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Federal Financial Regulatory Update

The FDIC and OCC released reports this week showing continued growth among community and larger banks, while the CFPB delayed compliance with new regulatory rules for payday loans.

FDIC Quarterly Report

The FDIC released this week the “FDIC Quarterly,” a comprehensive summary of the most current financial results for the banking industry.

In the report, FDIC researchers write about community bank mergers since the financial crisis, finding that acquired community banks are typically less profitable and reported lower capital ratios.

Additionally, FDIC researchers found that the number of offices operated by community banks increased slightly over the past five years, but cutbacks in offices at these banks have been large enough to drive a decline in the overall number of banking industry officers since 2012. This continuing trend of fewer banking offices can be attributed to factors like population migration, industry consolidation, and financial technology.

OCC Semiannual Risk Perspective

The OCC released Thursday its report on credit, operational, and compliance risks for national banks.

In the report, the OCC found that the credit environment continues to be influenced by aggressive competition and slow loan growth. Banks also feel strain due to operational costs, largely because of increasingly complex cybersecurity threads and the use of third-party service providers. The OCC additionally notes the increasing complexity of consumer compliance regulations as a driver of compliance cost.

CFPB Delays Payday Lending Rule, Requests $0 for Annual Budget

The CFPB announced Tuesday it intends to engage in a rulemaking process so that the Bureau can reconsider its Payday Lending Rule. The CFPB also said it would entertain waiver requests from payday lenders for the parts of the rule that went into effect Wednesday.

Also, every quarter, the CFPB formally requests its operating funds from the Federal Reserve. Acting CFPB Director Mick Mulvaney’s first quarterly request is for $0. Mulvaney intends to use the CFPB’s $177 reserve fund to cover the estimated $145 million for the CFPB’s second quarter needs.

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