Banks See Spikes in Suspicious Activity After Disasters - ABI

Banks seeing a spike of suspicious activity in the months following natural disasters can use the information to better prepare for future crime-fighting efforts, according to an analysis of filings the banks made to the federal government by data-management firm Enigma, the Wall Street Journal reported. The firm, which last month began a series analyzing suspicious-activity reporting by banks to the U.S. Treasury Department, said yesterday in its latest analysis that it examined the linkage between financial crime and 20 natural disasters. It found the issues go beyond mere fraud: Banks are in the middle of preventing insurance exploitation, identity theft and cyber-related crimes following disasters.

Report: U.S. Retail Bankruptcies Hit 6-Year High in 2017 - ABI

Bankruptcies among U.S. retailers reached a six-year high in 2017 amid declining foot traffic and the rise of e-commerce giants like Amazon, reported. Some 50 retailers filed for bankruptcy this year, including one-time giants like Toys R Us, RadioShack and Payless. That’s the highest number of bankruptcies since 2011, when 59 companies filed for the protection, according to data from S&P Global. Mall-based stores and so-called “big-box” stores have been most affected by the retail crisis. Big-box stores like Macy’s and Sears accounted for 43 percent, or about 43 million square feet of shuttered U.S. retail space in 2017, Axios reported, citing data from real estate research firm CoStar. Of the 50 retail bankruptcies, some 21 occurred at major retailers. Other companies to file include Wet Seal, Hhgregg, Rue21, Gymboree, True Religion and Vitamin World.

Four Senators Seek Longer Foreclosure Delay in Puerto Rico - ABI

A bipartisan group of U.S. senators wants federal housing agencies to extend a moratorium on foreclosures in Puerto Rico into 2019 after the devastation on the island and a big surge in mortgage delinquencies, the New York Times reported. The four senators said in a letter on Friday that a longer moratorium was needed because large swaths of Puerto Rico remained without electricity in the aftermath of Hurricane Maria and because many residents were still trying repair the damage to their homes. The senators noted that homeowners needed more time to “pick up the pieces of their lives” than was allotted under the current grace period, which expires in March. They want the moratorium extended until March 2019, along with a commitment that lenders will not seek to collect any mortgage payments in that period. The four senators — Marco Rubio (R-Fla.), Catherine Cortez Masto (D-Nev.) Robert Menendez (D-N.J.) and Bill Nelson (D-Fla.) — was sent to officials at the Department of Housing and Urban Development and the mortgage finance giants Fannie Mae and Freddie Mac. About one-third of the island’s 425,000 homeowners are behind on their mortgage payments to banks and Wall Street firms that previously bought up distressed mortgages. And some 90,000 of those borrowers became delinquent as a consequence of Hurricane Maria, according to the data firm Black Knight.

CFPB to Revise Mortgage, Prepaid card Rules from Cordray Era - ABI

The Consumer Financial Protection Bureau (CFPB) said yesterday that the agency will review and reconsider aspects of two rules issued by its former director, Richard Cordray, The Hill reported. Under acting Director Mick Mulvaney, the CFPB announced plans to revise rules issued by Cordray regarding mortgage data collection and prepaid credit cards. One of the revisions: The bureau will no longer assess penalties against mortgage lenders and banks for errors collected in data next year that is subject to the Home Mortgage Disclosure Act (HMDA). The bureau also won't ask for lenders to resubmit such data if errors aren't "material" to the information provided. The CFPB also said it would begin the process of making a rule to revise parts of the CFPB’s 2015 rule regarding the HMDA. The bureau singled out institutional and transactional coverage tests, discretionary data points and lending-activity criteria that determine whether institutions are required to report mortgage data.

OCC’s Otting to Make Simplifying Bank Rules One of Top Priorities - ABI

Comptroller of the Currency Joseph Otting said yesterday that he will make simplifying bank rules one of his priorities in the coming year, the Wall Street Journal reported. The new U.S. regulator of federally chartered banks pointed to rules on money laundering-prevention, community investment, small-dollar loans, and capital rules for small banks as areas where he and other federal regulators should look to make changes. Otting, a veteran banker, took questions from reporters around a conference table at the Office of the Comptroller of the Currency headquarters, wearing a dark suit and American flag cuff links. He said that the U.S. banking sector is “in the best shape that it’s ever been since I began working in this industry in 1981,” citing the strong capital positions of U.S. banks and their improved ability to understand and assess risks. Otting didn’t discuss specific policy matters. An OCC spokesman said that Otting is observing a general recusal from policy decisions while he divests himself of his investments in financial companies, which he has agreed to do within 90 days of his confirmation by the Senate on Nov. 16.

