Tuesday Grab Bag

Posted by Anthony Demangone

Here are a few items of interest.

Discrimination.  HUD is going to investigate 22 banks and mortgage lenders to see if there is illegal discrimination against minorities related to FHA loans. 

The investigations are in response to 22 complaints the National Community Reinvestment Coalition (NCRC) filed with HUD alleging that the loan activities of the mortgage originators showed that their home lending practices deny FHA- insured loans to African Americans and Latinos with credit scores as high as 640. Federal Housing Administration (FHA) guidelines allow mortgages to borrowers with credit scores above 580, provided the borrowers have down payments equaling 3.5 percent of the loan amount, or above 500, provided the borrowers have down payments equaling 10 percent of the loan amount.

Regulation Z.  The OCC has updated its Regulation Z examination procedures.   These procedures are a great way to gain a solid overview of examiner expectations.  And while the OCC does not regulate credit unions, its views on Regulation Z matters should be useful, as Regulation Z applies evenly to both credit unions and banks.

NCUA Legal Opinion on Gift Card Incentives. Can a credit union use a gift card give-away to boost attendance at its annual meeting?  Yes, but credit unions must be judicious in their use.  At some points, examiners may raise objections on "safety and soundness or corporate waste grounds."  That puts credit unions in a tough position, as this opinion letter doesn't give bright-line guidance or any safe harbors.  When is a gift-card attendance campaign too much? When does it raise a safety and soundness or corporate waste issue? Much like Supreme Court Justice Potter Stewart said about hard-core pornography, I guess that examiners will know it when they see it.  

Privacy.  This blog post provides a nice overview of a recent Commerce Department report on privacy. (Privacy & Security Law Blog.) This isn't a regulatory proposal, so there aren't any changes to our privacy requirements on the horizon (other than the move to the model privacy disclosure).  But privacy is an important issue, and a fluid one.  As technologies and marketing methods evolve, you'll see efforts to amend privacy requirements for American businesses.  This blog post is a nice reminder of that fact. 

Comments

[home buyer]

I suspect that banks - especially big banks - just aren't interested in financing small business any more. Analyzing the credit and how the business works can take a lot of time, and requires trained and experienced credit officers. It can be a very satisfying kind of work in terms of personal contacts, community involvement, etc, but doesn't pay very well. How many community bankers are still capable of evaluating small businesses on their own merits.