#2023-3, February 10, 2023

Virtual Washington Visit for Connecticut, Massachusetts, and Rhode Island

On Wednesday, February 8th, the Connecticut, Massachusetts, and Rhode Island Bankers Associations hosted a Virtual Washington Visit for members.  This full day of meetings was coordinated with the CFPB, FDIC, Federal Reserve Board, and the OCC.  The meetings covered a wide range of topics, including the agencies plans for CRA, fair lending, and Section 1071 implementation.  Members expressed serious concerns on several topics including issues with pending CRA modifications, potential difficulties regarding the small business lending (1071) proposal, overdraft enforcement, real-life representment pitfalls, digital asset regulation difficulties, climate/ESG-related trepidations, data portability (1033) complexities and many more.

All meetings were well-represented by members for each state and the Virtual Washington Visit created a forum for the agencies to hear about unique issues within CT/MA/RI, our collective emerging concerns, and all participants’ perspectives individually.

The one-day virtual event served as an important touchpoint with each regulator and a reminder of where the industry stands on each issue moving forward.  It also sets an early tone for our Washington DC fly-in planned for November.  More details on that event to be provided when available.

Member Advisory:  OFCCP Deadline Extended to Object to Release of Diversity Data

The Office of Federal Contract Compliance Programs (OFCCP) extended the deadline to object to the release of federal contractor’s diversity data to February 17th.  This matter concerns a Freedom of Information (FOIA) request from Will Evans, a reporter with the Center for Investigative Reporting, for Equal Employment Opportunity (EEO-1) Commission data.  This EEO-1 Type 2 data encompasses age, gender, race/ethnicity, and other information.  The OFCCP is not releasing salary data.  The OFCCP has posted a list of companies it deems federal contractors, dating back to last fall ’22. The agency encouraged companies to consult its list and then make a decision on objecting or not.

The Association, in conjunction with our national association partner, the American Bankers Association (ABA), is encouraging members to object on the basis that banks are not federal contractors, and the OFCCP is incorrect in its assertion that banks are federal contractors by virtue of their accepting deposit insurance.  That conclusion is disputed by many and within the legal system.

The ABA issued a Staff Analysis on preparing written responses and objections.  ABA Staff Analysis are a direct member benefit to their members, but we have permission to share this document to any affected or concerned MBA members.  Please contact Ben Craigie or Brad Papalardo with any questions about the ABA Staff Analysis on the FOIA Request and Objection.

Banks and financial institutions may object directly to the OFCCP via email by clicking here.

HMDA Reporting Threshold Changes from FDIC and OCC

Last week, the FDIC and OCC announced changes to the threshold for reporting HMDA data on closed-end mortgages.  The new threshold is now 25 loans in each of a financial institution’s two preceding calendar years.  This threshold now matches the established threshold from the CFPB’s 2015 HMDA Final Rule, and represents a decrease from the 100-loan threshold set by the 2020 Final Rule.  The Association would also note that the FDIC and CFPB clarified in December that, in respect of data collected for the three prior years of 2020-22, there are no present plans to initiate enforcement actions or cite HMDA violations – so long as certain conditions are met - for failures to report such data due to the conflicting and amended thresholds.

This is a challenging time of year for residential and commercial operations, compliance officers and other staff involved in HMDA reporting.  To that end, the Association is running a HMDA webinar on February 23, 2023 with Carl Pry of Treliant Risk.

To read FDIC FIL-06-2023 on this evolving supervisory approach, please click here.

To read OCC Bulletin 2023-5, please click here.