When the Supreme Court decided in favor of the plaintiff in Loper Bright Enterprises et al vs. Gina Raimondo it overruled its decision in Chevron v. Natural Resources Defense Council, the so-called “Chevron Decision” which...more
7/16/2024
/ Administrative Procedure Act ,
Banks ,
Chevron Deference ,
Chevron v NRDC ,
Community Reinvestment Act ,
Consumer Financial Products ,
Depository Institutions ,
Financial Services Industry ,
Government Agencies ,
Judicial Authority ,
Loper Bright Enterprises v Raimondo ,
Regulatory Authority ,
SCOTUS ,
Statutory Interpretation
In a recent article in National Mortgage Professional entitled "Manufacturing Fair Lending”, former chief of the Housing and Civil Enforcement Section at the Department of Justice under Attorney General William Barr, Paul...more
6/17/2024
/ Banks ,
Consumer Financial Products ,
Department of Justice (DOJ) ,
Discriminatory Lending Practices ,
Fair Lending ,
Financial Institutions ,
Financial Services Industry ,
Mortgage Lenders ,
Mortgages ,
Race Discrimination ,
Real Estate Transactions ,
Redlining
In emails in recent months we've warned bankers about the extremely aggressive enforcement of anti-redlining policies. This is becoming more and more obvious every day as more banks get threatened with referral to the DOJ....more
6/13/2024
/ Banks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Department of Justice (DOJ) ,
Discriminatory Lending Practices ,
Fair Lending ,
Financial Institutions ,
Financial Services Industry ,
Mortgage Lenders ,
Mortgages ,
Race Discrimination ,
Real Estate Transactions ,
Redlining
Since October 2021, the prudential bank regulators in concert with the Department of Justice have been pursuing the “Anti-Redlining Initiative” announced by Attorney General Merrick Garland on October 21, 2021. During that...more
5/20/2024
/ Banks ,
Consumer Financial Products ,
Department of Justice (DOJ) ,
Discriminatory Lending Practices ,
Fair Lending ,
FFIEC ,
Financial Services Industry ,
HMDA ,
Mortgages ,
Race Discrimination ,
Redlining
Every banker should know by now that the Department of Justice announced an “Anti-Redlining” crusade in October 2021. In his October 2021, press release, Attorney General Merrick Garland, proclaimed that redlining is...more
Now that a Texas court has issued a temporary injunction delaying the April 1, 2024, scheduled implementation of the new CRA Rule should bankers relax and assume that the new rule’s effective date has been delayed for at...more
Podcast #71 of The Compliance 911 Show discusses how banks can estimate their performance under the new Community Reinvestment Act (CRA) rules. Len highlights bankers' concerns about the increased difficulty in passing the...more
The March 21, 2024, announcement that the prudential bank regulators have decided to postpone the scheduled April 1, “applicable” date for the Facility-based assessment areas, the new Public File section and the Public Notice...more
3/25/2024
/ Assessment ,
Banks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Consumer Lenders ,
Deadlines ,
Financial Institutions ,
Financial Regulatory Reform ,
Financial Services Industry ,
Postponement ,
Regulatory Requirements
With April 1, 2024, the effective date for the new CRA rule fast approaching, every bank is asking what must we do on April 1? Here are the answers....more
3/20/2024
/ Banks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Financial Institutions ,
Financial Regulatory Reform ,
Financial Services Industry ,
HMDA ,
Lending ,
Loans ,
Low-Income Issues ,
Mortgages ,
Regulatory Requirements
The Retail Lending Test in the new CRA will measure bank performance against “market” benchmarks (lending activity reported by other lenders) and “community” benchmarks” (community demographics). Many bankers, although not...more
3/18/2024
/ Banks ,
Benchmarks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Consumer Lenders ,
Financial Institutions ,
Financial Regulatory Reform ,
Financial Services Industry ,
Low-Income Issues ,
Mortgage Loan Originators ,
Mortgages ,
OCC ,
Real Estate Transactions ,
Small Business Loans
There has been much understandable confusion about many aspects of the new CRA rule. But perhaps there’s been no greater confusion and anxiety than about the Assessment Areas. And this anxiety has become more acute the closer...more
