ICBA News, sponsored by Bank Intelligence Solutions—Loan Originator Rule Includes ICBA-Advocated Concessions

Advocacy
CFPB Rule on Loan Originators Includes ICBA-Advocated Concessions
The Consumer Financial Protection Bureau released the final rule on mortgage loan originator qualification and compensation practices. The rule clarifies acceptable mortgage loan originator compensation structures, including participation in both qualified and non-qualified bonus and profit-sharing plans. As a result, mortgage loan originators will be able to participate in both kinds of plans, subject to certain restrictions. ICBA strongly supported this provision.

The final rule also waived a provision of section 1403 of the Dodd-Frank Act, which would have prohibited consumers from paying upfront discount points and fees to lower their interest rate. The bureau said it was concerned that implementing section 1403 would have caused “consumer confusion and other negative outcomes” and instead issued an exemption to the prohibition on the payment of upfront points and fees while it studies the matter further.

ICBA has been actively engaged with the CFPB on this rulemaking. ICBA community banker Robin Loftus of Security Bank in Springfield, Ill., last year participated on a Small Business Regulatory Enforcement Fairness Act panel on the rulemaking. The bureau appears to have incorporated many of the suggestions that Loftus and ICBA provided to enable community banks to hire and retain qualified mortgage loan originators while providing consumer safeguards against steering and other inappropriate behaviors.

Under the rule, all mortgage loan originators will have to meet certain character and fitness requirements, pass criminal background checks, and receive training that is appropriate with their origination activities. Community bank mortgage loan originators must be registered with the Nationwide Mortgage Licensing System and Registry and have a NMLS number, though they do not have to be licensed. ICBA told the bureau that community banks already performed background checks on mortgage loan originators, who received training that was in many ways superior to what was provided through the NMLS.

The majority of the rule becomes effective on Jan. 10, 2014.

Advocacy
CFPB Delays Remittance Rule Following ICBA Outreach
The Consumer Financial Protection Bureau announced a temporary delay in the effective date of a final rule on remittance transfers. ICBA last week told the bureau that it strongly supports a temporary delay in the Feb .7 effective date as the bureau works to amend the final rule.

In a comment letter delivered to the bureau last week, ICBA said it appreciates the willingness of the CFPB to revisit areas of the rule that community banks find problematic, such as liability for consumer error and disclosure of foreign taxes and recipient bank fees.

The association wrote that amending these provisions could prevent community banks from exiting the remittance transfer market or limiting the scope of the services they offer. Further, the proposed modification of certain provisions without a delay would force community banks to undergo an unnecessary and costly implementation that would likely change upon adoption of the proposal, ICBA said.

While the CFPB said a new effective date will be announced later this year, the bureau proposed delaying the rule for 90 days after it is finalized. Comments on the remainder of the proposal are due by Wednesday, Jan. 30.

Regulation
Regulators Propose Social Media Guidance
The Federal Financial Institutions Examination Council released proposed guidance on the applicability of consumer protection and compliance laws to financial institutions’ social media activities. The guidance is designed to help financial institutions understand potential consumer compliance, legal, reputation and operational risks associated with the use of social media as well as expectations for managing those risks.

The FFIEC is seeking comments on other types of social media that should be included in the proposed guidance and impediments to financial institutions’ compliance. The FFIEC said that while the guidance does not impose additional obligations on financial firms, the council expects financial institutions to take steps to manage potential risks associated with social media.

Comments must be received 60 days from publication in the Federal Register.

Agriculture
USDA Guaranteed Farm Ownership Loan Volume Maxed Out
The Agriculture Department told ICBA that its guaranteed farm ownership loan program has reached its maximum allowable loan cap of $1.5 billion. No authorization for new loans is expected until Congress adopts a new budget to replace the current continuing resolution that expires March 27.

Last spring ICBA urged Congress to eliminate the volume caps on the guaranteed loan program because the program has been made self-funding through an increase in user fees. There is no need to limit the volume of loans that can be made in a program that has no costs, the association said.

ICBA will continue to urge Congress to significantly raise or eliminate the programs volume cap on the amount number of loans that can be made. Read ICBA Recommendations .

ICBA NewsWatch Today is sponsored by Bank Intelligence Solutions:
Today’s bank executives can no longer afford to make strategic or tactical decisions without substantiating their plans with objective, quantifiable analysis. Find out how the BankAnalyst online advisory tools perform peer benchmarking, produce risk scorecards, and support critical small business strategies, loan pricing, branch planning, non-interest expense and M&A decisions. Call (800) 846-6681 or visit www.bankintelligence.fiserv.com.

Congress
Financial Services Panel Announces Subcommittee Assignments
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) announced subcommittee assignments for the panel’s Republican members. Hensarling will serve as an ex officio member of all subcommittees, as will former chairman Spencer Bachus (R-Ala.), who is serving as chairman emeritus in the 113th Congress.

Subcommittee chairmen are:

Scott Garrett (N.J.), Capital Markets and Government Sponsored Enterprises
Shelley Moore Capito (W.Va.), Financial Institutions and Consumer Credit
Randy Neugebauer (Texas), Insurance and Housing
John Campbell (Calif.), Domestic and International Monetary Policy
Patrick McHenry (N.C.), Oversight and Investigations.

Economy
Existing-Home Sales Decline in December
Existing-home sales declined 1 percent in December but were up 12.8 percent from a year ago, the National Association of Realtors reported. The preliminary total for 2012 existing-home sales was 4.65 million, up 9.2 percent from 4.26 million in 2011. It was the highest volume since 2007, when it reached 5.03 million, and the strongest increase since 2004.

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.

Education
ICBA Seminar on IT Issues in April
ICBA is hosting an upcoming seminar to help technology and security officers learn more about some of the newer technologies community banks are implementing today. “Current IT Issues” is scheduled for April 24-25 in Minneapolis. Register Online.

Products and Services
White Paper: Engaging Customers Through Direct Mail Solutions
Consumers have adapted to the rapid increase in communication channels, relying on spam filters, do-not-call lists and quick decisions to avoid information overload. Everyone finds a way to filter information. These filters, however, can make it difficult to connect in a meaningful or cost-efficient manner. In this environment, many organizations are increasing their reliance on direct mail solutions for Standard Mail, a proven channel with response rates that can exceed digital alternatives. Pitney Bowes, an ICBA Preferred Service Provider, offers a white paper examining recent changes and innovations in technology and mail operations and highlights five strategies that can improve the overall effectiveness of direct mail solutions for Standard Mail. Read It Now.