bad credit events such as late or missed payment, or both to push their credit scores over the 620 threshold.
  • No evidence of improved budgeting practices. Treatment group members are no more or less likely than their control group counterparts to compare a budget with their actual spending.
Dallas Fed: Oil roller coaster: prices rise and fall

After a wild downhill ride at the start of the year, oil prices began ascending in the second quarter. Prices rose as market participants found some assurance that global inventory build-ups are slowing. However, the U.K.'s Brexit referendum and its possible global repercussions may signal a renewed series of ups and downs.
  
Beige Book for July 13, 2016

Reports from the twelve Federal Reserve Districts indicate that economic activity continued to expand at a modest pace across most regions from mid-May through the end of June. Business contacts in Cleveland reported a steady level of activity, while Minneapolis reported that activity increased at a moderate pace. Labor market conditions remained stable as employment continued to grow modestly since the previous report and wage pressures remained modest to moderate. Price pressures remained slight. Consumer spending was generally positive but with some signs of softening. Manufacturing activity was mixed but generally improved across Districts. Real estate activity continued to strengthen, and banks reported overall increases in loan demand. Agricultural activity was mixed but generally improving. The natural resources and energy sector has remained weak. The outlook was generally positive across broad segments of the economy including retail sales, manufacturing, and real estate. Districts reporting on overall growth expect it to remain modest.
 
FedFocus
 
FedFocus is the source for the latest Federal Reserve Financial Services news. Each edition keeps you informed about hot topics in the industry, as well as provides insight into the value of Federal Reserve Financial Services. In this month's edition:
  • Bull's Eye Credit Union moves up the FedLine® access solutions chain
  • FedLine Advantage® with a secondary VPN device helps make Warthen Bank stronger
  • Fed Facts: The importance of education
  • Don't risk it - take advantage of the Fed's Risk Management tools
FedFlash

FedFlash is the source for the latest Federal Reserve Financial Services operational news. Each bulletin keeps you informed of issues critical to your day-to-day operations, providing you with National and District updates regarding the Fed's products and services, processes, technical protocols and contact information. In this month's edition:
 
Account Services
  • Reminder - Testing and training opportunities for billing data file layout changes
Central Bank
  • New Federal Reserve collateral margins table effective August 1, 2016
Check/Check 21 Services
  • Announcing 2017 Check Services pricing changes
  • Check Adjustments Tip: Verify receipt by the Federal Reserve Banks
FedACH Services
  • FedACH Feature: View unauthorized ACH return activity
  • Same Day ACH and government returns
  • Reminder - Keep FedACH contact information current
  • Same Day ACH qualified batch reporting
Fedwire® Services
  • FedTransaction Analyzer® tool format and data enhancements
 
Proposed rules are included only when community banks may want to comment.
 
08.22.2016   Arbitration Agreements . The CFPB proposed to establish 12 CFR part 1040, which would contain regulations governing two aspects of consumer finance dispute resolution. First, the proposed rule would prohibit covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action with respect to the covered consumer financial product or service. Second, the proposal would require a covered provider that is involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau. The Bureau proposes that the rulemaking would apply to certain consumer financial products and services. The Bureau is also proposing to adopt official interpretations to the proposed regulation.

09.01.2016    FDIC adjustment of maximum CMPs . This interim final rule adjusts the maximum limit for CMPs according to inflation as mandated by Congress in the 2015 Adjustment Act. The intended effect of annually adjusting maximum civil money penalties in accordance with changes in the Consumer Price Index is to minimize any distortion in the real value of those maximums due to inflation, thereby promoting a more consistent deterrent effect in the structure of CMPs. Other technical changes to 12 CFR part 308 are intended to improve the transparency of the regulation and to assist readers in quickly identifying the applicable CMP amounts.

