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Wednesday, 06 November 2019

Cannabis Banking

Written by The Rehmann Team

Thirty-three states, the District of Columbia, Guam and Puerto Rico have legalized marijuana in some form while possession, distribution or sale of marijuana remains illegal under federal law. This means any contact with money that can be traced back to marijuana operations could potentially be considered money laundering and heighten exposure to legal, operational and regulatory risks. Nonetheless, legitimate cannabis businesses experienced a 62 percent year-over-year jump in banking options, with 715 banks and credit unions actively serving the industry. While these financial institutions have been mindful of following stringent procedures to identify and report “red flags,” most of the nearly 30,000 marijuana-related SARs filed between June 30, 2018, and June 30, 2019, were considered “routine...

Wednesday, 06 November 2019

Anticipated CECL Impact on Public Filers

Written by The Rehmann Team

The impact of CECL on anticipated loan loss allowances must now be reported in quarterly 10-Q SEC filings. Banks that are expecting the largest allowance increases have a more heavily weighted consumer portfolio because commercial loans typically have shorter expected lives whereas mortgages and consumer loans have longer terms. Moreover, the largest impact will likely be on retail portfolios heavily weighted with credit cards, which typically have larger estimated losses, especially portfolios with a concentration of lower credit quality. CECL will extend credit card estimated losses to a longer period of time, from the current year to two years...

Wednesday, 06 November 2019

LIBOR Phase Out: Looking to 2021 and Beyond

Written by The Rehmann Team

The London Interbank Offered Rate (LIBOR) is a global benchmark interest rate investors and banks use in credit agreements. It is calculated daily by a British regulator, using the average interest rate at which large, international banks around the world report they borrow unsecured funds from one another, and expressed in five different currencies. Since the mid-1980s, LIBOR has been used for nearly all commercial, consumer and mortgage loan products. The problem is that LIBOR is not set by the cost of funds that banks actually pay because the rates are collected through a self-reported survey of participating banks...

Wednesday, 06 November 2019

SEC Proposes Updates to Registrant Disclosures

Written by The Rehmann team

The SEC has proposed changes to Industry Guide 3, Statistical Disclosure by Bank Holding Companies. First published in 1976, the changes update required disclosures financial institution registrants provide to investors and eliminate disclosures that overlap with Commission rules, U.S. GAAP or IFRS...

As seen in our BWDe Flash in July  The FASB is standing by CECL and its decision to require all publicly traded firms to proactively report and set aside reserves for credit losses, saying the move would make the financial system safer and is worth the cost. As part of its ongoing review of the contentious standard and ongoing controversy, the FASB recently voted to extend the deadline for CECL implementation until January 2023 for small reporting companies, all non-SEC public filing lenders and private and nonprofit lenders. SEC reporting companies who are not considered small reporting companies still must comply by January 2020. FASB plans to publish the proposed changes in mid-August, followed by 30-day public comment period...

Monday, 05 August 2019

Proposed bill would increase tax credit to boost affordable housing

Written by The Rehmann Team

When the 2017 federal tax overhaul reduced banks’ tax rates from 35% to 21%, it also provided less incentive for banks to invest in affordable housing. Now, some lawmakers are proposing legislation aimed at renewing banks’ interest in the tax credits by increasing the amount available for housing developers to sell to investors.  Here’s how it works: developers sell low-income housing tax credits to investors, including banks, in return for equity that reduces their debt associated with building affordable housing apartments and houses. Banks rely on the credits when determining if an investment in affordable housing is a good financial decision...

Monday, 05 August 2019

Multifactor authentication helps protect Against Cyberattacks

Written by The Rehmann Team

Usernames and passwords surely help protect against unauthorized online access. However, even if someone has a unique password for every website visited, that won’t stop malware on a computer or the website itself from stealing confidential information. Security experts agree that two-factor authentication (also called two-step verification) is one of best ways to protect online accounts because it adds a second step in the log-in process. It combines “something you know,” such as a username and password, with “something you have,” such as a PIN, one-time code, fingerprint or other biometric to confirm the identity of the person trying to log into the account...

Monday, 05 August 2019

Call Report requirements reduced

Written by The Rehmann Team

On June 21, 2019, the OCC, Board of Governors of the Federal Reserve and the FDIC published a final rule to implement Section 205 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) which reduces the amount and frequency of information required on Call Reports. Beginning with the September 30, 2019 report, financial institutions with less than $5 billion in total assets will be eligible to file the streamlined FFIEC 051 Call Report as long as they also: Have no foreign offices Are not “advanced approaches institutions” for regulatory capital purposes Are not treated as “large” or “highly complex” institutions for deposit insurance assessment purposes Are not subject to the filing requirements for the FFIEC 002 report of condition The final rule reduces the reporting frequency (from quarterly to semiannually) of detailed information on the risk weighting of assets and other exposures in Schedule RC-R, troubled debt restructurings by loan category in Schedules RC-C and RC-N, website addresses and trade names in Schedule RC-M, and, for certain institutions, fiduciary and related services assets and income in Schedule RC-T.  Institutions with total assets between $1 and $5 billion eligible to file FFIEC 051 will also be able to report estimated uninsured deposits, disaggregated data on the allowance for loan and lease losses, and certain data on consumer deposit account products either semiannually or annually. Institutions with less than $1 billion in total assets are not required to report this data on FFIEC 051...

Wednesday, 08 May 2019

Phishing and spoofing scams cost billions in losses

Written by The Rehmann Team

Each and every employee must serve as a first line of defense when it comes to protecting a bank from cybercrime, specifically phishing attempts and spoofing scams. According to the FBI, phishers range from computer geeks looking for internet fame to businesses trying to gain an upper hand by hacking competitor websites. They also include criminals who want to steal and sell personal information, and spies and terrorists looking to rob our nation of vital information or launch cyber strikes. In 2018, the FBI’s Internet Crime Complaint Center’s (IC3) received 351,936 complaints with losses exceeding $2...

Wednesday, 08 May 2019

How is your efficiency ratio?

Written by The Rehmann Team

In banking, this is one instance where lower is better. Banks strive for a lower efficiency ratio since it indicates that the bank is earning more than it is spending. It’s not only an important measure for internal strategic planning, it’s also a key metric looked at by potential investors and current stakeholders. Noninterest expense: Employee salaries and benefits, equipment and property leases, taxes, loan loss provisions and professional service fees...

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