August 7, 2019
Community Bank Services

BKD 2010
Bankers Bank  


Main Street Victory on Faster Payment
Community bankers, we did it! After years of ICBA-led advocacy on behalf of a real-time payments system that ensures access and choice for community banks, the Federal Reserve has announced that it will build a real-time payments service.
This landmark announcement will ensure universal access to real-time payments, avoid a megabank monopoly, and encourage innovation that will benefit consumers and businesses nationwide. And community bankers can take pride in knowing we left nothing on the field during this fierce policy debate.
In thousands of messages and phone calls to the Fed and Congress, shoe-leather meetings on Capitol Hill, op-eds and blog posts, and an ad campaign in Beltway publications, ICBA and community bankers applied immense pressure on policymakers and had a direct impact on the Fed's decision. This followed hundreds of comment letters from community bankers that Fed Chairman Jerome Powell cited in justifying the move.
The Fed is uniquely positioned to provide equitable access to real-time payments. A Fed-operated real-time settlement system will ensure industry-wide access, is consistent with the roles it already serves in providing payments services to nearly 11,000 financial institutions, will avoid the risk of having one for-profit settlement service run by the nation's largest banks, and will encourage further innovations.

Congress Adopts Chapter 12 Expansion
Before leaving for the August recess, the House and Senate quickly adopted legislation to expand the amount of eligible assets qualifying for Chapter 12 farm bankruptcy.

The legislation ( S. 897 and H.R. 2336), driven by the ongoing economic difficulties in the farm sector, expands the current level of eligible assets from $4.2 million to a new threshold of $10 million and was brought unexpectedly to the Senate floor without consideration at the committee level, a parliamentary move normally reserved for non-controversial bills.

ICBA opposes expansion of Chapter 12, whereas national farm groups including the American Farm Bureau and the National Farmers Union, as well as the Farm Credit System, supported expansion.

CFPB Announces 2020 Reg Z Dollar Thresholds
The Consumer Financial Protection Bureau announced 2020 dollar_bill.jpg changes in dollar thresholds for several Regulation Z provisions governed by the CARD Act, the Home Ownership and Equity Protection Act and the Dodd-Frank Act. The thresholds are based on changes in the Consumer Price Index and take effect on Jan. 1, 2020.
For credit cards, the penalty fees safe harbor for 2020 will increase by $1 to $29 for a first late payment. The subsequent late payment safe harbor fee will also grow by $1 to $40. The minimum interest charge disclosure threshold will remain unchanged for 2020 at $1. The loan amount at which HOEPA's points-and-fees test comes into effect will increase to $21,980, and the HOEPA points-and-fees trigger will rise to $1,099.
For Qualified Mortgages, points and fees cannot exceed 3% of loans of $109,898 or more; $3,297 for loans between $65,939 and $109,898; 5% for loans between $21,980 and $65,939; $1,099 for loans between $13,737 and $21,980; and 8% of loans of less than $13,737. 

Agencies Encourage BSA/AML Innovation
Federal agencies should develop better ways to communicate the value of suspicious activity reports to the bankers that incur the costly burden of the reporting, FDIC Chairman Jelena McWilliams said.

Speaking in Washington, McWilliams noted that Bank Secrecy Act rules impose significant compliance costs on the entire financial system, though SAR information can help authorities detect and stop crime.

She noted that the FDIC has encouraged banks to evaluate innovative approaches to help reduce the cost of compliance.
The Answer of the Week
QUESTION:   A credit-worthy application was denied because the applicant was on maternity leave. The applicant stated there was a break in employment because of maternity. It was not asked by the lender. Is there still potential for a Reg B violation? 
ANSWER:    Yes, there is potential for a Regulation B violation. Regulation B prohibits discrimination based on familial status and sex. In addition, asking about child-rearing is also prohibited.
Consider: Even if the lender did not ask the applicant, and the information was volunteered, did the lender document that the information was volunteered or simply note the employment break in the application? If the applicant were similarly situated and also had a break in employment, would the bank have denied the loan? Does the bank's policy address how it treats a break in employment? When evaluating the application, was any consideration given to whether the person had a child? Would the same consideration have been given men with children?
When addressing how to handle applicant's on maternity leave, be sure that the bank's policy follows the requirements of Regulation B (and fair lending); ensures that all applicants are treated in the same manner; and that all personnel understand the requirements and bank's policy and how to apply it.
Reference: Regulation B: 12 CFR 1002.2; 1002.5; 1002.6


2019 Arkansas Community Bankers Association 
Bank Management & Directors Conference
November 5, 2019

** Mike Neighbors, Keynote Speaker 
UofA Women's Basketball Head Coach ** 
**Washington D.C Update from ICBA**
**Arkansas SBA Bank Lender Awards**
and much more....Watch for Details

Amplify your understanding of commercial lending activity and opportunity and Take Your Commercial Loan Prospecting to the Next Level  
A Financial Institution Webinar 
Managing Emerging Ag Lender Liability Risks
August 27, 2019  -  12:00 CT
*  Draw attention to potential lender liability issues from new
    agricultural economic stressors   
*  Common circumstances that could give rise to lender liability
*  Strategies and best practices to reduce liability and exposure