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All in Regulatory Update
In this Compliance Clip (video), Adam briefly discusses the recent CRA proposal by providing an overview of the goals of the proposal. Adam also discusses how, if passed as proposed, this new rule would have some major changes to Assessment Areas that may have negative effects on banks. Comments are due soon on this proposal, so watch this video to learn how the changes might affect your bank.
This month, the FDIC announced updates to their Risk Management Manual of Examination Policies (RMS Manual), including:
Section 1.1 of the RMS Manual: This section was updated to…
On January 7, 2020, the NCUA announced that it had issued its annual letter to credit unions listing its 2020 supervisory priorities as well as updates on regulations and the agency’s modernization programs.
The letter includes a summary of recent statutory and regulatory updates, including additional guidance on serving legal hemp businesses; changes in the appraisal threshold for commercial real estate transactions; the amended supervisory committee audits rule, which took effect Jan. 6; and the amended public unit and nonmember shares rule, which takes effect Jan. 29. For 2020, the NCUA has listed the following as supervisory priorities:
The long awaited CRA proposal was published in the Federal Register on January 9, 2020, meaning that comments on the proposed rule are due on March 9, 2020. This joint proposal between the OCC and FDIC did not include the support of the Federal Reserve, who currently have a slightly different take on how CRA regulations should be revised (according to comments by Federal Reserve Governor Lael Brainard on January 8, 2020). As we have explained before, this would be the first substantial update to the rules in nearly 25 years if the rule is finalized. According to the release, the proposed rules are intended to do a number of things including:
As is the case each year, the regulatory agencies have adjusted the asset size threshold under the Community Reinvestment Act for 2020. The “small institution” asset threshold has increased from 1.284 billion to 1.305 billion, while the “intermediate small institution” asset threshold has increased from 321 million in 2019 to 326 million in 2020.
On 12/23/19, the FDIC released their Fall 2019 edition of the publication Supervisory Insights. This edition contains two articles that might be of interest for bank management. The first article discusses commercial real estate (CRE) exposure in the banking industry while the second article discusses leveraged lending. In addition, the publication includes a “Regulatory and Supervisory Roundup” section which includes thirteen pages of activity by the FDIC.
On December 19, 2019, the CFPB announced the annual adjustment to the asset size threshold for small creditors under Regulation Z. This threshold applies to both the exemption to the requirement to establish an escrow account for higher-priced mortgage loans as well as the thresholds for small creditors to originate small-creditor portfolio and balloon-payment qualified mortgages. For 2020, the exemption threshold has increased from…
On December 20, 2019, the CFPB adjusted the HMDA exemption threshold from $46 million to $47 million. The adjustment is based on the 1.6 percent increase in the average of the CPI-W for the 12-month period ending in November 2019 (down from 2.6 last in 2018). Therefore, banks, savings associations, and credit unions with assets of $47 million or less as of Dec. 31, 2019, are exempt from collecting data in 2020.
On December 18, 2019, Fannie Mae and Freddie Mac published a revised implementation timeline for the redesigned Uniform Residential Loan Application (URLA) as well as updated automated underwriting systems (AUS). Starting on September 1, 2020, all lenders may begin using the redesigned URLA and may also submit loan applications to the new AUS production environment. Prior to this time, testing and limited use (during a “test and learn” period) will be available for some lenders. By November 1, 2020, all lenders must use the redesigned URAL and submit loan applications to the new AUS production environment. In addition to announcing the implementation dates of the URLA and new AUS, the…
On 12/18/19, the CFPB released two additional TRID guides regarding disclosures for construction-only and construction-permanent loans. The guidance can be viewed in either a combined guide or a separate guide, and provides examples based on common questions received by the Bureau.
