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California Regulators Launch Probe of Marketplace Lending Industry

December 22 – The California Department of Business Oversight has launched an inquiry into the growing marketplace lending industry, the department announced. This type of lending — also known as peer-to-peer or P2P — allows consumers and small businesses to get personal loans through online lending platforms without going through a traditional bank or other financial institution.  Such lending has been attracting attention of regulators, including a Treasury Department request for information on the industry that was conducted earlier this year.

California regulators will be using the requested information to assess the industry’s size in California and how many consumers and businesses it touches, as well as to better understand various loan and investor funding programs used by marketplace lenders.  That knowledge, in turn, will help the DBO assess how the state’s licensing and regulatory authorities are working when it comes to the industry. 

“We want to assess the effectiveness and proper scope of our licensing and regulatory structure as it relates to these lenders,” said DBO Commissioner Jan Lynn Owen in a news release.

 As part of the inquiry, the regulator sent an online survey to 14 marketplace lenders requesting five-year trend data about their loan and investor funding programs.  The survey also requests information about the firms’ business models and online platforms.  The DBO sent the request to firms that offer personal or small business loans.  The survey responses are due by March 9.

 

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The Good and the Bad in Agricultural Lending

By Jim Overstreet

Agricultural loans are an important part of the lending portfolios of many small rural banks. The bad thing about lending to farmers and ranchers is that their businesses are not profitable every year. The good thing is that over a five-, 10- or 20-year horizon, the vast majority of ag borrowers repay their loans, providing banks with good income.

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Midwest Banks Select nCino to Boost Commercial Lending Performance

October 16 – nCino, a leader in cloud banking, has announced that $396 million First Federal Savings Bank (FFSB) and $303 million Oxford Bank (OXBC) have selected its Bank Operating System to streamline their commercial lending processes and mitigate loan portfolio risks.

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Fifth Third Bank Fined for Indirect Auto Lending Markups

September 28 – The Consumer Financial Protection Bureau has announced two separate actions against Cincinnati-based Fifth Third Bank, for discriminatory auto loan pricing and for illegal credit card practices. The joint CFPB and Department of Justice auto-lending enforcement action requires Fifth Third to change its pricing and compensation system to minimize the risks of discrimination, and to pay $18 million to harmed African-American and Hispanic borrowers. The CFPB’s action against Fifth Third’s deceptive marketing of credit card add-on products requires the bank to provide an estimated $3 million in relief to eligible harmed consumers and pay a $500,000 penalty. (more…)

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ICBA Opposes Plan to Expand Credit Union Business Lending Powers

September 1 – The Independent Community Bankers of America (ICBA) expressed strong opposition to the National Credit Union Administration board’s proposed rule to relax business-lending rules for tax-exempt credit unions. In a comment letter, ICBA wrote that the proposed rule to expand lending authority while relaxing regulatory oversight would jeopardize the safety and soundness of federally insured credit unions and place undue risk on U.S. taxpayers.

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2015 ISA ENTRY – Wolters Kluwer Financial Services: ComplianceOne Assumption Lending

Financial institutions that offer certain types of residential mortgage products must also provide the ability for another party to assume the terms of that mortgage. This process is called a mortgage assumption. Historically, mortgage assumption transactions lacked automation because of demand variations given interest rate fluctuations. Due to intense regulatory requirements, mortgage assumptions are expensive and challenging transactions to process, with data collection, calculations, content and process challenges.

The problem is exacerbated by the TILA-RESPA Integrated Disclosures (TRID) regulation, which dictates new disclosure documents for mortgage assumptions.

ComplianceOne assumption lending is unique in that it automates a process that is almost entirely manual today. It leverages an existing lending platform — ComplianceOne — that was originally designed to help smaller institutions document lending and deposit transactions. ComplianceOne assumption lending contains functionality that automates processes beyond document generation and allows tracking from the start of the assumption loan to servicing. It also offers e-delivery of new TRID disclosures vs. the paper routing approach usually used in mortgage assumption transactions.

ComplianceOne assumption lending pivots existing technology architecture to capitalize on a small but highly lucrative market adjacency leveraging an existing platform. It solves data collection, calculation, content and process challenges for assumption lending, significantly reducing institutions’ operational expenses.

Four Key Advantages:

  • Most competing solutions are expensive, manual-based processes. ComplianceOne assumption lending is unique because it automates the necessary calculations and documentation, helping institutions manage the entire workflow — from application through closing documents — for the assumption process.
  • Institutions benefit from the elimination of manual processes, reduction in time and labor to produce transactions, and efficiency gains in regulatory and process compliance.
  • The solution allows financial institutions to be compliant with TRID regulatory requirements.
  • The solution creates a sustainable approach to mortgage assumption transactions that is automated and repeatable.

Wolters Kluwer Financial Services
www.wolterskluwerfs.com

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Mirador Financial’s Cloud-Based Lending Offered Through Oregon Bankers Association to Member Banks

July 9 – Mirador Financial, provider of a cloud-based small business lending platform that helps financial institutions make smarter, faster lending decisions, has forged a strategic partnership with Synergy by Association, Inc. that will enable banks around the country to leverage Mirador’s advanced technology platform to originate more small business loans, quickly and efficiently. Synergy by Association, a wholly owned subsidiary of the Oregon Bankers Association, will initially offer the Mirador platform to banks in Oregon with plans to expand the program to state bankers associations across the U.S. (more…)

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ICBA, ABA Criticize Proposal to Expand Credit Unions’ Business Lending

June 29 – Proposed rules described as regulatory relief for credit unions by the National Credit Union Administration drew sharp rebukes from the American Bankers Association and the Independent Community Bankers of America. (more…)

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Florida Bankers Association Endorses Five Market-Leading D+H Lending Solutions

May 11 – DH Corporation has announced that the Florida Bankers Association (FBA) has extended an agreement that endorses five of the company’s consumer, commercial and mortgage lending solutions. The Board of Directors and staff of BancServ, Inc., a wholly-owned subsidiary of the FBA, conduct a rigorous examination process to select a single endorsed solution for each critical area, helping member banks save precious time on vendor evaluation and selection.

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LendKey Powers Student Lending for World’s Largest Credit Union

April 27 – LendKey, the innovative online lending platform that connects borrowers with credit unions and local banks, has announced that its platform will power online student lending for Navy Federal, the world’s largest credit union. Using LendKey’s platform, Navy Federal will offer private student loan options to all of its members.

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