Join us for an open discussion with a panel of state/federal regulators and lawyers on the causes, effects and options for avoiding a repeat in the future. Each panel member will give their perspective on the lessons learned from the recent recession and how to avoid the problems in the future.
Discussions will also include:
- due diligence
- risk ratings
- the process of making and preserving loans
- lender liability
Our guest speakers include:
|Kevin Moore, Senior Vice President in charge of the Supervision and Risk Management Division of the Federal Reserve Bank of Kansas City|
|Stephen Gaddie, Assistant Regional Director at the FDIC|
|Ken Torgler, Director of Examinations, Kansas Office of the State Bank Commissioner|
Wednesday, Oct. 8 2:30 p.m. Registration 3-4:30 p.m. Seminar 4:30-6 p.m. Cocktail Reception
Stinson Leonard Street 1201 Walnut St. Suite 2900 Kansas City, MO 64106 29th Floor Conference Center
Please register by Monday, October 6
Designed for attorneys as well as business people, SLS Bankruptcy Blog offers analysis of recent case law developments and issues affecting the world of bankruptcy and creditors’ rights.
The ability to stay on top of all things related to bankruptcy and creditors’ rights just got easier. Stinson Leonard Street LLP, backed by the insight of longtime bankruptcy and creditors’ rights attorneys with nationwide practices, is proud to announce the launch of the SLS Bankruptcy Blog (www.slsbankruptcyblog.com).
Our bankruptcy attorneys contributing to the blog have extensive experience in all facets of the debtor–creditor relationship, both litigation and transactional.
Readers can sign up to receive automatic email notices of recent blog posts by subscribing to the blog here. Subscribing is as simple as entering your email, clicking a submit button. Upon subscribing, the blog front page will be delivered to your email box each time a new post is published. You can always unsubscribe if you decide you would prefer not to continue to receive the blog.
Go here for more information about Stinson Leonard Street’s bankruptcy and creditors’ rights practice and attorneys.
The Financial Crimes Enforcement Network (FinCEN) recently proposed regulations under the Bank Secrecy Act (BSA) in an effort to combat illicit financial activity, including terrorist financing and money laundering. The proposed regulations impose additional requirements for bank’s customer due diligence programs.
Written by: Evan Berquist
During the last two weeks, the Consumer Financial Protection Bureau (Bureau) announced two new policies that will significantly expand the agency’s reach. First, on July 16, the Bureau proposed a new policy that would allow consumers to publish detailed narratives of their complaints on the Bureau’s online consumer complaint database. Then on July 21, the Bureau began accepting complaints related to prepaid cards and several nonbank financial products, including debt settlement services, credit repair services, and pawn and title loans. Bankers and nonbankers who provide financial services should be aware of the increased legal and reputational risks that these new Bureau policies bring.
New Types of Complaints Accepted
The addition of prepaid cards and certain nonbank financial services expands the list of consumer complaints the Bureau already handles. The existing list includes complaints related to credit cards, mortgages, bank accounts and services, private student loans, auto and other consumer loans, credit reporting, debt collection, payday loans, and money transfers.
When consumers file a complaint with the Bureau, the Bureau forwards the complaint to the relevant company, and requests that the company respond within 15 days. The company’s response should include a description of the actions the company has taken or plans to take to address the complaint. The Bureau expects companies to close all but the most complicated complaints within 60 days. Consumers are given a tracking number that they can use to check the status of their complaint by logging on to the Bureau’s website.
The Bureau will now accept complaints for prepaid gift cards, employee benefit cards, and “general purpose reloadable cards,” which customers often use in lieu of traditional checking accounts. In the coming months, the Bureau also plans to issue a proposed rule that would increase federal consumer protections for general purpose reloadable prepaid cards. Consumers can now submit prepaid card complaints to the Bureau about problems with:
managing customer accounts
- overdrafts, incorrect or unexpected fees
- frauds, scams or unauthorized transactions
- advertising, disclosures, and marketing practices
- adding money and savings or rewards features.
Debt Settlement and Credit Repair Services
The Bureau has already taken a number of enforcement actions against debt settlement and credit repair services companies for engaging in deceptive practices and charging illegal up-front fees. Consumers can now submit complaints about these types of companies for problems related to:
Excessive, unexpected or unjustified fees
- Advertising and marketing practices
- Customer service
- Frauds or scams
Pawn and Title Loans
Consumers can now submit complaints about pawn and title loan services for problems such as:
Unexpected charges or interest fees
- Loan application problems
- Incorrect charging and crediting payments by the lender
- Damages from the lender repossessing, selling, or damaging the consumer’s property or vehicle
- Inability to contact lender
Detailed Consumer Narratives to Appear on Website
As the Bureau expands the types of complaints it accepts, it is also moving to increase the amount of information consumers can share on its customer complaint database. Under a new policy proposed by the Bureau on July 16, consumers will be able to publish detailed narratives of their complaints on the database. Until now, the Bureau’s database has included only a more limited set of information about consumer complaints, including the date of submission, the consumer’s zip code, the company’s name, the product type, the general category of problem the consumer is complaining about, and the company’s response.
