ICBA News, sponsored by QwickRate—Mortgage-Servicing Rules Due Today

Regulation
CFPB Releasing Final Mortgage-Servicing Rules Today
The Consumer Financial Protection Bureau is scheduled to release final mortgage-servicing rules today. The rules will be released in conjunction with a field hearing scheduled for 11 a.m. (Eastern time) in Atlanta that will be streamed on the CFPB website.

The proposed rules released in August would require servicers to provide monthly mortgage statements, warnings before interest rate adjustments, and options to avoid “force-placed” insurance and foreclosure. They also would require servicers to credit payments promptly, establish new procedures for documentation and correcting errors, provide delinquent borrowers with ongoing support, and offer borrowers help to avoid foreclosure.

In an October comment letter, ICBA urged the bureau to exempt servicers that service 10,000 or fewer mortgage loans, noting that the bureau’s proposed threshold of 1,000 loans is too low to provide any real relief for community bank mortgage servicers.

The association also urged the CFPB to drop proposed changes to adjustable-rate mortgage notices. Finally, ICBA asked the bureau to provide clear guidance to the prudential banking regulators to accept existing community bank processes and procedures for proposed rules regarding error resolution, continuity of contact and other areas.

Regulation
FSOC Extends Comment Period for Money Fund Reforms
The Financial Stability Oversight Council this week extended the comment period for proposed reforms to money market mutual funds. The council voted to extend the comment period from Jan. 18 to Feb. 15 to give the public more time to consider information released in a Securities and Exchange Commission staff report.

The FSOC is proposing three alternatives that would:

Require MMMFs to have a floating net asset value (NAV) per share so that their shares would not be fixed at $1.
Require MMMFs to have a NAV buffer with a tailored amount of assets of up to 1 percent to absorb day-to-day fluctuations in the value of the funds’ portfolio securities.
Require MMMFs to have a risk-based NAV buffer of 3 percent to provide explicit loss-absorption capacity that could be combined with other measures to enhance the effectiveness of the buffer.

Regulation
Goldman, Morgan Stanley Agree to $557M Mortgage Settlement
The Federal Reserve Board said Goldman Sachs and Morgan Stanley have to pay $557 million in cash payments and other assistance to help mortgage borrowers. These agreements are similar to those announced on Jan. 7 between 10 mortgage-servicing companies and regulators.

The sum includes $232 million in direct payments to eligible borrowers and $325 million in other assistance, such as loan modifications and forgiveness of deficiency judgments. More than 220,000 borrowers whose homes were in foreclosure in 2009 and 2010 with former subsidiaries of Goldman Sachs and Morgan Stanley will receive cash compensation.

The Federal Reserve said it continues to work to reach similar agreements in principle with other servicers that are not yet parties to the agreements, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing.

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Economy
Beige Book Reports Modest, Moderate Growth
Economic activity has expanded in recent weeks, with all 12 Federal Reserve districts reporting modest or moderate growth, according to the agency’s Beige Book. Every district reported growth in consumer spending, and activity among nonfinancial service sectors improved. Real estate activity expanded or held steady in most districts, credit standards were largely unchanged and agricultural activity remained mixed. Trends in wages, prices and employment conditions were relatively unchanged.

Economy
Builder Confidence Index Flat in January
Builder confidence in the market for new single-family homes was unchanged in January, according to the National Association of Home Builders. The NAHB housing market index remained at 47 this month following eight consecutive monthly gains. The index is at its highest level since April 2006. The component gauging current sales conditions remained unchanged at 51, while the component gauging sales expectations in the next six months fell one point to 49.

Economy
Industrial Production Up 0.3 Percent
Industrial production increased 0.3 percent in December following a 1.0 percent rise in November, the Federal Reserve reported. Total industrial production was up 2.2 percent from a year ago and up 1.0 percent in the fourth quarter. Capacity utilization for total industry moved up 0.1 percentage point to 78.8 percent, a rate 1.5 percentage points below its long-run average.

Economy
Consumer Prices Flat in December
Consumer prices were unchanged in December on a seasonally adjusted basis, the Commerce Department reported. The Consumer Price Index increased 1.7 percent in 2012 before seasonal adjustment. While the gasoline index declined again in December, indexes such as food and shelter increased.

Poll
This Week’s Quick Poll
Take this week’s Quick Poll on the regulatory environment, and review the previous poll on the 2013 community banking outlook. View the Archive.

Education
OCC Announces Community Bank Director Workshop Schedule
The Office of the Comptroller of the Currency announced its schedule of workshops for community bank and thrift directors. The workshops cover mastering the basics, risk assessment, compliance risk and credit risk. View the Schedule.

Education
ICBA Compliance Institute in February
ICBA is hosting its Compliance Institute Feb. 24-March 1 in Dallas. For 2013, the program has been revised to incorporate the Consumer Financial Protection Bureau’s comprehensive compliance reforms in areas such as Regulations Z, X, B and E. The latest guidance on integrated mortgage disclosures, high-cost mortgages, loan servicing, and lender compensation will be covered in detail in the lending units, and new foreign remittance transfer rules will be clarified in the deposit compliance unit.

Education
Federal Home Loan Bank Webinar Next Month
ICBA and the Federal Home Loan Bank of Topeka are hosting an upcoming webinar to explore FHLBank residential mortgage lending and funding programs to help community banks make and retain high-quality mortgages. “Funding Tools That Make Your Mortgage Program a Success,” scheduled for 1 p.m. (Eastern time) Tuesday, Feb. 5, also will feature mortgage partnership programs designed to save community banks money, lower the risk of repurchase and improve servicing relationships.