09.14.2016    Payday, Vehicle Title, and Certain High-Cost Installment Loans . The CFPB proposed to establish 12 CFR part 1041, which would contain regulations creating consumer protections for certain consumer credit products. The proposal generally would cover two categories of loans. First, the proposal generally would cover loans with a term of 45 days or less. Second, the proposal generally would cover loans with a term greater than 45 days, provided that they (1) have an all-in annual percentage rate greater than 36 percent; and (2) either are repaid directly from the consumer's account or income or are secured by the consumer's vehicle. For both categories of covered loans, the proposal would identify it as an abusive and unfair practice for a lender to make a covered loan without reasonably determining that the consumer has the ability to repay the loan. The proposal generally would require that, before making a covered loan, a lender must reasonably determine that the consumer has the ability to repay the loan. The proposal also would impose certain restrictions on making covered loans when a consumer has or recently had certain outstanding loans. The proposal would provide lenders with options to make covered loans without satisfying the ability-to-repay requirements, if those loans meet certain conditions. The proposal also would identify it as an unfair and abusive practice to attempt to withdraw payment from a consumer's account for a covered loan after two consecutive payment attempts have failed, unless the lender obtains the consumer's new and specific authorization to make further withdrawals from the account. The proposal would require lenders to provide certain notices to the consumer before attempting to withdraw payment for a covered loan from the consumer's account.

The proposal would also prescribe processes and criteria for registration of information systems, and requirements for furnishing loan information to and obtaining consumer reports from those registered information systems. The CFPB is proposing to adopt official interpretations to the proposed regulation.
 
Not all final rules are included. Only rules affecting community banks are reported, but we make no guarantees that these are all the final rules your bank needs to know about.
 
08.01.2016    OCC CMP inflation adjustments . The OCC adopted an interim final rule amending its rules of practice and procedure for national banks and its rules of practice and procedure in adjudicatory proceedings for Federal savings associations to publish the maximum amount, adjusted for inflation, of each civil money penalty within its jurisdiction to administer. These actions are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The OCC is accepting comments on the interim final rule through August 30, 2016.

08.01.2016    
FDIC adjustment of maximum CMPs . This interim final rule adjusts the maximum limit for CMPs according to inflation as mandated by Congress in the 2015 Adjustment Act. The intended effect of annually adjusting maximum civil money penalties in accordance with changes in the Consumer Price Index is to minimize any distortion in the real value of those maximums due to inflation, thereby promoting a more consistent deterrent effect in the structure of CMPs. Other technical changes to 12 CFR part 308 are intended to improve the transparency of the regulation and to assist readers in quickly identifying the applicable CMP amounts. The FDIC is accepting comments on the interim final rule through September 1, 2016.

08.01.2016  
FinCEN adjustment of maximum CMPs . FinCEN is amending the regulations under the Bank Secrecy Act to adjust the maximum amount or range, as set by statute, of certain civil monetary penalties within its jurisdiction to account for inflation. This action is being taken to implement the requirements of the Federal Civil Penalties Inflation Adjustment Act of 1990, as further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. FinCEN is accepting comments on the interim final rule through September 1, 2016.

12.01.2016   
Overtime Rule . In this Final Rule the Department updates the standard salary level and total annual compensation requirements to more effectively distinguish between overtime-eligible white collar employees and those who may be exempt, thereby making the exemption easier for employers and employees to understand and ensuring that the FLSA's intended overtime protections are fully implemented. The Department sets the standard salary level for exempt executive, administrative, professional, outside sales, and computer employees at the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region. The Department also permits employers to satisfy up to 10 percent of the standard salary requirement with nondiscretionary bonuses, incentive payments, and commissions, provided these forms of compensation are paid at least quarterly. The Department sets the total annual compensation requirement for an exempt Highly Compensated Employee (HCE) equal to the annualized weekly earnings of the 90th percentile of full-time salaried workers nationally. The Department also adds a provision to the regulations that automatically updates the standard salary level and HCE compensation requirements every three years by maintaining the earnings percentiles set in this Final Rule to prevent these thresholds from becoming outdated. Finally, the Department has not made any changes in this Final Rule to the duties tests for the EAP exemption.
  
