During the last 15 years there have been notable changes in regulatory enforcement of potential redlining situations. This article addresses those changes....more
When the new 2023 CRA Rule was approved by regulators FDIC Chairman Martin Gruenberg indicated one of the goals was to “raise the bar” for CRA performance ratings. Now that the final 2023 CRA performance ratings are in it...more
10/24/2024
/ Banks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Consumer Lenders ,
FDIC ,
Federal Reserve ,
Final Rules ,
Financial Institutions ,
Financial Regulatory Reform ,
Financial Services Industry ,
Loans ,
OCC ,
Performance Ranking Systems
Recent news stories explain the criticism of Senator Warren and Congresswoman Waters directed at banks that are litigating the 2023 CRA rule. But perhaps their frustration should be focused on the regulators who have...more
10/9/2024
/ Banks ,
Community Reinvestment Act ,
Consumer Financial Products ,
Fair Lending ,
Financial Institutions ,
Financial Regulatory Reform ,
Financial Services Industry ,
Lending ,
Loans ,
Mortgages ,
Multi-Family Development ,
Real Estate Transactions
Readers of this article may think I am referring to Orcas, sometimes known as “killer whales.” But what I am referring to is the new form of Assessment Area in the 2023 CRA Rule. However, the analogy/metaphor may be...more
I’ve written articles critical of the Section 1071 Rule and the CFPB’s implementation of the new rule. For example, the scheduled “applicable dates” for data recording and reporting make no sense at all. As currently...more
9/6/2024
/ Borrowers ,
Community Reinvestment Act ,
Consumer Financial Products ,
Consumer Financial Protection Bureau (CFPB) ,
Discriminatory Lending Practices ,
Financial Institutions ,
Financial Services Industry ,
Lenders ,
Loans ,
Section 1071 ,
Small Business Loans
Previously, I have written about regulatory enforcement of anti-redlining regulations. I pointed out the problems and potentially misleading statistical conclusions caused by the application of what is called a “REMA” or...more
8/27/2024
/ Consumer Financial Products ,
Department of Justice (DOJ) ,
Discriminatory Lending Practices ,
Enforcement Actions ,
Fair Lending ,
Financial Institutions ,
Financial Services Industry ,
Mortgage Lenders ,
Mortgages ,
Race Discrimination ,
Redlining ,
Regulatory Requirements
Len and Dean discuss the alarming issue of elder abuse in their 78th and 79th podcasts. Dean expresses concern, especially since he has elderly parents, and highlights recent statistics from FinCEN and the FBI on elder...more
In a recent podcast, Len and Dean discuss the June 10 article "Manufacturing Fair Lending" from National Mortgage Professional, which delves into the "Modern Theory of Redlining" introduced by bank regulators after AG...more
As any bank professional regulatory compliance professional knows redlining is the hottest issue today and has been since Attorney General Merrick Garland announced the “Combatting Redlining Initiative” in October 2021. Since...more
7/25/2024
/ 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 ,
Risk Management
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
The recent Supreme Court ruling that upheld the constitutionality of the Consumer Financial Protection Bureau’s funding resulted in the Bureau announcing the new effective dates for banks to begin collecting their CRA...more
5/31/2024
/ Compliance ,
Consumer Financial Products ,
Consumer Financial Protection Bureau (CFPB) ,
Data Collection ,
Dodd-Frank ,
Financial Institutions ,
Financial Services Industry ,
Lenders ,
Loans ,
Reporting Requirements ,
Section 1071 ,
Small Business
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
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
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
Episode 70 of "Compliance 911, show" titled "2024 Regulatory Hot Topics," discusses the major regulatory challenges facing financial institutions in 2024. Hosts Len and Dean mark their 70th episode, reflecting on various...more
Episode 68 of the podcast discusses the investigation process for Electronic Funds Transfers (EFT) under the Electronic Fund Transfer Act. The hosts, Dean and Len, emphasize the importance of consumer protection in EFT and...more
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