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Financial Services Law Insights and Observations

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  • Michigan Department of Insurance and Financial Services defines certain operations as essential

    State Issues

    On March 30, Michigan Department of Insurance and Financial Services Director Anita Fox issued a bulletin clarifying that certain financial services are considered essential businesses and operations. The following financial businesses are deemed essential: (i) banks, credit unions, and consumer finance providers, such as mortgage companies, consumer installment lenders, payday lenders, etc.; (ii) bond issuers; and (iii) title companies, inspectors, appraisers, surveyors, registers of deeds, and notaries. The bulletin clarified the scope of an executive order signed by Governor Whitmer on March 23, which in part, called for residents to stay in their homes and limited in-person exceptions to essential activities (previously discussed here).

    State Issues Covid-19 Michigan Banking Consumer Finance Credit Union Mortgages Installment Loans Payday Lending

  • Texas Department of Banking issues business continuity considerations

    State Issues

    On March 30, the Texas Department of Banking issued considerations for business continuity planning. In it, the Department asked banks and financial institutions to consider enterprise-wide interdependencies, as well as critical business functions like core processing, physical and digital cash deposits and withdrawals, and payment transactions. The issuance also included employee- and security-focused considerations such as secure remote access to systems, testing of remote capabilities, cross-training employees, and alternative staffing for physical branch operations. The considerations were drafted in coordination with the Independent Bankers Association of Texas and the Texas Bankers Association.

    State Issues Covid-19 Texas Banking

  • New York issues executive order addressing certain Banking Law requirements

    State Issues

    On March 29, New York Governor Cuomo issued an executive order granting the superintendent of Financial Services (superintendent) the authority to promulgate emergency regulations to apply the provisions of the executive order relevant to policy cancellations to premium finance agencies, subject to safety and soundness considerations. The executive order also provides that all instruments that are signed and delivered to the superintendent under the New York Banking Law, and that are required to be verified or acknowledged thereunder, may be verified or acknowledged by including standard verification or acknowledgment language in the instrument and transmitting a legible copy of the signed instrument by fax or electronic means.

    State Issues Covid-19 New York Banking

  • Michigan Department of Insurance and Financial Services issues message to consumers addressing financial concerns

    State Issues

    On March 17, Michigan Department of Insurance and Financial Services Director Anita Fox published a letter to consumers seeking to address financial concerns stemming from the Covid-19 crisis and emergency measures. In the letter, Fox assured consumers that Michigan’s financial institutions are well-positioned to sustain the impacts of the crisis, and reminded consumers that deposits in state’s banks and credit unions are federally insured. Fox also recommended that consumers take advantage of remote banking capabilities and contact their financial institution with any questions pertaining to in-person operations or concerns involving extensions of credit.

    State Issues Covid-19 Michigan Banking Credit Union

  • Mississippi regulator issues “working from home” guidance for loan originators

    State Issues

    On March 16, the Mississippi Department of Banking and Consumer Finance (DBCF) issued guidance granting authority for licensed mortgage origination companies to permit MLOs to work from home, even if the home is not a licensed branch. The DBCF stated that as long as applicable data security requirements are met, the DBCF will not take punitive action against a licensed MLO for conducting activities from home.

    State Issues Covid-19 Mississippi Banking MLO Mortgage Origination

  • Illinois Division of Financial Institutions and Division of Banks reschedule certain hearings

    State Issues

    On March 16, the Illinois Department of Financial and Professional Regulation, Divisions of Financial Institutions and Banking, issued a general orders rescheduling all Status and Preliminary Hearings scheduled for Wednesday, March 25, 2020, to Wednesday, May 27, 2020 at 9:30 AM and all All Status and Preliminary Hearings scheduled for Wednesday, April 22, 2020, to Wednesday, May 27, 2020 at 9:30 AM.

    State Issues Covid-19 Illinois Banking Financial Institutions

  • FDIC posts enforcement actions manual

    Agency Rule-Making & Guidance

    On December 2, the FDIC announced the release of its full enforcement manual (manual). According to Financial Institution Letter (see FIL-76-2019), the manual, which was posted to the FDIC website, is meant to “support the work of field office, regional office, and Washington office staff involved in processing and monitoring enforcement actions.” The letter states that the manual was released to promote “greater transparency” to FDIC-insured institutions and other concerned parties as to the agency’s enforcement policies and procedures. Additionally, the letter cautions that the manual “does not interpret any law or regulation” nor does it “establish supervisory requirements” or “industry guidance.”

    Agency Rule-Making & Guidance FDIC Banking Enforcement

  • FDIC releases winter 2017 Supervisory Insights

    Federal Issues

    On January 10, the FDIC released its Winter 2017 Supervisory Insights (see FIL-5-2018), which contains articles discussing credit management information systems and underwriting trends. The first article, “Credit Management Information Systems: A Forward-Looking Approach,” discusses, among other things, how financial institutions can incorporate forward-looking metrics to assist in identifying future issues. The article also emphasizes the importance of effective risk management programs which contain policies and procedures that support strategic decision making by senior management and board members responsible for overseeing lending activities. The second article, “Underwriting Trends and Other Highlights from the FDIC’s Credit and Consumer Products/Services Survey,” shares the recent credit survey results from examinations of FDIC-supervised financial institutions. The survey indicates that risk may be increasing in the industry based on reports of credit concentrations, increases in potentially volatile funding sources, and more “out-of-area lending.” In addition, the winter issue includes an overview of recently released regulations and supervisory guidance in its Regulatory and Supervisory Roundup.

    Federal Issues FDIC Banking Bank Supervision Risk Management

  • OCC Releases Schedule of Fees and Assessments for 2018; Rates to Remain Unchanged

    Agency Rule-Making & Guidance

    On December 1, the OCC issued Bulletin 2017-60 (Bulletin), which informs all national banks, federal savings associations, and federal branches and agencies of foreign banks that the agency’s 2018 fees and assessment rates remain unchanged from last year. The Bulletin provides details concerning, among other things, the assessment schedule, surcharges designed to ensure fees accurately reflect the increased cost of supervision, and general assessment fees. The Bulletin takes effect January 1, 2018.

    Agency Rule-Making & Guidance OCC Banking

  • Acting Comptroller Argues for Removing Separation Between Banking and Commerce

    Federal Issues

    On November 8, Acting Comptroller of the Currency Keith A. Noreika addressed The Clearing House Annual Conference in New York, New York and called for an end to the separation between banking and commerce. Noreika noted that the topic may be considered “taboo” to banking regulators but nonetheless offered “an alternative to the popular narrative.” In his speech, Noreika acknowledged that the premise of the separation is to avoid the risks associated with entangling federally insured deposits with unreliable commercial enterprises. However, he argued, “the recent financial crisis actually demonstrated that there is nothing inherently safer about separating banking and commerce or traditional banking and investment banking,” and further noted that allowing for commingling could generate efficiencies and improve banking economic performance.

    Federal Issues OCC Banking

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