The Pinion Community Banking team members have attended several conferences and trainings over the past month. I just wanted to share with you a few of the highlights that stood out to us from the OBA Annual Convention, MBA Annual Convention, and the KBA Legal Update.
- Be prepared for what’s ahead! From the words of a recent Federal Reserve and FDIC leader, community banks need to be prepared for the next set of regulations, and the next banking crisis – there will always be a “next” one.
- Nonbank competitors are on the rise, including companies like Apple and Amazon. Be aware of what is happening in the industry and do your part to be heard as a community banker.
- An inverted yield curve is said to be a reliable predictor of a recession. According to the economist speaking, keep your eye on the yield curve.
- Manage liquidity risks! As inflation and interest rates continue to rise, liquidity may begin to decline. Banks need to make sure they have sources for borrowing in place to manage their liquidity risks efficiently.
- Follow GDPNOW from the Atlanta Federal Reserve – mathematical model estimating real GDP growth based on available economic data for the current measured quarter. Subscribe to e mail updates here.
- Documentation required: EEO, Sexual Harassment, Discrimination, and Diversity and Inclusion training should be completed annually and documented.
- Hacker issues: Be sure to know where your “gold” is and keep it protected. Remember a camera system can record the password login and can be hacked. Find lessons learned by a bank hacker: @lemonitup
- UDAAP and Overdrafts: The wording on overdraft disclosures should be reviewed. The definition of what the bank considers an item or even an attempt should be clear. A common mistake examiners are finding is a disclosure indicating each “item” overdrawing the account will be charged, which can cause issues during a representment. The model consent form for overdraft services has the following wording: “We will charge you a fee of up to $XX each time we pay an overdraft.” Please find a link to the CFPB model form here (Appendix A to 12 CFR Part 1005). Please also find a link to another Pinion article “Potential Scrutiny Around Re-presented Transactions” here.
- Be sure the opt-in notice for OD balance method is clear. Understand how the bank is treating those customers who have opted-in and/or out. If there are differences, and there is no benefit to being “opted-in”, changes need to be made.
- Reg E: Be sure the bank is including interest earned in provisional credit, if applicable.
- SARS: Card skimming should be reported on the SAR and KBI22-3 should be included in the narrative to help track it.
- CRA/ECOA/FHA: Notices have been updated for OCC banks – contact information for OCC has changed.
- 911 calls: Banks are required to comply with 911 dispatch being able to find the location of the call. This issue comes more into play with “online” phone systems being used, rather than landlines. (FCC – Kari’s law and RAY BAUM’S Act)
- Juneteenth Holiday: Banks need to make sure their documents/disclosures include this holiday. We have seen some Business Day listings, not including the new holiday.
- Existing collateral evaluations/appraisals must have good supporting documentation for why they are being used. Recent changes have caused collateral to change in value.
- New rate reminder: LIBOR will be discontinued June 2023 and SOFR will be the new rate to use. Federal law now protects legacy contracts.
- Sur charges on credit card payments may start to increase in KS, the law has changed. (CardX, LLC v. Schmidt)
Please reach out to a member of our team if you’d like to discuss any of these items in greater detail.