Pub. 5 2015-2016 Issue 5

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S March • April 2016 23 These answers reflect an industry well aware of prevailing regulatory priorities. As noted, respondents rankedmortgage-re- lated regulations as their greatest compliance concern heading into 2016, due largely to three areas: TRID, HFIAA and HMDA. TRID Continues to Trip Up Banks … Despite the delay in TRID’s effective date, the integration of updated disclosure systems and the corresponding staff training are proving difficult. Just prior to implementation, the American Bankers Association (ABA) estimated that “only 60 percent of banks report having received production versions of systems by September 1. In almost all instances, banks report that they have had inadequate time to properly install and test the software.” By now that installation and testing headache should be easing. Unfortunately, it only leads to the next one as bank em- ployees try to comprehend the intricacies of the new disclosures. National Mortgage News presciently described that anxiety when it warned last June: “The chance of amistake are (sic) high with a rule so rigid that it requires fees to be listed in alphabetical order, and the costs for violations will be steeper than ever.” Those fees run as high as $5,000 per day per violation for non-compliance, $25,000 per day per violation for reckless non-compliance, and $1 million per day for knowing non-compliance. On the bright side, regulators have said they would be lenient in the initial phase-in period as long as banks make a good faith effort to comply. Assume this means showing that you planned appropriately for the TRID implementation and have good pol- icies and procedures in place to follow the rule. …with HFIAA on Its Heels On Jan. 1, 2016, the final piece of HFIAA went into effect. Covered institutions (primarily banks with over $1 billion in assets; see the Final Rule for small bank exemption rule details) must now have procedures in place to ensure the following: • Mandatory flood insurance is escrowed on all residential real estate andmobile home loans originated, refinanced, increased, extended, or renewed on or after Jan. 1, 2016. • Written notice of the option to escrow for flood insur- ance premiums and fees is provided to all borrowers of outstanding covered loans booked prior to Jan. 1, 2016. It’s important to understand what constitutes a covered and non-covered loan. HFIAA exempts business, commercial, and agricultural purpose loans; subordinate liens; loans where a homeowners association pays the premiums; home equity lines of credit; loans with terms of less than 12 months; and non-performing loans. HMDA Effective Dates Only Seem Distant With everything else going on, the temptation to procras- tinate on your HMDA implementation will be great, especially since the effective dates still feel very distant. In reality, and just as we learned with TRID, they will come quickly enough. So the sooner you get ready to implement HMDA the better off your institution will be. Remember, though, to not lose sight of your other regulatory obligations in 2016. And download CSI’s 2016 Banking Priorities Executive Report to see what else your peers have planned this year.  Keith E. Monson serves as chief risk officer for Computer Ser- vices, Inc. (CSI). In this role, Keith maintains focus on CSI’s com- pliance initiatives to establish and build out an enterprise-wide compliance framework for risk assessment and reporting, issue management and other key components of CSI’s corporate compliance program. Contact us today at 303.860.0242 or refer a small business anytime at coloradoenterprisefund.org Jumping Good Goat Dairy Offering loans up to $500K including SBA Community Advantage loans up to $250K With everything else going on, the temptation to procrastinate on your HMDA implementation will be great, especially since the effective dates still feel very distant.