Rep. Barr introduces legislation to incentivize banks opening in underserved areas

U.S. Rep. Andy Barr (R-KY) on Friday introduced legislation he said would “kickstart the economic recovery in underserved areas” by relaxing regulation hindering new bank charters. © Shutterstock The “Promoting Access to Capital in Underbanked Communities Act of 2021” would require federal banking agencies to establish a three-year phase-in period for de novo financial institutions […]

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U.S. Rep. Andy Barr (R-KY) on Friday introduced legislation he said would “kickstart the economic recovery in underserved areas” by relaxing regulation hindering new bank charters.

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The “Promoting Access to Capital in Underbanked Communities Act of 2021” would require federal banking agencies to establish a three-year phase-in period for de novo financial institutions to comply with Federal capital standards and ease restrictions places on those banks.

Barr’s office said in a press release, bank consolidation has left many communities without access to bank branches and that the current regulations are to blame for the lack of new bank formation. Barr introduced similar legislation in September of 2020 where it was referred to the House Committee on Financial Services but did not make it to the floor of the House.

“The key to economic growth and recovery throughout the country is having access to capital for individuals, families, and small business entrepreneurs,” Barr said. “My proposal rolls back government onerous regulations and paves the way for investment to flood into underserved communities to make sure that the economic recovery is not uneven.”

The bill is supported by the American Bankers Association and Independent Community Bankers of America.

“We thank Congressman Barr for introducing this critically important legislation, which would help ensure that all Americans continue to enjoy the many benefits of a local bank,” the American Bankers Association said in a statement. “By making it easier for new banks to launch in rural areas of the country, this legislation expands banking access for individuals and businesses, which translates into greater economic activity and growth. The temporary regulatory adjustments provided in this bill are a reasonable step to encourage de novo formation that will benefit local economies.”

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NCUA releases report detailing progress in advancing diversity, equity, and inclusion

The National Credit Union Administration (NCUA) released a report detailing its progress in advancing diversity, equity, and inclusion in its workforce. © Shutterstock The NCUA’s Office of Minority and Women Inclusion (OMWI) annual report also highlights the agency’s efforts to ensure fair and inclusive business practices and assess the diversity policies and practices of the […]

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The National Credit Union Administration (NCUA) released a report detailing its progress in advancing diversity, equity, and inclusion in its workforce.

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The NCUA’s Office of Minority and Women Inclusion (OMWI) annual report also highlights the agency’s efforts to ensure fair and inclusive business practices and assess the diversity policies and practices of the entities it regulates.

“This report reflects the agency’s ongoing commitment to promote diversity, equity, and inclusion as values reflected in our policies and practices,” NCUA Chairman Todd Harper said. “The NCUA remains deeply dedicated to advancing diversity, equity, and inclusion in its workforce, business activities, and the credit union system, and creating a greater sense of belonging within the agency for all employees.”

Among the achievements, NCUA reported that 41.5 percent of new hires in 2020 were people of color. Further, gender diversity among the agency’s senior executives achieved parity for the first time. Also,
15.4 percent and 4.2 percent of the NCUA’s workforce identify as having disabilities and targeted disabilities, respectively.

Further, 23.4 percent of the NCUA’s workforce participated in employee resource groups, more than twice the benchmark participation rate. Also, there were 15 facilitated, open discussions on racial injustice and racism hosted by OMWI in the aftermath of the killing of George Floyd and the nationwide Black Lives Matter demonstrations.

“Unquestionably, 2020 was one of the most challenging years in recent history,” Harper said. “Despite the unexpected changes the COVID-19 pandemic caused to the agency’s operations, OMWI skillfully ensured that the NCUA continued to adhere to its mission and values.”

NCUA’s Office of Minority and Women Inclusion oversees all agency matters relating to monitoring and establishing policies for diversity at NCUA. It also assesses the diversity policies and practices of NCUA’s regulated entities.

