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CSBS Examiner

A weekly report of events affecting the state banking system from the Conference of State Bank Supervisors


 In This Issue...

 Upcoming Events...

Stress Testing Forum, August 9-10, Richmond, VAThis forum will evaluate the challenges and opportunities with stress testing for community banks. The session will include demonstrations of three models specifically developed for community banks.

Trust Forum, August 22-24, Raleigh, NCThis annual program allows trust examiners to analyze and discuss information on recent and emerging issues relating to bank trust departments and trust companies.

Legal Seminar, August 24-26, Raleigh, NC:  The Legal Seminar provides a forum for state banking department attorneys, assistant attorneys general assigned to the department, and other regulatory attorneys.

Stress Testing Forum, August 25-26, Atlanta, GAThis forum will evaluate the challenges and opportunities with stress testing for community banks. The session will include demonstrations of three models specifically developed for community banks.

"No, it’s NOT hotter than Hell." – Church sign seen on the Internet

As non-theologians, we aren’t inclined to quibble with the dicta of the church. In fact, this week Washington got a break from its own mini-heat wave. But there was no question that, elsewhere in the country, things were seriously uncomfortable if not downright hellish. Dallas has had more than 30 days nonstop of temperatures above 100. In Oklahoma City, sizzling at 111, silver maple trees are giving up the ghost. The record-keepers say we’ve seen this before, but to us it all looks to be a bit more intense than anything we can remember. It’s ironic that a warning usually given only on snow days should apply in early August: don’t go outside if you can possibly help it.


New Commissioner Named in Florida

Florida Governor Rick Scott and the Florida Cabinet, seated as the Financial Services Commission, appointed Tom Grady of Naples, Florida as Commissioner of the Florida Office of Financial Regulation effective August 29. Grady has almost 30 years of experience practicing law, focusing on the areas of securities, investment advice and financial industry regulation, litigation, arbitration and mediation. He has been active in securities organizations aimed at educating and safeguarding the public and raising the standards of professionalism within the brokerage industries. Since 1992, Grady has served as a broker/dealer training instructor for the American Arbitration Association, the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, the North American Securities Administrators Association, and Florida’s Office of Financial Regulation Arbitrator Training programs. He also served in the Florida House of Representatives representing a portion of Collier County.

Grady indicated he has yet to outline a list of priorities, but one particular area of concern is the state’s real estate market. "From a policy perspective, I continue to believe that we will not move forward as a state with a strong economy until we get to the bottom of the real estate problem," Grady told the News Service. Grady also said, "Capital goes where capital is treated well and I think the mandate of this board will be to treat capital well in the state of Florida. But I also know we need to balance the desire to attract capital and treat it well with the necessity to have full disclosure, transparency, and accountability for that capital." Read more.


Debt Deal Passes, Focus Now on ‘Super Committee’

Just hours before the midnight deadline, President Barack Obama signed into law Tuesday a compromise bill to raise the nation’s debt ceiling by $2.1 trillion.

After the announcement of a final debt deal Sunday night, the House immediately took up the legislation the following day, passing it by a vote of 269-191. The Senate brought the bill to the floor Tuesday morning, passed it by a 74-26 vote, and quickly sent it over to the White House for the President to sign.

The debt deal, seen as a compromise for both Republicans and Democrats, raises the nation’s debt ceiling by at least $2.1 trillion in two installments, eliminating the need to raise it again until 2013. The bill generates nearly $1 trillion in deficit reduction due to 10-year discretionary spending caps, according to a White House press release, and most notably, it establishes a bipartisan, bicameral committee of 12 legislators tasked with the goal of identifying an additional $1.5 trillion in deficit reduction by Nov. 23.

If the committee, known as the Joint Select Committee on Deficit Reduction, or the "super committee," fails to reach an agreement on deficit reduction by the stated date, triggers incorporated into the framework of the debt deal will automatically kick in to reduce domestic and defense spending beginning 2013. Social Security, Medicare and low-income programs are shielded from cuts induced by the automatic trigger.

