Tennessee Bankers

This Week Newsletter

June 27, 2016 - Issue No. 1626

Agencies Issue Guidance on Final CECL Standard

The federal banking agencies issued guidance on implementing FASB's new loan loss accounting standard, which uses a current expected credit loss model. Under CECL, banks will be required to record, at the time of origination, credit losses expected throughout the life of the asset portfolio on loans and held-to-maturity securities.

The regulatory guidance provides information on CECL's key elements, noting areas where it differs from current U.S. generally accepted accounting principles and emphasizing that they expect CECL to be "scalable to institutions of all sizes." They added that CECL "does not specify a single method for measuring expected credit losses; rather, institutions should use judgment to develop estimation methods that are well documented [and] applied consistently over time."

While the agencies said they did not expect that "smaller and less complex" banks will need to adopt "costly and complex models" to meet the new requirement, they noted that "institutions would need to consider how to adjust historical loss experience not only for current conditions as is required under the existing incurred loss methodology, but also for reasonable and supportable forecasts" of the future.
The agencies also provided guidance on how they will apply the new standard to different classes of assets at the effective dates of 2020 and 2021 and outlined steps to take to remain in compliance as CECL is implemented. Click here to read the guidance.
TBA will host a webinar titled "Current Expected Credit Losses (CECL) Model" on July 26. Early registration deadline is July 19. Click here to sign up.

CFPB Updates Reg Z Dollar Thresholds

The CFPB announced 2017 changes in dollar thresholds for several Reg Z provisions governed by the CARD Act, the Home Ownership and Equity Protection Act and the Dodd-Frank Act. The thresholds are based on changes in the Consumer Price Index.

For credit cards, the penalty fees safe harbor for 2017 will remain at $27 for a first late payment. Due to a miscalculation from the previous adjustment, the bureau has recalculated the subsequent late payment safe harbor fee to be $38, effective immediately. This new figure will remain unchanged in 2017. The minimum interest charge disclosure threshold will also remain unchanged for 2017. The HOEPA loan threshold will increase slightly to $20,579 and the HOEPA fee trigger will be $1,029, effective Jan. 1.

For Qualified Mortgages, points and fees cannot exceed 3 percent of loans of $102,894 or more; $3,087 for loans between $61,737 and $102,894; 5 percent for loans between $12,862 and $20,579; and 8 percent for loans of less than $12,862. Click here to read more.

CFPB Mortgage Servicing Exams to Emphasize Borrower Requests

The CFPB last Wednesday, June 22, issued updated exam procedures for its mortgage servicing rules. The bureau noted that servicers should expect a "greater emphasis" from bureau examiners on how they handle complaints from borrowers and requests from troubled borrowers, as well as discrimination issues.

Examiners will review "whether the servicer has an adequate process for expedited evaluation of complaints or information requests from borrowers facing foreclosure," the CFPB said. Meanwhile, "the CFPB is conducting targeted reviews of mortgage servicers' compliance with fair lending laws," the bureau added.

The bureau also released a special edition of its Supervisory Highlights publication focused on servicing, noting multiple instances where borrowers received late or incorrect information about loan modifications due to technological breakdowns and where borrowers faced runarounds following servicing transfers between companies with incompatible computer systems. Click here to view the updated exam proceduresClick here to read the Supervisory Highlights.

Agencies Issue 2015 List of Distressed, Underserved Non-Metro Areas

The federal banking agencies released their 2016 list of distressed or underserved middle-income non-metropolitan areas where banks can receive Community Reinvestment Act credit for revitalization activities. The designations reflect local economic conditions, including unemployment, poverty and demographic changes. Thirty-nine counties in Tennessee made the list. Click here to view the list.

Kemp Instructs August TBA Basic Consumer Lending School

Join instructor David Kemp August 25-26 for the Basic Consumer Lending school. Hosted at TBA Barrett Training Center in Nashville, this two-day program is for those charged with organizing and managing consumer loans. It is excellent preparation for those interested in attending The Southeastern School of Consumer Credit, a week-long school conducted in March 2017. The workshop will address credit decision-making, as well as the human relations aspect of lending. It includes case studies and role-playing to acquaint attendees with effective interviewing skills and to improve credit decisions. It also includes discussion on the concepts of secured lending, an analysis of decision-making, and major changes to mortgage underwriting standard. Register before August 11 for the early-registration discount.

Save the Date for Women in Banking Conference

On September 8 in Nashville, TBA will host its inaugural Women in Banking Conference designed to bring together Tennessee's many successful female bankers for professional development and networking. It is designed for all levels of staff from any financial institution or financial services provider interested in the enhancement and career growth of women in Tennessee. This conference will give you the opportunity to network with other professional women and discuss similar challenges and solutions. Make plans now to attend, to find inspiration, and to embrace empowerment from other successful women. To inquire about associating your brand with this event, please contact Susan Taylor. Sponsorships are limited and available at varying rates.  

Deadline Approaching to Order Bankers Directory

The 2016/2017 Bankers Directory is a compact, handy reference that puts information about all of Tennessee's commercial banks and trust companies at your fingertips. The directory contains complete financial data for Tennessee institutions taken from the 2015 year-end FDIC Call Reports, including:

  • "Statement of Condition"
  • Main address and phone numbers
  • Officers and Directors
  • Branch locations
  • The directory also contains:
  • TBA officers, directors, and staff
  • National banking associations and regulatory agencies
  • Tennessee's state legislators and US congressional delegation
  • TBA–endorsed partners and associate members, complete with a brief description of their product or service.

CEOs, out-of-county main office branches, and associate members each receive one complimentary copy of the directory. Additional copies are available for purchase.
The deadline to order this valuable resource is July 15. Click here to order your copy of the 2016/2017 Bankers Directory online, or download the order form and send the completed form to T'Lanie Luu.

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TBA On the Road

  • TBA's Stacey Langford is on the road for bank visits.