Jun 4

Recent Compliance Issues: 5/16/14 – 5/29/14


1. A recent survey of financial institutions indicated that a majority plan to ramp up commercial lending this year. Very few institutions anticipated a decline in business lending as they see improving balance sheets among private companies applying for loans.

Many banks forget that several consumer regulations (such as Reg. B; flood insurance; BSA/AML; FCRA and; Reg. C/ HMDA, etc.) apply to various aspects of business lending.

This is an area where exceptions are routinely identified by regulators that can result in monetary penalties and can detract from the reputation of the institution.

Our former Federal bank regulators can review your commercial loan operations to ensure that your institution is meeting all the requirements pertaining to applicable consumer protection laws and regulations.


2. Home-equity lines of credit and home-equity loans rose 8% overall in the first quarter of this year compared with 2013 as borrowers took advantage of rising home prices. Banks have revived a loan product that was popular before the financial crisis.

Bank of America alone reported that its home-equity lines of credit were up 77% in the first quarter this year. Wells Fargo’s home-equity products saw a 33% bump over last year. Home equity lines of credit are consumer products for which the regulators scrutinize applicable compliance requirements pertaining to initial disclosures, periodic statements, and advertising for these unique open-end products.

As these products grow in popularity once again, it would be prudent to have an independent firm review this crucial operation in your institution.



Ronald Reeves & Michael Viscera