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News By Edition
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Dodd Frank Update Monthly Edition
Dodd Frank Update May 2020
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As PPP funding runs out, Hunt says demand may be $1 trillion
Posted Date: Friday, April 17, 2020
Depending on when you’re reading this story, funding for the Paycheck Protection Program (PPP) already might be gone.
That’s how fast the Small Business Administration has been providing delegated authority to lenders to disperse PPP loans. By mid-afternoon Wednesday, $5 billion in approvals was being granted every two hours, with more than $301 billion already approved.
Association and bank representatives talked on a conference call about the urgent need for more funding, with demand potentially reaching $1 trillion. Read on for more.
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Fannie, Freddie update loan doc, QC standards
Posted Date: Thursday, June 11, 2020
Shortly after issuing guidance on changes to practices for electronic documentation and appraisal work, Fannie Mae and Freddie Mac issued updated guidance to loan applications. It now has extended that guidance through at least July 31.
The new guidance concerns the age of documentation to be used, standards for power of attorney, changes to quality control requirements, broadening use of remote online notarization and more.
Read on for details from the updated guidance.
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Phase 2 of PPP gets green light
Posted Date: Friday, April 24, 2020
The House followed the Senate’s lead on Thursday by approving an additional $310 billion in funding for the Paycheck Protection Program. Despite bipartisan calls for urgency in restarting the process, though, lenders did not learn until Friday afternoon when the program would be scheduled to restart.
There are changes to the program under the legislation that must be sorted out before the agency can take applications again, and the Treasury Department issued new guidance Thursday which could be a stumbling block as lenders prepare the next round of applications.
Read on for all the latest.
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PPP deal in place, but when will it restart?
Posted Date: Tuesday, April 21, 2020
The devil is in the details, and in this case it appears the details might hold up the restart of the Paycheck Protection Program (PPP) until next week – or longer.
The first step in the process of replacing PPP funding began Tuesday afternoon, when the Senate approved the replenishment of funding by unanimous consent.
Read on for the latest on the plan, the next steps, and how lenders might be affected by the new legislation.
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Origination forecast: Better than 2019
Posted Date: Tuesday, April 21, 2020
The headlines can seem grim. Behind those headlines, though, is a reality that people within the real estate industries understand – business is active and busy and hasn’t slowed down, in spite of the effects from the pandemic disruption.
Those facts are born out in two recent reports from Fannie Mae and the Mortgage Bankers Association (MBA), with both groups revising their forecasts after the pandemic took hold and still showing the origination market performing at its best level in nearly 15 years.
MBA talked with Dodd Frank Update about just how strong the origination market is expected to perform.
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FHFA offers ‘clarity’ for servicers during forbearance
Posted Date: Tuesday, April 21, 2020
The Federal Housing Finance Agency announced a plan to provide “stability and clarity” for servicers working with loans backed by Fannie Mae and Freddie Mac.
But the announcement is a far cry from the liquidity facility that Congress and HUD Secretary Ben Carson have called for to help servicers dealing with skyrocketing forbearances.
Read on for more details from the agency’s announcement.
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MBA: Profits quadrupled in 2019 from previous year
Posted Date: Tuesday, April 21, 2020
The mortgage market in 2019 was not simply more active than any year since 2006. It was hugely profitable for the industry as well.
The Mortgage Bankers Association reported that independent mortgage banks and mortgage subsidiaries of charted banks quadrupled their profits in 2019 from 2018.
Read on for details from the report and reaction from the association.
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Forbearances grow by 1.1 million in a week
Posted Date: Monday, April 20, 2020
The Mortgage Bankers Association (MBA) reported that the number of loans in forbearance grew by 1.1 million in the past week.
MBA’s Forbearance and Call Volume Survey showed the number of loans in forbearance jumped to 5.95 percent of portfolio volume as of April 12, up from 3.74 percent the week before.
Read on for more details from the survey results and reaction from MBA’s Mike Fratantoni.
