STATE GOVERNMENT RELATIONS
Congress Holds Signing Ceremony to Rename VA Clinic for Congresswoman Walorski
House Speaker Nancy Pelosi held a signing ceremony on Tuesday for the Indiana delegation’s bill, H.R. 8656, to rename the Department of Veterans Affairs Clinic in Mishawaka, Indiana, the “Jackie Walorski VA Clinic.” The legislation passed the House unanimously on Aug. 12, passed the Senate unanimously on Sept. 8, and now heads to the president’s desk.
Holcomb Joins Midwest Hydrogen Compact
Gov. Eric J. Holcomb joined his fellow governors in Illinois, Iowa, Kentucky, Michigan, Minnesota, Ohio and Wisconsin to collaborate on developing a robust hydrogen market, supply chain and workforce across the Midwest by signing the Midwest Hydrogen Coalition Memorandum of Understanding (M-H2 Coalition MOU).
New Albany Regional Meeting
One regional meeting remains in New Albany, rescheduled for Oct. 17. Join us to facilitate grassroots communication between the bankers we serve and the legislators who serve our state. The meeting 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 join bankers for lunch. The meeting will begin at 11:00 a.m. local time.
New Albany – October 17
The Exchange Pub
118 W Main Street
New Albany, IN 47150
FEDERAL GOVERNMENT RELATIONS
Fed Raises Rates by 75 Basis Points
The Federal Open Market Committee on Wednesday indicated it would raise the target range for the federal funds rate to 3% to 3¼% – a 14-year high – to help return inflation closer to its 2% target. The committee will also continue reducing its holdings of Treasury securities and agency debt, and agency mortgage-backed securities.
The FOMC statement noted that the committee will continue to monitor the implications of incoming information for the economic outlook and be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede reaching the committee’s goals.
While acknowledging that higher interest rates would be a “significant hardship” for households and businesses, Fed Chairman Jerome Powell noted in a press conference that “we will need to bring our funds' rate to a restrictive level and keep it there for some time.” The FOMC’s median projection now anticipates rates to reach 4.4% by the end of the year.
When asked at what point the Fed would consider lowering rates, Powell said, “we’d want to be very confident that inflation is moving back down to 2%” before taking action to reduce rates. “We have got to get inflation behind us,” he added. “I wish there were a painless way to do that – there isn’t.”
CFPB: Home Loan Activity Shifts From Refinancing to Purchasing
The Consumer Financial Protection Bureau’s most recent annual report on residential mortgage lending activity shows a shift from refinancing loans in 2020 to home purchase loans in 2021, with a greater share of home purchase loans going to Asian, Black and Hispanic white borrowers relative to the percentage of home purchase loans for non-Hispanic white borrowers, the agency reported Monday.
Closed-end mortgage originations, excluding reverse mortgages, increased by 2.4%, from 13.4 million in 2020 to 13.7 million in 2021, according to the report. CFPB previously reported a 66.8% increase in originations from 2019 to 2020, largely driven by refinances. However, most of the increase from 2020 to 2021 was due to jumbo home purchase loans. The number of refinance loans decreased year-over-year by 1.7%.
Black borrowers’ share of home purchase loans increased from 7.3% in 2020 to 7.9% in 2021, according to CFPB. Hispanic white borrowers saw their share of home purchase loans increase from 9.1% to 9.2%, and Asian borrowers’ share increased from 5.5% to 7.1%. The share of non-Hispanic white borrowers’ home purchase loans decreased from 59.1% to 55.6% during the same time period. Black and Hispanic white borrowers, overall, continued to qualify for lower median loan amounts, had lower median credit scores and had higher denial rates compared to non-Hispanic white and Asian borrowers.
Biden Nominates Hill, McKernan for FDIC Board
President Joe Biden on Tuesday nominated Republicans to fill the two vacant seats on the five-member Federal Deposit Insurance Corp. board of directors. Travis Hill was nominated as vice chair. Hill previously worked at the FDIC for four years as senior adviser to the chairman and deputy to the chairman for policy.
Jonathan McKernan – currently senior counsel at the Federal Housing Finance Agency – was also nominated. McKernan previously was a senior policy adviser at the U.S. Department of the Treasury and to former Sen. Bob Corker (R-Tenn.).
By law, the FDIC Board cannot have more than three members from the same party, with two seats filled by the comptroller of the currency and the director of the CFPB. The Senate must approve the nominations.
Plan to Codify Gun Merchants in Payment System Sees Pushback
A plan by the leading payment networks to register firearm merchants with a specific code has met forceful opposition from a group of Republican state attorneys general, who say they will "marshal the full scope" of their authority to oppose it if necessary. "Purposefully tracking this information can only result in its misuse, either unintentional or deliberate," the group warns warned in a letter to the firms. Indiana Attorney General Todd Rokita is among those who signed the letter.