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Welcome to another insightful episode of the Compliance 911 Show! In this episode, hosts Dean Stockford and Len Suzio dive deep into the challenges and impacts of the simultaneous implementation of the new CRA 2023 rule and the Section 1071 rule set to unfold over the next few years.
Our discussion focuses on how compliance officers can prepare for these significant changes, including understanding the phased rollout plan, identifying covered lenders, and the implications of reporting requirements under Section 1071.
As litigation continues to pose potential delays, our hosts emphasize the importance of getting a head start on compliance efforts. Listen as they unpack the various complexities and crossovers between CRA and Section 1071, helping you to strategize your compliance approach effectively while highlighting the possible pitfalls and the significance of maintaining proper data collection systems.Brought to you by GeoDataVision and M&M Consulting
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In this podcast, Dean Stockford and Len Suzio discuss the recent FDIC Advertising and Signage rule changes, which took effect on April 1, 2024, and aim to modernize compliance requirements to align with digital banking practices. Dean highlights the importance of these updates, which include modernized signage rules for branches, digital platforms, and ATMs, disclosures distinguishing insured deposits from non-deposit products, and mandatory written policies for compliance. The rule also addresses misrepresentations about FDIC insurance by IDIs and non-bank entities, clarifying disclosure requirements to prevent consumer confusion. With a mandatory compliance date of May 1, 2025, Dean urges institutions to act promptly to ensure compliance.
Brought to you by GeoDataVision and M&M Consulting
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Saknas det avsnitt?
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In this episode of the Compliance 911 Show, hosts Dean Stockford and Len Suzio are joined by special guest Linda Ezuka for the second part of their series on the Community Reinvestment Act (CRA). Linda, the founder of CRA Today and the CRA Hub, shares her extensive expertise on CRA compliance, community development finance, and the new CRA rules introduced in 2023.
The discussion delves into the complexities and challenges posed by the new CRA regulations, including the concerns expressed by bankers about adapting to these changes. Linda provides valuable insights into how financial institutions can prepare for the transition, balancing the legacy CRA rules with the new requirements.
Linda also highlights the potential opportunities offered by the new CRA, such as partnerships with minority depository institutions and community development financial institutions. The conversation explores how these collaborations can enhance service to disadvantaged communities and improve financial literacy.
Additionally, the episode touches on the introduction of calibrated benchmarks for assessing bank performance, and the importance of understanding community context when evaluating CRA activities.
Join us for this informative session as we explore the evolving landscape of the Community Reinvestment Act and learn how banks and community groups can work together to better serve their communities.
CRAtoday: cratoday.com
CRAhub: cratoday.com/hub
Linda: [email protected]
Brought to you by GeoDataVision and M&M Consulting
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Welcome to the Compliance 911 Show, where hosts Dean Stockford and Len Suzio dive into the intricacies of the Community Reinvestment Act (CRA) with special guest Linda Ezuka. Linda, the founder of CRAtoday and the CRAhub, shares her extensive experience and insights on how to master CRA compliance, stay exam-ready, and leverage capital for community development.
In this episode, Linda discusses the most common questions from bankers, the importance of performance context, and the challenges of identifying community development loans. She also emphasizes the need for CRA professionals to engage with their communities to truly understand and meet local credit needs.
Join us for an enlightening conversation that will equip you with the knowledge to navigate the complexities of the CRA and drive impactful community development initiatives.
CRAtoday: cratoday.com
CRAhub: cratoday.com/hub
Brought to you by GeoDataVision and M&M Consulting
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In Episode 81 of the podcast series "Red Warning on Redlining," Len and Dean continue their discussion with fair lending expert Lori Sommerfield, a partner at Troutman Pepper. They explore the future of redlining enforcement by DOJ and federal agencies through 2024 and beyond. Lori explains the Combatting Redlining Initiative's impact to date and coordination among the federal agencies, as well as advises financial institutions on best practices to monitor and manage redlining risks. Implications of the U.S. Supreme Court's recent Loper Bright decision for redlining cases is also discussed. The episode emphasizes preparation and fair lending compliance for financial institutions.
