STATE GOVERNMENT RELATIONS
House Bill 1109 - Telephone Solicitation and Consumer Credit
Author: Rep. Matt Lehman, R-Berne
Summary: Amends the law requiring telemarketers to register with the office of the attorney general (registration law) as follows: (1) Provides that a seller is not subject to the registration law solely because the seller makes or will make a solicitation in a telephone call that is exempt from the Do Not Call statute. (2) Restores conditions removed by P.L.242-2019 that limit application of the registration law to sellers that make certain types of solicitations. (3) Provides that a solicitation occurs for purposes of the registration law only in a telephone call made by a seller. (4) Removes the requirement that a seller must provide in the seller's registration statement information as to whether the seller (or any officer, director, trustee, general partner, manager, principal, executive, or representative of the seller) has been: (A) held liable in certain civil actions; (B) convicted of certain crimes during the most recent seven years; or (C) declared bankrupt during the most recent seven years. Repeals from the statute governing consumer sales the chapter that sets forth certain requirements for a consumer reporting agency that uses a Social Security number as a factor in determining whether a file maintained by the consumer reporting agency matches the identity of an individual who is the subject of a credit inquiry.
Latest Action: House Bill 1109 will be voted on for a final time in the Senate on Monday, Feb. 24.
House Bill 1353 - Financial Institutions and Consumer Credit
Author: Rep. Woody Burton, R-Whiteland
Summary: Makes various changes to the statutes concerning: (1) first lien mortgage lenders; (2) persons licensed under the Uniform Consumer Credit Code (UCCC); (3) civil proceeding advance payment providers; (4) debt management companies; (5) banks; (6) credit unions; (7) pawnbrokers; (8) money transmitters; and (9) licensed cashers of checks. Repeals a provision in the statute governing credit unions that concerns loans made by a credit union to the credit union's individual directors and committee members. Amends a provision in the statute governing credit unions that concerns loans made by a credit union to the credit union's individual officers to: (1) include extensions of credit made to the credit union's individual directors and supervisory committee members (and to the immediate family members and related interests of the credit union's individual directors and supervisory committee members); and (2) specify that such extensions of credit shall be made in accordance with Regulation O of the Board of Governors of the Federal Reserve System.
Latest Action: House Bill 1353 was heard in the Senate Insurance and Financial Institutions Committee Feb. 18 and was held for further consideration until Wednesday, Feb. 26.
Senate Bill 327 - Reporting of Consumer Loans by Unlicensed Lenders
Author: Sen. Andy Zay, R-Huntington
Summary: Requires a person, with certain exceptions, that is not required to be licensed with the department under the Uniform Consumer Credit Code to report to the department certain information concerning each consumer loan made to a debtor who is a resident of Indiana by the person after June 30, 2020. Authorizes the department to adopt rules to implement these provisions.
Latest Action: Senate Bill 327 was heard in the House Financial Institutions Committee Feb. 18 and was held for further consideration until Tuesday, Feb. 25.
Senate Bill 395 - Uniform Consumer Credit Code
Author: Sen. Eric Bassler, R-Washington
Summary: Amends the Uniform Consumer Credit Code (UCCC) as follows: (1) Changes: (A) from July 1 of each even-numbered year to January 1 of each odd-numbered year the effective date for the adjustment, based on changes in the Consumer Price Index, of various dollar amounts set forth in the UCCC; and (B) the corresponding date that precedes the adjustment date and by which the department of financial institutions (department) must issue an emergency rule announcing the adjustment. (2) For an agreement for a consumer credit sale entered into after June 30, 2020: (A) authorizes a seller to contract for and receive a nonrefundable fee based on the amount financed, in addition to the credit service charge and any other authorized charges and fees; and (B) prohibits precomputed consumer credit sales. (3) Repeals a provision concerning the credit service charge for revolving charge accounts and relocates the language to the provision concerning the authorized credit service charge for consumer sales. (4) For an agreement for a consumer loan entered into after June 30, 2020: (A) redesignates the authorized "nonrefundable prepaid finance charge" as an authorized "nonrefundable fee" and changes the amount of the authorized fee from $50 to an amount based on the amount financed, in the case of a consumer loan not secured by an interest in land; and (B) prohibits precomputed consumer loans. Changes from $1.50 to $3.00 the amount of the fee that a lessor in a rental purchase agreement may impose for accepting rental payments by telephone. Makes conforming technical amendments throughout the UCCC to reflect the bill's changes.
