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Financial Services Law Insights and Observations


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  • FFIEC highlights the importance of property valuation practices

    On February 12, the Federal Financial Institutions Examination Council (FFIEC) released a statement on examination principles related to ensuring fair and creditable residential property valuation practices among supervised institutions. The FFIEC underscored the necessity for institutions to comply with anti-discrimination laws and regulations, such as the ECOA and the Fair Housing Act, while also adhering to safety and soundness regulations outlined in statutes like the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. According to the statement, effective valuation review programs are essential for identifying and addressing deficiencies, ensuring compliance with appraisal regulations, and promoting fair lending practices. Through examination processes, both in consumer compliance and safety and soundness assessments, the FFIEC aimed to mitigate risks associated with valuation discrimination or bias.

    Bank Regulatory FFIEC Fair Housing ECOA OCC Fair Housing Act

  • OCC’s Hsu discusses appraisal bias

    On February 13, Acting Comptroller of the Currency Michael Hsu discussed eliminating appraisal bias in the financial industry at a public hearing held by the Appraisal Subcommittee of the FFIEC. In his remarks, Hsu highlighted the importance of addressing bias in the existing standards for appraisal reports to aid in the OCC’s efforts to expand access to homeownership. Hsu noted that the OCC is taking steps to increase access to homeownership by improving supervisory methods used to identify potential discrimination in lending and housing valuations and encouraging banks to expand affordable housing financing and access to credit.

    Bank Regulatory Federal Issues OCC Appraisal FFIEC

  • FFIEC releases statement on examination principles related to discrimination and bias in residential lending

    Federal Issues

    On February 12, the Federal Financial Institutions Examinations Council (FFIEC) released a statement on “Examination Principles Related to Valuation Discrimination and Bias in Residential Lending.” The statement outlined principles that examiners should use to evaluate an institution’s residential property appraisal and valuation practices to mitigate risks that stem from (i) discrimination “based on protected characteristics in the residential property valuation process, and (ii) bias, defined as “a preference or inclination that precludes an appraiser or other preparer of the valuation from reporting with impartiality, independence, or objectivity” as required by the Uniform Standards of Professional Appraisal Practice. Failure to have these internal controls to identify and address discrimination or bias can result in poor credit decisions, consumer harm, increased safety and soundness risk. The principles outlined by the statement are categorized into consumer compliance examination principles and safety and soundness principles. For consumer compliance, examiners should consider an institution’s (i) board and senior management oversight to determine if it is commensurate with the institution’s risk profile; and (ii) consumer compliance policies and procedures to identify and resolve potential discrimination. The principles during a safety and soundness examination should include reviewing the consumer protection issues, governance, collateral valuation program, third-party risk management, valuation review, credit risk review, and training programs. 

    Federal Issues FFIEC CFPB Consumer Finance Mortgages Discrimination

  • FFIEC publishes proposed extension of reporting obligations

    Agency Rule-Making & Guidance

    On January 26, the Federal Financial Institutions Examination Council (FFIEC) approved the OCC, Fed, and FDIC’s publication for public comment of a proposal to extend several information collection items for three years. As previously covered by InfoBytes, the FFIEC last month put forth a similar three-year proposal on FFIEC 002 which affected the three Call Reports (FFIEC 031, 041, and 051). While this proposal includes those same four items, it adds two more: the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101), and the Market Risk Regulatory Report for Institutions Subject to the Market Risk Capital Rule (FFIEC 102). The proposed changes include a new confidential report (FFIEC 102a) titled the Market Risk Regulatory Report that would “collect information necessary for the agencies to evaluate [an]… institution’s implementation of the market risk rule and validate a [bank’s] internal models used in preparing the FFIEC 102.” The revisions are related to the agencies’ capital rule proposal published on September 18, 2023. Comments are requested by March 25, 2024, and the revisions are planned to be effective as of September 30, 2025.

    Agency Rule-Making & Guidance Federal Issues FFIEC OCC Federal Reserve Call Report FDIC

  • FDIC proposes revisions to call reports

    Federal Issues

    On December 27, 2023, the FDIC published its proposed revisions to the reporting forms and instructions for Call Reports and the FFIEC 002 report in a financial institution letter under the auspices of the FFIEC. Call Reports are also known as Consolidated Reports of Condition and Income, a set of financial reporting standards that banks in the U.S. must file with a regulatory agency. The proposed revisions are currently open for public comment until February 26, 2024.

    The changes affect Call Reports FFIEC 031, FFIEC 041, and FFIEC 051, as well as the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002). The FFIEC’s proposed changes encompass reporting on (i) loans to non-depository financial institutions, (ii) structured financial products, and (iii) long-term debt requirements. The proposed changes are found in more detail in the Federal Register, and state detailed revisions for each FFIEC form. The changes will go into effect on June 30, 2024.

    Federal Issues FDIC FFIEC OCC Federal Reserve Call Report Bank Regulatory

  • FFIEC agencies release 2022 CRA data

    Federal Issues

    On December 20, FFIEC members released the 2022 CRA data on small business, small farm, and community development lending. (See fact sheet here and data table here.) The 711 lenders that provided the data reported they originated or purchased 8.9 million small-business loans totaling $284.6 billion. The total number of loans originated or purchased by reporting lenders decreased by 5.8 percent and the dollar amount of these small business loans originated decreased by 24.8 percent from 2021. Concerning community development lending activity, the agencies reported that based on data compiled from 633 banks, lending activity decreased by 1% from 2021 in terms of total dollar amount.

