CFPB Sets Up ABA-Advocated Rural Designation Appeal Process
The Consumer Financial Protection Bureau yesterday issued a final rule establishing process by which businesses and individuals can appeal the bureau’s designation of a rural area. The final rule implements a regulatory relief measure, long advocated by ABA, that Congress passed in December. Under the rule, the CFPB will begin accepting appeals on March 31.
The Dodd-Frank Act gave the CFPB discretionary authority to exempt certain loans from the qualified mortgage rule for banks serving areas that it deems “rural” or “underserved.” Given the CFPB’s struggle to appropriately define what constitutes rural, and the significant impact that the designation -- or lack thereof -- can have on small lenders and their customers, ABA urged Congress to mandate a formal process by which banks can appeal for rural status. When the measure was first proposed in 2014 through a collaboration with an ABA member banker, the Kentucky Bankers Association and Rep. Andy Barr (R-Ky.), ABA was the only banking trade group that testified in favor of it on Capitol Hill.
“This legislatively mandated appeals process brings needed meaningful relief to rural bank customers, facilitating the provision of credit in areas that need it the most,” said ABA EVP Bob Davis. “Thanks to grassroots efforts by bankers and bipartisan congressional leadership, bankers in demonstrably rural areas have a way to get the regulatory relief the law provides for them.”
To request rural status, banks must submit supporting information from federal and state agencies, including the U.S. Census Bureau, the Office of Management and Budget, the Department of Agriculture and the state banking supervisor about whether the area in question is designated as rural and describing its population density in comparison with other CFPB-designated rural areas nearby. The bureau said it would issue interpretive guidance on the term “rural area” before March 31.
The bureau will publish complete applications in the Federal Register within 60 days of receiving them, collect public comments for at least 90 days and make a final determination at most 90 days after the comment period closes. Due to a two-year sunset on the process included in the legislation, applications must be received by the bureau before April 8, 2017. Read the final rule.
ABA-Advocated Tailored Reg Bill Clears House Committee
By a bipartisan 34-22 margin, the House Financial Services Committee yesterday advanced the ABA-advocated TAILOR Act. The bill -- a key part of ABA’s Agenda for America’s Hometown Banks and crafted with the assistance of the state bankers associations and ABA -- would direct financial regulators to tailor regulatory actions based on the sizes, business models, risk profiles and other differentiating characteristics of the institutions they supervise.
“This important legislation would help address the tremendous influx of new regulations that have made it more difficult for banks to meet the needs of consumers and small businesses as well as local and regional economies,” said ABA EVP James Ballentine. “While regulation is a fact of life for banks, indiscriminately applying rules to institutions whose business models and risk levels don’t warrant it serves only to increase costs and lessen the number of financial products and services available to consumers.”
ABA, Associations Urge Congress to Protect Crop Insurance
In a joint letter last week, ABA and several farming industry groups called on congressional budget committees to protect crop insurance as they develop budget proposals for fiscal year 2017, urging them not to reopen the 2014 Farm Bill in their efforts to reduce the national deficit.
“An overreliance on savings from the agriculture community in the future will greatly undermine rural economies that have faced an estimated 54 percent decline in net farm income from 2013 to 2015,” the groups wrote. “In these challenging economic circumstances, it is federal crop insurance that will provide lenders the assurances they need to provide capital to America’s farmers and ranchers.”
Crop insurance is vitally important to the nation’s farmers, particularly after the Farm Bill placed a greater emphasis on risk management, the associations said. They added that the bill has already made significant contributions to deficit reduction, and that crop insurance is expected to come in $6 billion under budget between 2014 and 2023. Federal crop insurance has also reduced demand for ad hoc disaster assistance -- an entirely taxpayer-funded initiative. Read the letter.
OCC Outlines Response Procedures for BSA Compliance Violations
The OCC on Monday issued a bulletin updating the procedure by which banks may respond to potential noncompliance with BSA compliance program requirements or repeat or uncorrected BSA compliance problems.
Under the U.S. Code, the OCC is required to issue a cease-and-desist order when citing BSA compliance violations. When potential noncompliance or an uncorrected issue is identified, the OCC provides bank management with written notice about the violation.
The bank then has 15 days to respond to the written notice before the decision to issue a cease-and-desist order is finalized. The OCC reviews the information submitted by the bank before making a determination about whether or not to pursue an enforcement action. Read the bulletin. For more information, contact ABA's Rob Rowe.
Make Plans to Attend Tri-State Trust Conference in April
Registration is now open for the 2016 Tri-State Trust Conference April 25-27 in Fargo, N.D., at the Hilton Garden Inn. This year's conference will open with magician and mentalist Tim David’s keynote “Body Language and Magic Words for Managers.”
Featured presentations include David Richman's “Client Primacy: Inspiring Intentional Outcomes," Jim DeMasi's “Economic and Interest Rate Outlook," Sharon Carson's “Healthcare Costs in Retirement," and Jonathan Blattmachr's “Estate Planning Update.”
Other hot topics to be discussed will include leadership ethics, unique asset management, update on the IRS 2 percent trustee fee regulation, and a retirement plan legislative and regulatory update.
In addition, more than 30 companies will participate as exhibitors. More information and register.
Free First Quarter Update Webinar
Diehl and Associates, in conjunction with the SDBA, is hosting a free First Quarter Update Webinar on March 25 at 12:30 p.m. CST. Diehl President Scott Weghorst will cover information from the Nationwide Multistate Licensing System Convention and more.
The Fed raised rates and the market rates didn’t change? CFPB’s regulatory priorities tell us about where they are focused, but what else should we know? What is the outlook for the rest of 2016?
Join us for a lively and informative webinar. Learn ways to leverage this timely information into your business plans. Space is limited. Register for the webinar.
And don't miss the two-day FHA and USDA Mortgage Skills Course on May 18-19 at RedRossa Italian Grille in Pierre. More information and register.
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