Not all final rules are included. Only rules affecting community banks are reported, but we make no guarantees that these are all the final rules your bank needs to know about.
 
10.03.2016    Limitations on Terms of Consumer Credit Extended to Service Members and Dependents . The Department of Defense issued a final rule amending the implementing regulations of the Military Lending Act of 2006. The final rule expands specific protections provided to service members and their families under the MLA and addresses a wider range of credit products than the DOD's previous regulation. FDIC-supervised institutions and other creditors must comply with the rule for new covered transactions beginning October 3, 2016 . For credit extended in a new credit card account under an open-end consumer credit plan, compliance is required beginning October 3, 2017. FIL-37-2015 

12.24.2016   
Credit Risk Retention . The OCC, Board, FDIC, Commission, FHFA, and HUD (the agencies) are adopting a joint final rule (the rule, or the final rule) to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934, as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act or Dodd-Frank Act). Section 15G generally requires the securitizer of asset-backed securities to retain not less than 5 percent of the credit risk of the assets collateralizing the asset-backed securities. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as ''qualified residential mortgages,'' as such term is defined by the agencies by rule. The final rule was effective February 23, 2015. Compliance with the rule with respect to asset-backed securities collateralized by residential mortgages is required beginning December 24, 2015. Compliance with the rule with regard to all other classes of asset-backed securities is required beginning December 24, 2016 .

09.30.2017
   Joint Agencies: Loans in Areas Having Special Flood Hazards . A lender that loses the small lender exemption shall mail or deliver to the borrower no later than September 30 of the first calendar year in which the lender loses its small lenders exemption a notice in writing, or if the borrower agrees, electronically, informing the borrower of the option to escrow all premiums and fees for any required flood insurance and the method(s) by which the borrower may request escrow, using language similar to the model clause in appendix B. A lender loses the exemption when its assets are $1 billion. This applies to any loan secured by residential improved real estate or a mobile home that is outstanding on July 1 of the first calendar year in which the lender no longer qualifies for the small lender exemption (exception is for lenders with <$1 billion in assets). Also, see January 1, 2016 above and September 30, 2017 below

10.03.2017    
Limitations on Terms of Consumer Credit Extended to Service Members and Dependents . The Department of Defense issued a final rule amending the implementing regulations of the Military Lending Act of 2006. The final rule expands specific protections provided to service members and their families under the MLA and addresses a wider range of credit products than the DOD's previous regulation. FDIC-supervised institutions and other creditors must comply with the rule for new covered transactions beginning October 3, 2016. For credit extended in a new credit card account under an open-end consumer credit plan, compliance is required beginning October 3, 2017 . FIL-37-2015

01.01.2018   
Home Mortgage Disclosure (Regulation C)  . The CFPB amended Regulation C to implement amendments to HMDA made by section 1094 of the Dodd-Frank Act. Consistent with section 1094 of the Dodd-Frank Act, the CFPB is adding several new reporting requirements and clarifying several existing requirements. The CFPB is also modifying the institutional and transactional coverage of Regulation C. The final rule also provides extensive guidance regarding compliance with both the existing and new requirements.
 
Our list of effective dates of past final federal rules is limited to approximately 12 months. 

07.11.2016   FinCEN issued final rules under the Bank Secrecy Act clarifying and strengthening customer due diligence requirements for: Banks; brokers or dealers in securities; mutual funds; and futures commission merchants and introducing brokers in commodities. The rules contain explicit customer due diligence requirements and include a new requirement to identify and verify the identity of beneficial owners of legal entity customers, subject to certain exclusions and exemptions.

