Financial Institutions

Monday, 04 April 2016

Is FDICIA going to impact your financial institution?

Written by Rehmann Team

Is the FDICIA going to impact your financial institution? If your financial institution will surpass $500 million in consolidated assets, the answer is YES. Passed in 1991 at the height of the savings and loan crisis, the Federal Deposit Insurance Corporation Improvement Act (FDICIA) fortified the FDIC's role and resources in protecting consumers by, among other provisions, revamping FDIC auditing and evaluation standards to help with early identification of problem institutions. Today, most institutions expect growth in overall assets through acquisition and in lending as customers’ economic situations improve...

Monday, 04 April 2016

Mortgage originations continue strong pace

Written by Rehmann Team

Implementation of the TILA-RESPA Final Rule and Amendments on October 3, 2015, does not seem to have significantly impacted the pace of mortgage originations in late 2015. Some anticipated that new disclosure requirements would place additional burdens on their employees and processes and lead to a slowdown in originations. However, if they were prepared with up–to-date systems and forms and trained staff, they may have easily transitioned into the new process. On the consumer side, the new Consumer Financial Protection Bureau (CFPB) requirement may be empowering consumers to pursue home ownership and refinancing opportunities because they have increased confidence in understanding their loan terms and obligations...

Monday, 04 April 2016

Apple encryption issue may have far-reaching impacts

Written by Rehmann Team

The U.S. government has been trying to force Apple to help the FBI unlock an iPhone used by one of the people involved in the San Bernardino terrorist attack last year. The lawsuit took a surprising twist at the end of March, when a hearing slated for federal court in the Central District of California was postponed at the government’s request...

Monday, 25 January 2016

Loosening terms underscore importance of thorough loan review

Written by Rehmann Team

Financial institutions' hard work following the financial crisis has paid off with improved credit. Based on the FDIC Quarterly Banking Profile for 3Q 2015: Community banks (93 percent of all insured institutions) reported a 7.5 percent increase in net income (compared to 5.1 percent for all FDIC insured institutions) over the prior year due to improved net interest income and noninterest income and lower loan-loss provisions 5...

Monday, 25 January 2016

Updated FFIEC booklet focuses on ITRM

Written by Rehmann Team

The FFIEC recently released an updated booklet in its Examination Handbook Series. The new "Management" booklet replaces the June 2004 version and explains how risk management is a component of governance and how IT Risk Management (ITRM) is a component of risk management. Financial institutions would be well-served to review the new booklet because examiners use booklet guidance to measure how well executive management understands, at a high level, IT risks faced by the institution, as well as the adequacy of ITRM processes.Some key points of guidance for financial institution leadership to consider include: IT supports most aspects of an institution's business, so ITRM should go beyond technology to include back-office operations for lines of business, network administration, systems development and acquisition, business continuity and resilience, and third-party management ITRM not only contains costs and controls operational and cybersecurity risks, it also supports business strategies for sustained success IT systems connect with affiliates, customers, third party providers and the public through interdependent infrastructure, applications, and Web content...

Monday, 25 January 2016

FASB to release CECL standards update later this year

Written by Rehmann Team

While the FASB keeps reviewing CECL (current expected credit loss) standards, financial institutions will have to wait a little longer for the final Accounting Standards Update (ASU). The FASB recently pushed the release date back again, to the end of the first half of 2016. Russell G. Golden , FASB Chair, noted in a December 2015 presentation, “The credit crisis of 2008 underscored the need for a more forward-looking model—one that gives preparers the opportunity to recognize losses that exist in the loan portfolio, and recognize them up front...

Monday, 25 January 2016

Branch technology trends

Written by Rehmann Team

Brent King’s book Banking 3.0 (released in 2013), made the case that banking is no longer a place you go, but something you do, largely a result of radical changes in technology and consumer behavior. Then, the “2015 Digital Banking Report” by DBR Media released in February 2015, predicted that four of the top five retail banking trends would have a technology focus. Were those trends realized, and is technology in the driver’s seat when it comes to maximizing delivery channels that meet customer demands?..

Monday, 25 January 2016

Borrowers financial stability leads to better lending

Written by Rehmann Team

Disciplined underwriting includes proper evaluation for a borrower’s capacity to repay the mortgage, including a review of their income, employment, assets and liabilities, and other documentation that validates the borrower’s financial situation.Income — applicant’s gross monthly income from all verifiable sources that can reasonably be expected to continue at the then-current level for at least the next three years, and a two-year income history, verified by income tax returns Employment — identify income from primary and second jobs, earnings, bonuses, commissions, overtime or seasonal employment. Self-employed borrowers require closer examination since they are typically responsible for their personal financials and those of the company; evaluate the borrower’s individual tax return and complete business tax returns, including all schedules. Assets — verify sufficient assets to close and document the source to confirm the borrower did not take on unverified debt, and ensure they will have enough reserves after closing to continue repaying the mortgage if on-going cash flow is disrupted or diminished...

Monday, 05 October 2015

SBA lending shows strong upward trend

Written by Rehmann Team

It appears the Small Business Administration is fulfilling its mission to get lending flowing to small businesses to support their long-term success. According to the SBA’s Lending Statistics for Major Programs, the 7(a) and 504 programs have delivered on their funding promise, as of September 26, 2015: Totals for both types of loan approvals stand at $27.3 billion, a 20% increase over the same period in 2014 ($22.8 billion)...

Monday, 05 October 2015

TILA-RESPA implementation effective October 3, 2015

Written by Rehmann Team

Thanks to a procedural oversight (the CFPB failed to submit certain timely reports to the House of Congress and the Comptroller General of the GAO), implementation of the TILA-RESPA Final Rule and Amendments was delayed from August 1 to October 3, 2015. The delay was granted to facilitate smooth implementation and provide financial institutions with more time to prepare.According to the CFPB, the “Know Before You Owe” Final Rule and Amendments significantly strengthen and streamline the mortgage loan disclosures provided to consumers, noting “the stress of shopping for a mortgage will be reduced” for consumers who apply for most mortgages after October 3. By collapsing four overlapping disclosure forms into two forms, the new rule is designed to help ensure consumers understand the costs, risks and benefits of their loans before they make a final commitment to the loan, minimize changes at closing and make it easier for consumers to understand how and why closing costs may have changed...

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