Week of May 22

May 23, 2023

In This Issue…

ABA joins Texas lawsuit to block CFPB’s Section 1071 rule
Agencies issues host state loan-to-deposit ratios
OBA education corner …

ABA joins Texas lawsuit to block CFPB’s Section 1071 rule

The American Bankers Association has joined a lawsuit filed by the Texas Bankers Association and McAllen, Texas-based Rio Bank challenging the Consumer Financial Protection Bureau’s final rule implementing Section 1071 of the Dodd-Frank Act.

ABA president and CEO Rob Nichols made the announcement of his association joining the legal fight during the TBA’s annual convention in San Antonio late last week.

Section 1071 requires the collection and submission of data related to credit applications by women-owned, minority-owned and small businesses. The lawsuit, filed in the Southern District of Texas by the TBA and McAllen, Texas-based Rio Bank, argues the Section 1071 final rule goes well beyond the 13 data points specified in the Dodd-Frank Act to impose a final rule that “requires banks to develop and implement new software and compliance mechanisms to address over 80 reporting requirements that have been exponentially grown by the CFPB since the Act requiring this Rule was passed.”

The plaintiffs contend the significant reporting requirements will force some community banks out of small business lending altogether, which would only harm women-owned and minority-owned small businesses.

Agencies issue host state loan-to-deposit ratios

Federal bank regulatory agencies issued late last week the host state loan-to-deposit ratios that are used to evaluate compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.

These ratios replace those from June 2022.

OBA education corner …

Memorial Day weekend is upcoming, and so is the unofficial start to summer! (Actually, it could be somewhat official, since June 1 marks the beginning of “meteorological summer.”) It’s time to break out the jams and swim trunks and get your sun tan on! Before putting on that music track from DJ Jazzy Jeff & The Fresh Prince, however, take a little time to prepare for upcoming continuing education opportunities available through the OBA:

E-Sign for Lenders – Challenges & Solutions, May 30, webinar — This session will explain the intersection of E-Sign and cybersecurity while providing valuable tips for educating consumers and identifying fraud.
Role of Information Security Officer, June 1, webinar — Who should really be the information security officer? What does it mean to be the information security officer today?
Best-Ever Compliance Checklists for Commercial Lending, June 1, webinar — Don’t let compliance traps trick you – discover the best practices for business-entity documentation, underwriting documents, guarantors and security interests to ensure your success!
Understanding the Role of the Notary Public, June 6, webinar — Help your team know their responsibilities, plus learn basic laws, liability and reviews of various notarial acts.
1071 small Business Data Collection and Submission: Deep Dive and Operational Impacts, June 6, webinar — The CFPB has (finally) issued its long-awaited final rule on small business lending data collection, which will require lenders to collect and submit to the CFPB data around small business loan applications by June 1 of each year.
Bi-monthly Compliance Briefing, June 7, webinar — A bi-monthly update to help you keep up with changes and deadlines in the compliance area in a quick and easy format.
Role of Board Secretary, June 8, webinar — The board secretary’s dynamic role is critical. It involves and affects administration of corporate governance, director liability, communication with directors and management, oversight of policy/procedure reviews, obtaining and maintaining annual documentation, compliance issues and more.
All In with ACH All-Day Streaming, June 13, webinar — We’ll make sure that as either a receiving depository financial institution or an originating depository financial institution, you’ll know your responsibilities regarding ACH.
Alert! FinCEN Issues Initial Beneficial Ownership Information Reporting Guidance, June 13, webinar — Financial Crimes Enforcement Network published its first set of guidance materials to aid the public, and in particular the small business community, in understanding upcoming beneficial ownership information reporting requirements taking effect on Jan. 1, 2024.

Also, take note of the dates for the 2024 OBA schools! Sure, it’s several months away, but for planning purposes, we always try to get the info to you as soon as possible!

- Intermediate School, Session I — Feb. 5-9.
- Commercial Lending School — March 3-8.
- Intermediate School, Session II — June 3-7.
- Compliance School — Aug. 19-23.
- Basic Banking School — Sept. 16-19.
- Consumer Lending School — Oct. 7-11.
- Operations School — Nov. 18-22.