07.01.2016   The Secretary of Education amended the cash management regulations and other sections of the Student Assistance General Provisions regulations issued under the Higher Education Act of 1965, as amended. These final regulations are intended to ensure that students have convenient access to their title IV, HEA program funds, do not incur unreasonable and uncommon financial account fees on their title IV funds, and are not led to believe they must open a particular financial account to receive their Federal student aid. In addition, the final regulations update other provisions in the cash management regulations and otherwise amend the Student Assistance General Provisions. The final regulations also clarify how previously passed coursework is treated for title IV eligibility purposes and streamline the requirements for converting clock hours to credit hours.
 
Comment: This rule amendment is meant to stop educational institutions from prioritizing the deposits of financial aid into institutional-sponsored accounts. Marketing material must be presented in a neutral way that enables the student to choose either his or her existing account or a campus account.

07.01.2016
   Registration of Securities Transfer Agents . The FDIC issued a final rule requiring insured State savings associations and subsidiaries of such State savings associations that act as transfer agents for qualifying securities to register with the FDIC, similar to the registration requirements applicable to insured State nonmember banks and subsidiaries of such banks. Second, the final rule revises the definition of qualifying securities to reflect statutory changes to the '34 Act made by the Jumpstart Our Business Startups Act .

07.01.2016   
Assessments . Pursuant to the requirements of the Dodd-Frank Act and the FDIC's authority under section 7 of the Federal Deposit Insurance Act (FDI Act), the FDIC is imposing a surcharge on the quarterly assessments of insured depository institutions with total consolidated assets of $10 billion or more. The surcharge will equal an annual rate of 4.5 basis points applied to the institution's assessment base (with certain adjustments). If the Deposit Insurance Fund (DIF or fund) reserve ratio reaches 1.15 percent before July 1, 2016, surcharges will begin July 1, 2016. If the reserve ratio has not reached 1.15 percent by that date, surcharges will begin the first day of the calendar quarter after the reserve ratio reaches 1.15 percent. (Lower regular quarterly deposit insurance assessment (regular assessment) rates will take effect the quarter after the reserve ratio reaches 1.15 percent.) Surcharges will continue through the quarter that the reserve ratio first reaches or exceeds 1.35 percent, but not later than December 31, 2018. The FDIC expects that surcharges will 18 commence in the second half of 2016 and that they should be sufficient to raise the DIF reserve ratio to 1.35 percent in approximately eight quarters, i.e., before the end of 2018. If the reserve ratio does not reach 1.35 percent by December 31, 2018 (provided it is at least 1.15 percent), the FDIC will impose a shortfall assessment on March 31, 2019, on insured depository institutions with total consolidated assets of $10 billion or more. The FDIC will provide assessment credits (credits) to insured depository institutions with total consolidated assets of less than $10 billion for the portion of their regular assessments that contribute to growth in the reserve ratio between 1.15 percent and 1.35 percent. The FDIC will apply the credits each quarter that the reserve ratio is at least 1.38 percent to offset the regular deposit insurance assessments of institutions with credits.

06.30.2016   
Joint Agencies: Loans in Areas Having Special Flood Hazards . A lender who doesn't qualify for the small lender exemption shall mail or deliver to the borrower no later than June 30 a notice in writing, or if the borrower agrees, electronically, informing the borrower of the option to escrow all premiums and fees for any required flood insurance and the method(s) by which the borrower may request escrow, using language similar to the model clause in appendix B . A lender with $1 billion in assets does not qualify for the exemption. This applies to any loan secured by residential improved real estate or a mobile home that is outstanding on January 1, 2016. Also, see January 1, 2016 above. For lenders that lose the exemption, see September 30, 2017 below.