Latest Action: Senate Bill 395 was heard in the House Financial Institutions Committee Feb. 18 and was held for further consideration until Tuesday, Feb. 25.
FEDERAL GOVERNMENT RELATIONS
Regulators Issue 2020 HMDA Guide
The Federal Financial Institutions Examination Council issued its 2020 Home Mortgage Disclosure Act reporting guide. The resource includes technical updates and is designed to help financial institutions better understand HMDA requirements, including data collection and reporting.
Fed Nominees Appear on Capitol Hill
Federal Reserve Board nominees Judy Shelton and Christopher Waller testified before the Senate Banking Committee. Shelton faced questions about previous comments advocating the use of monetary policy to devalue the dollar. Waller, executive vice president and director of research at the Federal Reserve Bank of St. Louis, did not appear to generate concerns among committee members.
Fintech Plans to Purchase Bank
Financial technology company LendingClub announced plans to acquire Boston-based Radius Bancorp for $185 million. If approved by the Office of the Comptroller of the Currency, LendingClub would become the first fintech to purchase a bank. The fintech, which specializes in consumer installment loans noted several expected benefits from its foray into banking including, adding deposits as a low-cost, stable source of funding and the ability to sell more products and attract new customers.
FDIC Makes Change to Deposit Insurance Application Manual
The FDIC announced several changes to its Deposit Insurance Application Procedures Manual. The agency will now permit de novo banks to give prior notice when making any material change or deviation from their business plan within the first three years of operation, rather than requiring prior approval.
The change will give de novo banks the flexibility they need to respond to their new customers and the market opportunities that present themselves without first obtaining regulatory permission.
The FDIC also added a supplement to the manual addressing matters related to deposit insurance proposals from applicants that are not traditional community banks, including application review processes, field investigations, evaluation of statutory factors, approval conditions and written agreements. The FDIC clarified that this supplement does not establish new policy or guidance, or modify existing policy or guidance.
Agencies Announce Extended Comment Period for CRA Proposal
The FDIC and OCC announced plans to extend the comment period for their proposed rule to modernize the Community Reinvestment Act until April 8, 2020. The proposal overhauls the CRA by broadening "assessment areas," developing general performance standards and creating a qualifying activities list.
FDIC Watchdog: Clearer Criteria Needed for Regulatory Cost-Benefit Analyses
The FDIC "does not currently have a consistent process in place" for conducting cost-benefit analyses to determine the effects of regulations, nor does it have established criteria for which rules are "significant" enough to warrant such an analysis, according to a report by the agency’s Office of the Inspector General last Thursday.
Based on a review of new rules issued between January 2016 and December 2018, the OIG found that the FDIC performed cost-benefit analyses on just 37 percent. No explanation was provided for why the other 63% did not require analysis. The report also noted that the FDIC’s cost benefit analysis process was not consistent with best practices, such as seeking the input of its economists when rules were initially developed or disclosing cost benefit analyses to the public. "Absent clear processes and criteria, demonstrating that FDIC regulations justify their costs remains a fundamental challenge," the agency watchdog said.
The report comes amid a concerted effort by FDIC Chairman Jelena McWilliams to increase transparency at the agency.
Other issues flagged by the OIG include the FDIC’s ability to keep pace with financial technologies, ensure crisis readiness and share threat information with banks and examiners.