February 7, 2018

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The Federal Reserve Board said it will restrict Wells Fargo's growth until it sufficiently improves its governance and controls following widespread consumer abuses.

The bank also will have to improve its governance and risk management processes and replace three current board members by April and a fourth board member by the end of the year.

Until Wells makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017.

"We cannot tolerate pervasive and persistent misconduct at any bank," Janet Yellen said in her final act as Fed chair.

Senate Finance Chairman Orrin Hatch (R-Utah) sent a letter to the National Credit Union Administration expressing concern that credit unions may be operating beyond their tax-exempt purpose.

Noting that the credit union tax exemption is valued at approximately $2.9 billion this year, Hatch cited several of the NCUA's actions, including rules on field of membership, commercial lending, and alternative capital.

The nations community bankers, led by ICBA, strongly support repealing the tax exemption, which they strongly advocated during the tax reform debate. ICBA's comment in the letter:  "ICBA thanks Sen. Hatch for speaking out against the tax-exempt credit union industry, which for too long has enjoyed the benefits of competing with tax-paying community banks," ICBA President and CEO Cam Fine said. "Sen. Hatch's comments echo ICBA's belief that the credit union model has become outdated and that its charter, purpose and tax-exempt status should be reviewed by Congress."

Sen. Hatch's Letter  >>>  
Legislation to allow more holding companies to raise capital is headed for a vote on the House floor this week.

Inspired by ICBA's Plan for Prosperity and introduced by Rep. Mia Love (R-Utah), the Small Bank Holding Company Relief Act (H.R. 4771) would raise the Federal Reserve's Small Bank Holding Company Policy Statement asset threshold from $1 billion to $3 billion. Identical language is included in the bipartisan S. 2155 awaiting a Senate vote.

Also this week on Capitol Hill, several key committees convene ahead of Thursday's budget deadline. The House Financial Services Committee will hear from Treasury Secretary Steve Mnuchin, the Senate Banking Committee will meet to discuss virtual currencies, and the House Agriculture Committee will hold a hearing on the rural economy.
CFPB Consolidates Fair Lending Oversight in Supervision and Enforcement Unit           
The Consumer Financial Protection Bureau will remove day-to-day oversight and enforcement authority from its Office of Fair Lending and Equal Opportunity. Those responsibilities will now be carried out by the CFPB's supervision, enforcement and fair lending division. The decision came after a memo by Acting Director Mick Mulvaney last week pledged that the bureau will no longer "push the envelope" in the name of enforcing consumer protection laws.
Tax Scam Targeting Preparers' Data           
With the start of the 2018 tax filing season, the IRS issued a warning about an emergent identity theft tax scam that targets tax preparers' computers and, in some cases, involves depositing funds in victims' bank accounts. The agency warned that cybercriminals are sending phishing emails to tax preparers that contain malware allowing them to make off with sensitive tax filer data. The fraudsters then use that information to file for fraudulent tax returns.
"In a new twist, the fraudulent returns in a few cases used the taxpayers' real bank accounts for the deposit," the IRS said. "A woman posing as a debt collection agency official then contacted the taxpayers to say a refund was deposited in error and asked the taxpayers to forward the money to her." The novel approach comes as fraudsters continue modifying their efforts to steal tax refunds.
The IRS advised taxpayers who receive a direct deposit refund that they did not request to ask their bank to return the direct deposit to the IRS and to call the IRS to explain why it is being returned. "Keep in mind interest may accrue on the erroneous refund," the agency added.

The IRS Warning  >>> 
HMDA Formatting Tool Launched             
The Consumer Financial Protection Bureau launched the 2018 Home M ortgage Disclosure Act Loan-Application Register Formatting Tool.

The LAR Formatting Tool is intended to help financial institutions, typically those with small volumes of covered loans and applications, to create an electronic file that can be submitted to the HMDA platform.

The CFPB also released an updated instructional guide.   

LAR Formatting Tool and Guide
Proposal Adopted to Address Real Estate Appraiser Shortage              
The Appraiser Qualifications Board (AQB) of The Appraisal Foundation (Foundation) adopted revisions to the Real Property Appraiser Qualification Criteria (Criteria). These changes will provide additional methods for entry into the real property appraisal profession in the United States. The Criteria will become effective on May 1, 2018. 

Today's changes address a number of options for entry into the residential appraisal profession. Additionally, the number of experience hours and timeframe for obtaining that experience have been modified.  The changes include:  reduce the college-level education degree requirements for licensed residential and certified residential appraisers, create an alternative track for licensed residential appraisers to become certified without obtaining a bachelor's degree and reduce the number of field hours needed to obtain certification from 2,000 to 1,000 for licensed appraisers and 2,500 to 1,500 for certified appraisers.

The Foundation will provide guidance to state appraiser regulatory agencies and candidates on the new Criteria changes. Individual state agencies may implement the Criteria on or after May 1, 2018, but not before. Additionally, state agencies may choose not to implement some or all of the Criteria changes.

Follow The Appraisal Foundation website
for more information on these new changes.
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