    Federal Issues OCC FFIEC CRA Federal Reserve

  • FFIEC updates BSA/AML examination manual

    Agency Rule-Making & Guidance

    On August 2, the Federal Financial Institutions Examination Council (FFIEC) updated its Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual, which provides examiners with instructions for assessing a bank or credit union’s BSA/AML compliance program and adherence to BSA regulatory requirements. The revisions include updates to the following sections:

    The FFIEC noted that the “updates should not be interpreted as new instructions or as a new or increased focus on certain areas,” but rather are intended to “provide information and considerations related to certain customers that may indicate the need for bank policies, procedures, and processes to address potential money laundering, terrorist financing, and other illicit financial activity risks.” In addition, the Manual itself does not establish requirements for financial institutions, which are found in applicable statutes and regulations but rather reinforce the agency’s risk-focused approach to BSA/AML examinations.

    Agency Rule-Making & Guidance FDIC Federal Reserve OCC FFIEC NCUA Bank Secrecy Act Financial Crimes Bank Regulatory Anti-Money Laundering

  • FFIEC releases 2022 HMDA data

    Federal Issues

    On June 29, the Federal Financial Institutions Examinations Council (FFIEC) released the 2022 HMDA data on mortgage lending transactions at 4,460 covered institutions (an increase from the 4,338 reporting institutions in 2021). Available data products include: (i) the Snapshot National Loan-Level Dataset, which contains national HMDA datasets as of May 1; (ii) the HMDA Dynamic National Loan-Level Dataset, which is updated on a weekly basis to reflect late submissions and resubmissions; (iii) the Aggregate and Disclosure Reports, which provide summaries on individual institutions and geographies; (vi) the HMDA Data Browser where users can customize tables and download datasets for further analysis; and (v) the Loan/Application Register for filers of 2022 HMDA data.

    The 2022 data includes information on 14.3 million home loan applications, of which 11.5 million were closed-end and 2.5 million were open-end. The Snapshot revealed that an additional 287,000 records were from financial institutions making use of the Economic Growth, Regulatory Relief, and Consumer Protection Act’s partial exemptions that did not designate closed-end or open-end status. Observations from the data relative to the prior year include: (i) the percentage of mortgages originated by non-depository, independent mortgage companies decreased, accounting for “60.2 percent of first lien, one- to four-family, site-built, owner-occupied home-purchase loans, down from 63.9 percent in 2021”; (ii) the percentage of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers increased from 7.9 percent in 2021 to 8.1 percent in 2022, while the share of these loans made to Hispanic-White borrowers decreased slightly from 9.2 percent to 9.1 percent and the share made to Asian borrowers increased from 7.1 percent to 7.6 percent; and (iii) “Black or African American and Hispanic-White applicants experienced denial rates for first lien, one- to four-family, site-built, owner-occupied conventional, closed-end home purchase loans of 16.4 percent and 11.1 percent respectively, while the denial rates for Asian and non-Hispanic-White applicants were 9.2 percent and 5.8 percent respectively.”

    Federal Issues Bank Regulatory FFIEC HMDA Mortgages Consumer Finance EGRRCPA

  • FFIEC releases 2023 HMDA reporting guide

    On April 13, the OCC issued Bulletin 2023-10 announcing the Federal Financial Institutions Examinations Council’s issuance of the 2023 edition of the revised “A Guide to HMDA Reporting: Getting It Right!” The guide focuses on HMDA data submissions due March 1, 2024, and includes requirements and instructions for reporting and disclosing data for institutions and transactions covered by Regulation C. The guide also reflects a technical amendment to the 2020 HMDA Rule to adjust the loan volume thresholds (which took effect January 1) for reporting HMDA data on closed-end mortgage loans. As previously covered by InfoBytes, the CFPB issued the technical amendment last December to establish that the threshold for reporting data about closed-end mortgage loans is 25 mortgage loans in each of the two preceding calendar years, the threshold established by the 2015 HMDA Rule.

    Bank Regulatory Federal Issues OCC FFIEC HMDA Mortgages Regulation C

  • FFIEC releases 2022 HMDA data

    Federal Issues

    On March 20, the CFPB announced the release of the 2022 HMDA modified loan application register (LAR) data. The LAR data, available on the Federal Financial Institutions Examination Council’s HMDA platform, contains modified loan-level information on approximately 4,394 HMDA filers. The Bureau also announced plans to produce the 2022 HMDA data “in other forms to provide users insights into the data,” including through a nationwide loan-level dataset, which will provide all publicly available data from all HMDA reporters, as well as aggregate and disclosure reports with summary information by geography and lender, to allow users the ability to create custom datasets and reports. The Bureau also said it plans to publish a Data Point article highlighting key trends in the annual HMDA data.

    Federal Issues HMDA CFPB Mortgages FFIEC Consumer Finance


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