Appraisal threshold adoption for CRE loans, ‘RushCard’ redress checks among ‘most read’ in March

The adoption of a new appraisal threshold by the Federal Deposit Insurance Corp.’s (FDIC) Board, and the settlement for users of “RushCard” pre-paid cards, were among the five most-viewed items reported in March by Regulatory Report.

Here’s the rundown of the top five, starting with the most-viewed item reported during the month:

  1. FDIC Board also approved new appraisal threshold as part of ‘summary agenda’ at March 20 meeting (March 22): As part of its quarterly meeting earlier that week, the FDIC Board approved a new commercial real estate appraisal threshold that was ultimately approved by all three federal banking agencies. The final rule increased the threshold level at or below which appraisals are not required for commercial real estate transactions from $250,000 to $500,000. According to the memo distributed to the FDIC board, the final rule defines commercial real estate transaction as a real estate-related financial transaction that is not secured by a single 1-to-4 family residential property. It excludes all transactions secured by a single 1-to-4 family residential property, so construction loans secured by a single 1-to-4 family residential property are excluded.
  2. Users of ‘RushCard’ pre-paids from 2015, check your mail: a check is on its way (March 12): The Consumer Financial Protection Bureau (CFPB) said “redress checks” were sent to consumers who held the RushCard in October 2015 (which were not tied to a financial institution) and unable to access money on the cards three years ago. The payments are being made to those who held the cards, but no longer have an active RushCard Account. The RushCard is a prepaid debit card not linked to a bank account that is aimed at persons who lack a checking account and want a way to receive paychecks and make payments. It can be used to withdraw cash at ATMs and make online payments; loading cash or checks on the card has been termed “inconvenient.” The card was introduced in 2003.
  3. 2 bills before House this week on financial institutions regulation, exams (March 12): The House scheduled consideration of two bills to require “tailoring” of regulations for banks, savings associations and credit unions and creating an independent examination review structure. The Taking Account of Institutions With Low Operation Risk Act (TAILOR Act, H.R. 1116) would require the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (The Fed), Federal Deposit Insurance Corp. (FDIC), National Credit Union Administration (NCUA) and Consumer Financial Protection Bureau (CFPB) to “tailor” their regulations to limit the compliance impact, cost, liability risk and other burdens on depository institutions based on their risk profiles and business models. Impacts of other agencies’ rules and impacts of regulatory action “with respect to” third-party service providers would also be considered. The Financial Institutions Examination Fairness and Reform Act (H.R. 4545) would revise the Federal Financial Institutions Examination Council (FFIEC) Act of 1978 to set timing requirements for exam reports and create within the FFIEC an “Office of Independent Examination Review.” Examined institutions would be authorized to ask this office for reviews of material exam findings. H.R. 1116 was passed by the House March 14 on a 247 – 169 vote; H.R. 4545 was passed March 15 on a vote of 283-133. Both bills are now pending in the Senate.
  4. Fed: Cease-and-desist order against Royal Bank of Scotland Group terminated (March 8): The Federal Reserve Board announced the termination of a cease-and-desist (C&D) order entered into in July 2011 with the Royal Bank of Scotland Group, which set requirements for risk management and internal controls, Bank Secrecy Act (BSA) and anti-money laundering (AML) programs and processes, and compliance with requirements of the Office of Foreign Assets Control (OFAC). In addition to the Fed, that 2011 order was also signed by the New York State Banking Department, Connecticut Department of Banking and Illinois Department of Financial and Professional Regulation. Reports on the date of the order termination, March 6, meanwhile said RBS Group had reached a $500 million settlement with the New York regulator over the sale of high-risk, residential mortgage-backed securities that contributed to the financial crisis. Reportedly $100 million of that is going to the state, with the remaining $400 million designated for consumer relief.
  5. Fed seeks to bar 2 former Regions Bank employees, assess $28K in civil money penalties (March 26): The Federal Reserve Board announced it had filed a “notice of intent” to permanently bar two former employees of Regions Bank, Birmingham, Ala., from working in the banking industry and pay a collective $28,404 in civil money penalties (CMPs) for inflating credit applicants’ incomes and, in some cases, opening credit card accounts without customer authorization. The notice describes the alleged activities of former bank employees Nathaniel Frazier and Jeffrey Garrison and focuses on the period from June 7, 2013, through Jan. 31, 2017. Both men are charged with engaging in unsafe or unsound banking practices and for violating federal prohibitions against bank employees making false entries with intent to injure or defraud such bank. The latter charge can bring fines of up to $1 million or 30 years in prison. In the case of these two, the Fed intends to impose fines of $18,936 against Frazier and $9,468 against