Financial Institutions

Monday, 05 October 2015

Microchips coming to debit and credit cards

Written by Rehmann Team

Millions of consumers are starting to receive new credit or debit cards in the mail, not because their credit limit has been upped, they are being offered lower interest rates or they are enrolled in new reward programs. Rather, the new cards are being sent because they include high tech features that are intended to make transactions more secure than magnetic strip cards. The microchip technology adds a chip to the front of the card. The chip contains the cardholder’s name, card number and other account information; no other personal information is stored on the chip...

Monday, 05 October 2015

FFIEC CAT helps evaluate and manage cybersecurity risks

Written by Rehmann Team

Due to increasing volume and sophistication of cyber threats, the Federal Financial Institutions Examination Council (FFIEC) developed the Cybersecurity Assessment Tool (CAT) to help financial institutions identify their cybersecurity risks and determine their preparedness over time with a repeatable and measurable process. CAT helps guide financial institution leadership to improve their oversight and management by identifying factors that contribute to cyber risk, assessing cybersecurity preparedness and its alignment with overall risks, and determining risk management practices, processes and actions that might be needed or need to be enhanced. The Assessment consists of two parts: Inherent Risk Profile and Cybersecurity Maturity to determine if the bank’s risk and level of preparedness and corresponding controls align: Inherent risk profile identifies the amount of risk posed to an institution by the types, volume, and complexity of the institution’s technologies and connections, delivery channels, products and services, organizational characteristics, and external threats—notwithstanding the bank’s risk-mitigating controls. Cybersecurity maturity is evaluated in five domains: Cyber Risk Management and Oversight, Threat Intelligence and Collaboration, Cybersecurity Controls, External Dependency Management, and Cyber Incident Management and Resilience...

Monday, 05 October 2015

More call report changes coming soon

Written by Rehmann Team

A round of changes to simplify and reduce the reporting burden on financial institutions was rolled out in March 2015. Now, the FDIC, FRB and OCC are seeking comment on additional proposed revisions that would take effect December 31, 2015, or March 31, 2016, depending on the change. The proposed changes include some additional burden-reducing requirements — good news for financial institutions. However, many of the other proposed changes are expected to have a limited impact on financial institutions as well...

Combine advances in technology, globalization of competition, and consolidation of the industry, and it's more critical than ever that your organization is prepared to take advantage of future opportunities today. With the beginning of a regulatory shift from rule-making to enforcement, financial institutions need to adjust and strengthen their focus on managing key risks to remain compliant. While the most critical risk areas will differ for each institution, here are areas worthy of heightened interest and diligent monitoring. Equal Credit Opportunity Act (ECOA) valuations rule (Reg B) The Equal Credit Opportunity Act (ECOA), enacted in 1974, and its implementing rules (Regulation B) prohibit creditors from discriminating against applicants...

Tuesday, 30 June 2015

Is an ESOP a good choice for your institution?

Written by Rehmann Team

The National Center for Employee Ownership (NCEO) estimates there are approximately 7,000 employee stock ownership plans (ESOPs) covering some 13.5 million employees. Two-thirds of these are used to facilitate the sale of shares of an owner of a profitable, closely held company who is leaving the company; most of the rest are used as a part of an employee benefit plan or as a way to borrow money with beneficial tax consequences. Fewer than 10 percent of ESOPs are in publicly traded companies...

Tuesday, 30 June 2015

Protect electronic data, customer information

Written by Rehmann Team

In late May, the IRS reported an online cyberattack that breached data security and allowed identity thieves to access past tax returns of 104,000 people. The IRS also reported that at least 13,000 fake tax returns have been filed using the stolen information at an estimated loss of approximately $39 million to the government, and, therefore, to taxpayers. The organizations, countries and people purported to be behind the attack have ranged widely from Russia to China to other possible sources around the globe. While the IRS Commissioner John Koskinen maintained the IRS has good security protocols in place and they were simply “taken over by recent events,” the Treasury Department's Inspector General for Tax Administration J...

According to the FDIC, reserves for loan losses at all FDIC-insured banks decreased by $2.6 billion (2.1 percent) in 4Q 2014, primarily because net charge-offs totaled $9.9 billion exceeding the $8...

Tuesday, 30 June 2015

Online mortgage origination key to future success

Written by Rehmann Team

It’s clear that online and mobile banking delivery channels are increasingly in demand and popular with consumers. The appeal stretches beyond the ability to conduct routine banking transactions, such as depositing checks, transferring funds and paying bills, to include mortgage rate comparison, educational research and online applications. According to JD Power & Associates, non-institution lenders that have embraced an online business model are experiencing higher loan growth rates than traditional lenders relying on “pen and paper” applications. In fact, Quicken was recently recognized as the number one online lender, the third largest retail mortgage lender in the US and for the fourth consecutive year received excellent customer satisfaction scores on the JD Power survey...

Tuesday, 30 June 2015

Streamlined call reports for community banks under consideration

Written by Rehmann Team

The industry has experienced a bit of a trend in simplifying reporting regulations for community banks, as shown by the recent Basel III AFS opt-out change. There may be another call report change in the works, designed to ease community banks’ burden to meet strict, one-size-fits-all policies.The quarterly call report has grown from just 18 pages in 1986 to 80 pages, with more than 670 pages of instructions. According to the 2014 ICBA Community Bank Call Report Burden Survey, “the annual cost of preparing the call report has increased for 86 percent of respondents over the past 10 years and the total hours dedicated to preparing the Call Report has increased for 73 percent...

Tuesday, 30 June 2015

Does the recent SEC change rate an “A+”?

Written by Rehmann Team

The Securities Act of 1933 requires that when a company offers or sells securities to potential investors, it must register the offer and sale with the SEC or rely on Regulation A which “permits unregistered public offerings of up to $5 million of securities in any 12-month period, including no more than $1.5 million of securities offered by security-holders of the company.”Specifically, Regulation A, which has been in place for more than two decades: Enables mini-registration with the SEC Allows public solicitation of accredited investors (those who make over $200,000 a year or have a net worth of $1 million) and non-accredited investors Affords the ability to issue freely tradable shares Requires fewer disclosures, limited SEC review, easing of post-offering reporting and the opportunity for small companies to explore interest in their investment opportunity before incurring the significant up-front filing costs While the intent of Regulation A was to make access to capital easier for small companies, thereby encouraging company formation and stimulating jobs growth, it has historically been little used due to high costs relative to the amounts raised and the complications and expenses associated with complying with states’ blue sky laws. Title IV of the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), relating to small company capital formation, was intended to expand Regulation A...

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