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Black Knight examines early effects of disruption
Posted Date: Friday, April 17, 2020
The impact of the business disruption of the past month has been evident in many ways across the mortgage and real estate industries. Black Knight Inc. recently released a whitepaper diving into some of the most important ways in which business has changed in this time.
To begin with, Black Knight said the pandemic is significantly affecting the real estate and mortgage industries. Showings, listings and sales are affected by social distancing standards, as well as disruptions to closings.
Read on for details and recommendations from the company’s whitepaper.
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Roundup: Federal regulators offer host of reg relief
Posted Date: Friday, April 17, 2020
Federal regulators have been hard at work the past couple of weeks to provide regulatory relief to the industry as quickly as possible.
That includes actions taken by the Consumer Financial Protection Bureau, by the prudential financial regulators, and by the National Credit Union Administration.
Read on for details of the myriad of actions taken by federal regulators to assist the industry.
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With PPP funds tapped, wait for reauthorization begins
Posted Date: Friday, April 17, 2020
Shortly after 10 a.m. on April 16, funding for the Paycheck Protection Program officially was tapped out.
The Small Business Administration announced that it had granted delegated authority to disperse more than $339 billion in funds across more than 1.6 million loans to nearly 5,000 lenders across the country. It will not, however, be taking applications without new funding.
Read on for information on the next steps in the future of the program.
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GAO finds USPS could benefit from offering real estate service
Posted Date: Friday, April 17, 2020
A recent report from the Government Accounting Office examined the potential benefits of expanding banking services through the U.S. Postal Service.
The report looked into non-postal products and services that have been offered at retail facilities for more than a decade, and asked postmasters about the potential impact of expanding services, particularly in rural areas.
Read on for details of the report, and see what real estate-related service postmasters think the system could offer to benefit consumers.
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Mortgage rates back near all-time lows
Posted Date: Friday, April 17, 2020
A pair of new reports found that mortgage rates for a 30-year fixed loan are back near all-time lows, driving refinancing activity once again.
The Mortgage Bankers Association and Freddie Mac reported that refinance activity continued to remain strong as the rates fell again.
Read on for details from the latest on the markets.
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PPP update: More funding needed fast
Posted Date: Tuesday, April 14, 2020
Despite struggles with systems and guidance in the first 10 days of the Paycheck Protection Program’s launch, it appears that the $349 billion earmarked for the program by Congress won’t be even close to enough to meet demand.
Yet the Senate won’t be able to act before Thursday, and partisan bickering has put what appeared to be sure, swift approval of more funds in doubt.
Read on for the latest on the state of funding, reaction from the industry, and new guidance from the Treasury Department.
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Cordray urges diligence from CFPB to protect consumers
Posted Date: Tuesday, April 14, 2020
As the Consumer Financial Protection Bureau (CFPB) has issued industry guidance the past month to provide regulatory relief during the coronavirus pandemic, one voice is speaking up to urge caution in those plans.
Former CFPB Director Richard Cordray authored a whitepaper with two former colleagues to provide recommendations to the bureau as it navigates the business disruption.
Read on for details of the recommendations, and why the former director believes the bureau needs to “change gears fast.”
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Analyst argues against CECL implementation delay
Posted Date: Tuesday, April 14, 2020
One of the provisions of the CARES Act federal stimulus package passed at the end of March was the delay of compliance with Current Expected Credit Loss (CECL) accounting rule for banks, bank holding companies or their affiliates.
Although the financial services industry has cheered each announcement of a delay in implementation in CECL compliance, Kroll Bond Rating Agency (KBRA) Senior Director Ethan Heisler argued in a recent report that the implementation of the new accounting standard should not be delayed.
Read on for details from the report.
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Moody’s says leverage ratio change provides relief
Posted Date: Tuesday, April 14, 2020
Federal banking regulators recently announced they would lower the community bank leverage ratio temporarily in conjunction with the CARES Act.
The move will lower the leverage ratio from 9 percent to 8 percent, the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency said in a joint statement.
Read on for reaction to the move from Moody’s analysts.
