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Dec 6, 2017 10:30:00 AM

2018 Regulatory Changes Your Bank Should Be Watching

At the turn of 2017, the U.S. environment was best described as unsettled and uncertain. With the unexpected election results, President Trump entered Washington with a stance that “excessive rulemaking strangles economic growth” and a promise of change from the political norm.[1] Change is difficult. Many of the plans have been executed more slowly or differently than expected, sustaining the underlying climate of uncertainty. As we approach the close of the year, however, the pace of change seems to be picking up.

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Topics: Regulations

Nov 15, 2017 1:00:00 PM

4 Steps to Prepare for Regulatory Change in 2018

Banks had a recent win in Washington. Behind closed doors, President Trump signed a Congressional bill to overturn the Consumer Financial Protection Bureau (CFPB) rule banning mandatory arbitration clauses.[1] As initially written, the CFPB rule would have opened banks and credit unions up to a flood of litigation. The new bill is a sign of support from Washington as banks face looming regulatory changes.

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Topics: Regulations, CFPB

Nov 1, 2017 1:00:00 PM

4 Reasons Your Bank Should Demand Tax Returns from Borrowers

Has your customer ever questioned why their personal tax returns are needed during the application process? Most banks know why they are required, but are you fully utilizing the financial information that is available within the document. Banks require current tax returns from prospects as a condition of making a commercial loan. They expect them as a prerequisite for prudent underwriting and ongoing loan monitoring. And they employ tax returns for calculating a borrower’s cash flow and for generating ability, debt leverage, and liquidity position. While they may fully comprehend all of these uses, most borrowers understand that their tax return is an essential document that banks and lenders need for determining their creditworthiness.

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Topics: Tax

Oct 18, 2017 11:30:00 AM

How Banks Should Prepare for HMDA Changes

In September, the Consumer Financial Protection Bureau (CFPB) issued its final ruling on an amendment to Regulation B of the Home Mortgage Disclosure Act (HMDA). It also noted its intent to assist with compliance with Regulation C. The amendment, which follows a 2015 congressional update, will go into effect starting January 1, 2018. Ultimately, it is designed to give creditors more flexibility to meet standard government regulations, but banks are generally unprepared for the changes, in part because the standards have been moving targets.

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Topics: HMDA

Oct 11, 2017 10:00:00 AM

Regulators are Striving to Ease Capital Rules for Small Banks

“Regulation is killing community banks.” Treasury Secretary Stephen Mnuchin

In March, regulators announced that they would launch an effort to ease capital rules for smaller institutions. In June, a Treasury report recognized, “community financial institutions’ business models have come under pressure from added compliance costs from new regulations.” It urged regulators to “explore exempting community banks from the risk-based capital regime implementing the Basel III standards.” In the most recent step, which happened on August 22, U.S. bank regulatory agencies put forth a proposal to delay the implementation period for stricter capital rules for smaller banks while they review ways to simplify requirements.

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Topics: Regulations

Oct 5, 2017 10:00:00 AM

Is Your Bank Winning at Customer Experience in the Digital Economy?

As every football fan knows, the "hurry-up offense" is a staple in many playbooks. (For those of you unfamiliar with the term, in a “hurry-up offense,” the offense tries to execute as many plays as possible—as quickly as possible). It's a style of attack that works well if the opponent is complacent or under-prepared. When successful, the speed of the play exposes weaknesses in the defense quickly. It wears them down, and makes them confused and frustrated, giving the offense the opportunity to capitalize on the defensive breakdown.

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Topics: Customer Experience, Digital Economy

Sep 27, 2017 10:00:00 AM

3 Ways the New iPhone X Will Change Consumer Banking

After much anticipation, Apple has announced its iPhone X. As is so often the case with new Apple company releases, the newest generation brings more than just an updated device design. It also introduces a host of new technologies that change how many industries operate in the digital space. For the banking sector, three innovations will likely impact customer engagement and how business gets done.

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Topics: Electronic Health Records

Sep 20, 2017 10:00:00 AM

2 Reasons Your Bank Should Have Already Begun CECL Implementation

As banks navigate through their CECL implementation, many are experiencing challenges and uncertainties along the way. Since last summer when the new standard was announced, we’ve advised banks to get started on their implementation timeline sooner than later. In part, it’s to give time to mitigate the unexpected. In part, the advice comes from our experience with how complex and challenging it can be to implement new models, standards, regulations, and technologies. And finally, it’s because more robust data analysis means more confident decisions and ultimately more profitable loans over the long term.

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Topics: CECL

Sep 13, 2017 1:00:00 PM

4 Steps to Help Millennials Build Wealth and Security

As the adage says, one of the surest ways to combat fear is to confront it head on. Financial anxiety is one of those fears. For 85% of adults, concerns around unplanned emergencies, medical expenses, insufficient funds for retirement, and school loans rank as the top stressors in their life.[1] For young, Millennial-aged adults, these concerns are even more pressing.

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Topics: Millennials, Growth

Sep 7, 2017 10:00:00 AM

Weighing the Risks and Benefits of ESOP

True to its name, an employee stock ownership plan (ESOP) is a type of employee benefit plan, similar in some ways to a profit-sharing setup. The National Center for Employee Ownership (NCEO) estimates that approximately 14 million workers currently participate in an ESOP, making it the most common form of employee ownership in the U.S.

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Topics: ESOP

Aug 30, 2017 10:00:00 AM

What Banks Need to Understand About Blockchain

The world around us is in a constant state of change and moving at a pace that has never been seen before. Adaptation is vital to remain relevant in this type of environment. We all know of examples of companies and industries that failed to anticipate and adapt to changing technology and quickly became or are becoming obsolete—Blockbuster, Kodak and the taxi industry to name a few. Whether it was a lack of vision or a lack of belief that change could happen, we certainly do not want to find ourselves on this list.

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Topics: Electronic Health Records, Blockchain

Aug 23, 2017 11:30:00 AM

What Banks Need to Know About the AICPA Cyber SOC

For organizations of every kind, data breach incidents are "when"—not "if" events. Especially for business entities (like banks) that manage clients’ private information, building vigilance against threat actors, unintentional compromises, and other cyber vulnerabilities is as much a part of risk management as instituting compliance measures. But understanding how to spot weaknesses, build transparency, and engage checks and balances demands a new level of focus and capability for many banks.

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Topics: Electronic Health Records, SOC

Aug 16, 2017 11:00:00 AM

Looming Regulations Require Immediate Attention

After attending the Public Company Accounting Oversight Board’s (PCAOB) Forum on Auditing in the Small Business Environment, our HORNE Financial Institutions team was reminded of future certainties that require immediate preparations. Regulations are becoming more complex. Regulators are requiring more diligence from publicly traded companies and banks—as well as from their auditors. 

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Topics: Regulations, Accounting Standards