September 24, 2014
Masthead 2

 
Contents:
Debit Interchange Costs Vary Widely in '13
Basel Endorsing TBTF Bailouts?
Mortgage Lending Transactions Available
Rural Economy Stagnating on Low Grain Prices
CFPB Proposes Oversight of Nonbank Auto Lenders



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Debit Interchange Costs Vary Widely in '13 
Debit card costs for issuers covered by the Federal Reserve Board's interchange rule varied greatly in 2013, according to a new report. The Fed said the cost of authorizing, clearing and settling debit card transactions was 14.9 cents per transaction for the median issuer, 42.2 cents for the issuer at the 75th percentile and as low as 4.4 cents per transaction for the largest issuers.
Basel Endorsing TBTF Bailouts?
ICBA expressed deep concern with the Basel
committee's endorsement of using public funds to resolve large and systemically risky banks.

In a comment letter, ICBA wrote that in a recent consultative document the Basel committee produced a valid framework for identifying and dealing with weak banks. However, the committee's explicit endorsement of unlimited taxpayer funds to resolve troubled banks promotes the presence of large, too-big-to-fail megabanks with outsized balance sheets, ICBA wrote.

By endorsing the use of public funds, Basel is implicitly admitting that capital levels are not sufficient to protect against catastrophic losses, ICBA wrote. Regulators should instead require sufficient levels of capital at these large institutions to absorb any losses that could occur as a result of an unforeseen crisis.

In a recent American Banker op-ed, ICBA President and CEO Camden R. Fine wrote that while capital is king for the Basel committee, taxpayer funds apparently will do in a pinch.
Mortgage Lending Transactions Available
The Federal Financial Institutions Examination Council (FFIEC) announced the availability of data on mortgage lending transactions at 7,190 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). Covered institutions include banks, savings associations, credit unions, and mortgage companies.

The HMDA data made available cover 2013 lending activity, and include applications, originations, purchases and sales of loans, denials, and other actions related to applications.

Some highlights:
  • In terms of borrower income, the share of 1-4 family home purchase loans that were made to low- and moderate-income borrowers declined from nearly 31 percent in 2012 to about 26 percent in 2013 
  • FHA-insured share of first-lien home purchase loans for 1-4 family, site-built owner-occupied properties was 24 percent, down from 31 percent in 2012, and down from its peak of 42 percent in 2009.
  • Conventional loans accounted for 84 percent of all first-lien refinance mortgages for 1-4 family, site-built owner-occupied properties while FHA- and VA-guaranteed loans accounted for about 10 percent and 6 percent, respectively
View it all here.
Rural Economy Stagnating on Low Grain Prices 
The rural economy is at its lowest level in two years on declining grain prices, according to Creighton University's Rural Mainstreet Index.  The September index, based on a survey of bank CEOs in a 10-state region, declined to 48.2 and has been trending lower since June 2013. Weaker crop prices are taking the air out of agriculture land prices, the survey found.
CFPB Proposes Oversight of Nonbank Auto Lenders
The Consumer Financial Protection Bureau proposed expanding its oversight to include large nonbank auto lenders. The CFPB issued a proposed rule that would allow it to supervise nonbank auto finance companies that make, acquire or refinance 10,000 or more loans or leases per year.

The CFPB said approximately 38 auto-finance companies that originate 90 percent of nonbank auto loans and leases would be subject to this new oversight. The bureau said it has found auto-lending discrimination and wants to ensure lenders fairly market and disclose financing, provide accurate information to credit bureaus and treat customers fairly when collecting debts.
Wednesday, October 8, 2014                                  

Risk Management Series: Defining Risk Management Officer Expectations & Responsibilities

Thursday, October 9, 2014                                  Complimentary

 
Wednesday, October 22

                         
2014 Arkansas Community Bankers Fall Conference
 

Nov. 3-5 in Memphis, TN.