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Reps. Hill, Houlahan introduce bill to help small businesses

U.S. Reps. French Hill (R-AR) and Chrissy Houlahan (D-PA) introduced legislation in the House last week that seeks to provide some additional relief for small businesses. © Shutterstock The Paycheck Protection Program Revenue Adjustment Calculation to Increase Capital Accessibility Long-term Act, or the PRACTICAL Act, would allow small businesses eligible for the second-draw PPP to […]

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U.S. Reps. French Hill (R-AR) and Chrissy Houlahan (D-PA) introduced legislation in the House last week that seeks to provide some additional relief for small businesses.

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The Paycheck Protection Program Revenue Adjustment Calculation to Increase Capital Accessibility Long-term Act, or the PRACTICAL Act, would allow small businesses eligible for the second-draw PPP to calculate their revenue based on a 90-day earning period rather than on a year over year quarterly basis.

“The PPP, created by the CARES Act, has been a necessary tool for struggling small businesses as they’ve weathered the unprecedented COVID-19 pandemic. In fact, more than 14,000 businesses in Arkansas have received $4.6 billion and through the program have helped save more than 375,000 jobs,” Hill said. “I’d like to thank Rep. Houlahan for joining me in introducing this commonsense bill. Small businesses are the lifeblood of Arkansas, and I am honored to be able to advocate for them in Washington, D.C.”

The PPP has helped many struggling businesses; however, some small businesses are currently at a disadvantage with how the program is set up because of how a business must show its year-over-year revenue decrease.

“While we are making great progress in our fight against the pandemic, our small businesses still need help,” Houlahan said. “I sound like a broken record, but our economy will not successfully recover until our small businesses recover. They represent the very backbone of our economy, at both the local and national level. I have spoken with countless small business owners these past few weeks about their difficulty obtaining a second PPP loan because of the current earning criteria.”

Kevin Kuhlman, vice president, federal government relations at the National Federation of Independent Business, explained that many small business revenue cycles do not follow strict quarterly cycles, especially those in the tourism and hospitality industries.

“By adjusting the eligibility calculation to 90 consecutive days, the bill would allow additional small businesses to be eligible for a second PPP loan. The change is welcome news to small businesses,” Kuhlman said.

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Sens. Warren, Smith urge Labor Department not to provide Goldman Sachs with EBSA exemption

U.S. Sens. Elizabeth Warren (D-MA) and Tina Smith (D-MN) are urging the Department of Labor not to give financial firm Goldman Sachs an exemption from Employee Benefits Security Administration (EBSA) that would allow the company to manage clients’ retirement plans. © Shutterstock The senators reasoned that the company should be held accountable for its “impending […]

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U.S. Sens. Elizabeth Warren (D-MA) and Tina Smith (D-MN) are urging the Department of Labor not to give financial firm Goldman Sachs an exemption from Employee Benefits Security Administration (EBSA) that would allow the company to manage clients’ retirement plans.

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The senators reasoned that the company should be held accountable for its “impending admission of criminal wrongdoing for its subsidiary’s role in the Malaysian 1MDB global bribery scandal.”

The lawmakers explained that EBSA has proposed an exemption for Goldman that would allow it to retain its status as a “qualified professional asset manager.” However, under EBSA regulations, a financial entity cannot maintain that status if convicted of criminal activity involving trust management. Goldman Sachs settled the case with the Department of Justice last October, agreeing to pay a $2.9 billion penalty.

“Companies that are convicted of or plead guilty to fraudulent schemes do not deserve special government favors. We have long been concerned about the federal government’s unwillingness to impose on white-collar and corporate criminals the penalties necessary to deter future wrongdoing and protect consumers, taxpayers, and families,” the senators wrote in a letter to Timothy Hauser, deputy assistant secretary of the EBSA, which is part of the Department of Labor.

The senators said that exempting corporations from consequences for misconduct is a breach of EBSA’s obligation to the public.

“You have the opportunity to send a clear message that the federal government holds corporate criminals accountable for their misdeeds and does not give them special regulatory favors. We ask that you review and rescind this proposal,” they added.

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ICI chief issues statement on potential money market fund reform

The Investment Company Institute issued a statement on the Securities and Exchange Commission’s request for comments on potential options for money market fund reforms, as detailed in the President’s Working Group (PWG) report.© Shutterstock “Policymakers seeking to address the COVID-19 market turmoil should be prudent in placing new rules on money market funds. ICI’s new […]

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The Investment Company Institute issued a statement on the Securities and Exchange Commission’s request for comments on potential options for money market fund reforms, as detailed in the President’s Working Group (PWG) report.

