IBA E-News 5-3-19
STATE GOVERNMENT RELATIONS
Save the date and make plans to join your banking peers and local lawmakers for lunch and conversation at one of eight IBA regional meetings this summer. We are delighted to host this important grassroots advocacy series once again in the cities of Bloomington (July 3), Evansville (June 3), Fort Wayne (July 9), Indianapolis (July 10), West Lafayette (June 11), Merrillville (July 18), New Albany (July 29) and Richmond (June 19). More information coming soon!
The 2019 Indiana legislative session began with 1,358 bills and joint resolutions introduced by legislators. Of those bills, only 31% moved out of their chambers of origin. Of that 31%, only 310 bills (roughly three-quarters of the 31%) survived through the process of being voted out of the second chamber. Only 17 of 310 bills that passed both chambers did not receive the final legislative action(s) needed to be sent to the governor.
This brings the final number of bills sent to the governor’s desk eligible to be signed into law to a total of 293 (163 House bills and 130 Senate bills). This equates to a pass rate of 22% of all introduced bills. As of May 1, Gov. Holcomb has signed 184 of the 293 bills into law.
FEDERAL GOVERNMENT RELATIONS
The Consumer Financial Protection Bureau on May 1 issued a fact sheet to help lenders determine when the TILA-RESPA integrated disclosures – the Loan Estimate and the Closing Disclosure – are required when mortgages are assumed. The fact sheet addresses TRID requirements when a new consumer is added or substituted as an obligor on an existing closed-end credit transaction secured by real property and that is not a reverse mortgage.
The fact sheet uses a flowchart to illustrate when the Loan Estimate and Closing Disclosure are required, and it discusses the specific factors that characterize an “assumption” as defined in Regulation Z: the creditor’s express acceptance of the new consumer as a primary obligor, the creditor’s express acceptance in a written agreement, and the new borrower’s use of the real property securing the mortgage as a principal dwelling.
As part of its ongoing efforts to support innovation in the banking sector, the Office of the Comptroller of the Currency on Tuesday requested public feedback on a proposed “innovation pilot program.” Under this program, OCC-supervised banks – and third parties working with these banks – may receive regulatory input early in the process of developing innovative products and services, helping to develop appropriate controls during a pilot. “The program focuses on new or unique activities where uncertainty is perceived to be a barrier to development and implementation,” the OCC indicated.
The proposed program is distinct from so-called regulatory sandboxes offered by other U.S. and foreign regulatory agencies, which provide safe harbors for participants from certain laws and regulations. “The program would not provide participating entities with statutory or regulatory waivers or absolve them from complying with applicable laws and regulations,” according to the agency. “The program would not release entities from consumer protection requirements.”
Under the proposed terms of the program, OCC-supervised banks could request OCC participation in a pilot of up to 24 months. Tools that the OCC might use would include interpretive letters, supervisory feedback and technical assistance. The legal permissibility of the proposed activity must be determined before any live test can begin. Pilot projects must include reasonable controls and exit strategies. Comments on the OCC’s proposed program are due by June 14.
The Office of the Comptroller of the Currency on Monday issued an advance notice of proposed rulemaking (ANPR) regarding the scope of activities that are fiduciary in nature, as well as the requirements of non-fiduciary custody activities of national banks, federal thrifts and federal branches of foreign banks.
In particular, the OCC is considering amending the definition of “fiduciary capacity” to include trust-related roles allowed under state law that do not involve investment discretion – for example the roles of “trust protector,” “trust director” and “distribution trust adviser.” The OCC is also exploring the possibility of issuing explicit regulations governing non-fiduciary custody activities, activities which are currently subject to non-regulatory guidance in OCC handbooks and bulletins. The comment deadline is June 28.
The Financial Accounting Standards Board has issued an accounting standards update to clarify recently issued standards, including the Current Expected Credit Loss standard. FASB released the amendments, which also apply to recognizing financial instruments and hedging, after working with stakeholders to determine areas in need of clarification.
The Federal Open Market Committee held target interest rates at a range of 2.25% to 2.5% and indicated that economic activity rose at a “solid rate” in recent weeks. The panel reported it will be patient as it determines future adjustments based on economic, financial and inflation developments. In its latest economic projections released in March, the Fed noted that it does not expect any further rate increases in 2019.