Brought to you by GeoDataVision and M&M Consulting
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In Episode 80 of the podcast series on regulatory compliance, Len and Dean discuss the topic of redlining with Lori Sommerfield, a partner at Troutman Pepper, in a new two-part series “Red Warning on Redlining.” Lori, a seasoned fair lending attorney, explains the traditional and modern definitions of redlining, emphasizing how regulators now primarily use Home Mortgage Disclosure Act (HMDA) data to identify potential redlining activity without other evidence to support such claims. She also discusses the DOJ's "Combatting Redlining Initiative," which is a “whole of government” approach leveraging federal agencies, U.S. attorneys, and state attorneys general to eradicate redlining practices. The episode highlights the challenges financial institutions face under aggressive enforcement and the importance of monitoring for redlining risks.
Brought to you by GeoDataVision and M&M Consulting
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In a recent podcast, Len and Dean discuss the June 10 article "Manufacturing Fair Lending" from National Mortgage Professional, which delves into the "Modern Theory of Redlining" introduced by bank regulators after AG Merrick Garland's 2021 Combatting Redlining Initiative was announced. The article includes insights from notable figures like Paul Hancock former chief of the Housing and Civil Enforcement at the DOJ and Brian Montgomery, former deputy secretary of HUD highlighting concerns about the government's push for racial balance in loan originations. Len also mentions his follow-up article, "Redlining Isn’t What it Used to Be," which criticizes regulators' use of statistics to allege redlining. They discuss the complexity of redlining enforcement, the legal battles, and the importance of banks proactively assessing their risk of redlining accusations. Len advises banks to conduct internal risk assessments and seek expert legal and consulting help if unfairly accused, while emphasizing the need for industry unity in opposing regulatory overreach.
Brought to you by GeoDataVision and M&M Consulting
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Len and Dean discuss the alarming issue of elder abuse in their 78th and 79th podcasts. Dean expresses concern, especially since he has elderly parents, and highlights recent statistics from FinCEN and the FBI on elder exploitation. Financial institutions reported over $27 billion in elder exploitation between June 2022 and June 2023. The abuse is categorized into elder scams and theft, with scams being more prevalent. The FBI's report for 2023 shows a significant increase in scams targeting individuals aged 60 and older, causing over $3.4 billion in losses. Dean recommends reviewing FinCEN and CFPB guidelines to combat elder financial exploitation and acknowledges the FBI's efforts in recovering some of the lost funds. Both agree on the seriousness of the issue and thank their listeners for tuning in.
Brought to you by GeoDataVision and M&M Consulting
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In "Podcast 77: The Court Decides But it Ain’t Over Till It’s Over," Dean and Len discuss the recent Supreme Court ruling on the Consumer Financial Protection Bureau (CFPB)'s funding, which upheld its constitutionality, much to the disappointment of many bankers who hoped for its dissolution. Despite this decision, other legal challenges to CFPB's regulations remain unresolved. Specifically, the podcast delves into ongoing litigation concerning Section 1071, which involves the CFPB's new rules for small business lending data collection. The discussion covers the timeline for compliance, the complex issues around additional data points required by the CFPB, and the high costs of implementation. Len advises small business lenders to begin preparing their data collection systems and utilize the "free look period" to test these systems before mandatory reporting begins. The conversation highlights the ongoing legal battles and regulatory challenges facing the financial industry.
Brought to you by GeoDataVision and M&M Consulting
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This podcast discusses flood regulations for institutions lending money on properties. While there are many federal laws, some key ones being the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, institutions must comply to avoid penalties. This includes checking if a property is in a flood hazard area, notifying the borrower and requiring flood insurance if necessary, properly handling escrows and monitoring, and even force-placing insurance if the borrower lets it lapse. Common violations include weak internal controls, issues with contents coverage, mistakes in timing and notification, miscalculations of coverage amounts, and failing to properly monitor or force-place insurance.
Brought to you by GeoDataVision and M&M Consulting
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In this podcast episode, Dean and Len discuss the complexities surrounding redlining accusations faced by banks, particularly focusing on the implications of the 2020 Census data. Len explains that the increase in the number of census tracts and changes in their minority status have created challenges for banks, especially since these changes were announced late into 2022. He highlights how these complications can impact a bank’s compliance with anti-redlining regulations, as loan applications could be affected by tract status changes during processing. Len advises banks to proactively analyze the impact of new and altered tracts on their lending practices to better prepare for examinations and mitigate potential criticisms.
