In This Issue

• Training for Bank Directors To Be Held May 6 in Sioux Falls
• CFBP Targets Mortgage Closing Problems with Pilot Program
• Democrats Seek Limits on Campus Banking Services
• Treasury Announces 2014 Bank Enterprise Award Funding
• Agencies Revise CRA Exam Procedures
• ABA Suggests Tweaks to Johnson-Crapo

Training for Bank Directors To Be Held May 6 in Sioux Falls

 
The FDIC, in partnership with the South Dakota Bankers Association and South Dakota Division of Banking, will hold the 2014 Directors College on May 6 at the Sioux Falls Convention Center in Sioux Falls.

The 2014 Directors College is a one-day educational seminar designed with outside directors in mind but will also include information on emerging issues in the banking industry. The seminar is a unique opportunity to interact with bank regulators and enhance board experience and knowledge.

In addition to opening and closing general sessions, registrants can tailor this training to their needs by attending two breakout sessions of their choice. Each breakout session has been designed for audience participation through the use of roundtable discussions, case studies and in-class exercises. This is an excellent opportunity for directors to learn from regulators and their peers about issues their banks face.

CFPB Targets Mortgage Closing Problems with Pilot Program

The Consumer Financial Protection Bureau yesterday announced guidelines for an “e-closing” pilot program intended to reduce what the bureau called “pain points” in the mortgage closing process.

These points include insufficient time to review documents, too much paperwork, hard-to-understand documents and errors in the paperwork. The CFPB offered two principal causes for these problems: a “high number” of required disclosures under federal, state and local rules, and the presence of numerous stakeholders.

The e-closing pilot, which will launch later this year, will test a variety of technologies that might make it easier for lenders, borrowers and other participants to more efficiently review and sign documents. The bureau released a document describing the pilot and the requirements for banks wishing to participate.

In its report, the CFPB also identified “reduction and simplification of the closing package” as another potential solution. But “the volume and complexity of the documents and actors involved create high barriers that limit opportunities for direct CFPB action,” the bureau said. “Additionally, the need for action at multiple levels of government would likely take considerable time to bear fruit. As a result, the Bureau will not focus its efforts on this [e-closing] solution over the next year.”

“This initiative is puzzling coming just months after the CFPB finalized an entirely new set of mortgage disclosures,” said ABA EVP Bob Davis. “However, ABA has long supported simplifying the paperwork burden of banks and consumers and will watch the bureau’s efforts closely.” Read the report

Democrats Seek Limits on Campus Banking Services

Twenty-four congressional Democrats on Tuesday urged Education Secretary Arne Duncan to impose strict limitations on collegiate banking services. Specifically, the members called for Duncan to prohibit a variety of collegiate agreements with financial institutions, including revenue-sharing arrangements and relationships that involve debit cards used to deposit federal student aid.

“The Department of Education has the authority to issue rules related to the disbursement of aggressive marketing and ban high fees when colleges partner with banks to sponsor debit cards, prepaid cards, or other financial products used to disburse student aid,” the members of Congress wrote.

ABA expressed its concern about these proposals. “The current draft rulemaking pending at the Department of Education is troubling because it limits financial choices for students and parents and raises costs for everybody,” warned ABA EVP Ken Clayton. “The continued attempts by some in Congress and the administration to vilify financial institutions and require free services will limit consumer choice, increase the costs to students and universities and stifle innovation that has helped modernize higher education financing.”

In a comment letter earlier this month, ABA and the Consumer Bankers Association shared similar concerns, noting that the rulemaking goes beyond student aid disbursements to affect the terms and availability of deposit accounts and payment cards. Read the congressional letter.  Read ABA’s comment letter.

Treasury Announces 2014 Bank Enterprise Award Funding

The Treasury Department’s Community Development Financial Institutions Fund yesterday announced $18 million in funding for the 2014 Bank Enterprise Awards, which encourage banks to increase their investments and loans in disadvantaged communities. The BEA program is the only program to which CDFI banks have had regular access in recent years.

ABA successfully advocated last year for Congress to fund the BEA program at $18 million, up from the $10 million that the administration had requested. “It is one of the federal government’s best market-based strategies for leveraging and channeling needed resources to our most challenged communities,” ABA and three other trade groups told congressional appropriators.

The deadline to apply for BEA funds is June 2. Read more.

Agencies Revise CRA Exam Procedures

The federal banking agencies on Friday issued revised Community Reinvestment Act examination procedures. The procedures, which apply to banks with more than $1.202 billion in assets at the end of either of the previous two years, reflect revisions to the CRA interagency questions and answers made in November.

The November changes -- which generally reflected ABA's input -- revised five questions related to community development.

They clarify how agencies consider community development activities that benefit a zone broader than a bank’s assessment area; offer guidance on CRA consideration for investments in nationwide funds; clarify consideration for service on a community development organization board; address how to treat loans or investments in organizations that in turn reinvest those funds; and clarify the weighting of community development lending performance in ratings. View the revised exam procedures.  View ABA's staff analysis of the changes.

ABA Suggests Tweaks to Johnson-Crapo

ABA last Thursday wrote the Senate Banking Committee to express its support for the overall framework of the housing finance reform bill proposed by Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho). The association also offered several concerns and ways to improve the bill, scheduled for a committee vote on April 29.

ABA urged the committee to tighten the proposed Federal Mortgage Insurance Corporation’s regulatory authority, give FMIC authority to balance the bill’s two channels for credit protection, prevent combinations of originators and guarantors, eliminate all explicit affordable housing goals, make the bill’s mortgage access fee upfront and one-time-only and provide more independent regulation for the Federal Home Loan Banks. ABA also opposed efforts to impose a fiduciary duty on corporate trustees as part of their relationship with servicers and investors.

“The Johnson/Crapo discussion draft is a substantial achievement and a solid vehicle for legislative reform of the government guaranteed secondary market system,” ABA said. “It is our hope that our proposed changes are helpful in advancing this important legislation and we stand ready to assist further in addressing these and any other concerns that may arise.” Read the memo.