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More than 1.8 million loans in forbearance, MBA finds
Posted Date: Monday, April 13, 2020
The Mortgage Bankers Association (MBA) reported that loans in forbearance spiked again in the first week of April, with about 1.86 million loans currently in forbearance. That has grown from about 12,450 loans in forbearance at the start of March.
“With mitigation efforts seemingly in place for at least several more weeks, job losses will continue and the number of borrowers asking for forbearance will likely continue to rise at a rapid pace,” MBA’s Mike Fratantoni said.
Read on for more details from the latest survey.
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Credit unions navigate PPP
Posted Date: Friday, April 10, 2020
As the first full week of the Paycheck Protection Program kicked into gear, glitches and questions remained, but funding appeared to moving through the system.
Although Small Business Administration-approved lenders and larger banks seemed to get the first spots in line since Friday, new lenders trying to work with SBA on the program struggled to get onboarded. In the credit union industry, that difficulty has been felt acutely.
NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt talked with Dodd Frank Update about the challenges and opportunities credit unions have to help small businesses around the country.
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One more time, Fed takes extraordinary moves
Posted Date: Friday, April 10, 2020
Timed with the release of the weekly jobless claims report, showing for the second consecutive week that a record 6.6 million Americans filed jobless claims, the Federal Reserve announced a host of actions meant to backstop the economy and provide $2.3 trillion of loans.
The Fed announced details on two programs expected, the expansion of lending to other facilities, and one new program – the purchase of municipal bonds, for the first time in Fed history.
Read on for details of the announcement along with reaction from Fed Chairman Jerome Powell and industry representatives.
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As Calabria pans servicer liquidity, senators join MBA call
Posted Date: Friday, April 10, 2020
With the explosion of forbearance requests in March after the announcement by Fannie Mae and Freddie Mac requiring lenders and servicers to offer programs, the plight of servicers’ liquidity has been front and center.
In interviews this week, however, FHFA Director Mark Calabria made it clear that neither FHFA nor Fannie and Freddie would provide assistance, saying he did not see the dire situation that the Mortgage Bankers Association (MBA) and servicers have outlined.
MBA took issue with the comments, and a bipartisan group of senators joined MBA in asking for federal help for the industry. Read on for more.
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Fed allows Wells to expand lending past cap limits
Posted Date: Friday, April 10, 2020
Days after informing customers it had capped its application intake for the Paycheck Protection Program (PPP) because of growth restriction caps from federal regulators, Wells Fargo got news it would be able to do more.
The Federal Reserve announced that it was temporarily lifting the restriction caps on Wells Fargo, imposed because of an enforcement action following a string of regulatory citations from federal regulators.
Wells Fargo welcomed the announcement and said it would immediately expand PPP application intake. Critics were wary of the decision. Read on for more.
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CFPB asks for feedback for consumer taskforce
Posted Date: Friday, April 10, 2020
While business disruption continues in the wake of the COVID-19 pandemic, the Consumer Financial Protection Bureau (CFPB) is requesting information to help its Taskforce on Federal Consumer Financial Law do its work.
The CFPB issued a request for information on recommendations on harmonizing, modernizing, and updating the federal consumer financial laws.
Read on for details of the request.
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Bankers tout PPP, ask White House for help
Posted Date: Friday, April 10, 2020
As the Paycheck Participation Program moved into its first full week, the White House welcomed a group of bankers to meet and discuss the success and concerns about the program.
Treasury Secretary Steven Mnuchin said more than 3,000 banks had participated in the program since it launched, combination of community banks, regional banks and large banks.
Read on for details and for remarks from the three community bank CEOs in attendance.
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PPP update: Lending swells, but questions remain
Posted Date: Tuesday, April 7, 2020
The first days of the Paycheck Protection Program – the section of the federal stimulus act expected to funnel $349 billion in Small Business Administration (SBA) loans to businesses around the country through lenders – has seen a dramatic amount of action, despite some issues which appear to have limited full lender participation.
SBA has said to approved $50 billion since the program’s launch, but not all of those approvals have reached business accounts yet.
Read on for the latest from the agencies and lenders on the program.