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“Policymakers seeking to address the COVID-19 market turmoil should be prudent in placing new rules on money market funds. ICI’s new data and analysis challenge the narrative that money market funds caused or amplified the stress in the short-term funding markets in March 2020. As such, it is important to examine how last year’s events, market structure, and the actions of all market participants, not just money market funds, led to significant strains in the short-term funding markets last March. This is a necessary step before considering any of the PWG money market fund reform options,” ICI President and CEO Eric Pan said.

Pan said that removing the tie between the 30 percent weekly liquid asset threshold and the imposition of fees and gates would strengthen prime money market funds and improve the financial system’s resiliency.

“As ICI’s letter shows, the threat of fees and gates was a main contributor to the unusually high redemptions from some prime institutional money market funds. In contrast, the other PWG options will not achieve policymakers’ goal of making the financial system more resilient in the face of a severe liquidity shock. Instead, those options will only severely weaken money market funds’ key characteristics and eliminate the important benefits they provide to millions of investors and the economy—without addressing the underlying vulnerabilities in the financial system,” Pan added.

Pan added that more than 50 million retail investors, as well as corporations, municipalities, and other institutional investors, rely on money market funds, which have some $4.9 trillion in assets.

“ICI and its members are committed to working with U.S. and international policymakers to further strengthen money market funds and the short-term funding markets for the benefit of investors and the economy,” the ICI CEO concluded.

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FDIC partners with Duke University to advance technological innovation in financial industry

The Federal Deposit Insurance Corporation (FDIC) formed a strategic partnership with Duke University’s Pratt School of Engineering to support technological innovation in the banking and financial services industries.© Shutterstock “This exciting collaboration will amplify our efforts to drive innovation in the banking ecosystem and within the FDIC,” Sultan Meghji, FDIC’s chief innovation officer, said. “We […]

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The Federal Deposit Insurance Corporation (FDIC) formed a strategic partnership with Duke University’s Pratt School of Engineering to support technological innovation in the banking and financial services industries.

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“This exciting collaboration will amplify our efforts to drive innovation in the banking ecosystem and within the FDIC,” Sultan Meghji, FDIC’s chief innovation officer, said. “We share a common interest to better understand the opportunities and the risks of new technologies and to build a first-of-its-kind strategic innovation program.”

This is the continuation of a longstanding relationship between the FDIC’s Center for Financial Research and Duke University. It provides a way for the two organizations to collaborate in different areas of innovation, including artificial intelligence, risk management, quantitative research, and cybersecurity.

“The opportunity to partner with the FDIC, and in particular Sultan, will allow our students to work on the cutting edge of finance, risk management, credit, and emerging asset classes,” Jimmie Lenz, director of Duke’s Master of Engineering programs in FinTech and Cybersecurity, said. “Our FinTech and Cybersecurity graduate students will be leveraging the applied learning that defines these programs and students to develop and deliver solutions to assist the largest bank insurance organization in the world. This partnership highlights the dramatic changes taking place in finance and recognition by the FDIC of the key role Duke Engineering is playing in this dynamic environment.”

Duke Engineering school offers master’s degree programs in FinTech, Cybersecurity, AI for Product Innovation, and Engineering Management.

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Rep. Brownley introduces legislation to provide tax relief for homeowners

U.S. Rep. Julia Brownley (D-CA) introduced several bills that seek to deliver tax benefits for homeowners. © Shutterstock One is the Mortgage Insurance Tax Deduction Act, which would make the existing deduction for mortgage insurance premiums permanent. “Homeownership is absolutely key to helping Americans build personal wealth and to save for a secure retirement,” Brownley […]

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U.S. Rep. Julia Brownley (D-CA) introduced several bills that seek to deliver tax benefits for homeowners.

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One is the Mortgage Insurance Tax Deduction Act, which would make the existing deduction for mortgage insurance premiums permanent.