In July 2023, the Office of Management & Budget published an update to “Core Based Statistical Areas, Metropolitan Divisions, and Combined Statistical Areas”. That document contains the latest definitions of Metropolitan...more
There has been much understandable handwringing about the new CRA and its complexity as well as the high CRA exam failure rate predicted by regulators based on the new assessment areas and the higher performance standards...more
2/26/2024
/ Banks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Discriminatory Lending Practices ,
Fair Lending ,
Financial Institutions ,
Financial Services Industry ,
Mortgage Lenders ,
Mortgages ,
Race Discrimination ,
Real Estate Transactions ,
Redlining
I’ve written at least a dozen articles about the dramatic impact the new CRA is going to have on banks. Until now, only about 1.2% of bank CRA examinations end with a failing grade. But, by the estimates of the regulators, if...more
2/21/2024
/ Banking Examinations ,
Banks ,
Benchmarks ,
Community Development ,
Community Reinvestment Act ,
Consumer Financial Products ,
Financial Institutions ,
Financial Services Industry ,
Lenders ,
Loans ,
Mortgages
I have written a number of articles about the new CRA and the problems its requirements will impose on banks. But there are also problems posed by what the new Rule omits....more
2/7/2024
/ Banks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Fair Lending ,
Financial Institutions ,
Financial Regulatory Reform ,
Financial Services Industry ,
HELOC ,
Lending ,
Loans ,
Mortgages ,
Real Estate Transactions
Our office has been inundated with inquiries about an aspect of the impact of the impending new CRA rule. As we have noted in previous articles there are mistakes and inconsistencies in the new CRA Rule, and some of these...more
As I write this article the Department of Justice is pursuing a record-breaking number of “redlining” cases against banks and mortgage lenders. The “Anti-redlining Initiative” was announced October 22, 2021, by Attorney...more
1/18/2024
/ Banks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Department of Justice (DOJ) ,
Discriminatory Lending Practices ,
Fair Lending ,
Financial Institutions ,
Financial Services Industry ,
Mortgage Lenders ,
Mortgages ,
Race Discrimination ,
Real Estate Transactions ,
Redlining
Climate Risk Assessments for banking purposes are in the early stages of development. No laws or regulations have been issued regarding the topic. Nonetheless, it is obvious that lawmakers and regulators are keenly intent on...more
1/3/2024
/ Analytics ,
Banks ,
Business Strategies ,
Climate Action Plan ,
Climate Change ,
Community Reinvestment Act ,
Consumer Financial Products ,
Fair Lending ,
Financial Institutions ,
Financial Services Industry ,
Risk Assessment ,
Risk Management
In episode 64 of the Compliance 911 podcast, hosts Len Suzio and Dean Stockford discuss the intricacies of Reg. CC, a regulation that deals with funds availability. Dean emphasizes the importance of understanding the...more
The new CRA Rule has a number of surprises for banks and maybe a surprise or two for the regulators themselves. One of those surprises involves the transition rules in §__.51 as they pertain to the April 1, 2024, the...more
Most of the articles published about the new CRA rule have repeated the party line – that the new rule “modernizes” the Regulation, that it will make CRA exams more objective and CRA ratings more consistent, etc. But the new...more
Dear Banker, The new CRA Rule contains a "break" for Large banks that would exempt them from having to declare Retail Lending Assessment Areas ("RLAAs") for any calendar year in which the bank lends more than 80% of its home...more
In Parts I and II I explained the devastating impact of the new CRA Rule and what the underlying reasons for that adverse impact are. In Part III I will touch upon what banks are most significantly impacted by the new Rule....more
In my previous email I explained the devastating impact of the new CRA Rule on the percentage of banks receiving a less than satisfactory CRA Performance Rating. The data in Table 32 within the new Rule demonstrate that if...more
With all the news stories circulating about the new CRA Rule, it's surprising that not one article has addressed the topic that should be the biggest story of all - the catastrophic implications for banks!...more