FFIEC issues revised information security booklet

The FHA announced new procedures to strengthen the process mortgage servicers use to help struggling families avoid foreclosure and remain in their homes. FHA is streamlining its loss mitigation protocols that servicers must use when evaluating and deploying 'home retention options,' foreclosure alternatives that allow delinquent borrowers to retain their home. Read FHA's mortgagee letter.

FHA's revised procedures streamline the process servicers use to engage borrowers, specifically when evaluating them for the FHA-Home Affordable Modification Program (FHA-HAMP). These changes will reduce the number of steps that a servicer and borrower must take to resolve a delinquency and enter into a loss mitigation home retention product. In addition, FHA is removing certain obstacles that will allow servicers greater flexibility for evaluating an unemployed borrower for a special forbearance agreement.

Comment: Specifically, FHA will:

Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand at a modest pace on balance during the reporting period of July through late August. Most Districts reported a "modest" or "moderate" pace of overall growth. Contacts across the twelve Districts generally expect moderate economic growth in coming months. Overall consumer spending was little changed in most Districts, and auto sales declined somewhat but remained at high levels. Tourism activity was flat from the previous report but above year-earlier levels. Sales of nonfinancial services gained further momentum. Manufacturing activity rose slightly in most Districts. Activity in residential real estate markets grew at a moderate pace, but the pace of sales was constrained in a few Districts by shortages of available homes. Commercial real estate activity expanded further. Demand for business and consumer credit varied across Districts but appeared to expand at a moderate pace overall, with stable credit quality. Agricultural conditions were mixed, with price declines largely offsetting growing volumes. Overall demand for energy-related products and services weakened.

Labor market conditions remained tight in most Districts, with moderate payroll growth noted in general. Upward wage pressures increased further and were moderate on balance, with more rapid gains reported for workers with selected specialized skill sets. Price increases remained slight overall.

In prepared remarks delivered to the Marketplace Lending Policy Summit 2016, Comptroller of the Currency Thomas J. Curry, said that the OCC's "Innovation Framework Development Team is considering in their work to create a framework to enable the OCC to assess responsible innovation." Curry didn't share details of the framework, but said that it would be completed this fall and the final product would be consistent with eight principals (a description of those principals begins on page 6 of his remarks). With respect to chartering fintech companies, Comptroller Curry said, "If we at the OCC do decide to grant limited-purpose charters in this area, the institutions who receive the charters will be held to the same strict standards of safety, soundness, and fairness that other federally chartered institutions must meet."

Comment: Briefly, the eight principals are: 1. Support responsible innovation; 2. Foster a receptive culture at the OCC; 3. Capitalize on deep expertise at OCC; 4. Ensure fair access and treatment of customers; 5. Effective risk management and corporate governance; 6. Encourage banks to consider responsible innovation in strategic planning; 7. Ongoing dialogue with all stakeholders in the financial services community; 8. Collaboration with other regulators.

Industrial production rose 0.7 percent in July after moving up 0.4 percent in June. The advance in July was the largest for the index since November 2014. Manufacturing output increased 0.5 percent in July for its largest gain since July 2015. The index for utilities rose 2.1 percent as a result of warmer-than-usual weather in July boosting demand for air conditioning. The output of mining moved up 0.7 percent; the index has increased modestly, on net, over the past three months after having fallen about 17 percent between December 2014 and April 2016. At 104.9 percent of its 2012 average, total industrial production in July was 0.5 percent lower than its year-earlier level. Capacity utilization for the industrial sector increased 0.5 percentage point in July to 75.9 percent, a rate that is 4.1 percentage points below its long-run (1972-2015) average. Industrial Production and Capacity Utilization - G.17 .

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