“Homeownership is absolutely key to helping Americans build personal wealth and to save for a secure retirement,” Brownley said. “Homeowners are also able to tap into home equity to help pay for emergencies, like unexpected medical bills or prolonged unemployment. Instead of making it more difficult for families to become homeowners, my bill makes permanent the deduction for mortgage insurance premiums, which will reduce the cost for hardworking families trying to achieve the American Dream of homeownership.”

She also introduced the Mortgage Debt Tax Forgiveness Act, which would make permanent the existing income tax exclusion for mortgage debt forgiveness. Qualifying debt includes debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure.

“Since 2007, Congress has extended this provision numerous times through the regular tax extenders bill, and the time has come to make the provision a permanent part of the tax code,” Brownley said. “Many homeowners have benefited from this tax provision since the last recession. Extending and making permanent the provision will help middle-class families stay in their homes and provide stability and assurance for homeowners going forward.”

Finally, she is sponsoring the Protecting Homeowners from Disaster Act, which would restore the tax deduction for uninsured property and casualty losses. The 2017 tax law, enacted by the Trump administration, limited to only presidentially-declared disasters. The Protecting Homeowners from Disaster Act would ensure that families get economic relief without requiring any a president’s approval.

“When someone’s home is destroyed by a fire, flood, tornado, or hurricane, the federal tax code should not discriminate based on whether the loss was part of a Presidentially-declared disaster,” Brownley said. “Property owners should be able to deduct uninsured losses, period. Instead of compounding a family’s tragedy, Congress should make sure our tax code treats Americans fairly by restoring the tax deduction for property and casualty losses.

As the nation recovers from the pandemic, Congress must act to ensure a new foreclosure crisis does not take hold.

“Tax policy plays an important role in helping Americans achieve the dream of homeownership and keeping homeownership affordable,” Brownley said.

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Reps. McHenry, Luetkemeyer advise Yellen on new FinCEN rules

Leading House Republicans are urging the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) to adhere to Congressional intent when developing the new beneficial ownership reporting regime. © Shutterstock Rep. Patrick McHenry (R-NC), Republican Leader of the House Financial Services Committee, along with Rep. Blaine Luetkemeyer (R-MO), and the Republican Leader of the Consumer Protection and […]

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Leading House Republicans are urging the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) to adhere to Congressional intent when developing the new beneficial ownership reporting regime.

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Rep. Patrick McHenry (R-NC), Republican Leader of the House Financial Services Committee, along with Rep. Blaine Luetkemeyer (R-MO), and the Republican Leader of the Consumer Protection and Financial Institutions Subcommittee, sent a letter to Treasury Secretary Janet Yellen regarding FinCEN’s recent announcement to begin implementing Division F of the 2021 National Defense Authorization Act.

“Division F reflects the bipartisan agreement reached by House and Senate Republicans and Democrats to establish a new beneficial ownership reporting paradigm as part of the Department of Treasury’s anti-money laundering program. As FinCEN fulfills its responsibilities to promulgate new regulations, we cannot overemphasize the importance of adhering to congressional intent. To be clear, beneficial ownership information is the personally identifiable information (PII) of a company’s beneficial owners,” the GOP leaders wrote.

The lawmakers said the bipartisan provisions in Division F of the 2021 National Defense Authorization Act aim to eliminate costly, onerous reporting requirements on small businesses while codifying protections to safeguard the PII of business owners.

“These provisions ensure the new reporting paradigm is focused on fighting bad actors such as human traffickers, money launderers, and State actors such as China … Thus, it is critical that FinCEN implement the statute as intended,” they wrote.

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ICBA among groups opposed to Treasury, FHFA restrictions on GSEs

The Independent Community Bankers of America (ICBA) is among several groups calling on the Treasury Department and Federal Housing Finance Agency to delay and withdraw new restrictions on Fannie Mae and Freddie Mac.© Shutterstock The restrictions relate to a recent amendment to the Preferred Stock Purchase Agreements between Treasury and the government-sponsored enterprises. The restrictions […]

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The Independent Community Bankers of America (ICBA) is among several groups calling on the Treasury Department and Federal Housing Finance Agency to delay and withdraw new restrictions on Fannie Mae and Freddie Mac.