03.31.2016    
Operations in Rural Areas Under the Truth in Lending Act Interim Final Rule . This interim final rule amends certain provisions of Regulation Z in light of title LXXXIX of the Fixing America's Surface Transportation Act, entitled the Helping Expand Lending Practices in Rural Communities Act, Public Law 114-94. The amendments to Regulation Z concern two matters: The eligibility of certain small creditors that operate in rural or underserved areas for special provisions that permit the origination of balloon-payment qualified mortgages and balloon-payment high cost mortgages and for an exemption from the requirement to establish an escrow account for higher-priced mortgage loans and the determination of whether an area is rural for the purposes of Regulation Z. DATES: This final rule is effective on March 31, 2016. Comments may be submitted on or before April 25, 2016.

01.01.2016   
Joint Agencies: Loans in Areas Having Special Flood Hazards . Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) relating to the escrowing of flood insurance payments and the exemption of certain detached structures from the mandatory flood insurance purchase requirement. The final rule also implements provisions in the Biggert-Waters Flood Insurance Reform Act of 2012 (the Biggert-Waters Act) relating to the force placement of flood insurance. In accordance with HFIAA, the final rule requires regulated lending institutions to escrow flood insurance premiums and fees for loans secured by residential improved real estate or mobile homes that are made, increased, extended or renewed on or after January 1, 2016, unless the loan qualifies for a statutory exception. In addition, certain regulated lending institutions are exempt from this escrow requirement if they have total assets of less than $1 billion. Further, the final rule requires institutions to provide borrowers of residential loans outstanding as of January 1, 2016, the option to escrow flood insurance premiums and fees. The final rule includes new and revised sample notice forms and clauses concerning the escrow requirement and the option to escrow. The final rule includes a statutory exemption from the requirement to purchase flood insurance for a structure that is a part of a residential property if that structure is detached from the primary residence and does not also serve as a residence. However, under HFIAA, lenders may nevertheless require flood insurance on the detached structures to protect the collateral securing the mortgage. (Lenders with assets < $1 billion, see June 30, 2016 and September 30, 2017.)

01.01.2016
   CFPB: Reg. Z Annual Threshold Adjustments (CARD ACT, HOEPA and ATR/QM) : The CFPB issued this final rule amending the regulatory text and official interpretations for Regulation Z. The CFPB is required to calculate annually the dollar amounts for several provisions in Reg. Z; this final rule reviews the dollar amounts for provisions implementing amendments to TILA under the CARD Act, HOEPA, and the Dodd-Frank Act. These amounts are adjusted, where appropriate, based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2015. The minimum interest charge disclosure thresholds will remain unchanged in 2016

01.01.2016     
Amendments Relating to Small Creditors and Rural or Underserved Areas Under the Truth in Lending Act (Regulation Z) . The CFPB amended certain mortgage rules issued by the CFPB in 2013. The final rule revises the CFPB's regulatory definitions of small creditor, and rural and underserved areas, for purposes of certain special provisions and exemptions from various requirements provided to certain small creditors under the CFPB's mortgage rules.

01.01.2016     
The OCC, the Board, and the FDIC amended their CRA regulations to adjust the asset-size thresholds used to define "small bank" or "small savings association" and "intermediate small bank" or "intermediate small savings association." As required by the CRA regulations, the adjustment to the threshold amount is based on the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers. The agencies also propose to make technical edits to remove obsolete references to the OTS and update cross-references to regulations implementing certain Federal consumer financial laws in their CRA regulations.

01.01.2016      
Federal Reserve Bank Services . The Board of Governors of the Federal Reserve System (Board) has approved the private sector adjustment factor (PSAF) for 2016 of $13.1 million and the 2016 fee schedules for Federal Reserve priced services and electronic access. These actions were taken in accordance with the Monetary Control Act of 1980, which requires that, over the long run, fees for Federal Reserve priced services be established on the basis of all direct and indirect costs, including the PSAF.

01.01.2018     
Home Mortgage Disclosure (Regulation C) . The CFPB amended Regulation C to implement amendments to HMDA made by section 1094 of the Dodd-Frank Act. Consistent with section 1094 of the Dodd-Frank Act, the CFPB is adding several new reporting requirements and clarifying several existing requirements. The CFPB is also modifying the institutional and transactional coverage of Regulation C. The final rule also provides extensive guidance regarding compliance with both the existing and new requirements.

