IBA E-News 3-17-17


Indiana Legislative Session Update
The General Assembly has picked up steam as the April 3 committee report deadline in both chambers quickly approaches. This means that legislators only have two full weeks remaining of committee hearings to get through bills in the second chamber. The IBA GR Team continues to monitor and testify on bills that impact the banking industry.

Mark Schroeder Honored With Concurrent Resolution
Mark A. Schroeder, chairman and chief executive officer of German American Bancorp in Jasper, was honored Monday with a concurrent resolution by the Indiana Senate and House. Presented on Monday, March 13, the resolution honored Schroeder for being named by American Banker magazine as one of three nationwide Community Bankers of the Year for 2016. The resolution was authored by Sen. Mark Messmer and sponsored by Rep. Mike Braun.

HB 1407 – Probate and Trust Matters
Author: Rep. Thomas Washburne, R-Inglefield
Sponsor: Sen. Rodric Bray, R-Martinsville

Bill summary:
This bill makes various changes to probate and trust laws concerning contesting of wills, the size of unsupervised estates, authorization of certain acts by a trustee, and the consideration of the requests of de facto custodians and living parents of incapacitated persons in the appointment of guardians and in custody orders.

What happens next: The bill, sponsored by Sen. Rodric Bray (R-Martinsville), was heard in the Senate Judiciary Committee on Wednesday. The committee took testimony, but decided to hold the bill.

SB 13 – Use of Firearms to Secure Loans
Author: Sen. Jim Tomes, R-Evansville
Sponsor: Rep. Ben Smaltz, R-Auburn

Bill summary: This bill repeals the statute prohibiting the use of a firearm (handgun) as a security.

What happens next: The bill was heard in the House Financial Institutions Committee on Wednesday and passed by a vote of 9-0.

SB 196 – School Debt Service Obligations
Author: Sen. Luke Kenley, R-Noblesville
Sponsor: Rep. Timothy Brown, R-Crawfordsville

Bill summary:
This bill amends the definition of “debt service obligations” used for purposes of the statute concerning the Department of Local Government Finance review of school corporation bond and lease rental property tax levies.

What happens next: The bill was heard in the House Ways and Means Committee on March 16. The bill was held for amendments and is expected to be voted on next week. Rep. Timothy Brown, R-Crawfordsville, is the sponsor of the bill in the House.

SB 455 – Tax Administration of Mobile Homes
Author: Sen. Randy Head, R-Logansport
Sponsor: Rep. Karen Engleman, R-Georgetown

Bill summary: The bill establishes an optional procedure by which a county treasurer may sell a mobile home assessed as personal property at auction to the highest bidder, in order to satisfy the amount owed by the owner for delinquent personal property taxes, penalties and collection expenses attributable to the mobile home. The bill requires that notice of a tax sale proceeding be sent to lienholders that each year ask for a notice.

What happens next: The bill, sponsored by Rep. Karen Engleman (R-Georgetown), was heard in the House Ways and Means Committee on Wednesday, March 15. The committee did not vote on the bill.



Fed Raises Rates in Widely Telegraphed Move
As numerous policymakers had signaled in recent weeks, the Federal Open Market Committee decided to raise the target federal funds rate range to 0.75 to 1 percent -- the first rate hike since December’s 25 basis-point range increase to 0.5 to 0.75 percent -- according to a statement from the committee released on Wednesday. All but one committee member voted for the increase.

FOMC members credited rising inflation as the primary reason for the increase – also noting job gains and steady overall economic growth -- and said they expect the “moderate” pace of growth to continue. The committee agreed that it will “carefully monitor actual and expected inflation developments” to determine when to next raise rates, and by how much.

Economic projections also released yesterday showed that most FOMC members expect two more rate hikes this year, leaving the target rate range at year-end between 1.25 and 1.5 percent.

President Trump Unveils Budget Proposal
President Trump unveiled his FY 2018 budget proposal on Thursday, which calls for a $54 billion increase in military spending, offset by considerable cuts to domestic agencies.

CFPB Imposes Largest-Ever HMDA Deficiency Fine on Nonbank Lender
The Consumer Financial Protection Bureau on Wednesday issued an enforcement action for alleged Home Mortgage Disclosure Act reporting deficiencies by Nationstar Mortgage. Nationstar is the country’s ninth-largest HMDA-reporting institution by total originations. The enforcement order imposes a $1.75 million fine -- the largest ever for a CFPB HMDA violation -- and requires Nationstar to correct reporting deficiencies by improving its compliance management program and correcting its HMDA submissions from 2012 to 2014.

According to the consent order, as Nationstar grew its HMDA-covered loan portfolio by nearly 900 percent over four years, it had flawed HMDA compliance systems that generated submission sample error rates reaching as high as 33 percent in 2013. The bureau also indicated that Nationstar did not adequately detail HMDA data collection and validation strategies, define employee roles related to HMDA, conduct compliance audits or tests of HMDA data, guard against data inconsistencies, monitor vendors or implement compliance management tactics to identify these deficiencies.

The enforcement action comes as the industry is preparing to comply with HMDA’s greatly expanded data collection, scheduled to take effect on Jan. 1, 2018. The expanded pool of reportable data raises the stakes for HMDA compliance. Bureau officials have in the past advised financial institutions to read CFPB enforcement actions carefully to understand the bureau’s interpretation of its regulations.

Posted 3-17-17