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The restrictions relate to a recent amendment to the Preferred Stock Purchase Agreements between Treasury and the government-sponsored enterprises. The restrictions include a volume cap on sales through the GSE cash window and purchase restrictions on certain loans, including affordable housing. These changes would disrupt the housing market and limit access to affordable mortgage credit, particularly for low- and moderate-income or minority borrowers.

“There is little question these changes will not only alter the role and obligations of Fannie Mae and Freddie Mac but will also have significant impacts on borrowers, lenders, servicers, and affordability. Some of the proposed limits on single-family acquisitions will have a disproportionate impact on borrowers of color as well,” the letter to Treasury Secretary Janet Yellen and FHFA Director Mark Calabria stated.

ICBA signed the letter along with the Community Home Lenders Association, the Leadership Conference on Civil and Human Rights, the National Association of Federally-Insured Credit Unions, the National Community Reinvestment Coalition, the Community Mortgage Lenders of America, and America’s Homeowner Alliance.

“This letter is also intended to underscore that a wide and diverse spectrum of stakeholders have significant concerns that the PSPA amendments are the latest in a number of meaningful regulatory decisions made without appropriate transparency or guidance. These changes will adversely affect pricing, loan product development, affordable housing, and other Enterprise activities, which are expected to facilitate affordable homeownership for borrowers and fair and equal access to the secondary market that enable lenders to serve their customers. Elements of the PSPAs will constrain future liquidity in the mortgage market and will undercut access to mortgage credit for low- and moderate-income (LMI) borrowers and for borrowers of color,” the missive continued.

The groups are urging the agencies to delay implementing these restrictions and remove them from the PSPAs.

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NAFCU, industry groups urge Treasury, FHFA to revisit GSE amendments

The National Association of Federally-Insured Credit Unions (NAFCU) is among a group of industry organizations that are expressing concern about recent amendments to the government-sponsored enterprises’ (GSEs) Preferred Stock Purchase Agreements (PSPAs). © Shutterstock In January, the Treasury Department and Federal Housing Finance Agency (FHFA) announced the PSPA amendments, which allow the GSEs to retain […]

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The National Association of Federally-Insured Credit Unions (NAFCU) is among a group of industry organizations that are expressing concern about recent amendments to the government-sponsored enterprises’ (GSEs) Preferred Stock Purchase Agreements (PSPAs).

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In January, the Treasury Department and Federal Housing Finance Agency (FHFA) announced the PSPA amendments, which allow the GSEs to retain earnings until they meet capital rule requirements. Also, they announced that the Treasury will permit the GSEs to raise private capital and exit conservatorship once certain conditions are met, among other changes.

NAFCU officials say the changes would add to the GSEs’ compliance costs and could result in increased fees for borrowers and lenders. NAFCU and other industry groups sent a letter to Treasury Secretary Janet Yellen and FHFA Director Mark Calabria, the White House, and Congress, urging the agencies to delay the PSPA changes. Further, they ask the agencies to conduct a broader review of their impact on mortgage market liquidity, low- and moderate-income borrowers, and borrowers of color to determine revisions that should be made.

“…[T]here must be confidence that the agencies’ conservatorship policies have struck an appropriate balance between maintaining a sound financial condition and facilitating mortgage market liquidity and access in underserved markets,” the groups wrote. “The report should also make public any fair housing and fair lending analysis of the PSPA amendments that either agency has completed.”

NAFCU and the other groups made several recommendations, including raising the limit on the use of the cash window to limit the impact on smaller lenders; removing new mortgage product covenants; removing restrictions on loan features and volumes that could create constraints in the market; and
providing an impact analysis of the PSPA amendments and delaying the implementation dates of the changes.

NAFCU added that the amendments could hinder credit unions’ use of the temporary GSE patch. The Consumer Financial Protection Bureau is currently considering delaying the effective date of its revised general qualified mortgage (QM) definition. This would also extend the use of the GSE patch to Oct. 1, 2022. However, the PSPA amendments restrict the GSEs’ ability to acquire GSE patch loans before July 1, 2021.

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