CFPB is questioning whether to increase the data collected under the Home Mortgage Disclosure Act to better monitor trends and abuses in the market. This would possibly requiring lenders to explain why they rejected a loan and whether they thought it was a so-called “qualifying mortgage.” In addition, financial institutions would have disclose an applicant’s debt-to-income ration, the interest rate, the total origination charges, and the total discount points of the loan.
ABA & Subchapter S Bank Association Seeks Action
ABA urged federal regulators to remedy a provision in the Basel III capital standards that disadvantages the 2,000 community banks organized as Subchapter S corporations.
‘Heightened Expectations’ for Banks
The OCC recently released proposed amendments to its Part 30 regulations, which reflect the agency’s “heightened expectations” for large banks. The “Interim Final Rule,” contains risk-management standards for institutions with more than $50 billion in assets. It also places greater responsibility on board members, particularly independent directors, to ensure that the rules are followed and to require that banks have independent audit and risk-management officers who can go straight to the board with concerns. In the Interim Final Rule OCC has explicitly reserved authority to apply the guidelines to an institution with less than $50 billion in assets if the OCC determines that it is highly complex or otherwise presents a heightened risk.
Sole Proprietors Face Hurdles Obtaining QM Loans
Self-employed individuals and small-business owners may not meet the requirements of new mortgage rules that went into effect Friday and could face hurdles obtaining new home loans.
CFPB to Revisit Qualified Mortgage Exemption?
According to Richard Cordray,The Consumer Financial Protection Bureau’s agency director, the CFPB could consider expanding exemptions for small lenders from its qualified mortgage rule after it goes into effect on Friday. Mr. Cordray asked for input from community bankers, credit unions, and other lenders to let the CFPB know if they “got the line right.”
S Corp Banks Performance and Dividend Practice Compared to C Corp Banks
In Volume 16, Issue 4 of the Sub S Bank Report, The Subchapter S Bank Association engaged a statistics and mathematics graduate student at Georgetown University, Washington, DC to review some performance measures and other statistics of interest on Sub S Banks. The attached raw data reflects some interesting comparisons between the profitability and dividend practices of S corp banks versus C corp banks. In addition, S corp bank conversions from S corp back to C corp tax status was also tracked over the past 4 years. While not statistically significant, total conversions from S to C were 123 banks.
FDIC Issues List of Banks Examined for CRA Compliance
FDIC today issued its list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in October 2013.
OCC Report Focuses on Risks Facing National Banks and Federal Savings Associations
National banks and federal savings associations continue to face a number of risks as they seek to improve profits in the face of slow economic growth and a prolonged low interest rate environment. Banks are layering risk back into the system in ways that are difficult to quantify at this point in the cycle. That is why risk management must remain a top priority according to the Office of the Comptroller of the Currency’s semiannual assessment of risk.
Agencies issue statement on supervisory approach for qualified and non-qualified mortgage loans
Four federal financial institution regulatory agencies today issued a statement to clarify safety-and-soundness expectations and Community Reinvestment Act (CRA) considerations related to Qualified Mortgage loans and non-Qualified Mortgage loans offered by regulated institutions.
Agencies Final Rule to Exempt Subset of Higher-Priced Mortgage Loans from Appraisal Requirements
Six federal financial regulatory agencies today issued a final rule that creates exemptions from certain appraisal requirements for a subset of higher-priced mortgage loans. The exemptions are intended to save borrowers time and money while still ensuring that the loans are financially sound.