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Thursday, October 31, 2013

Regulators Vow to Work With Industry on Mortgage Rules

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray and acting Federal Housing Finance Agency (FHFA) Director Edward DeMarco on Monday promised to work with lenders to implement a bevy of new mortgage regulations intended to stave off a repeat of the foreclosure crisis of the late 2000s. Cordray's remarks, made during the Mortgage Bankers Association's 100th annual conference, sought to assuage fears that the new regulations will hurt lenders once they take effect early next year. DeMarco, meanwhile, assured the group that the FHFA does not plan to surprise the industry with additional rules involving the size of U.S. guaranteed loans.

From "Regulators Vow to Work With Industry on Mortgage Rules"
The Hill (10/28/13) Goad, Ben

Monday, October 28, 2013

Most Consumers Don’t Know Credit Score, Survey Finds
Only 42 percent of consumers know their credit scores, according to an Ipsos survey conducted for ABA and released Friday. The survey of 1,000 American adults found that 56 percent did not know their scores, which is calculated based on consumer credit reports and affects lenders’ credit decisions. “People might have a scare when they apply for a loan and discover that a low credit score could mean a higher interest rate or no loan at all,” said ABA SVP Nessa Feddis. ---ABA Daily Newsbytes

Friday, October 25, 2013

Fed Said to Issue Warning About Lax Loan Underwriting Practices

The Federal Reserve and the Office of the Comptroller of the Currency are recommending lenders bolster underwriting standards for leveraged corporate loans as borrowing of the high-risk debt nears levels not seen since before the financial crisis, according to sources who asked not to be identified because the actions have not been made public. The regulators sent letters to some of the largest banks -- including Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co., and others -- asking them to avoid originating loans that can be considered "criticized," or debt classified as having some flaw that may result in a loss.

From "Fed Said to Issue Warning About Lax Loan Underwriting Practices"
Bloomberg (10/24/13) Huanss, Kristen

Monday, October 21, 2013

Local Op-Ed: Relationships Distinguish Community Banks

Relationships with customers distinguish community banks from larger financial institutions, according to a new community banker op-ed in the Alexandria (Va.) Times.

John Marshall Bank regional executive Ted Johnson wrote in the newspaper that being on a first-name basis with customers trumps impersonal relationships and that community banks are second to none in serving small businesses.

“Community bankers have personal business relationships with customers and a finger on the pulse of the community,” Johnson wrote. “With this involvement and knowledge of the local business climate, community banks are more likely to be receptive to small business loans.”  --ICBA

Friday, October 18, 2013

Friday Rate Update

Mortgage Rates Edge Up

The average rate for a 30-year fixed-rate mortgage edged up to 4.28 percent from last week’s rate of 4.23 percent, Freddie Mac said Thursday. At this time in 2012, the 30-year FRM rate averaged 3.37 percent.

Thursday, October 17, 2013

Consumer Loan Demand Weakens with Fewer Home Purchases: Fed

The Federal Reserve noted in a new report that lenders continued to be battered in the third quarter as consumer loan demand weakened slightly in some areas of the country. In New York, bankers reported "softer" loan demand from consumers, particularly for residential mortgages and home loan refinancing. Philadelphia-area bankers, meanwhile, expressed a similar sentiment but said that most financial companies continue to report "modest increases" in overall lending.

From "Consumer Loan Demand Weakens with Fewer Home Purchases: Fed"
American Banker (10/17/13) Borak, Donna

Tuesday, October 15, 2013

Senators Call for Flood Insurance Affordability Study

A bipartisan group of 24 senators wrote last week to their Senate leadership expressing concern about the flood insurance premium hikes that took effect Oct. 1. The rate increases, mandated by the 2012 Biggert-Waters flood insurance reform law, “could render flood insurance unaffordable and unattainable for up to 4 million homeowners and businesses nationwide,” the senators said.

They called for an affordability study that can provide “immediate rate relief” for homeowners as Biggert-Waters is implemented, and urged Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) to attach a provision for this to a viable Senate bill.

--ABA Daily Newsbytes

Monday, October 7, 2013

Fed's Powell: Regulators Ought Not Unduly Burden Community Banks

Federal Reserve Governor Jerome Powell said Thursday during a community banking conference that financial regulators must be careful to not over-burden community banks with onerous rules, which could unintentionally impede lending activity that is vital for small business growth and job creation. "Although both the traditional bank regulatory agencies and the Consumer Financial Protection Bureau are constrained, to some extent, by the language in the Dodd-Frank Act, all regulators should aim to ensure that we are not unduly rigid in our actions," he said. He added that the Fed will continue to study the overall effects of the new rules on the safety and soundness of community banks and to consider whether modifications to rules, or the way in which they are implemented, could achieve regulators' aims while reducing the regulatory burden on banks.

From "Fed's Powell: Regulators Ought Not Unduly Burden Community Banks"
Reuters (10/03/13)

Tuesday, October 1, 2013

Economy Continues to Threaten Community Banks

Community banks in the U.S. south are showing signs of improvement, but they continue to face income pressure tied to lower loan demand and low interest rates, according to the Office of the Comptroller of the Currency. Officials said Wednesday that banks have higher capital levels and more money available for loans, based on an analysis of financial data through the second quarter. While more than 80 percent of the 511 community banks in the nine southern states received the highest level of rating, loan demand declined at 38 percent of the district's institutions, according to the comptroller's office.

From "Economy Continues to Threaten Community Banks"
Tennessean (09/26/13) McGee, Jamie