SDBA eNews

November 15, 2018

FDIC Seeks Information on Small-Dollar Loans

The FDIC is seeking public feedback on the steps it can take to encourage FDIC-supervised banks to offer small-dollar credit products to meet the needs of consumers, the agency announced yesterday. Comments will be due 60 days after publication in the Federal Register.

Specifically, the FDIC is seeking information about consumer demand for small-dollar credit products, features and characteristics of these products, and the benefits and risks to banks offering them. The FDIC is also interested in the challenges that stand in the way of banks’ ability to offer small-dollar credit products, how technology can play a role in offering these products or assessing the creditworthiness of potential borrowers, and how alternative products or services could supplement or complement small-dollar credit offerings.

ABA has long called on regulators to remove barriers that impede banks from making small-dollar loans, and earlier this year welcomed guidance from the OCC encouraging banks to make responsible short-term, small-dollar installment loans to help meet the credit needs of their customers. The association has previously called on the FDIC to rescind its 2013 guidance on direct deposit advance services, which imposes requirements on banks that are inconsistent with efficient underwriting standards, and will submit feedback to the bureau in response to the RFI. Read more. For more information, contact ABA's Jonathan Thessin

ABA Unveils New 'Basic Bank Training' for Servicemembers, Military Spouses

The ABA on Monday launched a new training initiative designed to help veterans, active-duty servicemembers and military spouses transition to careers in banking. The series--Basic Bank Training for Veterans--consists of eight self-paced online courses covering a range of topics including customer service, lending, payments and ethics.

With an estimated 230,000 to 245,000 U.S. military members entering civilian life each year according to the U.S. Department of Defense, ABA developed this suite of courses to assist veterans with their transition and to help banks tap into a community of uniquely talented job candidates. The program is available free to banks and to qualified individuals--including active-duty military spouses--who request access on their own. Learn more about the training.

A recent article on the ABA Banking Journal website highlights the many ways banks can support military servicemembers on their families by providing financial education and job and mentorship opportunities. Meanwhile, a new bonus episode of the ABA Banking Journal Podcast features an interview with Steve Lepper of the Association of Military Banks of America. Lepper discusses the unique financial needs of service members and veterans, the employment potential of veterans and military spouses and what banks are doing to serve these populations. Read the article. Listen to the podcast

ABA Issues Comment Letter Writing Guide to Help Bankers Draft CRA Comments

The ABA has developed a comment letter writing guide to help bankers draft letters in response to the OCC’s advanced notice of proposed rulemaking on modernizing the Community Reinvestment Act. With the comment deadline of Nov. 19 fast approaching, it is critical that regulators receive feedback from as many banks as possible, regardless of regulator.

The guide includes directions for filing comment letters and suggests several key themes bankers could address, including the challenges of the current CRA framework, CRA performance standards, assessment areas, and the various activities that count toward CRA credit. Bankers need not address all points in their letters; comments that provide one example or describe one CRA challenge can be very impactful.

The financial regulatory agencies have signaled that banker feedback will play an important role as they work collaboratively to update the CRA regulations. For bankers, this initiative is a critical opportunity to make meaningful changes that will help bring the 30-year-old statute into the 21st century. View the guide. For more information, contact ABA's Krista Shonk

Podcast: Giving Thanks for Banks' Community Commitment

The latest episode of the ABA Banking Journal Podcast features short interviews with the winners of ABA's 2018 Community Commitment Awards. Recorded before a live audience at ABA's Annual Convention in New York, where the awards were presented, each interview explores the winning program or initiative at each bank and provides insights on how they might be implemented or adapted at other banks. These stories present the perfect inspiration for the upcoming Thanksgiving holiday.