Brought to you by GeoDataVision and M&M Consulting
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In this podcast episode, Dean and Len discuss the timely issue of appraisal discrimination and bias within the context of Fair Lending. Dean highlights the FFIEC's recent guidance on mitigating risks related to discriminatory practices in property valuations and ensuring credible appraisals. Appraisal bias, which can result in minorities receiving lower property valuations, affects credit access and terms and violates anti-discrimination laws like the Equal Credit Opportunity Act and Fair Housing Act. The guidance is relevant for both financial institutions and examiners, emphasizing the importance of internal controls and compliance to avoid legal risks and ensure fair lending practices. Dean provides practical suggestions for lenders, including thorough vendor due diligence, risk assessments, training on bias red flags, and establishing clear processes for appraisal reviews and complaints. Both hosts stress the necessity for financial institutions to address and mitigate appraisal bias actively.
Brought to you by GeoDataVision and M&M Consulting
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In Podcast 73, Dean and Len discuss a recent preliminary injunction issued by a Texas federal judge against the 2023 Community Reinvestment Act (CRA) rule. This injunction has halted the implementation of the new rule, pending legal proceedings. The court found substantial grounds suggesting the federal banking regulators may have exceeded their authority in expanding CRA evaluation markets and including deposits and other retail banking products under the regulation. The court's decision highlighted four key reasons for this view: the inconsistent interpretation of "entire community" in the new rule, the questionable authority to regulate beyond credit activities, the application of the "Major Questions Doctrine," and a substantial likelihood of plaintiff’s success with irreparable harm due to compliance costs. Dean and Len predict a favorable outcome for the plaintiffs, with the case likely progressing to the Supreme Court, prolonging the legal process into 2025. They advise banks to comply with the current rule and suggest banks compute and target the proposed calibrated benchmarks for at least a satisfactory performance rating on the Lending Test. The episode ends with Dean and Len emphasizing the importance of staying informed and prepared as the situation develops.Brought to you by GeoDataVision and M&M Consulting
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This episode of the podcast, focusing on climate risk as an emerging regulatory compliance issue, features a dialogue between Len and Dean. They discuss how climate-related risks, especially in the financial sector, have gained attention in recent years. New York State is highlighted for its proactive stance in providing guidance for financial institutions on managing these risks, including a section published on the NYDFS website. Dean emphasizes the lack of specific regulations but notes earlier general principles issued by the OCC regarding climate-related financial risk management. They also delve into the use of data and mapping techniques to assess climate risks at a granular level, stressing the importance of geocoding records and correlating them with climate hazards. The discussion concludes with an emphasis on financial institutions starting to identify and assess climate risks, considering both physical and transition risks, and integrating these into their overall risk management frameworks. The episode promotes their consulting services for assisting institutions in managing climate risks.Brought to you by GeoDataVision and M&M Consulting
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Podcast #71 discusses how banks can estimate their performance under the new Community Reinvestment Act (CRA) rules. Len highlights bankers' concerns about the increased difficulty in passing the CRA exam with the new rules, which predict a significant rise in failure rates. He emphasizes the importance of the Retail Lending Test, explaining that failing this test results in an overall unsatisfactory CRA rating.To estimate their performance, banks should first focus on the Retail Lending Test and identify their Retail Lending Assessment Areas. The next steps involve determining benchmarks based on geographic and borrower distribution tests and applying multipliers to create calibrated benchmarks for a low satisfactory rating. Banks then need to compute their penetration rates in different income tracts and compare them to these benchmarks.Dean asks about data sources for these calculations, and Len suggests using HMDA and CRA data, along with FFIEC demographic files. He also notes that GeoDataVision will publish relevant benchmarks on their website for further guidance. The podcast ends with an invitation for future topic suggestions from listeners.
Brought to you by GeoDataVision and M&M Consulting
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Episode 70 of "Compliance 911, show" titled "2024 Regulatory Hot Topics," discusses the major regulatory challenges facing financial institutions in 2024. Hosts Len and Dean mark their 70th episode, reflecting on various topics covered over the series. They delve into significant regulatory changes including the Community Reinvestment Act (CRA) reforms and Dodd-Frank 1071 rules, highlighting their impact on banks and the ongoing lawsuits challenging these regulations. Additionally, they touch on proposed changes to the Fair Credit Reporting Act (FCRA), slow progress in Anti-Money Laundering rulemaking, and new standards for Automated Valuation Models (AVMs). The episode also covers updates in Fair Lending, digital adaptations for FDIC signs, and mortgage-related regulations, emphasizing their significance for financial institutions in 2024.