12.31.2015    
Cyber-related sanctions regulations . OFAC issued regulations to implement Executive Order 13694 of April 1, 2015 ("Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities"). OFAC intends to supplement this part 578 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy.

12.24.2015      
Credit Risk Retention . The OCC, Board, FDIC, Commission, FHFA, and HUD (the agencies) are adopting a joint final rule (the rule, or the final rule) to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934, as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act or Dodd-Frank Act). Section 15G generally requires the securitizer of asset-backed securities to retain not less than 5 percent of the credit risk of the assets collateralizing the asset-backed securities. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as ''qualified residential mortgages,'' as such term is defined by the agencies by rule. The final rule was effective February 23, 2015. Compliance with the rule with respect to asset-backed securities collateralized by residential mortgages is required beginning December 24, 2015. Compliance with the rule with regard to all other classes of asset-backed securities is required beginning December 24, 2016.

12.24.2015      
CFPB corrections to TRID rules . The CFPB made technical corrections to Reg. Z and the Official Interpretations of Reg. Z. These corrections republish certain provisions of Reg. Z and the Official Interpretations that were inadvertently removed from or not incorporated into the CFRs by the TRID TILA-RESPA Final Rule. Specifically, this final rule makes the following corrections to reinsert existing regulatory text that was inadvertently deleted from Reg. Z and its commentary:
  • Amends §1026.22(a)(5) to restore subparagraphs (i) and (ii).
  • Amends the commentary to §1026.17 at paragraph 17(c)(1)-2 to restore subparagraphs i, ii, and iii.
  • Amends commentary paragraph 17(c)(1)-4 to restore subparagraphs i.A, and i.B.
  • Amends commentary paragraph 17(c)(1)-10 to restore introductory text and subparagraphs iii, iv, and vi.
  • Amends commentary paragraph 17(c)(1)-11 to restore subparagraphs i, ii, iii, and iv.
  • Amends commentary paragraph 17(c)(1)-12 to restore subparagraphs i, ii, and iii.
  • Amends commentary paragraph 17(c)(4)-1 to restore subparagraphs i and ii.
  • Amends commentary paragraph 17(g)-1 to restore subparagraphs i and ii.
  • Amends the commentary to §1026.18 at paragraph 18(g)-4 to restore text to subparagraph i.
This rule also amends the commentary to appendix D to Reg. Z to add paragraph 7 that had been included in the TILA-RESPA Final Rule published in the Federal Register but that was inadvertently omitted from the commentary to appendix D in the CFR.

12.22.2015     The Federal Reserve
Amended Reg. D (Reserve Requirements of Depository Institutions) to revise the rate of interest paid on balances maintained to satisfy reserve balance requirements ("IORR") and the rate of interest paid on excess balances ("IOER") maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORR is 0.50 percent and IOER is 0.50 percent, a 0.25 percentage point increase from their prior levels. The amendments are intended to enhance the role of such rates of interest in moving the Federal funds rate into the target range established by the Federal Open Market Committee.

10.03.2015      
CFPB: Final integrated Mortgage Disclosures under the RESPA (Reg. X) and the Truth In Lending Act (Reg. Z) . Notice of final rule and official interpretations. The CFPB amended Reg. X and Reg. Z to establish new disclosure requirements and forms in Regulation Z for most closed-end consumer credit transactions secured by real property. In addition to combining the existing disclosure requirements and implementing new requirements imposed by the Dodd-Frank Act, the final rule provides extensive guidance regarding compliance with those requirements. CFPB blog on the disclosure .

