November 18, 2020-...------------------------------------------------------------------------------------------------No copyright infringement intended
Vendor * Spotlight

Plan for Long-Term Working from Home

FIS' survey on readiness showed almost twice as many financial firms will allow long-term remote work, compared to just three months ago. The firms that expected to allow long-term remote working jumped from 35% in June to 62% in September.

As part of its 2020 readiness report, FIS surveyed 250 executives in June and September and found companies' attitudes shifted strikingly over the months: while companies were uncertain about remote working back in June, they became much more likely to adopt it as a long-term strategy according to September's survey.

Furthermore, only 21% of all respondents said they would bring employees back as soon as they can, while 67% say they will not require employees to return as soon as it is safe to do so. These findings are in line with BofA Securities' survey on back-to-work plans among U.S. companies, which showed that the financial sector is more likely to wait to return to "normal" work protocols.

The main reasons listed by the firms to allow remote working are cost savings, attracting employees and productivity gains. In particular, 68% of the largest companies said they are likely to use remote working as an opportunity to reduce their physical footprint. Moreover, the firms that are planning to expand geographically fell from 45% to 34% in September.

The shift to remote working has numerous repercussions, and firms are starting to take action. As companies are facing pressures on capital expenditure and low interest rates, they are prioritizing other areas for development. FIS noted in particular that 47% of buy-side firms said they prioritize investment in core operations upgrades and resilience measures, whereas 66% of sell-side companies prioritized cyber-security tools.

FIS concluded that, even with the announcement of a vaccine, changes in working culture are permanent. The pandemic pointed out the risks of firm-owned technology and infrastructure, managed services and cloud are more important and long-term remote working has also made gains.
Source: S&P Global Market Intelligence
2021 Fed Fee Schedule Largely Unchanged

The Federal Reserve said the Reserve Banks will maintain the current fee schedules for payment services in 2021 except for a modified Check Services participation fee to provide stability amid the COVID-19 pandemic.
 
The Reserve Banks estimate that the change to the Check Service participation fee will result in a 2.7 percent average price increase for affected customers. Fees will remain unchanged for FedACH, National Settlement, Fedwire, and FedLine services.
 
The Reserve Banks said that while they do not expect to fully recover actual and imputed expenses in 2021, they do expect to recover their expenses over the long run.
Source: Federal Reserve Bank 
New Custom Grassroots Message
 
ICBA launched a new customizable grassroots message for community bankers urging Congress to include common-sense policies in any economic stimulus package. The message on ICBA's Be Heard grassroots action center urges support for simplifying PPP forgiveness, fully forgiving Economic Injury Disaster Loan advances, and excluding PPP loans from regulatory asset thresholds. Contact Congress now.

Source: Independent Community Bankers of America
Debt-Collection Compliance Guide
 
The Consumer Financial Protection Bureau released a guide on its compliance aids related to its final rule implementing the Fair Debt Collection Practices Act.
 
The guide includes information on the CFPB's Regulatory Implementation and Guidance team and links to various resources on complying with the rule, which restricts debt collector communications with consumers.
 
The CFPB structured the final rule to ensure it applies only to third-party debt collectors and doesn't cover community banks and other first-party debt collectors.
Source: S&P Global Market Intelligence
Coin Allocation Caps Removed

The Federal Reserve removed coin allocations for pennies and quarters while raising caps for nickels and dimes by 25 percent as Reserve Bank coin inventories near pre-pandemic levels.
 
In a message to Federal Reserve Cash Services customers, the Fed said it will apply the updated standards to small, medium, large, X-large, and XX-large "endpoint" groups. The sizing regime is based on historical ordering volumes and doesn't correspond to bank size.
 
The Fed asked customers to order only what they need to meet near-term demand, noting that coin circulation is improving but has not been fully resolved.
 
Meanwhile, the U.S. Coin Task Force continues calling on financial institutions to use resources on its Get Coin Moving site to encourage consumers to gather, turn in, and circulate their coins.

 Source: Federal Reserve Bank
Statement on LIBOR Fallback Rate

Federal regulators issued a statement reiterating that banks may use any reference rate for loans that they determine to be appropriate for their funding model and customer needs. However, banks should include language in lending contracts on using a robust fallback rate if the initial reference rate is discontinued.
 
The agencies said that while they are not endorsing a specific LIBOR replacement rate, institutions should have processes to mitigate their LIBOR transition risks. The statement notes that while the Alternative Reference Rates Committee recommended the Secured Overnight Financing Rate, or SOFR, as its preferred LIBOR alternative, the use of SOFR is voluntary.
 
The ARRC in August released a SOFR “starter kit” to help with the transition from LIBOR that complements a series of webinars on the subject.
 Source: Independent Community Bankers of America
Loan Demand, Standards Tighten in Q3

Banks tightened their standards and reported weaker demand for commercial and industrial loans as well as commercial real estate loans during the third quarter, the Fed reported. Banks also tightened standards for residential real estate and consumer loans but reported stronger demand for credit card loans, auto loans, and most categories of RRE loans, according to the agency's senior loan officer survey.

 Source: Independent Community Bankers of America