SDBA eNews: June 12, 2014

In This Issue

CFPB, Fed to Host TILA-RESPA Integration Webinar

The Consumer Financial Protection Bureau and the Federal Reserve will co-host a webinar on June 17 to answer basic compliance questions about the TILA-RESPA integrated mortgage loan disclosures.

The webinar is expected to be the first in a series that will help financial institutions implement the new forms, known as the Loan Estimate and the Closing Disclosure.

“The CFPB anticipates a substantial volume of compliance and interpretive questions during implementation and plans to use these webinars to consolidate and address these questions in a way that promotes consistent understanding of the rules and provides a resource that stakeholders may reference,” the agencies said.

Webinar, Guide Helps Bankers Tell Housing Stories

ABA invites bankers to tell their housing stories as part of “American Housing Month” in June, offering a members-only guide and a free webinar.

The webinar, on June 17 at 2 p.m. EDT, will help bankers showcase their affordable housing efforts to media and the general public.

The communications guide on telling your housing story covers broad themes, developing a strategy, sample media tools and social media.

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New SDBA Officers Elected at Annual Convention in Fargo

SDBA membership elected a new slate of officers for 2014-2015 at the SDBA Business Meeting on June 10 at the NDBA/SDBA Annual Convention.

New SDBA officers are:

  • Chairman: George Kenzy, First Fidelity Bank, Burke
  • Chairman-Elect: Rick Rylance, Dacotah Bank, Rapid City
  • Vice Chairman: Paul Domke, Heartland State Bank, Redfield
  • Immediate Past Chairman: Kevin Tetzlaff, First Bank & Trust, Brookings.

This year's convention was held June 8-10 in Fargo, N.D. Look for full convention coverage in the July issue of the South Dakota Banker magazine.

House Panel Passes ABA-Supported Bills

The House Financial Services Committee yesterday voted -- mostly along party lines -- to pass several ABA-backed bills that would reform the Consumer Financial Protection Bureau.

Among them are measures that would reform the Consumer Financial Civil Penalty Fund (passed 31-27), create an independent inspector general for the CFPB (39-20), require transparency in CFPB research (32-27) and require a notice-and-comment period prior to CFPB guidance being issued (35-24).

Read ABA’s memo in support.

SBA to Streamline Lending Process for Loans Under $350K

The Small Business Administration (SBA) will next month ease lending requirements for SBA-backed loans of $350,000 or less, SBA Administrator Maria Contreras-Sweet said Wednesday in Washington. Specifically, the agency will allow banks to use the SBA’s new total credit score model instead of performing analysis of cash flow.

“Our loan documentation is too complex and labor-intensive, forcing banks to hire specialized staff or contract it out -- or walk away from the loan,” said Contreras-Sweet, the former chairwoman and founder of ABA member ProAmerica Bank in Los Angeles. “We cannot afford to lose these partners and turn job creators away.”

The SBA’s model combines an entrepreneur’s personal and business credit score. “We're now so confident of our model's predictive value on small loans that we're eliminating cumbersome analyses of a company's cash flow, a step that can delay loan decisions,” said Contreras-Sweet.

Meanwhile, the SBA is launching a new lending platform called SBA One that will automate document uploads and form generation and allow electronic signatures. “On each 7A loan, our core product, SBA One will save banks hours of processing time and thousands of dollars,” Contreras-Sweet explained. Read the speech.

CFPB Signals Interest in Mobile Banking

The Consumer Financial Protection Bureau is requesting information about how consumers use mobile banking.

Noting that the use of mobile financial services continues to grow -- especially among the young and the underbanked -- the bureau broadly requested general information on how mobile banking is used, information about any barriers to customers accessing mobile banking and potential consumer protection issues associated with low-income customers using mobile banking.

Any responses are due Sept. 9. Read more.

ABA Urges Agencies to Supervise Appraisal Management Firms

The federal financial agencies should establish a registration system for appraisal management companies in states that do not set up their own systems, ABA said in a comment letter Monday.

The agencies in March proposed minimum requirements for state supervision of appraisal management companies under the Dodd-Frank Act. They would not require states to regulate AMCs, but if states do, AMCs must register in the state, use only state-certified or licensed appraisers for federally related transactions and ensure appraisals are independent.

ABA explained that banks depend on appraisal management services to comply with mortgage rules. “[T]he proposed rule creates a dangerous legal void that can cause harmful lending disruptions for banks in affected jurisdictions,” the association said. Moreover, ABA added, Dodd-Frank’s language requires AMCs to be subject to state supervision and authorizes the agencies to become a default supervisor of AMCs in states that do not meet the act’s minimum standards. Read the letter.

Obama Announces Executive Order on Student Loan Burden

President Obama on Monday announced executive actions to reduce student loan burden, capping payments at 10 percent of monthly income for federal borrowers and providing additional relief for student borrowers.

Obama ordered the Education Department to implement the 10 percent payment cap for direct student loans by December 2015. He also instructed the Treasury and Education Departments to improve incentives for federal student loan servicers to improve performance, reduce active-duty military rates without additional paperwork, communicate repayment options through the tax filing process and personal finance software, improve outreach to vulnerable borrowers and provide better counseling to potential borrowers and their families.

Read more.