STATE GOVERNMENT RELATIONS
Register for 2022 IBA Regional Meetings
The IBA is once again hosting a series of regional meetings around the state to facilitate grassroots communication between the bankers we serve and the legislators who serve our state. The meetings will include an hour-long update on the IBA, including legislative information and advocacy opportunities. Following the update, local legislators from the Indiana General Assembly will meet for lunch with bankers from the community. Five regional meetings remain, each beginning at 11:00 a.m. local time. Below are the dates, locations and registration links of each regional meeting.
Merrillville – July 19
Cooper’s Hawk
2120 Southlake Mall
Merrillville, IN 46410
West Lafayette – July 20
Walt’s Pub & Grill
1050 Kalberer Road
West Lafayette, IN 47906
New Albany – August 4
The Exchange Pub
118 W Main Street
New Albany, IN 47150
Richmond – August 29
Olde Richmond Inn
138 South 5th Street
Richmond, IN 47374
Bloomington – August 30
Graduate Hotel
210 East Kirkwood Avenue
Bloomington, IN 47408
FEDERAL GOVERNMENT RELATIONS
CFPB Moves to Scrutinize Banks’ Overdraft Programs
As part of a pilot supervision effort, the Consumer Financial Protection Bureau has requested information on overdraft and non-sufficient funds practices from “over 20 institutions” that it has identified as having a higher share of frequent overdraft users or higher average fees. The bureau signaled in a blog post yesterday that it intends to “use this information for further examination and review” and to “share this information with other regulators,” but not make the information public.
Specifically, the CFPB is asking the institutions to provide data on: the total annual dollar amount consumers receive in overdraft coverage compared to the amount of fees charged; the annual dollar amount of overdraft fees charged per active checking account; the annual amount of NSF fees charged per active checking account; the prevalence of frequent users of overdraft; and the share of active checking accounts that are opted into overdraft programs for ATM and one-time debit transactions.
This marks the latest effort by the bureau under Director Rohit Chopra’s leadership to target legitimate bank overdraft programs, which are already subject to robust disclosure and regulatory requirements.
Agencies Release HMDA Data for 2021
The Federal Financial Institutions Examination Council on Thursday released the 2021 Home Mortgage Disclosure Act data on mortgage lending transactions at 4,338 financial institutions. The data encompasses 23.3 million mortgage applications. Of these, 21.1 million were closed-end loans and 1.8 million were open-end loans such as home equity lines of credit. There were also 350,000 records that did not indicate loan type.
The total number of originated closed-end loans increased by about 528,000 between 2020 and 2021. Refinance originations decreased by 1.4% from 8.5 million, and home purchase lending increased by 9.2% from 4.8 million. The share of mortgages originated by nonbanks continues to climb, accounting for 63.9% of home-purchase loans, up from 60.7% in 2020.
Closed-end first-lien loans to Black borrowers rose from 7.3% in 2020 to 7.9% in 2021. Loans to Hispanic white borrowers increased slightly from 9.1% to 9.2%, and those made to Asian borrowers increased from 5.5% to 7.1%. Denial rates have edged down slightly. In 2021, Black and Hispanic white applicants experienced denial rates of 15.7% and 9.8%, respectively, compared to 17.2% and 11.2% in 2020. Denial rates for Asian and non-Hispanic white applicants were 7.5% and 5.6%, respectively, compared with 9.1% and 6.1% in 2020.
The Federal Housing Administration-insured share of loans decreased slightly from 19.4% in 2020 to 17.2% in 2021. The overall government-backed share of loans, including FHA, VA, Rural Housing Service and Farm Service Agency loans, was 29.3% in 2021, down from 32.8% in 2020.The FHA-insured share of closed-end refinance mortgages increased to 6.9% in 2021 from 6.2% in 2020, while the VA-guaranteed share of such refinance loans decreased from 11.9% in 2020 to 10.2% in 2021.
Fed Approves Highest Rate Hike in 28 Years
In a move to slow the specter of generationally high inflation, the Federal Reserve on Wednesday increased the target range for the federal funds rate by three-quarters of a percentage point to a range from 1.5% to 1.75% ¬¬– the central bank’s most aggressive hike since 1994.
At a press conference immediately following the announcement, Fed Chairman Jerome Powell said a similar increase may be necessary next month. “From the perspective of today, either a 50 basis-point or a 75 basis-point increase seems most likely at our next meeting,” Powell said. “We anticipate that ongoing rate increases will be appropriate.”
“Overall economic activity appears to have picked up after edging down in the first quarter,” the Federal Open Market Committee indicated in a statement. “Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices and broader price pressures.” In addition, FOMC noted that the invasion of Ukraine by Russia is “weighing on global economic activity,” while causing “tremendous human and economic hardship” and “additional upward pressure on inflation.”