#CECL – Federal Financial Analytics

5 07, 2023

REALESTATE25

Max Camateros-Mann2023-07-05T09:16:12-04:00July 5th, 2023|1- Financial Services Management|

CRE Loan Modifications

The banking agencies and NCUA have agreed on a final policy statement providing guidance for how financial institutions are to handle troubled commercial real estate loans, giving banks considerable latitude to forbear when borrowers are unable to meet their obligations but are deemed to be able to pay at least some of it over time. The statement was finalized in consultation with state regulators, suggesting most also agree with its provisions and thus establishing a national standard that regulators hope will prevent unnecessary losses and market distress. However, long experience in prior downturns suggests that loan extensions may lead to heightened losses, making it unclear if this policy will ultimately have its desired effect. Should this not prove the case, the agencies’ new policy will insulate banks from near-term loss and reduce credit outflows from sectors particularly dependent on regional banks.

REALESTATE25.pdf…

DAILY062923

Eliza Allen2023-06-29T17:22:46-04:00June 29th, 2023|2- Daily Briefing|

Powell Stands by Big-Bank Reg Rewrite

In remarks today, Chair Powell echoed Vice Chair Barr’s “humble” comments yesterday about the need to anticipate additional risks despite banking-system resilience, noting that rules and supervision require review. Building on the Fed’s internal SVB review (see Client Report REFORM218), Mr. Powell suggested that the Fed had succumbed to the “natural tendency” to fight the last war and needs now to update its standards to address new risks.

FTC Finalizes Tough New Guidance On Deceptive Reviews And Endorsements

The FTC today finalized an updated version of its Endorsement Guides, setting new standards for the advertising and endorsement behavior that may constitute unfair or deceptive practices. These include implementation of a Consumer Review Fairness Act ban on standardized contract provisions penalizing consumers for negative reviews, a practice the CFPB last year called “gag” clauses that are banned under this law.

Banking Agencies Encourage Banks To Go Easy On CRE Borrowers

The banking agencies and NCUA today finalized changes to troubled-loan standards in a policy statement that is substantially similar to last year’s proposal.

Daily062923.pdf…

DAILY080222

Eliza Allen2023-01-04T13:33:07-05:00August 2nd, 2022|2- Daily Briefing|

FFIEC Turns Back to Troubled Loans

The banking agencies and NCUA today sought comment on proposed changes to troubled-loan standards that would codify action during the great financial crisis on CRE-related allowances for loan and lease losses (see FSM Report ALLL5) and Covid-crisis era regulatory and CECL actions (see FSM Report CECL7). Although focused on CRE, the statement’s general principles would also apply to commercial loans secured by real property or business assets, reiterating current injunctions for banks to work “constructively” with troubled borrowers.

Senate Banking at Another Loggerhead, This One re Housing

Today’s Senate Banking hearing on rising rent was a partisan session, with Democrats urging support for legislation to provide emergency rental assistance and other federal interventions. In sharp contrast, Republicans argued that needless government regulation is to blame. Ranking member Toomey (R-PA) also continued Republican attacks on the GSEs, denouncing what he called their loose underwriting standards and calling for Congress to prohibit them from investing in areas with rent-control laws.

Hsu Fears Continuing Cyber Risk

In remarks today, Acting Comptroller Hsu indicated that, while banks have generally done a good job combatting cyber threats, this has led to an undue sense of security across the industry, law enforcement, and national-security officials. Mr. Hsu thus urges continued vigilance and investment that recognizes the increasingly inter-connected and complex nature of financial instruments, payment systems, and markets, as well as continued attention to contingency planning and recovery protocols.

Daily080222.pdf…