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To our valued clients and friends,
This summer, the Dodd-Frank Wall Street Reform and Consumer Protection Act became the law of the land. At first glance, the Act appears to be a mixed bag for community banks, with some potential benefits and some drawbacks. Our lead article in this issue looks at some of the key provisions of the Act and how they may affect community banks.
Over the past few years, many banks have allowed high concentrations of risky loan types to build up in their portfolios. One of the lessons community banks can take from the financial crisis is to monitor these concentrations and covariance within loan portfolios and strive for a more diversified mix of borrowers. See article 2 for more details on how to accomplish this.
Some commercial lenders are surprised to find that the Home Mortgage Disclosure Act (better known as HMDA) is having an impact on clients refinancing commercial loans. See article 3 to learn what this impact is and how to prepare for it.
We hope that you find this issue of Financial Lending Notes to be helpful and beneficial to your company. If you would like more information on any of the topics mentioned here, we would be glad to discuss them with you in more detail.
Sincerely,
Tom Beisner, CPA, Partner |
| Financial Reform: What Will it Mean for Community Banks? | | This summer, the most comprehensive overhaul of the financial services industry since the Great Depression was signed into law: the Dodd-Frank Wall Street Reform and Consumer Protection Act. Passage of the Act was just the beginning, though, as many of the implementation details must still be ironed out by regulators. But at first glance, the Act appears to be a mixed bag for community banks, with some potential benefits and some drawbacks. Following is a look at some key provisions of the Act and how they may affect community banks. Read more... |
| Portfolio Management Strategies - Monitoring Borrower Concentrations and Covariance |
We all know better than to put all our eggs in one basket. Unfortunately, many banks ignored this time-tested wisdom when it came to constructing their loan portfolios, contributing to the financial crisis and credit crunch of the past few years. Specifically, these banks allowed high concentrations of risky types of loans to build up in their portfolios without considering the potential impact on the bank should things turn south. Often, this was unintentional, as banks didn't realize the high degree of covariance that existed among borrowers. Read more... |
| HMDA and Commercial Loan Refinancing |
If you're a commercial lender, you can be forgiven for wondering what, if anything, the Home Mortgage Disclosure Act, better known as HMDA, has to do with commercial loans. HMDA, which was enacted by Congress in 1975 and implemented by the Federal Reserve Board's Regulation C, requires banks to maintain and annually disclose data about home purchases and refinance applications. This data is then used to help regulators determine whether the bank is serving the housing needs of their communities and identify possible discriminatory lending patterns. So what does this have to do with commercial loans? Read more... |
| About Us | |
The Whitlock Company is a full-service accounting firm offering a range of audit, tax, technology, risk management and consulting services to the community banking industry.
The experiences our professionals have gained from these relationships allow us to offer you best practice ideas on business issues specific to community banks.
We appreciate your referrals. If you know of a company, organization or individual who may benefit from our services, please let us know.
www.whitlockco.com / 417.881.0145
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