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Wednesday, July 1, 2015

OCC: Credit, Compliance Risk Growing in 2015

Noting an environment of “high” credit, strategic, compliance and operational risk, the OCC outlined nine priorities for ongoing midsize and community bank supervision in its Semiannual Risk Perspective report released yesterday.

The OCC said its examiners will focus on strategic planning, credit underwriting, cyber threats, operational risk, BSA/AML compliance, overall regulatory compliance, interest rate risk, fair lending and responsiveness to Matters Requiring Attention.

These priorities respond to increasing credit risk as competition for loans continues to grow, especially in more volatile commercial markets; to elevated compliance risks as banks prepare to implement the new TILA-RESPA integrated disclosures; and to pressure to hit strategic plan targets in a difficult environment. Other risk areas the OCC is monitoring include the effects of oil and gas prices, rising commercial real estate concentrations, accounting for loan and lease losses and exposure to nonbank servicers.

Read the report.

DoL Proposal Would Raise Salary Threshold for Non-Exempt Workers

The Department of Labor yesterday released a long-awaited proposal revising the requirements for employees to be exempt from overtime pay under the Fair Labor Standards Act. The proposal would more than double the salary basis test -- the level below which all employees must be paid overtime beyond 40 hours per week, regardless of their duties -- from the current level of $455 per week (or $23,660 per year) to $921 per week (or $47,892 per year).

The proposal would also increase the total annual compensation requirement for highly compensated employees to $122,148 and establish a mechanism for automatically updating the salary and compensation levels going forward to ensure that they will continue to provide a useful and effective test for exemption. DoL did not propose changes to the duties tests under FLSA, but it did request comment on whether the tests should be changed.

ABA is part of a coalition of employer groups -- the Partnership to Protect Workplace Opportunity -- that will respond to the proposal. Comments are due 60 days after publication in the Federal Register. To help bankers understand the proposal, ABA will host a briefing on July 30 at 2 p.m. EDT.

Read the summary of the rule.

Monday, June 29, 2015

Florida Issues Flood Bill to Protect Second Homes

On Thursday, H.R. 2918, the Flood Insurance Fairness Act of 2015 was introduced by Florida Keys Congressman Carlos Curbelo and fellow U.S. Rep. Patrick Murphy to provide economic relief to second homeowners and rental property owners.  

Last year, Congress approved the Homeowners Flood Insurance Affordability Act, which limited flood insurance rate increases on people’s primary homes in coastal areas of the country like the Florida Keys. The bill did not provide protections for second homeowners and the owners of commercial properties.   If passed, H.R. 2918 would extend caps on National Flood Insurance Program (NFIP) insurance rates to second homes and rental properties in coastal areas.

 “Often times, these rental properties not only serve as primary income for the landlords, but also provide reasonably priced housing for the workforce in our coastal communities,” Curbelo said. “This bill is critical to South Florida, especially Monroe County and the residents living in the Florida Keys. It’s important that we protect the real estate market and small businesses of hard-working Americans everywhere.”

Read more.

Want to learn more about Flood Insurance?  Join the ABIA Flood Insurance Working Group.

Friday, June 26, 2015

This Week at the CFPB

A summary of this week's news about the CFPB from the ABIA and ABA Dodd-Frank Tracker:
  • CFPB Unveils Complaint Narratives, Access for Government Workers
  • CFPB Formally Proposes TRID Delay to Oct. 3
  • Servicing Rule Compliance Lapses Are Focus of CFPB Report
The ABIA has a Task Force of members that work on issues related to the CFPB's regulation of insurance products. If you are an ABIA member and would like to learn more about ABIA's work with CFPB to educate them about the bank-insurance industry or join our CFPB Task Force, please contact us and visit our website.

Thursday, June 25, 2015

CFPB Formally Proposes TRID Delay to Oct. 3

As Consumer Financial Protection Bureau Director Richard Cordray announced last week, the CFPB yesterday issued its formal proposal delaying the effective date of the TILA-RESPA integrated disclosures.

The bureau attributed its decision in part to an administrative error in which it failed to notify Congress 60 days prior to the rule taking effect as required by law but also acknowledged that “moving the effective date may benefit both industry and consumers with a smoother transition to the new rules,” as ABA had advocated.

Under the proposal, the new disclosures would come into effect on Saturday, Oct. 3, more than two months after the original effective date. The bureau set the effective date for a Saturday to give the industry time over a weekend to reconfigure and test systems. Comments on the proposed delay are due by July 7.

Read the proposed rule.