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Wednesday, February 10, 2016

Curry: OCC to Issue Guidance on Higher LTV Lending

The OCC will issue guidance in the coming months on managing risk for higher loan-to-value lending in communities targeted for revitalization, Comptroller of the Currency Thomas Curry announced in his remarks at the 2016 National Interagency Reinvestment Conference in Los Angeles. The guidance will provide a framework for institutions wishing to set up mortgage programs allowing potential homeowners to secure purchase or purchase/rehabilitation loans in excess of supervisory LTV limits, he said.

FDIC Chairman Martin Gruenberg also gave remarks at the conference yesterday, focusing on the agency’s efforts to promote economic inclusion.

Read Curry’s remarks.
Read Gruenberg's remarks.

Study: Dividend Change Could Portend Fed Membership Losses

The dividends that regional Federal Reserve Banks pay to member banks on the stock they are required to hold is a historically important part of attracting banks to join the Federal Reserve System and limiting the shadow banking sector, according to a research brief released by the Federal Reserve Bank of Richmond. The dividend was controversially cut by Congress in December to help pay for the federal highway bill.
Researchers wrote:
[A] closer look at the history of the Fed-bank relationship shows that the value of these dividends is greater — and more complicated — than just the dollar amount. These payments are part of a long-running story: the Fed’s challenge, over time, to encourage banks to join and stay in the Federal Reserve System to reduce the risk of what is now known as ‘shadow banking.’

The dividend was historically set at 6% to reflect the 3% of capital that member banks were required to pay for Fed bank stock, plus the 3% of capital held “on call” for use by the Fed. In 2015, Congress reduced it to the current 10-year Treasury rate for banks with more than $10 billion in assets.

Researchers concluded:
There is no modern example to shed light on what might happen if banks decide Fed membership is no longer worth it. Nor is it clear what the consequences -- intended as well as unintended -- may be if member banks start leaving the System in substantial numbers.

Read more.

Tuesday, February 9, 2016

ABA Launches Interactive Map of State Banking Legislation

ABA has launched an interactive, members-only online map to help bankers track banking-related state legislation. Powered by the Working Group on State Issues — an ABA and state association partnership monitoring activity in state capitols — the map provides quick access to the latest developments at the state level.

Access the map.

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ABA Seeks Feedback for Final EGRPRA Comment Letter

As the regulators wind down their decennial Economic Growth and Regulatory Paperwork Reduction Act review of outdated and burdensome regulations, ABA is asking bankers one last time for help identifying unnecessary or outdated banking regulations. The final letter of this EGRPRA review is due in mid-March and can cover any bank statute or regulation, with the exception of rules transferred to the CFPB.

View ABA resources on EGRPRA.

Regulatory Compliance Conference Program Now Posted

ABA has posted the preliminary program for its Regulatory Compliance Conference, to be held June 12-15 in San Diego. With more than 50 unique sessions, RCC is ABA’s best-attended conference and is designed to give compliance officers the tools they need to keep up with evolving regulatory expectations.

Hot session topics will include the CFPB’s final servicing rule, continuing TRID implementation issues, M&A due diligence, overdraft compliance, military lending changes and lines of defense for community bankers.

The advance program — subject to change — will also cover the compliance lifecycle, fair lending, debt collection, marketing compliance, legal risk, e-lending, threat finance, compliance management systems, flood insurance, elder abuse, RESPA Section 8, AML/fraud risk, credible challenges, control testing and monitoring, HMDA changes, credit reporting, transitioning to CFPB supervision and model validation for smaller banks.

The conference will also feature meet-the-regulator sessions, peer group exchanges and four “deep dive” sessions on topics of special focus. Offered separately are pre-conference workshops on fair lending and third-party risk. Attendees must register by April 1 to receive early bird discounts.

View the program.
Register now.

Monday, February 8, 2016

New York Proposes AML Monitoring Requirements

The New York State Department of Financial Services is proposing a new anti-money laundering regulation that would apply to all financial institutions chartered in the state. If adopted, the proposal would set forth a set of specific mandates designed to detect suspicious activities that New York financial institutions would be compelled to follow.

More significantly, the proposal would require that financial institutions obtain a “certifying senior officer” to file an annual certification verifying compliance with the mandate as part of financial institutions' transaction monitoring and filtering program requirements. NYDFS has recently been involved in investigations regarding compliance by financial institutions with AML/BSA laws, including compliance with the Office of Foreign Assets Control's trade sanctions.

NYDFS said the proposal is needed to correct BSA/AML regime deficiencies caused by "a lack of robust governance, oversight, and accountability at senior levels of these institutions." ABA is concerned about the proposal since, if adopted, it could set an example for other states. Comments are due by March 31.

Read the proposed regulation.