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PPP view from the ground
Posted Date: Tuesday, April 7, 2020
Four days into the launch of the Paycheck Protection Program by the Small Business Administration and the Treasury Department, the agencies reported they had granted delegated authority for 175,000 loans totaling $50 billion.
All those loans have been guaranteed despite some questions, concerns, and technology programs which have created a bottleneck for even more work to come.
ICBA’s Paul Merski talked with Dodd Frank Update about the latest progress being made by the industry and federal officials.
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Industry ratchets up pressure for servicing facility
Posted Date: Tuesday, April 7, 2020
Over the weekend, a coalition of financial services associations and affordable housing advocates released a statement calling on regulators to provide a source of liquidity to mortgage servicers preparing for a surge of forbearance requests from borrowers.
Evidence of the coming wave was shown in a Friday filing with the Securities and Exchange Commission by Mr. Cooper and in a new survey released by the Mortgage Bankers Association.
Read on for more details of the industry’s requests for regulators to provide certainty to the market.
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Moody’s says finance agencies can survive forbearance
Posted Date: Tuesday, April 7, 2020
A recent report by Moody’s says that state and local housing finance agencies will be able to weather forbearance programs brought on by the effects of the coronavirus pandemic.
The disruption of cash flow for single-family programs will be a short-term credit negative for those HFAs, Moody’s said, while proposed eviction moratoriums and forbearance on rental projects also will lead to cash flow disruptions for multifamily programs.
Read on for details of the agency’s analysis of the sector.
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eMortgageLaw rebrands as eClosePlus
Posted Date: Friday, April 3, 2020
eMortgageLaw, a provider of digital closing technology, announced it has rebranded as eClosePlus effective immediately. The new name reflects the company's specialization in digital eClosing solutions for the mortgage and title industries that deliver a streamlined closing experience for all parties.
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MQMR makes staffing moves
Posted Date: Friday, April 3, 2020
Mortgage Quality Management and Research, LLC (MQMR) announced today that it has promoted Mabel Lee to Warehouse Due Diligence Manager and hired Scott Weintraub as Internal Audit Manager.
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ARMCO updates ACES IQ with regulatory guidance
Posted Date: Friday, April 3, 2020
ACES Risk Management (ARMCO) announced it has created a new question set category within its ACES Intelligent Questionnaire (ACES IQ) functionality to house all temporary regulatory provisions issued by state and federal agencies and the GSEs in response to the COVID-19 national emergency declaration.
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MBA sounds warning on margin calls
Posted Date: Friday, April 3, 2020
The Mortgage Bankers Association has requested help from the Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) to call on broker-dealers to work with mortgage lenders to prevent a surge of margin calls which could crush liquidity for lenders.
“In short, the dramatic price volatility in the market for agency mortgage-backed securities (MBS) over the past week is leading to broker-dealer margin calls on mortgage lenders’ hedge positions that are unsustainable for many such lenders,” MBA President and CEO Bob Broeksmit stated in a letter to the agencies.
Read on for details of the situation.
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Ginnie to provide servicer liquidity assistance
Posted Date: Friday, April 3, 2020
Ginnie Mae Principal Executive Vice President Seth Appleton announced that the agency would step up to help servicers address potential liquidity problems following business disruptions related to the coronavirus.
“We have heard from our issuer and servicing partners that borrower forbearance arrangements that are nationwide in scope could place an enormous strain on issuers,” Appleton said in a blog post on Ginnie Mae’s site.
Read on for details of Ginnie Mae’s plan to help servicers and issuers meet their obligations as borrowers take advantage of forbearance plans.
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CFPB enforcement staff still on the job
Posted Date: Friday, April 3, 2020
Staff at the Consumer Financial Protection Bureau reportedly is working remotely after workers earlier reported positive tests for coronavirus. But wherever staff is, they clearly are working.
The bureau announced its first enforcement action since March 9, before the pandemic began to shut down work across the country, saying it reached a settlement with Cottonwood Financial Ltd., which operates as Cash Store.