Brought to you by GeoDataVision and M&M Consulting
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Episode 68 of the podcast discusses the investigation process for Electronic Funds Transfers (EFT) under the Electronic Fund Transfer Act. The hosts, Dean and Len, emphasize the importance of consumer protection in EFT and remittance transfers, outlining the process for consumers to dispute unauthorized or incorrect transactions. They stress that financial institutions must promptly begin investigating disputes upon receiving notice, either oral or written, from the consumer. The regulation mandates strict timelines for these investigations, with institutions having 10 business days to investigate, extendable to 45 or 90 days for certain cases if provisional credit is provided. The episode highlights the need for financial institutions to be aware of and comply with these regulations, including the application of Regulation E to Person to Person (P2P) payments. The hosts conclude by encouraging listeners to stay informed about their institution’s error resolution processes and suggesting future podcast topics.
Brought to you by GeoDataVision and M&M Consulting
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Podcast #69, "The Coming Perfect Storm," features a discussion between Dean and Len Suzio about new regulatory challenges for the banking sector. Len highlights the implications of two key regulations: Section 1071 of the Dodd-Frank Act and the new Community Reinvestment Act (CRA) rule. Section 1071 requires detailed reporting of small business lending data, including race and ethnicity of borrowers, to the Consumer Financial Protection Bureau. The revised CRA rule emphasizes the impact of fair lending issues on a bank's CRA rating and introduces more stringent criteria for evaluating discriminatory or illegal credit practices.
Len expresses concerns about the potential misuse of small business lending data and the new CRA rule's assessment areas, which could unfairly impact banks' operations and regulatory compliance. He notes that these changes could lead to more aggressive regulatory approaches, especially in light of the Department of Justice's "Anti-redlining Initiative." The podcast concludes with an acknowledgment of the seriousness of these regulatory changes and their potential impact on the banking industry.
Brought to you by GeoDataVision and M&M Consulting
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"The New CRA" features a discussion between Dean Stockford and Len Suzio about the recent changes in the Community Reinvestment Act (CRA) regulations. Len has dedicated significant time to understanding the new CRA rule, which is a lengthy 1,494 pages, and has even published articles on the topic.
He describes the new rule as an "unmitigated disaster for the banking industry," a conclusion drawn not from his personal opinion but from the regulators' own data. The new CRA rule significantly increases the failure rate of CRA exams for banks, estimated to be 10-12%, up from the long-term average of 1.2%. This increase is attributed to the new Retail Lending Test included in the rule.
The new rule introduces additional assessment areas for banks, leading to evaluations in markets far removed from their physical branches. This creates competitive disadvantages for banks in these remote areas, as they are evaluated against the same benchmarks as local lenders. The failure rates in these new assessment areas are alarmingly high, with estimates of 22.4% for Retail Lending Assessment Areas and 28.8% for Outside Retail Lending Areas.
Len highlights that the complexity and size of the new rule, along with the extensive data manipulations required for compliance, may be overwhelming for many. He cites quotes from regulators that explicitly state that the increased failure rate was a deliberate intent of the regulators to "raise the bar" for CRA performance evaluations.
Dean concludes the podcast by expressing that listeners will likely be apprehensive yet eager to learn more about the changes in the new CRA. Both hosts encourage listeners to send in suggestions for future podcast topics.
Brought to you by GeoDataVision and M&M Consulting
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In this podcast, Dean and Len discuss the September guidance from the CFPB concerning the Equal Credit Opportunity Act (ECOA), credit denials, and Artificial Intelligence (AI). The guidance emphasizes that lenders using AI for credit decisions must provide specific and accurate reasons for adverse actions. This includes updates to sample adverse action forms and checklists to reflect actual reasons for credit denials or changes in conditions. The discussion also touches on potential updates to Home Mortgage Disclosure Act (HMDA) data collection to align with these expanded reasons for adverse action. Dean advises lenders to update ECOA assessments, review policies, procedures, forms, and ensure compliance and substantiation in credit decisions, especially in the context of AI and complex algorithms.
Brought to you by GeoDataVision and M&M Consulting
- Visa fler
