SDBA eNews: May 22, 2014

In This Issue

ABA Updates Mortgage Compliance FAQs

ABA has updated two sets of frequently asked compliance questions relating to the CFPB’s mortgage origination and servicing rules.

The updated origination FAQs cover the determination of residual income, increasing an interest rate to offset points and fees, seller credits to reduce points and fees, construction-to-permanent financing, disclosure of valuation materials and the definition of “business day.”

The updated servicing FAQs examine calculating delinquency, vacant and abandoned properties, foreclosure for reasons other than delinquency, “collection contracts,” periodic statements for accelerated loans and other servicing-related matters.

FHLB Des Moines Takes Nominations for Strong Communities Award

The Strong Communities Award demonstrates the value that communities throughout the Midwest derive from small business and economic development projects.

Federal Home Loan Bank of Des Moines has a chance for its members to honor projects that promote small business growth and demonstrate a stronger, more prosperous community.

This award, sponsored by the FHLB Des Moines Strong Communities Fund, recognizes initiatives that improve the communities around them. Learn more online or contact Mitch Fastenau, 800.544.3452, ext. 1069 if you have any questions.

The nomination process ends June 6.

SDBA Taxation Equality Awareness Campaign


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Upcoming Events

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Contact Alisa DeMers, SDBA, at 800. 726.7322 or via email.

Party Like a Rock Star at Annual Convention

The NDBA/SDBA 2014 Annual Convention offers three nights of rockin events June 8-10 in Fargo, N.D.

Dakota bankers are rock stars in their communities. This year's convention theme is "Rock On," so bring out your leggings and big hair.

  • Backstage Networking Party: Reconnect with fellow bankers and business partners Sunday evening at the Backstage Networking Party. Enjoy a casual backstage lounge evening atmosphere and have the opportunity to network and taste wines that rock. Learn more.

  • '80s Rock Star Party: Join SDBA and NDBA staff for an '80s Rock Star Party in the Exhibit Hall on Monday night. Dress up as your favorite '80s rock star and be entered in the costume contest for awesome prizes. Enjoy rockin food, high energy business partners, mind-blowing prizes and entertainment. Learn more.

  • A Night Out at The Venue at the Hub: Dress up in your best blue or black attire and have a night out on the town Tuesday evening. Travel will be provided to Fargo's hottest destination -- The Venue at the Hub. Enjoy an evening of fabulous food, drinks and hits from the past and present by Liquid Blue. Learn more.

 See the full agenda and register to attend.

Sen. Leahy Pulls Patent Reform Bill

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) yesterday said that the committee would not consider a bill, S. 1720, that is intended to deal with the problem of patent trolls, which use overly broad patents and threats of litigation to solicit payments from banks and other businesses.

Leahy pulled the bill because of opposition from lobbying groups for patent trolls but also from large patent-holding manufacturing and technology companies, universities, inventors and others that were concerned that certain litigation reform and other provisions in the bill could affect legitimate patent holders.

ABA supports several provisions in the bill, including those that would have provided relief from vaguely worded “demand letters” threatening lawsuits unless licensing fees are paid for patents asserted on ATMs and other common technologies banks use on a daily basis. Although ABA is disappointed with Leahy’s decision not to consider S. 1720, it will continue its efforts to deal with the patent troll problem banks face. For more information, contact ABA's Bill Boger.

The South Dakota Legislature passed a bill this session, proposed by the SDBA, to give the state's banks and small businesses a way to fight back against the activities of patent trolls.

GSE Watchdog Assesses Progress on New Securitization Platform

Fannie Mae and Freddie Mac’s common securitization infrastructure platform needs timelines and cost estimates both for system components and the overall project, the Federal Housing Finance Agency’s inspector general said in a report yesterday.“Moving forward without employing these critical project management tools would, in our estimate, increase the risks inherent in the development and implementation of the CSP,” the report said.

Other risks the report identified were the difficulties of constructing a large, public-private information technology project, as well as integrating Fannie and Freddie’s systems with the new platform’s.

FHFA Director Mel Watt recently scaled back the project’s scope by focusing it on Fannie and Freddie’s current operations, rather than trying to build a platform for use by other participants in a still-undefined future secondary market as originally intended. Read the report.

CFPB to Open Up Advisory Council Meetings

The Consumer Financial Protection Bureau said Tuesday that it will improve transparency for its advisory council meetings by welcoming the public to attend the meetings or view a live stream of the proceedings. The bureau has four councils composed of consumer advocates, community bankers, credit union representatives and academics.

The CFPB’s action follows calls by House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Rep. Sean Duffy (R-Wisc.) earlier this year to open the gatherings in keeping with the principles of the Federal Advisory Committee Act.

The CFPB’s Community Bank Advisory Council has met four times since October 2012. Eight of its 14 members represent ABA member banks. Read more.

Senators Quiz Regulators on Virtual Currencies

The Senate Banking Committee’s chairman and ranking member -- Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho) -- on Monday wrote to Treasury Secretary Jack Lew and the heads of the Commodity Futures Trading Commission, Federal Reserve, FDIC, OCC and Securities and Exchange Commission requesting their perspectives on the regulation of virtual currencies like bitcoin.

Specifically, Johnson and Crapo asked how virtual currencies fit into the U.S. banking, payments and trading systems; what actions, if any, the agencies have taken with law enforcement on virtual currencies; and what they expect of supervised institutions for Bank Secrecy Act compliance. They also asked whether the agencies will conduct rulemaking on virtual currencies.

“We believe it is vital that the financial regulators coordinate when considering virtual currency issues, especially if bitcoin and other virtual currencies become more widely adopted by consumers and small businesses,” they wrote. Read the letter.

Senate Banking Committee Passes Johnson-Crapo Bill

The Senate Banking Committee last week passed the Johnson-Crapo GSE reform bill, S. 1217, by a bipartisan 13 to 9 vote. The committee adopted a package of amendments that included an ABA-advocated measure to clarify and limit the authority of the bill’s proposed government reinsurer, the Federal Mortgage Insurance Corporation, and to mandate that it coordinate with other regulators to eliminate duplication.

“The bill establishes a thoughtful and realistic framework for a limited federal role in the housing finance system,” said ABA President and CEO Frank Keating. “The legislation incorporates many recommendations made by ABA and the Bipartisan Policy Center.”

“While more work lies ahead before the full Senate considers the bill, today's action is a positive and needed step,” he added. “We thank the members of the Senate Banking Committee and their staffs for their hard work and pledge to continue to work toward practical, needed GSE reform.”

The bill, which builds upon an earlier bill by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.) and incorporates many policy recommendations from ABA’s committees on GSE policy and the Federal Home Loan Banks, would eliminate Fannie Mae and Freddie Mac and replace them with a new entity -- the FMIC -- patterned after the FDIC.

The FMIC would provide a guarantee for eligible mortgages originated by the private sector. Mortgages would be packaged for the secondary market through private sector aggregators, guarantors, insurers and securitizers.