STATE GOVERNMENT RELATIONS
Applications for New Homes Rise for 10th Straight Month in Central Indiana
The Indianapolis-area homebuilding industry continued to see rising new-home activity in April, with residential construction applications increasing 37% on a year-over-year basis.
BSU Study Shows $1.6B Impact from State's $122M Regional Cities Program
According to a news release, a study from Ball State University's Center for Business and Economic Research points to successful projects across the state, showcasing how regional collaboration and strategic investments are driving economic growth.
FEDERAL GOVERNMENT RELATIONS
CFPB Launches Public Inquiry into Mortgage Closing Costs
The Consumer Financial Protection Bureau Thursday launched a public inquiry into so-called "junk fees" associated with mortgage closing costs to "understand why closing costs are increasing, who is benefiting, and how costs for borrowers and lenders could be lowered." The bureau also cited its research concluding that borrowers paid a median amount of $6,000 in closing costs as of 2022.
Specifically, the CFPB is seeking public feedback on which fees related to mortgage closing costs are subject to competition, how the fees are set and who profits from them, how fees are changing and how they affect customers. According to the bureau, the findings from the inquiry will inform possible rulemaking, guidance and other policy. Comments are due within 60 days of the request for comment being published in the Federal Register.
Read the CFPB request for comment
OCC's Hsu: Recovery Planning Guidelines Should Possibly Apply to More Banks
While the Office of the Comptroller of the Currency’s recovery planning guidelines currently apply to banks with at least $250 billion in assets, expanding the guidelines to cover banks with at least $100 billion in assets should be on the table, Acting Comptroller of the Currency Michael Hsu said Tuesday. In a speech, Hsu discussed the importance of recovery planning following last year's bank failures. He also suggested those failures may justify expanding the number of banks that fall under the recovery planning guidelines used by OCC examiners. However, the agency hasn't made any specific proposals.
The OCC guidelines list eight key elements of an effective recovery plan, but Hsu focused on three:
1. Banks should have triggers that, when breached, will assist them in identifying the risk or existence of severe stress.
2. Recovery options in a plan must be able to be put into action.
3. Impact assessments should help managers and boards of directors understand the full range of consequences of taking certain actions.
"Given last year's banking turmoil, I believe expanding the application of the guidelines to all large banks with at least $100 billion in assets warrants serious consideration," Hsu said. "While counterfactuals are hard to prove, one does not have to strain to see how strong recovery planning might have mitigated the failures of Silicon Valley Bank and Signature Bank. At a minimum, such planning would have made their resolutions more orderly and less costly to the Deposit Insurance Fund."
House Version of 2024 Farm Bill Goes Through Markup
The Farm, Food and National Security Act (H.R. 8467), commonly referred to as the 2024 Farm Bill, was marked up last week by the House Agriculture Committee. The bill reauthorized programs within the U.S. Department of Agriculture, including loan programs used by bankers. The 2018 Farm Bill expired in 2023 but was extended through 2024. The legislation is voted on every five years.
The bill – which totaled $1.5 trillion, the first Farm Bill in history over a trillion dollars – includes comprehensive risk management tools for farmers and ranchers, loan guarantees for agricultural loans, rural development projects, nutrition support and investments in conservation. The legislation provides a vehicle for the banking industry to help meet the financial needs of farmers, ranchers and U.S. agricultural communities. Both the House and Senate ag committees released outlines of their competing versions of the 2024 Farm Bill on May 1. The House committee released a nearly 1,000-page discussion draft on May 17.
Business Groups Challenge Labor Department Overtime Rule
Last week, nine national associations joined local businesses and business groups in filing a legal challenge to stop the Department of Labor's new overtime final rule from taking effect. The rule, issued on April 23, would dramatically increase the number of employees who are subject to the Fair Labor Standards Act's minimum wage and overtime requirements.
The rule increases the salary level below which an employee is automatically subject to the FLSA's overtime and minimum wage requirements from the existing $35,568 threshold to $43,888 as of July 1 and then to $58,656 as of Jan. 1, 2025. The plaintiffs said that the rule contravenes the court's 2017 order that permanently enjoined the final rule issued by President Obama's DOL, which also raised the salary level significantly.
In related news, earlier this month, 87 trade associations joined in a letter urging DOL to extend the implementation date of the first increase in the salary threshold to Sept. 1. The DOL "is providing the regulated community with only two months to analyze the rule, determine what changes to their operations and payrolls will be necessary, explain to the impacted workers how and why their pay, titles or workplace responsibilities will change, and then implement those changes," the groups said. "This is an arbitrary and burdensome timeline for the regulated community to meet, especially smaller businesses that do not have the resources to make such changes quickly."
Read the letter to DOL seeking an extension of the implementation date