#2023-29, December 8, 2023

Massachusetts Bankers Association Joins ABA and State Banking Associations Urging Federal Reserve to Seek Consensus on Rulemaking

In a letter to Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, the Association joined the American Bankers Association and state banking associations across the country to urge the Federal Reserve to seek consensus among the Board “to make durable rules that endure the inevitable political swings” arguing that without such support, “the regulatory pendulum could become its own destabilizing risk to the banking system.”

The letter emphasized the importance of ensuring that community banks are not negatively impacted by sweeping regulatory changes and encouraged the Board to seek input from multiple subcommittees of the Federal Reserve, including the Subcommittee on Smaller Regional and Community Banking on matters related specifically to such institutions, which traditional has sought “review policy proposals to better understand the effect that these policies and their implementation could have on smaller institutions, both in terms of safety and soundness and potential regulatory burden.”

To read the letter to Chair Powell, click here.

United States Congress Overturns CFPB’s Section 1071 Rule, President to Veto

Last week, the U.S. House of Representatives voted 221-202 on a resolution passed by the U.S. Senate to overturn the final rule implementing Section 1071 of the Dodd-Frank Act. Both resolutions were passed in a bipartisan vote. President Biden intends to veto the legislation when it reaches his desk.

In September, a federal judge granted an injunction delaying the compliance dates for the CPFB Section 1071 final rule while the Supreme Court hears a separate case weighing the constitutionality of the CFPB’s funding structure.

The Association continues to closely monitor this issue and will provide members with updates as they develop. In the meantime, please do not hesitate to reach out to us if you have any questions.

To read more about the vote in the U.S. House, click here.

FDIC Issues Final Rule to Recover Loss to Deposit Insurance Fund (DIF)

The FDIC Board of Directors recently approved a final rule that would “implement a special assessment to recover the loss to the Deposit Insurance Fund (DIF) associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.”

According to the FDIC, no banking organizations with total assets under $5 billion will pay a special assessment. The special assessment will be collected with the first quarterly assessment period of 2024.

To read more about the final rule, click here. 

Federal Housing Administration (FHA) Seeks Feedback on 203(k) Rehabilitation Mortgage Insurance Program Changes

Last week, the FHA unveiled changes to the 203(k) Rehabilitation Mortgage Insurance Program. According to the FHA, the proposed changes include:

• Increasing the maximum allowable rehabilitation costs for the Limited 203(k) program from $35,000 to $50,000 ($75,000 in high-cost areas) to address increased costs associated with repairs.
• Allowing 203(k) Consultant Fees to be included in the financed mortgage amount for the Limited 203(k) program, as is currently permissible in the Standard 203(k) program.
• Increasing the allowable rehabilitation period for the Standard 203(k) program from six months to 10 months, and for the Limited 203(k) program from six months to seven months, to account for longer repair and rehabilitation timeframes common for more complex projects.
• Increasing the allowable initial draw amount to include up to 75 percent of material costs, versus the 50 percent permitted under the existing policy, so the borrower can make payment to a supplier or manufacturer.
• Updating the 203(k) Consultant Fee schedule, including a streamlining of and substantial increases for, allowable fees for preparation of work write-ups and architectural exhibit reviews. FHA is also proposing increases to the maximum amount for other allowable fees, including the Draw Inspection Fee and the Change Order Request Fee. Proposed fee increases are designed to appropriately compensate Consultants for their role and incent more Consultants to participate in the program.

For more information on the proposed changes, see the links below:

• Proposed Changes to Section 203(k) Program
• Feedback Response Worksheet
• Email completed worksheet to sffeedback@hud.gov. 

FDIC, OCC Release 2024 Community Reinvestment Act (CRA) Exam Schedules

Last week, the FDIC and the OCC issued the lists of institutions scheduled for a Community Reinvestment Act examination during the first and second quarters of 2024.

FDIC CRA 2024 Exam Schedule
OCC CRA 2024 Exam Schedule