Under the proposed policy, consumers will be given the option of sharing a first-hand account of how they believe they were harmed by a company. The Bureau argues that by making detailed customer narratives publicly accessible, consumers will be able to make more informed decisions when selecting a financial product. The Consumer Product Safety Commission’s saferproducts.gov and the National Highway Traffic Safety Administration’s safercar.gov are two models that the Bureau says already provide this type of valuable consumer information.
Members of the financial services industry have expressed concern about the lack of safeguards in place to verify the truth of these publicly accessible complaints. In its proposed policy, the Bureau acknowledged the risk that factually incorrect information published on its database could harm both consumers and companies. To help mitigate this risk, the Bureau will allow companies to publish their response to a consumer complaint. Companies may request that their response be printed next to the consumer’s complaint, if the response is sent within the 15-day response period mentioned above. Both the customer complaint and the company’s response would delete any references to personal identifying information about the customer.
The Bureau has invited public comments to its proposed policy, a copy of which is available here.
Written by: McGregor K. Johnson
In early July, federal bank regulators and the Conference of State Bank Supervisors issued guidance regarding home equity lines of credit (“HELOC”) that are nearing the end of their draw periods. Typically, a HELOC consists of two periods: a draw period during which the borrower has access to unused amounts under the line of credit and interest only payments are made, followed by a repayment period during which a balloon payment or increased monthly payments are made.
The regulatory guidance reminded banks of key risk management principles when the end of the draw period is approaching for HELOCs. For example, banks should:
• not extend draw periods, modify loans, or establish amortization terms without conducting thorough due diligence on the borrower;
• use loan workout programs when feasible, but only if tailored to the borrower’s financial situation, and identify appropriate troubled debt restructurings;
• in estimating their allowance for loan and lease losses, consider the risks associated with the end of the draw period, such as “payment shock” of the borrower resulting from the increased payments due during the repayment period.
In addition, the guidance delineated specific policies that banks should follow in implementing such principles, including:
• proper identification of the risks associated with the end of the draw period and of the higher risk segments of the portfolio;
• analysis of expected payoffs, delinquencies and other factors that change risk levels;
• complete understanding of the contractual provisions of the HELOCs (such as notifications, payment amounts, interest rates, and amortization terms) and ensuring that the payment processing and servicing systems are controlled and programmed correctly;
• communication by well-trained customer account representatives with the borrowers well in advance of the end of the draw periods, including descriptions of options available for modifications to high risk borrowers;
• tracking of actions taken by type at the end of the draw periods and subsequent account performance and the distribution of such reports to all involved personnel on a frequent basis;
• sufficient staffing and resources to handle all activities within the HELOC portfolio.
This guidance may be found at Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Periods.
Kansas Governor Sam Brownback recently signed into law a bill phasing out the mortgage registration tax that requires anyone taking out a mortgage to buy property in Kansas to pay a tax of 0.26% on the principal debt or obligation secured by the mortgage. As summarized in the table below, this phase out will reduce the mortgage registration tax over a five-year period until the tax is completely eliminated in 2019.
Mortgage Registration Tax
0.00% (Totally Repealed)
Click here to view the full text of the amendment.
The Western Independent Bankers’ 2014 M&A Conference to Feature Stinson Leonard Street Partner Ernie Panasci
Ernie Pansasci, a Partner at Stinson Leonard Street LLP, will be a featured speaker at the Western Independent Bankers’ 2014 M&A Conference held June 11-12 in Newport Beach, Calif.
Panasci will be participating in an interactive, hands-on case study exercise, “Getting the Deal Done Right: A ‘Live’ M&A Deal.” In this session, attendees will gain a practical perspective on the mechanics and decisions leading up to an actual M&A deal. From setting the business case, to conducting appropriate due diligence, to following good legal process, to financially analyzing the merger from a shareholder perspective, to uncovering potential compensation surprises, this session is designed to help attendees become well-versed in critical M&A considerations without the pressure of an actual M&A event.
Panasci, who works from the firm’s Denver office, focuses his practice in the areas of financial institutions, mergers and acquisitions, corporate law and counsels financial institutions about federal and state banking matters and related securities law and financing issues. He has been directly involved in more than 100 transactions as counsel for buyers or sellers and the merger and acquisition of businesses in a diverse range of other industries. Panasci focuses his practice throughout the Western United States, including the States of Colorado, New Mexico, Wyoming, Montana, Arizona, Idaho and Washington.
Register to attend the Western Independent Bankers’ 2014 M&A Conference. Save $100 off the conference fees when you register by May 16.