10.03.2015     
CFPB: Amendments to the 2013 Integrated Mortgage Disclosures Rule under Reg. X and Reg. Z and the Loan Originator Rule under Reg. Z (80 FR 8767) . Notice of final rule and official interpretations. This rule amending the integrated mortgage rule extends the timing requirement for revised disclosures when consumers lock a rate or extend a rate lock after the Loan Estimate is provided and permits certain language related to construction loans for transactions involving new construction on the Loan Estimate. This rule also amends the 2013 Loan Originator Final Rule to provide for placement of the NMLSR ID on the integrated disclosures. Additionally, the CFPB made non-substantive corrections, including citation and cross-reference updates and wording changes for clarification purposes, to various provisions of Regulations X and Z as amended or adopted by the 2013 TILA-RESPA Final Rule. CFPB blog on the disclosure .

10.01.2015       
Department of Defense: Limitations on Terms of Consumer Credit Extended to Service Members and Dependents . The Department of Defense amended its regulation that implements the Military Lending Act, herein referred to as the "MLA." Among other protections for Service members and their families, the MLA limits the amount of interest that a creditor may charge on "consumer credit" to a maximum annual percentage rate of 36 percent. The Department amends its regulation primarily for the purpose of extending the protections of the MLA to a broader range of closed-end and open-end credit products. Among other amendments, the Department modifies the provisions relating to the optional mechanism a creditor could use when assessing whether a consumer is a "covered borrower," modifies the disclosures that a creditor must provide to a covered borrower, and implements the enforcement provisions of the MLA.

10.01.2015      
Joint Agencies: Loans in Areas Having Special Flood Hazards . The statutory force-placed insurance provision took effect upon the enactment of the Biggert-Waters Act on July 6, 2012. The statutory detached structure exemption took effect upon enactment of the HFIAA on March 21, 2014. The regulatory changes made by this final rule to incorporate these provisions are effective on October 1, 2015. See the final flood rule on 01.01.2016, below, for the statutory and escrow-related provisions.

08.01.2015     
Joint Agencies: Loans in Areas Having Special Flood Hazards . The OCC, the Fed, the FDIC, the FCA, and the NCUA amended their regulations regarding loans in areas having special flood hazards to implement certain provisions of the Homeowner Flood Insurance Affordability Act of 2014, which amends some of the changes to the Flood Disaster Protection Act of 1973 mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters). The Agencies plan to address the private flood insurance provisions in Biggert-Waters in a separate rulemaking.

Specifically, the final rule:
  • Requires the escrow of flood insurance payments on residential improved real estate securing a loan, consistent with the changes set forth in HFIAA. The final rule also incorporates an exemption in HFIAA for certain detached structures from the mandatory flood insurance purchase requirement.
  • Implements the provisions of Biggert-Waters related to the force placement of flood insurance.
  • Integrates the OCC's flood insurance regulations for national banks and Federal savings associations.
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NEWS & EVENTS
 
Community Bankers for Compliance 2016

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UPCOMING EDUCATIONAL AND INFORMATIVE EVENTS

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CID - DOD - TRID Fair Lending Review Techniques

Thursday - August 18, 2016
Eagle Eye Golf Club
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Wednesday - September 14, 2016
Grand Traverse
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2016 CBM Annual Convention and Expo  

September 14-16, 2016 Grand Traverse  Resort & Spa  Traverse City

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HMDA Seminar 
Thursday - October 20, 2016 
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FDIC Community Bank Forum

Wednesday - November 2, 2016
Crowne Plaza
West Lansing 

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CEO Leadership Network 

Friday - November 4, 2016
CBM Training Center
East Lansing 

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Community Bankers for Compliance 
4th Quarter Seminar

Wednesday - November 30, 2016
Eagle Eye Golf Club
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Past Education Webinars are Available to Purchase as Archived (On-Demand) Web Links

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In This Issue

© 2016 Independent Bankers Association of Texas
 in cooperation with the Community Bankers of Michigan. 
All rights reserved.
  Shannon Phillips Jr., Editor  

 

© Community Bankers of Michigan
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