Interviewees represented U.S. Bank (affordable housing); Citizens Bank, Batesville, Ark. (community and economic development); Eastern Bank, Boston (economic inclusion); Bank of Nevada, Las Vegas (financial education); Old National Bank, Evansville, Ind. (protecting older Americans); and United Bank, Parkersburg, W.Va. (volunteerism). The episode also features Marcus Vasquez of Allegiance Bank in Houston, the winner of the 2018 George Bailey Distinguished Service Award. Listen to this episode

FDIC's McWilliams Previews Role of Office of Innovation

After announcing during the ABA Annual Convention last month that the FDIC will create an innovation office, FDIC Chairman Jelena McWilliams on Tuesday offered additional insight into what such an office would look like when up and running. In remarks at a fintech event hosted by the Federal Reserve Bank of Philadelphia, McWilliams said FDIC staff will focus specifically on how the agency can provide a safe environment for innovation that is already ongoing; how it can promote technological development at community banks with limited resources; what policy changes are needed to support financial services innovation; and how the FDIC can transform itself to enhance financial system stability, ensure consumer protection and reduce regulatory burden.

“[I]nnovation can introduce safe and reliable products and services that will bring more Americans into the banking system,” McWilliams said. “It is my goal that the FDIC lay the foundation for this next chapter of banking, encouraging innovation that meets consumer demand, promotes healthy and successful banks, and reduces compliance burdens.” Read McWilliams' remarks

ABA Joins Other Payments Leaders to Launch Faster Payments Council

To continue U.S. progress toward faster payments, ABA and several other leading organizations and institutions in the payments industry on Tuesday launched the Faster Payments Council. The private-sector group grew out of a work stream of the Federal Reserve’s faster payments initiative, and its mission is to support safe and secure practices for service providers and payment users; ensure emerging challenges are addressed in a collaborative way; and develop an educational program to increase understanding of faster payments.

In addition to ABA, the founding members of the FPC include the Oklahoma City-based Bankers’ Bank; Kansas City, Mo.-based Commerce Bank; JPMorgan Chase; Madison, Wis.-based Bankers’ Bank; and Wells Fargo. Other members include payment card networks, core processors, payment system administrators and retailers. All U.S. payment system stakeholders are eligible to join. Learn more.

FDIC Releases Updated Financial Education Curriculum 

In a financial institution letter yesterday, the FDIC announced its release of the 2018 version of Money Smart for Adults, an instructor-led financial education curriculum. Replacing the 2010 version, the new release is designed to help consumers manage finances with confidence through practical knowledge, skills and resources. Financial institutions can use the curriculum to partner with nonprofits and government entities and offer financial education to their communities. Read more

FFIEC Releases Cybersecurity Resource Guide

The Federal Financial Institutions Examination Council has released a Cybersecurity Resource Guide for Financial Institutions that provides an overview of resources designed to assist in financial sector resilience. Included in the guide are the Financial Services Sector Specific Cybersecurity Profile, which provides a common, credible approach to cybersecurity and assessment, and Sheltered Harbor, an industry-wide effort to improve sector-wide resilience. ABA has been closely involved with both of these initiatives. View the guide

Compliance Alliance

Question of the Week

Question: Under Reg. DD, if a time account product is advertised generally is there a requirement to provide the term for CDs if a specific CD product is not advertised, and instead, simply that time accounts are among products offered? 

Answer: No, you’re not required to provide the time requirements in 1030.8(c)(6)(i) when you are only advertising CDs generally and not a specific product. The time requirements are required when you are advertising a specific annual percentage yield (or a bonus which would trigger the APY). If you advertise the APY, it is considered a “trigger term,” which requires you to provide all of the required information in 1030.8(c), as applicable. Since you are only advertising a general product and no APY, the time period requirement is not necessarily required. (c) When additional disclosures are required. Except as provided in paragraph (e) of this section, if the annual percentage yield is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously:  (6) Features of time accounts. For time accounts: (i) Time requirements. The term of the account. 12 C.F.R. 1030.8(c)

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Contact Alisa Bousa, SDBA, at 800.726.7322 or via email.