Consumer Protection 2015: What You Need to Know. New York Region Director s College

Transcription

1 Cnsumer Prtectin 2015: What Yu Need t Knw New Yrk Regin Directr s Cllege

2 Agenda CRA - Understanding Cmmunity Develpment A Directr s Rle Fld - Fld Insurance Awareness and Updates 2

3 CRA Understanding Cmmunity Develpment A Directr s Rle

4 Cmmunity Develpment Definitin Affrdable husing fr lw- r mderate-incme (LMI) individuals r families Cmmunity services targeted t LMI individuals Activities that prmte ecnmic develpment by financing small businesses and farms Activities that revitalize r stabilize LMI gegraphies, distressed r underserved nn-metrplitan middle-incme gegraphies, r designated disaster areas Lans, investments, and services that supprt, enable, r facilitate Neighbrhd Stabilizatin Prgram (NSP) eligible activities in designated targeted areas. 4

5 Primary Purpse f Activity Majrity f the $ r beneficiaries are cnsistent with ne f the five categries f cmmunity develpment OR The activity meets three tests: 1. The express, bna fide intent is cmmunity develpment 2. The activity is structured t achieve the purpse 3. The activity accmplishes, r is reasnably certain t accmplish, the cmmunity develpment purpse 5

6 Cmmunity Develpment Lending (CDL) An extensin f credit prceeds used fr a cmmunity develpment purpse Exceptins Multi-family Small Business Lans in Certain CRA Evaluatins 6

7 Cmmunity Develpment Lending Example - 1 The bank made a $37,000 unsecured lan t a nn-prfit rganizatin lcated in a mderate-incme tract inside the bank s assessment area. Des this qualify as a CDL? What d we knw abut the rganizatin? Is there a cmmunity develpment purpse? 7

8 Cmmunity Develpment Lending Example - 2 The bank riginated a $3.2 millin lan fr the cnstructin f a 34-unit apartment building in a mderate-incme tract within the bank s assessment area. Des this qualify as a CDL? What d we knw abut the building? Is there a cmmunity develpment purpse? 8

9 Cmmunity Develpment Investment An investment, depsit, membership share, r grant that has as its primary purpse cmmunity develpment. 9

10 Cmmunity Develpment Investment Example - 1 The bank invested $2.6 millin in a mrtgage-backed security cllateralized by 19 mrtgage lans, f which 15 f the mrtgage lans are lcated in lw- and mderateincme census tracts in the bank s assessment area. Des it qualify? What additinal infrmatin might be necessary? What cmmunity develpment purpse, if any, d we have? 10

11 Cmmunity Develpment Investment Example - 2 The bank made a $100,000 cntributin/dnatin t a nnprfit rganizatin lcated just utside f the bank s assessment area. The funds were placed in the rganizatin s small business lan pl fr the purpse f funding micr lans in the entire state (including the assessment area). Des this qualify? 11

12 Cmmunity Develpment Services CRA regulatin defines cmmunity develpment service as a service that: Has as its primary purpse cmmunity develpment Is related t the prvisin f financial services; and Has nt been cnsidered in the evaluatin f the bank s retail banking services 12

13 Cmmunity Develpment Service Example - 1 The president f the bank serves n the Bard f the lcal chapter f Habitat fr Humanity. A bank vice president als serves n the rganizatin s financing cmmittee. Additinally, three branch managers vlunteer mnthly t build hmes n the weekends. D all f these activities qualify fr cmmunity develpment service credit in the CRA evaluatin? 13

14 Cmmunity Develpment Service Example - 2 The bank s vice president serves n the lan review cmmittee f a lcal nn-prfit rganizatin that prvides ecnmic develpment financing t small businesses thrughut the entire state. Des this qualify as a cmmunity develpment service? 14

15 Cmmunity Develpment Service Example - 3 Tw branch managers vlunteer t teach mney management and budgeting techniques (mnthly) at a lcal nn-prfit rganizatin in the bank s assessment area. Shuld this activity be included as a qualified cmmunity develpment service? 15

16 CRA Resurces FDIC Technical Assistance CRA Vide FDIC CRA Q&As 16

17 Fld Insurance Awareness and Updates

18 Overview f Fld Insurance Requirements Cverage Frce Placement Escrw Ntificatin 18

19 Mst Cmmn Fld Insurance Issues Insufficient cverage r n cverage Frce Placement Ntice t Brrwer 19

20 Overview f Cverage Requirements At a minimum, Fld Insurance must cver the lesser f: The utstanding principal balance f the lan; r The maximum amunt f cverage allwed fr the type f prperty under the Natinal Fld Insurance Prgram (NFIP) Cverage under the NFIP is limited t the replacement cst value f the prperty securing the lan. 20

21 Cmpliance Management System (CMS) Cnsideratins Plicies and Prcedures Training Lan Platfrm Systems Audit and Mnitring Prcedures Third-Party Oversight Cmpliance Resurces 21

22 Highlights f the Jint Final Rule Detached Structures Frce Placement Escrw 22

23 Fld Scenari # 1 A cmmercial lan is presented t the Bard fr review and apprval: Cllateral includes warehuse and its cntents (inventry).; The warehuse is lcated within a SFHA; Lender als takes a subrdinate lien n the business wner s principal dwelling as an abundance f cautin; Fld insurance plicy nly cvers the warehuse; Previus cmpliance reprts remitted t the Bard indicate a small number f cmmercial lans require fld insurance Any cncerns and/r cnsideratins? 23

24 Fld Scenari # 2 Finding highlighted within a lan audit reprt: Fld Insurance Plicy expired. Bank frce placed cverage in an amunt equal t the principal balance f the lan. The replacement cst value f the cvered prperty is less than the principal balance f the lan. Bank didn t ntify the brrwer that they frce placed the cverage. Any cncerns? 24

25 Fld Insurance Resurces Final Rule n Lans in Areas Having Special Fld Hazards Financial Institutin Letter (FIL) : Hmewners Fld Insurance Affrdability Act f Lans in Areas Having Special Fld Hazards; Interagency Questins and Answers Regarding Fld Insurance Biggert-Waters Fld Insurance Refrm Act f Financial Institutin Letter (FIL) FDIC Technical Assistance Fld Insurance Vide 25

26 Questins? 26