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Financial Institutions

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...

Wednesday, 08 May 2019

Is the cannabis market opening up for banks?

Written by The Rehmann Team

At a time when more banks are carefully evaluating the benefits of serving marijuana-related businesses, the House Financial Services Committee recently approved – with bipartisan support – the Safe and Fair Enforcement Banking (SAFE) Act. SAFE would make it illegal for a federal regulator to penalize financial institutions that accept insured deposits from marijuana businesses in states where the substance is legal. Supporters noted the SAFE Act would help legitimate marijuana businesses access banking services so they do not need to operate on an all-cash basis. This also alleviates money-laundering concerns, as well as increased risk of crime by thieves attracted to large stashes of cash...

Wednesday, 08 May 2019

Update: Payday Lending Rule on hold

Written by The Rehmann Team

 On October 5, 2017, the Consumer Financial Protection Bureau (CFPB) issued a final rule, known as the Payday Lending Rule, to create consumer protections for certain personal loans. Rule highlights include: Short-term and longer-term loans with balloon payments were identified as unfair, deceptive and abusive practices (UDAAP) if a lender makes such loans without reasonably determining that the consumer has the ability to repay the loan according to its terms, the “underwriting conditions.” The same set of loans and longer-term loans with an APR greater than 36 percent that are repaid directly from the consumer’s account were identified as UDAAP if after two failed consecutive payment withdrawal attempts, the lender does not obtain the consumer’s new and specific authorization to make further payment withdrawals. A lender making a covered loan must develop, follow and retain for 36 months evidence of compliance with its written policies and procedures ensuring compliance with the Payday Lending Rule...

Monday, 25 February 2019

CECL proposal gets tepid response at recent roundtable

Written by The Rehmann Team

The Financial Accounting Standards Board’s current expected credit loss (CECL) standard presents significant operational challenges for banks whose resources are already taxed to meet regulatory and reporting requirements. It’s an on-going issue that has received considerable attention and commentary. A recent roundtable, attended by financial industry institution organizations, regulators, users of financial statements, and representatives from banks, credit unions and savings and loan associations, focused on developing an alternative proposal submitted by a group of banks. The proposed alternative addressed the income statement impact of CECL due to concerns about the reliability of long-term CECL estimates, and would recognize certain expected charge-offs as part of comprehensive income rather than earnings...

Monday, 25 February 2019

How does a government shutdown impact financial institutions?

Written by The Rehmann Team

The recent partial government shutdown prompted the Fed, FDIC, OCC, NCUA and CFPB to issue a short press release on January 11 stating, “While the effects of the federal government shutdown on individuals should be temporary, affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans or credit cards.” This message from regulators encouraged financial institutions across the country to consider ways they might modify terms on existing loans, extend new credit to help those not receiving a paycheck and take other measures to assist affected customers. Regulators made the same request in 2013 using the exact same language. Banks of all sizes, especially those serving federal workers, answered the call by offering low or no interest payroll advances and loans, waiving overdraft fees, and reversing direct deposit and credit card fees –among other actions – depending on customers’ individual circumstances...

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