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CFPB, Arkansas AG Settle with Brokers of High-Interest Credit Offers
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The Consumer Financial Protection Bureau (Bureau) and the
Office
 of the Arkansas Attorney General
filed a proposed settlement with Andrew Gamber; Voyager Financial Group, LLC; BAIC, Inc.; and SoBell Corp. The companies, owned and operated by Gamber, were brokers of contracts offering high-interest credit to veterans, many of whom are disabled, and to other consumers. Under the proposed settlement, Gamber and the companies will be banned from the industry and a judgment requiring redress, a civil money penalty, and a payment to the State of Arkansas will be entered against them.
The Bureau and the Arkansas Attorney General alleged that Gamber and his companies misrepresented to consumers that the contracts the companies facilitate are valid and enforceable when, in fact, the contracts are void under federal and state law; misrepresented to consumers that the product is a sale of payments and not a high-interest credit offer; misrepresented to consumers when they will receive their funds; and failed to inform consumers of the applicable interest rate on the credit offer.
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Accounting Standard Implementation Delay Proposed
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The Financial Accounting Standards Board issued a request for
 comment on a proposal to grant private companies, nonprofits, and certain small public companies additional time to implement FASB standards on current expected credit losses, leases and hedging.
The proposal would push back CECL's implementation date until January 2023 for most community banks, three years after the mandate for larger banks and FASB's leases and hedging implementation by two years to January 2021.
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Stop Credit Union Participation in SBA Program
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ICBA urged the Small Business Administration to terminate its  recent memorandum of understanding with the National Credit Union Administration.
In a letter to Acting Administrator Chris Pilkerton, ICBA said credit union participation in SBA programs violates the spirt of the Small Business Act, which encourages private enterprise and free competition, and prevents doubling-up on tax subsidies.
"If, indeed, the 'essence of the American economic system of private enterprise is free competition' then SBA should no longer encourage and enable credit unions to participate in SBA loan programs; credit unions do not exhibit the traits of 'free competition' that underlie the Act," ICBA wrote.
ICBA has repeatedly challenged NCUA efforts to allow credit unions to exceed limitations on commercial lending activity established by Congress.
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HUD Proposes Revised 'Disparate Impact' Rule
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The U.S. Department of Housing and Urban Development (HUD)  published a proposed rule to amend the HUD interpretation of the Fair Housing Act's disparate impact standard. The proposed rule as amended would provide more appropriate guidance on what constitutes unlawful disparate impact to better reflect the Supreme Court's 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc.
The HUD proposed disparate impact rule provides a framework for establishing legal liability for facially neutral practices that have unintended discriminatory effects on classes of persons protected under the Fair Housing Act. The rule has no impact on determinations of intentional discrimination. In its 2015 decision, the Supreme Court upheld the use of a 'disparate impact' theory to establish liability under the Fair Housing Act for business policies and local ordinances even if the policy or ordinance is neutral - in intent and application - if it disproportionately affects a protected class without a legally sufficient justification.
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Final Rule on Credit Score Models
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The Federal Housing Finance Agency released its final rule outlining the process for Fannie Mae and Freddie Mac to validate and approve third-party credit score models.
The final rule drops a conflict-of-interest provision that would have barred any credit score model that was owned by the credit reporting agencies.
A major concern with the initial rule was the additional cost burden for community banks, the government-sponsored enterprises, and the industry in general to switch credit score providers.
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Call for Hearing on Cybersecurity, Data Protection
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In a letter to House Financial Services Committee Chairwoman
 Maxine Waters (D-Calif.) today, Ranking Member Patrick McHenry (R-N.C.) today called for a hearing on cybersecurity and data protection in the financial services sector in response to concerns raised by industry leaders and recent data breaches.
"Over the last eight months, we've heard from chief executive officers and prudential regulators regarding the most significant issues facing the financial industry, and they all agree that cybersecurity and data protection are critical priorities," McHenry wrote. "To that end, it is imperative that the Committee focus its attention on this issue, including but not limited to: the regulatory regime governing cybersecurity and data protection, third party service providers, and other entities that have access to or store consumer data, including government agencies."
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Congratulations to I. Joe Miles !
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After a 43 year banking career I. Joe Mile is retiring as President of Integrity First Bank, Mountain Home.
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QUESTION:
The bank wants to enact a fair lending self-testing
program. The program meets the criteria described in Reg B to ensure privileged information. If self-testing finds violations, is the bank safe from having the results used against it?
ANSWER: If the bank's program meets the criteria set forth in Regulation B 1002.15(d)(3) the self-test report or results and any other information privileged under this section may be obtained and used by an applicant or government agency solely to determine a penalty or remedy after a violation of the Act or this part has been adjudicated or admitted. Disclosures for this limited purpose may be used only for the particular proceeding in which the adjudication or admission was made. Information disclosed remains privileged.
Reference: Regulation B 1002.15(d)(3); see also the Official Staff Interpretation 1002.15 for additional information about what information is privileged and not privileged under self-testing.
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** Keynote Speaker, Mike Neighbors,
Razorback Women's Basketball Coach **
**Washington D.C Update from ICBA**
**Arkansas SBA Bank Lender Awards**
and much more.... !
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A Financial Institution Webinar
Managing Emerging Ag Lender Liability Risks
August 27, 2019 - 12:00 CT
* Draw attention to potential lender liability issues from new
agricultural economic stressors
* Common circumstances that could give rise to lender liability
* Strategies and best practices to reduce liability and exposure
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