Read on for details of the bureau’s first enforcement action in three weeks.
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Report: DOJ investigating Tolstedt
Posted Date: Friday, April 3, 2020
More than three years after she left Wells Fargo, and since has been targeted as the executive most responsible for the sales practices which led the bank to record enforcement actions, Carrie Tolstedt reportedly is being eyed for criminal prosecution by the Department of Justice.
The woman who has been at the center of blame for the practices at the Community Bank division of Wells Fargo reportedly was on a short list of potential targets for criminal charges, a list which had been narrowed to focus solely on her.
Read on for more details of the latest report.
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NCUA moves all exams offsite
Posted Date: Friday, April 3, 2020
The National Credit Union Administration announced it would move all exams of regulated entities offsite.
The announcement came as the federal regulator said it would maintain a strict offsite policy for all employees and contracted support staff.
Read on for more details about the policy and how long it will last.
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Can servicers tap Fed facility for liquidity?
Posted Date: Thursday, April 2, 2020
After announcements by federal housing agencies that would provide forbearance to borrowers as the COVID-19 pandemic lingers, announcements reinforced by the federal stimulus bill passed by Congress, the servicing industry began to examine options to continue funding operations when borrowers no longer are making regular payments.
The Mortgage Bankers Association called on the Federal Reserve and the Treasury Department to create a separate credit facility to help provide liquidity to the servicing industry over this time. But House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) said that move would not be necessary.
Do servicers have access to the liquidity they may need? Read on for more details.
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CFPB pauses HMDA reporting, other data collections
Posted Date: Friday, March 27, 2020
The Consumer Financial Protection Bureau announced that as of March 26, it will not require lenders scheduled to report quarterly Home Mortgage Disclosure Act data by May 30 to report that information.
The bureau also announced it would pause data collections related to Section 1071 rulemaking over small-business lending, Property Assessed Clean Energy loans and reporting of certain data related to credit card and prepaid accounts.
Read on for more details of the regulatory relief the bureau announced.
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Why servicers have struggled to retain refi borrowers
Posted Date: Friday, March 27, 2020
In the first two months of 2020, as mortgage rates plunged down and pushed the refinancing boom further ahead than many experts expected, Black Knight reported interesting findings about where borrowers were getting their refinance loans.
While activity soared, the report also found that in the fourth quarter of 2019, only one in five borrowers remained with their servicer after they refinanced their loan. That level was even lower among cash-out refinances.
Read on for more details from Director of Market Research Andy Walden about some of the reasons behind the slumping retention rates.
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FDIC approves ILC charters, proposes new rule
Posted Date: Friday, March 27, 2020
The Federal Deposit Insurance Corp. recently approved a pair of industrial loan companies (ILCs) even as the regulator put out a proposal for a new rule concerning the approval of ILCs.
The FDIC granted charters to Nelnet Inc. and Square Financial Services, the first approvals from the FDIC in more than a decade.
Read on for more details of the approval and the proposed rule on future ILC charters.
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Regulators urge banks, credit unions to offer small-dollar loans
Posted Date: Friday, March 27, 2020
Federal financial regulators issued new guidance in the hopes of encouraging banks and credit unions to issue small-dollar lending options to individuals and small businesses looking for liquidity in a time of business disruption.
The statement said the agencies recognized that responsible small-dollar loans can play an important role in meeting customers’ credit needs because of temporary cash-flow imbalances, unexpected expenses, or income disruptions during periods of economic stress or disaster recoveries.
Read on for more details about the announcement, including new information about deadlines for Call Reports.
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Fed says it’ll give institutions a break
Posted Date: Friday, March 27, 2020
The Federal Reserve announced Tuesday night that it would change its focus on the financial institutions it oversees to minimize disruptions and burdens.
“The board recognizes that the current situation is significantly affecting areas of the country in different ways and will work with financial institutions to understand the specific issues they are facing,” the Fed stated.
Read on for more from the Fed and how it’s changed focus will affect examinations of institutions.
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Regulators flood market with relief for industry
Posted Date: Tuesday, March 24, 2020
Within an 18-hour span, lenders and banks got a slew of good regulatory news from Washington D.C.
