May 1, 2020

State Associations Reject CU Calls For Expanded Member Business Lending Cap

In a letter to congressional leaders, MBA was among 51 state bankers associations flagging “opportunistic and unnecessary” attempts by the credit union industry to seek charter enhancements, such as expansion of the member business lending cap, during the coronavirus pandemic.
The groups noted that government guaranteed loans, including SBA Paycheck Protection Program loans, are already exempt from the business lending cap and that an expansion is unnecessary. They added that at this time, just 30 credit unions, a fraction of a percent of the credit union industry, are at risk of hitting the member business lending cap.
 “We are proud of the joint work banks and credit unions have done together during this crisis, and both industries appreciate the important role we all play to keep liquidity flowing to communities,” the groups said. “However, efforts to increase credit union powers in the name of a crisis, including increases to the member business loan limit, are disappointing and distract from important policy priorities that are actually needed to support our small businesses.”

ABA, SIFMA Urge IRS To Delay Reporting On IRA Contributions In Form 5498

In a joint letter with the Securities Industry and Financial Markets Association, the American Bankers Association urged the IRS to delay reporting on Form 5498 and related forms from July 15 until Aug. 31, 2020, at the earliest. Under recent IRS guidance, Form 5498 — completed by IRA custodians and trustees to report contributions to those accounts — was postponed from the usual deadline of May 31 to July 15.
Because individuals have until July 15, 2020, to make calendar year 2019 contributions to their IRAs, ABA and SIFMA asked that banks and broker-dealers have at least an additional month and a half to report the total contributions in those accounts as of July 15.

CFPB Issues Guidance On Residential Mortgage Transfers

The Consumer Financial Protection Bureau issued guidance for transferring mortgage servicing rights to a servicer or sub-servicer. 

“As consumers do not have a choice with respect to the transfer of servicing, compliance with regulatory requirements is especially important in risk mitigation and consumer harm,” the CFPB said.
To help facilitate compliance with the servicing rules, the bureau highlighted several practices for servicers to consider, including the following.
  • developing a servicing transfer plan
  • engaging in quality control work after transfer of preliminary data
  • determining servicing responsibilities for legacy accounts
  • conducting a post-transfer review to determine the effectiveness of the transfer plan
  • tracking consumer complaints and loss mitigation performance metrics
  • identifying loans in default, active foreclosure and bankruptcy and any forbearance agreements entered in with the borrower
While the guidance was in development before the outbreak of the coronavirus, CFPB acknowledged that servicers may be experiencing difficulties related to the pandemic. The bureau noted that, with respect to servicing transfers that are requested or required by a federal regulator or by the security issuer of government loans, it would be “sensitive to good-faith efforts demonstrably designed to transfer the servicing without adverse impact to consumers.”

ABA Releases New Resources To Help Bankers Navigate Core Platform Marketplace

The American Bankers Association’s banker-led Core Platforms Committee has released several new resources to help bankers navigate the core provider marketplace.
ABA unveiled fact sheets on the offerings and future plans of 19 core providers currently in the market or launching new platforms soon, as well as sample RFP and RFI templates that bankers can customize for their own market research. These resources complement previously shared information from Finastra, FIS, Fiserv and Jack Henry and Associates. ABA also shared a timeline of the Core Platforms Committee’s work to date.
An episode of the ABA Banking Journal Podcast discusses these new resources and a webinar series on core platform topics. The first webinar, at 1 p.m. Wednesday, May 13, will cover contract issues, while future events will explore open banking and the landscape of emerging core providers.

Twenty-One Core Providers Sign On To ABA Principles

As part of the American Bankers Association’s ongoing work to strengthen the relationship between banks and their core providers so banks can deliver the innovative products and services customers want and need, 21 core providers have signed onto the Principles for Strong Bank-Core Provider Relationships developed by the Core Platforms Committee.
  • BMA Banking Systems
  • COCC
  • CSI
  • Datapro
  • DCI
  • Finastra
  • Finxact
  • Fiserv
  • InfoSys
  • Intellect Design
  • Jack Henry and Associates
  • Mambu
  • Moov
  • Neocova
  • Q2
  • SAP
  • Smiley Technologies
  • TCS
  • Technisys
  • Thought Machine
  • UFS Data
The principles offer reasonable standards for quality service, open communication, access to bank data, fair contracts and data security that banks can use as part of their conversations with core providers.

Agencies Issue Statement On Cloud Computing Security

With many banks moving some or all employees to remote work arrangements and accessing more cloud-based technologies, the Federal Financial Institutions Examination Council released a statement on risk management principles for cloud computing security. FFIEC noted that the statement does not contain new regulatory expectations but rather highlights examples of risk management practices. Such practices include those related to governance, cloud security management, change management, resilience and recovery, and audit and controls assessment.

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