SDBA eNews

June 6, 2019

McWilliams: CRA Reform to Clarify Qualifying Activities, Lending Assessment

In remarks Wednesday at a meeting of community development bankers, FDIC Chairman Jelena McWilliams highlighted several ongoing initiatives at the agency to strengthen and sustain the nation’s community banks, including the highly-anticipated reform of the Community Reinvestment Act regulations.

McWilliams stressed that modernization of the Community Reinvestment Act will focus on clarifying exactly what bank activities qualify for CRA credit. The revised regulatory framework will also address the lending offered beyond a bank’s brick-and-mortar market area, as well as ways to ensure that CRA investments target those most in need within the community. While she did not put a timeline on the reform process, she noted that she continues to meet regularly with her counterparts at the OCC and Federal Reserve “to see if we can come to a broad agreement on a set of priorities for CRA reform.”

Other topics addressed by McWilliams during the meeting included the agency’s efforts to support minority depository institutions, issue guidance on small dollar lending and foster innovation. Read the speech.

ABA Urges FCC to Protect Lawful Bank Calls

As the Federal Communications Commission prepares to vote Thursday on a proposal permitting telephone companies to block unwanted calls, ABA submitted two letters to the commission explaining how it could result in the erroneous blocking of lawful calls placed by banks. The letters expanded upon arguments made by ABA and other trade groups in a separate communication late last week urging the FCC to seek feedback before moving forward with the proposal.

The FCC’s draft declaratory ruling would permit voice service providers to enroll customers automatically in a call-blocking program that is “based on any reasonable analytics designed to identify unwanted calls.” The ability for customers to opt out of the program would be required. If adopted, the ruling would be effective immediately.

ABA explained that bank calls are currently being mislabeled as suspected “spam” or “nuisance.” The association also pointed out that many of the bank calls that are at risk of being blocked are not “unwanted” calls, but rather calls placed by the bank in response to a customer’s request, such as low-balance alerts.

House Extends NFIP Authorization Through Sept. 30

By a vote of 354 to 58, the House on Monday night passed a disaster aid bill that included an extension of the National Flood Insurance Program until Sept. 30. President Trump was expected to sign the bill. The House is expected to begin consideration of a longer-term extension for the NFIP in the coming days.

Waters to Prioritize Affordability in Long-Term NFIP Renewal

As House Financial Services Committee members continue preparing a much-anticipated long-term reauthorization of the National Flood Insurance Program, Chairwoman Maxine Waters (D-Calif.) said Wednesday that she is focusing on affordability of NFIP premiums. Speaking at an insurance industry event, she said her legislative approach includes repealing surcharges and delivering premium assistance to low-income NFIP policyholders.

“I will oppose any efforts to substantially raise premiums or to otherwise add to the affordability burdens that we in Congress are working so hard to tackle,” she said. “Similarly, I will oppose any efforts to weaken grandfathering protections that simply allow homeowners who played by the rules and did everything right to avoid being penalized for changing factors outside of their control.”

“Flood insurance has long been an issue that defies partisanship,” Waters said, adding that she hoped the committee would be able to work in a bipartisan fashion developing legislation “that includes much needed reforms to address affordability, improve mapping, enhance mitigation and ensur[e] that policyholders are protected.” While Congress recently passed its 12th short-term extension to the NFIP since 2017—authorizing the program through Sept. 30—ABA has long supported a long-term renewal that provides certainty to the housing sector. Read Waters' speech.

New ABA White Paper Helps Bankers Understand the Internet of Things

As part of its efforts to help bankers understand and leverage the benefits of fintech, ABA has published a free white paper on the Internet of Things, or IoT. A supplement to ABA's Fintech Playbook, the paper describes IoT’s potential to revolutionize how banks operate.

According to the white paper, increased connectivity, driven by the adoption of 5G and satellite internet, will lead to significant adoption of internet-connected devices which create a network known as IoT. This network is expected to have a significant effect on banking, with payments becoming seamless as digital wallets are embedded across multiple devices. In addition, highly granular data collection will enable greater customization and smarter loan decisioning. The paper also discusses the many challenges IoT will bring to the industry, noting that it will require smart strategies around data management, security and privacy.

In addition to the paper on IoT, ABA has also published supplements on artificial intelligence, digital lending and more. Bankers can access the papers as well as other fintech resources by visiting the white paper.

Podcast: Innovation and Inclusion with Fifth Third

Greg Carmichael entered the banking industry as a mid-career technology executive, and that's shaped his perspective on the challenges facing banks today. "Financial services was ripe for the opportunity to use technology different to change the business model," he says. On the ABA Banking Journal Podcast, Carmichael—the chairman and CEO of Fifth Third Bancorp in Cincinnati—discusses:

  • The strategic investments that Fifth Third has made to enhance its ability to serve its customers and improve its operations.
  • His "buy-partner-build" approach to innovation.
  • Creative products designed to help millennials pay down student debt and help consumers understand their own spending patterns.
  • Fifth Third's Express Banking product, which is designed to help the unbanked access banking services in a safe and convenient way.

Listen to the episodeRead more in an ABA Banking Journal Q&A with Carmichael.

FDIC Seeks Feedback on Technical Assistance

In a financial institution letter Monday, the FDIC issued a request for information seeking feedback on its efforts to provide technical assistance to FDIC-supervised institutions. Comments are within 60 days of publication in the Federal Register.

Specifically, the FDIC is seeking input on strategies to improve the effectiveness of the FDIC's technical assistance offerings, including videos, the Directors' Resource Center, director/banker colleges, teleconferences and webinars, community bank resource kits, regional compliance newsletters and individual assistance to institutions. Read the Financial Institution Letter.

FSB Issues Discussion Papers on Improving Resolvability of Largest Banks

The Basel, Switzerland-based Financial Stability Board has published two discussion papers for comment on possible actions to improve the resolvability of global systemically important institutions. The papers focus specifically on the public disclosure of resolution planning and resolvability and the solvent wind-down of derivatives and trading portfolios. Comments on the papers are due by Aug. 2. Read more.

Compliance Alliance

Question of the Week

Question: For examination purposes, should we be logging all changes to our website or just the ones related to compliance?

Answer: Since the bank's website is generally considered an advertisement and sometimes contains disclosures required by federal regulations, the bank would want to be sure to retain records of the webpages for any applicable retention periods. How long the pages should be kept would generally depend on the regulation that the content of the page falls under. For example, if the page contained an advertisement for deposit accounts, then the bank would want to retain a copy of that webpage for two years under Regulation DD.

The bank may also find our Record Retention Schedule helpful here:

Not a member? Learn more about membership with Compliance Alliance by attending one of our live demos:

Compliance rules and regulations change quickly. For timely compliance updates, subscribe to Compliance Alliance’s email newsletters.

Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call 888.353.3933 or email.

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