Announcements by the Federal Reserve, Fannie Mae and Freddie Mac, and federal financial regulators were issued to provide guidance and help to the banking and lending industries to allow the free flow of lending to individuals and businesses as the market has been disrupted by COVID-19.
Read on for more details of each of the announcements and how they answer problems which arose since the recent business disruption.
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Servicers get guidance in preparation for work
Posted Date: Tuesday, March 24, 2020
Servicers got some guidance Monday for navigating busy times ahead, after a pair of announcements by federal housing agencies last week provided a halt to foreclosures and a requirement to offer forbearance to borrowers affected by COVID-19 for as many as 12 months.
Fannie Mae released a letter to servicers detailing some of the main points they should consider as borrowers potentially enter loss mitigation options.
Read on for details from the federal agencies, as well as reaction from the Consumer Financial Protection Bureau.
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Payday trades say industry ready to provide liquidity
Posted Date: Tuesday, March 24, 2020
As states across the country have reduced workforces to essential businesses, the financial services industry and its support chain have remained among the essential businesses in operation.
Trade associations representing the payday lending industry announced that they are proud to provide essential products to individuals and businesses and stand ready to provide needed liquidity in a time of business disruption.
Read on for more details from the associations’ announcement.
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Credit union groups stake out reg relief priorities
Posted Date: Tuesday, March 24, 2020
As federal legislators and regulators have been working on bills and programs designed to provide regulatory relief to the nation’s bankers and lenders, credit union trade associations have been stepping up lobbying efforts to ensure that their priorities also are included in discussions.
The Credit Union National Association and National Association of Federally-Insured Credit Unions have reached out to both ends of Washington to make their voices heard on issues such as rulemaking and examinations, equity between the credit union and banking industries, and relief in areas such as member business lending and CECL.
Read on for more details about the industry’s efforts.
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Banks, lenders alter plans to ensure continuity
Posted Date: Friday, March 20, 2020
Banks and lenders around the country have shifted operations in the wake of business disruptions related to the coronavirus.
Most lenders and banks around the country have moved to remote work operations for their staffs, allowing the continuation of business as usual.
Read on for details of plans from leading banks and lenders such as Wells Fargo, JPMorgan Chase and Quicken Loans.
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KBRA: Bank sector strong despite uncertainty
Posted Date: Friday, March 20, 2020
A new report from Kroll Bond Rating Agency (KBRA) reinforced the strength of the banking industry as the economy goes through a period of disruption.
KBRA said its rating outlook for the sector remained stable despite the ongoing uncertainties because of the coronavirus.
Read on for details from the analysts’ report on the banking sector, including areas of strength for the industry as well as potential vulnerabilities during the disruption.
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Regulators state CRA relief for industry
Posted Date: Friday, March 20, 2020
Federal financial regulators backed up earlier statements encouraging institutions to meet the financial needs of customers and members affected by the coronavirus by issuing a new statement on Community Reinvestment Act relief.
The agencies stated they encourage financial institutions to work with affected customers and communities, particularly those that are low- and moderate-income. They said they recognize that such efforts served the long-term interests of these communities and the financial system.
Read on for details from the financial regulators.
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Senator calls for rulemaking halt
Posted Date: Friday, March 20, 2020
Sen. Sherrod Brown (D-Ohio), the ranking member of the Senate Banking Committee, has written federal financial regulators to urge they suspend all rulemaking.
In the letters, Brown made clear that all federal financial regulators should suspend all rulemaking not related to the COVID-19 pandemic.
Read on for details of Brown’s request, and how long he believes a moratorium should last.
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Report predicts big year for Blockchain
Posted Date: Friday, March 20, 2020
A new report from HFS Research and Wipro details the state of enterprise Blockchain in 2020.
Although Blockchain become a business buzzword in 2017, the report states that 2020 promises to be the most exciting Blockchain year, as it could see Blockchain adoption come of age to solve real-world business problems.
Read on for more details from the latest report.
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