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Friday, July 29, 2016

The Week Ahead: August 1 - 5

  • Comments Due CFTC: Identify Theft Red Flags (PRA) Read more.
  • Comments Due CFTC: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants--Cross-Border Application of the Margin Requirements (PRA) Read more.
  • Comments Due CFTC: Market Surveys (PRA) Read more.
  • Comments Due FRB: Savings and Loan Holding Company Registration Statement; Notice of Proposed Declaration of Dividend Read more.
  • Comments Due OCC: Community and Economic Development Entities, Community Development Projects, and Other Public Welfare Investments (PRA) Read more.
  • Comments Due OCC: Examination Questionnaire (PRA) Read more.
  • Comments Due OCC: Notice Regarding Unauthorized Access to Customer Information (PRA) Read more.
  • Comments Due OCC: OCC Supplier Registration Form (PRA) Read more.
  • Effective Date FDIC/CFTC: Adjustment of Civil Monetary Penalties for Inflation Read more.
  • Effective Date FINCEN: Civil Monetary Penalty Adjustment and Table. Read more.

  • Comments Due FDIC/FRB/OCC: Net Stable Funding Ratio: Liquidity Risk Measurement Standards and Disclosure Requirements Read more.
  • Comments Due FRB: Restrictions on Qualified Financial Contracts of SIFIs Read more.

All times in Eastern Standard Time. See future events on the  Dodd-Frank Calendar.

Thursday, July 28, 2016

CFPB Considers Proposal to Overhaul Debt Collection Market

The CFPB has outlined proposals under consideration that would overhaul the debt collection market by capping collector contact attempts and by helping to ensure companies collect the correct debt. Under the proposals being considered, debt collectors would be required to have more information about the debt before they collect. As they are collecting, companies would be required to limit communications, clearly disclose debt details and make it easier to dispute the debt. When responding to disputes, collectors would be prohibited from continuing to pursue debt without sufficient evidence. These requirements and restrictions would follow the debt if it were sold or transferred.

The outline of the proposals under consideration is in preparation for convening a Small Business Review Panel to gather feedback from small industry players, which is the next step in the rulemaking process. In addition to consulting with small business representatives, the bureau will continue to seek input from the public, consumer groups, industry and other stakeholders before continuing the rulemaking process.

Read more.

FDIC Issues Guidance on Managing Oil and Gas Loan Risks

With the path of oil prices uncertain but not forecast to improve substantially in the coming months, the FDIC issued guidance reiterating principles for prudently managing risks associated with oil and gas exposures. The agency said it expects banks to monitor their direct and indirect exposures to oil and gas, as well as manage any concentration risks related to oil and gas.

In addition to monitoring direct lending concentrations, the FDIC also urged bankers to track their indirect exposures to oil and gas volatility, including borrowers that could be affected by economic growth or contraction related to the oil market. The guidance also reminded bankers to “report the results of concentration monitoring programs regularly to the board of directors.”

The agency reiterated previous guidance on constructive and well-conceived workout plans for borrowers affected by adverse conditions in the oil and gas market in order to strengthen the credits and mitigate losses where possible. The OCC recently updated its Comptroller’s Handbook on oil and gas lending, and the Federal Reserve is expected to issue its own guidance soon.

Read the FDIC guidance.

Wednesday, July 27, 2016

CFPB Monthly Complaint Snapshot: Credit Cards

This month’s CFPB complaint snapshot highlighted complaints about credit cards. Consumers frequently complained about perceived unfairness in credit decisions regarding the initial application and interest rate charged. Consumers also complained about how payments are applied to accounts that have more than one balance, inadequately disclosed fees and misleading rewards programs.

Credit cards are currently used by more than half of adult consumers in the U.S., the bureau reports. As of July 1, 2016, the CFPB has handled roughly 97,100 credit card-related complaints. The report also took an in-depth look at Washington and the Seattle metro area.

Read the report.

CFPB Updates Know Before You Owe Webinar FAQs

The CFPB currently provides an index of the questions addressed in the bureau’s webinars on the Know Before You Owe mortgage disclosure rule. The index has been updated to include the questions that were addressed during the March 1, 2016 and April 12, 2016 Outlook Live webinars hosted by the Federal Reserve.

View the index

Tuesday, July 26, 2016

GAO Study: Community Banks Persist in Mortgage Servicing

Community financial institutions have expanded their share of the mortgage servicing market since 2008, even as new servicing rules and the Basel III capital treatment of mortgage service rights have made servicing home loans more expensive, according to a study released by the Government Accountability Office.

Since 2008, community banks’ share of the servicing market has doubled to 6.8%. Community banks’ persistence in the market comes in spite of significantly higher compliance costs and, for a few banks, a need to raise more capital. The GAO found that these costs are outweighed for community banks by the customer connection, fee revenue and cross-selling opportunities.

The report found:
Many community lenders noted that they and their customers benefit from the close relationship maintained when these institutions service mortgages. Representatives at several institutions we interviewed emphasized that they were well positioned to work directly with customers experiencing hardship to mitigate losses.

However, some institutions have had to limit customer-friendly products in response to regulatory burden. For example, the GAO said, community banks have reported ending home equity lines of credit and bridge loans. “Several institutions noted that they no longer offered customers certain products because offering them would require additional compliance testing to meet regulatory requirements,” the GAO said.

Responding to industry concerns that Basel III’s treatment of MSRs would require banks to shed servicing, the GAO found that just 1% of banks have had to make deductions from regulatory capital in the third quarter of 2015. However, the GAO cited ABA’s 2015 Real Estate Lending Survey showing that 5% of banks had sold MSRs, with 14% considering selling them.

The GAO rapped the CFPB for its “incomplete” plans to review the servicing rule after five years, as required by the Dodd-Frank Act. The first review would be due by January 2019. “Without a completed plan, CFPB risks not having enough time to perform an effective review,” the GAO said.

Read the report.