Pub. 15 2018 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S Issue 1 • 2018 7 n OPPORTUNITY  continued on page 8 consolidated assets who maintain tangible equity in an amount that exceeds the community bank leverage ratio will be deemed to be well-capitalized and in compli - ance with risk-based capital and leverage requirements. • Assist smaller banks raise stable funding by providing an exception for reciprocal deposits from FDIC restrictions on acceptance of bro - kered deposits. • Raise eligibility for Short TermCall Reports from $1 billion to banks with $5 billion in assets. • Raise eligibility for use of the Fed’s Small Bank Holding Company Policy Statement from $1 billion to banks with $3 billion in assets. • Raise eligibility for use of the Fed’s Small Bank Holding Company Policy Statement from $1 billion to banks with $3 billion in assets. • Raise eligibility for the 18-month exam cycle from $1 billion to banks with $3 billion in assets. Title III. Protections for Veterans, Consumers and Homeowners • Consumers are provided free placement and removal of securi - ty “freezes”. • VA lenders are required to demonstrate a material benefit to consumers when a mortgage is refinanced. • The Protecting Tenants at Foreclosure Act, which expired on Dec. 31, 2014, is reinstated prospectively. The Act provides tenants in foreclosed properties with protections against eviction. • Fannie Mae and Freddie Mac are required to develop pro - cesses for updating the cred - it-scoring models used in deter - mining whether to purchase a residential mortgage. Title IV. Tailoring Regulations for Certain Bank Holding Companies • Raise the threshold for designation as a systematically important fi - nancial institution from$50 billion to $250 billion in assets. • End company-run stress tests en - tirely for banks with under $250 billion in assets and change the frequency of supervisory stress tests to periodic for banks from $100 to $250 billion in assets. • Require the banking agencies to specify that funds of a custodial bank that are deposited with a central bank will not be taken into account when calculating he sup - plementary leverage ratio. • Direct the FDIC, Fed and OCC to classify investment-grade munici - palsecuritiesaslevel2Bliquidassets under the LiquidityCoverageRatio. House The House has passed a number of bills important to our industry including: • H.R. 1116- The Tailor Act of 2017: This bill requires federal financial regulatory agencies to: (1) tailor any regulatory actions so as to limit burdens on the institutions involved, with consideration of the risk profiles and businessmodels of those institutions; and (2) report to Congress on specific actions taken to do so, as well as on other related issues. The bill’s tailoring requirement applies not only to future regulatory actions but also to regulations adopted within the last seven years. • H.R. 4725- Community Bank Re - porting Relief Act: The bill requires the federal banking agencies to issue regulations that allow for re - duced quarterly reporting require - ments for banks with less than $5 billion in consolidated assets and that meet such other criteria as the agencies deem appropriate. Com - munity banks have argued that requirements to report hundreds of data points on a quarterly-annual basis are highly burdensome, as the reporting forms themselves contain many items that do not apply to smaller institutions. The federal regulators have shown a willingness to streamline call re - ports; however some institutions believe that the federal regulators need to extend additional regulato - ry relief to small institutions. • H.R. 4545- Financial Institu - tions Examination Fairness and Reform Act: The bill amends the Federal Financial Institutions Ex - amination Council Act of 1978 to establish deadlines within which regulatory agencies must hold exit interviews and issue final exam - ination reports to financial institu - tions. The bill would also provide supervised financial institutions the right to have material supervi - sory determinations reviewed by a newly created Independent Ex - amination ReviewDirector within the Federal Financial Institutions Examination Council. This legis - lation would establish the Office of Independent Examination Review within the Federal Financial Insti - tutions Examination Council. The Officewould investigate complaints from financial institutions about examinations, regularly review the quality of examinations, and adju - dicate appeals of determinations made within examinations. • H.R. 2226- Portfolio Lending and Mortgage Access Act: The bill ex - tends the “QualifiedMortgage” safe harbor for loans held in portfolio by certain depository institutions with less than $10 billion in as - sets. The legislation also imposes additional requirements for safe harbor treatment: loans cannot have negative amortization, inter - est-only features, and would need to comply with limits on prepay - ment penalties. Finally, the bill requires that the creditor must document and continually verify a consumer’s income, employ - ment, assets, and credit history. 2018 State Legislature Recap This year’s 30 day session ended on Thursday, February 15. When all was said and done, the Legislature approved a $6.3 billion budget and a $170 million public works package. Out of the 111 bills passed by the Leg - islature, the Governor signed 80. The success rate for bills signed this year is a far cry from last year in which the Governor signed only 48 percent of the bills passed by the legislature, and vetoed a huge portion of the 2017 budget bill. A special session of the