31 HќќѠіђџȱ юћјђџ ѝџіљ 2014 Nearly half of the respondents of a survey of U.S. and Canadian bank risk professionals forecast an increase in credit card delinquencies for the highest level since 2011. Results of the survey, conducted for FICO by the ȱ ȱ Ȃȱ - tional Association, indicate that risk appears to be reemerging as a concern in the consumer credit sector. The survey showed that 44 percent of respondents expected delinquencies on credit cards to increase during the next six months, while 35 percent of respondents indicated delinquencies on car loans would increase. Among those polled, 43 percent expected the total number of delinquencies on all consumer loans to increase. %DQNHUV 3UHGLFW 5LVH LQ 'HOLQTXHQFLHV RQ &UHGLW &DUGV DQG &RQVXPHU /RDQV This is the fourth consecutive ȱȱ ȱȂȱ pessimism has increased with regard to delinquencies on auto loans and credit cards. However the survey found that re-leveraging is likely to continue and perhaps accelerate. In the survey, 65 percent of bankers expected average balances on credit cards to increase over the next six months. That is the highest percentage of respondents expecting ȱȱȱȱȱ¢Ȃȱ four-year history. Additionally 61 percent of those polled expected the amount of new credit requested by consumers to increase, which is the Ȭȱęȱȱȱ for that question. In the small business lending sector, survey respondents indicated lending for small businesses would ȱȱȱȱ¢ȱȱ possibly improve. Ninety-four percent of those polled expected the amount of credit requested by small businesses to remain steady or increase over the next six months. Eighty-four percent of respondents believed the amount of credit extended to small businesses would remain steady or increase. And 74 percent of respondents expected the supply of credit for small business loans to satisfy demand. The survey included responses from 229 risk managers at banks throughout the United States and Canada in February. £ǯȱ ȱȱȱ ȱȱ Ȃȱ communications and timelines to stay on top of the upcoming changes, while also utilizing many of the other resources available and continuing to communicate with the board about these changes. ȱ ȱȱ ȱȱȱęȱ mortgage reform regulation changes, I continued to review posts and articles that would broaden our comprehension of the new lending requirements. Simultaneously we ȱȱĴȱȱȱ ȱęȱȱȱȱȱ plan of action. Much of our discussion revolved around risk. Last October we received an interagency statement on fair lending compliance and the Ability-to-Repay ȱȱ ęȱ ȱ - dards rule, which provided guidance ȱęȱȱȱ- ing risks. After some analysis, our ȱȱȱĴȱ determined that we would need to continue to evaluate fair lending risk in the same manner that we would for other types of product selections, including carefully monitoring our policies and practices. Like other community banks, in rural and underserved counties, we must remain compliant while meeting the needs of our various communities. To me this is part of the backbone of being a community bank. As compliant as we hope to be, we continue to feel as though these mortgage reform changes could still pose a disadvantage for some consumers, but only time will tell. Going Forward With Reform As the board writes and approves policies and procedures, key departments and applicable personnel go through training. I have been very fortunate to be involved with a wonderful community bank whose board of directors and executive senior management fully support back Ĝȱǯȱ ȱ ȱȱȱȱ ¡¢ȱȱ¢ȱȱĜȱ ¢ǯȱ ȱȂȱ- ment to ensure compliance enabled the required training to take place by all for ȱ ¢ȱěȱǰȱȱȱ amount of training still needed to be done. While some have been designated for face-to-face training on new procedures and requirements, others are involved in a third-party loan originating software webinar, demonstrating the compliance changes and the time frame for all changes to be rolled out. December was late for loan originating software updates to be released. With the late timing of ȱęȱȱȱȱȱ then additional changes and amendments, the software designers were under extreme pressure to meet the ¢ȱǯȱ ȱȱ¢- thing involved, we were ready to go. With the vast policy and procedural changes within our community banks along with the required ȱǰȱ Ȃȱȱȱȱ comfort zone. But a couple of years from now, I would imagine we will look back on this current nightmare of compliance change and think it ¢ȱ Ȃȱȱȱȱdz¢ǰȱ maybe not. Still, I know that I, along with many of my compliance colleagues, will look back and say we did our best to ensure our bank was in compliance, because that is our passion. ȱ Ȃȱȱȱ¢ȱȱ ¢ǰȱ ȱȂȱ ȱ ȱȱȯȱȱ- ȱĜǯȱȱȱ Editor’s note:A similar version of this article was published in the January-February 2014 $%$ %DQN &RPSOLDQFH 0DJD]LQH.
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