• On November 13, The Fed, OCC, and CFPB announced dollar thresholds for smaller loan exemption from appraisal requirements for higher-priced mortgage loans and dollar thresholds for the applicability of truth in lending and consumer leasing rules for consumer credit and lease transactions. The 2024 threshold for whether higher-priced mortgage loans are subject to special appraisal requirements will increase from $31,000 to $32,400. Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) generally will apply to consumer credit transactions and consumer leases of $69,500 or less in 2024. However, private education loans and loans secured by real property, such as mortgages, are subject to Regulation Z (Truth in Lending) regardless of the amount of the loan.
  • On November 15, acting Comptroller of the Currency Michael Hsu provided testimony and a written statement to the House Committee on Financial Services on regulatory priorities. Hsu stated that guarding against complacency by banks has been a priority since he took office in 2021. Doran Jones was not surprised to see risk management was of primary concern in his statement. “The OCC expects the banks we supervise to remain vigilant and stay ‘on the balls of their feet’ regarding risk management. Banks need to successfully manage traditional, ‘blocking-and-tackling’ risks, such as credit, liquidity, and interest rate risks, as well as prepare for emerging risks and tail risk events,” Hsu said.
  • On November 16, The OCC announced enforcement actions for November 2023. The actions included:
    • A Formal Agreement against Heritage Bank, NA of Spicer MN “for unsafe or unsound practices, including those relating to capital and strategic planning, timely and adequate credit review, ongoing monitoring of the credit portfolio, and liquidity risk management.”
    • A Consent order against United Fidelity Bank, FSB, Evansville, IN “for engaging in unsafe or unsound practices, including those relating to corporate governance and enterprise risk management, credit underwriting and administration, liquidity risk management, and interest rate risk management.”
    • A Consent order against Vast Bank, NA, of Tulsa, OK “for engaging in unsafe or unsound practices, including those relating to capital ratios, capital and strategic planning, project management, books and records, liquidity risk management; interest rate risk management, information technology controls, risk management for new products, and custody account controls.”
  • On November 16, Federal Reserve Vice Chair for Supervision Michael Barr addressed the 2023 U.S. Treasury Market Conference and used the opportunity to emphasize the importance of interest rate risk management (see our series on Regulatory Expectations for Interest Rate Risk Management here). Speaking to a group of financial services professionals in New York City, Barr stated the “Federal Reserve supervisors have stepped up their supervision of interest rate and liquidity risk, given what we have learned from recent experience, and they will continue to work with banks to ensure their balance sheets are resilient to a variety of conditions.” He also stressed the importance of contingency funding, planning, and preparedness, stating, “banks don’t need to sell securities to gain liquidity value from them if they can borrow against them. But firms can face challenges in significantly ramping up funding in private markets, such as repo markets, particularly if they do not tap those markets regularly.”

Contact us to learn how a strategic partnership with Doran Jones can provide you with cost-effective solutions by leveraging our expertise with these and other critical risk and compliance functions.