Be Wary Of Gift Cards from Retailers In Or Nearing Bankruptcy - CNBC

For a generation, gift cards have been the holiday present of last resort — the thing to buy when nothing comes to mind.  This year, however, givers have more to worry about than whether the gift card will get shoved in the back of a drawer.  The bigger issue is whether a gift card will become worthless if it involves a retailer that filed for bankruptcy protection. The retail industry saw a rash of bankruptcy filings as it lost sales to online retailers this past year — and that could only get worse in 2018.  Some major retailers are hanging by a thread in trying to stave off bankruptcy filings. Some, like Toys R Us, have already filed and are trying to reorganize. And in the worst cases in the past year, some chains have moved directly to liquidate their businesses and close the doors.  Each case has its own set of risks when it comes to gift cards.  "Gift cards are, technically, unsecured debt of the bankrupt retailer and bankruptcy law gives them no special protection," said Melissa Jacoby, a law professor at the University of North Carolina at Chapel Hill, who teaches bankruptcy law.  That's the bad news. The good news is that retailers filing Chapter 11 reorganizations often ask the court to let them continue to honor gift cards, she said. The request is often granted.  It's important because it's hard for a business to continue if customers don't have assurances that gift cards will still be good for purchasing merchandise and that patrons can make returns.  "If they go into Chapter 11, they immediately seek court authorization to honor gift cards," said Chuck Tatelbaum, senior attorney with the Tripp Scott law firm in Fort Lauderdale, Fla. "If they don't, it will kill sales."

Federal Regulators Approve ‘Living Wills’ for Eight Big Banks - ABI

Federal regulators yesterday announced they had approved the disaster plans for the nation's eight largest and most complex banks outlining the strategies they would deploy if they fell into bankruptcy, the Associated Press reported. The announcement by the Federal Reserve and the Federal Deposit Insurance Corp. came after the two agencies in April 2016 deemed that the plans of five of the eight banks were deficient. Congress imposed the requirement to write the plans, dubbed "living wills," in the 2010 Dodd-Frank financial overhaul legislation that sought to avoid a repeat of the 2008 financial crisis. While approving the plans of all eight banks, the regulators found in their latest review that the plans of four — Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo — had shortcomings that will need attention in the next round of review. Regulators found no shortcomings in the plans submitted by the other four — Bank of New York Mellon, Citigroup, J.P. Morgan Chase and State Street.

Government Shifts Gears on Fannie Mae, Freddie Mac - ABI

Lawmakers in both parties and the Trump administration are negotiating overhauls of Fannie Mae and Freddie Mac — critical to home mortgages but in government conservatorship since the financial crisis — that could keep them at the center of the U.S. mortgage market for years to come, abandoning long-stalled proposals to wind them down, the Wall Street Journal reported. Bipartisan Senate legislation set to be introduced in early 2018 marks the clearest sign of this reversal and shows how the companies, entering their 10th year under federal control, have proven too risky to attempt replacing. The housing market has seen strong demand in recent years, driven in part by steady access for many Americans to 4 percent or lower 30-year fixed-rate mortgages, thanks in part to a government backstop of the companies.

A Fight Over the Credit Score Lenders Use for Mortgage Applications - ABI

Banks and rival lenders are butting heads over the credit scores used to decide millions of mortgage requests by U.S. home buyers, the Wall Street Journal reported. Now, a federal agency is weighing whether to step into the fight, which revolves around a longtime requirement for lenders who sell mortgages to Fannie Mae and Freddie Mac to gauge most borrowers using FICO scores. The Federal Housing Finance Agency’s ultimate decision could have wide-reaching ramifications for the mortgage market and home buyers across the U.S. Many nonbank lenders, which in some recent quarters have accounted for more than half of the mortgage dollars issued in the U.S., want the ability to use a credit score provided by a company owned by credit-reporting firms Equifax Inc., Experian PLC and TransUnion. These lenders argue that the alternative score would open the mortgage market to a greater number of people and lead to more mortgage approvals, helping to boost home sales and the economy.

Fed Report Says Stocks, Homes Values Helped Total Household Net Worth Rise - ABI

The total net worth of U.S. households climbed further into record territory in the third quarter of 2017, reaching $96.939 trillion as stock markets and property prices boosted Americans’ wealth, the Wall Street Journal reported. The increase on the quarter was $1.742 trillion, according to the data the Federal Reserve released Thursday. That was a larger gain than the $1.276 trillion advance in the second quarter of this year. Household wealth in the stock market climbed by $1.1 trillion in the quarter, reflecting rising equity valuations last quarter amid solid business and consumer confidence and a strong labor market. The value of households’ real estate increased by about $411 billion, reflecting ongoing higher home prices. The data on household net worth include assets held by nonprofits, although nonprofits make up a relatively small proportion of household wealth.