October 20, 2021
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Groups push back on IRS reporting false claims

With Congress working to modify its IRS reporting proposal in response to widespread opposition, ICBA and 100 other organizations pushed back against false claims from supporters of the policy.
 
In a joint letter to Congress, ICBA and groups such as the National Association of Realtors and International Franchise Association said the proposal would affect virtually every American with a bank account despite proposals to increase the account flow threshold.
 
The groups also delivered a document responding to supporters’ claims that the measure is targeted and easy to implement, noting it would broadly affect taxpayers and include millions of accounts not currently subject to reporting.
 
ICBA is urging community bankers to speak out against the proposal by calling their lawmakers using an ICBA call alert and customizable script.
 
Community bankers can also continue using customizable email and social media content to urge consumers to contact Congress in opposition.
Source: ICBA
Lawmakers raise concerns with SBA responsiveness

Two leading House Republicans expressed concerns with the Small Business Administration’s lack of communication and responsiveness with small businesses and lenders.
 
House Small Business Committee Ranking Member Blaine Luetkemeyer (Mo.) and House Financial Services Committee Ranking Member Patrick McHenry (N.C.) cited conflicting messages and unanswered questions related to the Paycheck Protection Program and Economic Injury Disaster Loans.
 
In congressional testimony last month, ICBA said the SBA must respect lenders that choose not to use its PPP Direct Borrower Forgiveness Portal, which led the agency to withdraw its threat to audit PPP lenders that don’t participate.
Source: ICBA
Treasury issues guidance, data on ransomware

The Treasury Department issued guidance to help the virtual currency industry prevent ransomware exploitation, and it reported on 2021 ransomware trends.
 
The guidance provides an overview of the Office of Foreign Assets Control’s sanctions requirements and provides examples of compliance best practices.
 
In a separate report, the Financial Crimes Enforcement Network said ransomware-related Suspicious Activity Reports increased 30% from calendar year 2020 to the first six months of 2021, with the dollar value already exceeding last year’s filings.
 
FinCEN also identified 68 different ransomware variants reported in this year’s SAR data and several money-laundering typologies common among these variants.
Source: US Treasury
Two Measures Advancing Housing Sustainability and Affordability

The Federal Housing Finance Agency (FHFA) announced two measures to sustainably advance the affordability of homeownership for mortgage borrowers across the nation, especially those in underserved communities.

First, over the coming months, Fannie Mae and Freddie Mac (the Enterprises) will expand certain eligibility requirements for their RefiNow and Refi Possible refinance programs aimed at assisting low-income borrowers. Additionally, the Enterprises will be incorporating desktop appraisals into their selling guides for new purchase loans.

Second, both Enterprises will incorporate desktop appraisals into their Selling Guides for many new purchase loans starting in early 2022. The use of desktop appraisals by the Enterprises was one of several temporary flexibilities initiated last year in response to the COVID-19 pandemic. This decision is the result of a thorough review of data collected from use of the loan flexibilities, as well as input received from the Request for Input (RFI) and public listening session on appraisal-related policies, practices, and processes.

FHFA will continue to ensure the safety and soundness of its regulated entities as they support the housing finance market while ensuring equitable access to safe, decent, and affordable housing opportunities.
Source: Federal Housing Finance Agency
Economic Conditions

Consumer sentiment dips in early October
The University of Michigan index of consumer sentiment dipped 1.9% in early October following a 3.6% increase in September.
 
Retail Sales increased 0.7% in September from the previous month and were up 13.9% from a year ago, according to the Commerce Department.
 
Business Inventories rose 0.6% in August and were up 7.4% from the previous year, Commerce reported.

Jobs, supply chain hampering growth
The employment and economic outlook continues to be hampered by difficulties filling jobs, supply chain backups, and inflation concerns, according to the latest weekly video from ICBA Securities and Vining Sparks. Watch the video.

Producer prices set another 12-month record
The Producer Price Index increased a seasonally adjusted 0.5% in September following gains of 0.7% in August and 1.0% in July, the Labor Department reported. The index is up 8.6% over the past year, the largest advance since 12-month data were first calculated in November 2010.

Industrial production drops
Industrial production decreased 1.3% in September following a 0.1% decline in August, the Federal Reserve reported. The September decrease was led by a 7.2% decline in the production of motor vehicles and parts due to semiconductor shortages.

Consumer prices rise 0.4%
The Consumer Price Index increased a seasonally adjusted 0.4% in September after rising 0.3% in August, the Labor Department reported. The indexes for food and shelter contributed more than half of the monthly increase in the index, which is up 5.4% over the past 12 months.

Small-biz index dips
The NFIB Small Business Optimism Index decreased one point in September to 99.1. Owners expecting better business conditions over the next six months decreased five points, while a record-high 51% of owners reported job openings that could not be filled.

Source: Various
Guidance on third parties a key step

ICBA told regulators it supports their efforts to consolidate guidance on third-party risk management while providing recommendations on the proposed interagency guidance.
 
The agencies are proposing interagency guidance based on OCC guidance issued in 2013, which is a step toward further policies that fully recognize the potential benefits of community bank-fintech partnerships.
 
ICBA said the agencies should:

  • Consider how improvements to the process of developing and implementing the guidance—such as employing comment opportunities—will enhance the utility of this and other guidance.
  • Continue exploring additional policies that would spur more agile supervisory responses, such as growing the use of agency “sprints,” incorporating pilot programs and sandboxes, and facilitating shared due diligence.
  • Structure the guidance so it can be further tailored.

Source: ICBA