Congressional leaders have until Aug. 16 to appoint members to the Joint Select Committee on Deficit Reduction. Read more here.


Federally Registered Mortgage Originators Available on NMLS Consumer Access

The Conference of State Bank Supervisors (CSBS) announced that information on federally registered insured depository institutions and mortgage loan originators employed by such institutions and their subsidiaries is now available on NMLS Consumer Access. With the addition of federal registrants, NMLS Consumer Access is a comprehensive record of individuals, companies, and financial institutions licensed or registered through the Nationwide Mortgage Licensing System and Registry (NMLS). NMLS Consumer Access provides the public with standardized information concerning state-licensed companies, branches, and mortgage loan originators, as well as federally registered financial institutions and mortgage loan originators. Information available on NMLS Consumer Access includes: identification information about the individual, employment history, license and registration status, and the individual’s current employer. Read more here.


Around the States

GA: The Georgia Department of Banking and Finance has issued a final rule that makes changes to and clarifies existing language regulating state-licensed non-depository entities including check cashers, money transmitters, and mortgage lenders and brokers. The rule makes changes to or clarifies policies regarding the application for and renewal of licenses, administration fees, restrictions on employment, education requirements, and fines for violations. A proposed rule was issued June 28 in response to the passage of legislation during the 2011 Georgia legislative session. The final rule was adopted August 1 and will take effect August 22. Read more here.

WI: Wisconsin Department of Financial Institutions (WDFI) Secretary Peter Bildsten has announced two key appointments within the agency. George Althoff was appointed to the position of communications director and Chris Green was appointed as Chief Legal Counsel for the agency. Althoff is a newspaper veteran of 34 years. His career includes newspaper positions in Iowa, Illinois, and Minnesota. More recently, he served as publisher of the Portage Division of Capital Newspapers. Green has been with the WDFI for 15 years and has served in various capacities, including General Counsel. Read more here.


Around the Agencies

FHA: The Federal Housing Administration’s (FHA) Mortgagee Review Board (MRB) announced hundreds of administrative actions against FHA-approved lenders who failed to meet its requirements. MRB sanctions against lenders include reprimands, probations, suspensions, withdrawals of approval, and civil money penalties. "It’s never been more important that lenders doing business with FHA apply our standards to each and every loan they originate and underwrite," said Acting FHA Commissioner Carol Galante. "FHA requirements ensure homeowners are put on a path of sustainable homeownership that ultimately helps stabilize entire neighborhoods and communities." Since 2009, the MRB took more than 2,300 administrative actions against lenders, including a record 1,600 last year alone. Read more here.

OCC: The Office of the Comptroller of the Currency (OCC) has named Darrin Benhart its deputy comptroller for credit and market risk. As one of two deputy comptrollers for credit and market risk, Benhart will serve as a principal advisor on emerging systemic risks facing the banking system. He will co-chair the National Risk Committee, which coordinates the OCC risk identification practices, and will oversee staff responsible for commercial and retail credit policy as well as credit and market risk. Benhart assumes these responsibilities immediately. Read more here.


Upcoming Events

Aug. 9-10: A Stress Testing Forum will be held in Richmond, Virginia. This forum will evaluate the challenges and the opportunities with stress testing for community banks. The session will include demonstrations of three models specifically developed for community banks. These scenarios will serve to further the discussion of the value and limitations of stress testing. Read more here.

Aug. 10: The Financial Crimes Enforcement Network (FinCEN) will hold an informational webinar at 2:00 pm to highlight to money services businesses (MSBs) the benefits of the Bank Secrecy Act Electronic Filing System (BSA E-Filing) and instruct MSBs on the simple process of signing up and using E-Filing. Read more here.


Closing Comment

"We must preserve the role of community banks in mortgage servicing or you will see further consolidation, which will only harm borrowers, especially those in rural and underserved housing markets." -- Jack Hopkins, President of CorTrust Bank in Sioux Falls, SD, in testimony before the Senate Banking Committee on behalf of the Independent Community Bankers of America.


Catherine Woody, Editor

Edward Smith, Contributing Editor

Rockhelle Johnson, Contributing Writer

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