Sam Foreman

🏦 BIS 🏦 CAMELS 🏦 CFPB 🏦 CFTC These are just some of the acronyms in the banking industry that every banker should know! Banking+ helps you decipher these banking acronyms (and more) in a guide to industry lingo: https://lnkd.in/eDaWg4_h #Acronyms #Banking #Bankers #BankingIndustry #Enrichment #BankingPlus

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A driving factor in the growth of Same Day ACH payments is the ACH Network’s firm establishment. ACH is ubiquitous, and businesses and consumers are familiar with it. Unlike some of the newer real-time payment rails, virtually all FIs are connected to ACH, facilitating money movement regardless of the customer’s bank. “If you’re a business and you haven’t dipped your toe in the faster payments waters yet, start with what you’re familiar with, which is likely to be ACH,” Michael Herd, Executive Vice President of ACH Network Administration at Nacha said. “Same Day ACH is just a faster form of what you already know. It’s the same system and the same processes. You will have to adapt to the faster settlement of funds, but ultimately there’s a much lower barrier to entry.” Read more: https://lnkd.in/e3hiv_g2

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Let's talk about this article and mortgage servicing in general. "The FSOC recommends that Congress should give the Federal Housing Finance Agency (FHFA) and Ginnie Mae additional authority to establish appropriate safety and soundness standards, directly examine counterparties, enforce compliance, and authorize Ginnie Mae and state regulators to share information, among other things". The reason that servicers are generally at times "unstable", is the COST of the already in place over regulation and requirements they must adhere to following the housing crisis and the formation of the CFPB, as well as when the market has an impact, like COVID, the additional funds they need to spend when government or state required aid or adjustments to a seller guide or investor's servicing requirements need to be implemented across their organizations (yet, they are not allowed to increase their fees to offset this stress or additional costs and servicing is a "tight margin" business!). Adding more regulation to detract from the core role of a mortgage servicer, which is: To manage the lifecycle of the loan and to protect the investor/holder of the loan(s) in an event of default, while fairly working with a borrower, would generally lead to an increase in instability. Let's allow the servicers to do what they are supposed to do and that is collect payments, work through workouts with borrowers through loss mitigation, manage foreclosure and REO liquidations, etc. Giving more power to FHFA or having the CFPB (as they recently announced), propose a rule “to strengthen certain homeowner protections.” is not the way. I am not saying that efficient regulation is a bad thing. I am also not saying that homeowners should not be protected, of course they should - but it needs to be done in a way where they are also a responsible for the obligations they signed up for. All this will do is continue to allow the monopoly in Washington DC on housing and mortgages and candidly, eventually lead to losses for these same homeowners that they allege they are trying to protect. It is time for Washington DC to ASK the right EXPERTS in the mortgage, asset management and servicing industry, how to effectively and efficiently make change that can make a difference and not impede outcomes. It is time to allow fair and equitable competition again in the housing market. Stop bestowing rules on everyone else and giving yourself a year or two longer to catch up etc. Allow your business and the businesses you say you are partnering with to win together! I am happy to bring the panel of experts to Washington DC to have this discussion, name the time and place and we will all be there Janet Yellen Rohit Chopra Robert Broeksmit Scott Olson Brandon Milhorn Sandra Thompson Sam Valverde HousingWire Flávia Furlan Nunes Clayton Collins Geng Ngarmboonanant I hope to hear from you. There is work to be done and it can be done efficiently! https://lnkd.in/e5Xs5iyr

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Mortgage Banking: 36 percent of the firms in the study posted pre-tax net financial profits in 2023, down from 53 percent in 2022. Total production revenues (fee income, net secondary marking income and warehouse spread) were 329 basis points in 2023, down from 333 basis points in 2022. On a per-loan basis, production revenues were $10,202 per loan in 2023, down from $10,322 per loan in 2022. Total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – increased to $11,258 per loan in 2023, up from $10,624 in 2022. Be interesting to see 1-QTER 2024…..

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Buy now, pay later. Is it a credit card? Is it a consumer loan? CFPB is weighing in. "The Consumer Financial Protection Bureau Tuesday announced buy now/pay later lenders will be classified as credit card providers for consumer protection purposes under a new interpretive agency rule." "Under the 1968 Truth in Lending Act, credit card providers are required to adhere to certain standards, including disclosing lending terms and offering consumers the right to dispute charges and receive refund credits to their balances. CFPB director Rohit Chopra said the proposal would require buy now/pay later, or BNPL, offerings to adhere to those same standards" "The agency indicated that BNPL customers should receive clear disclosures detailing fees, pricing structures, and their rights when issuing billing disputes and requesting refunds on purchases. When facing a billing dispute, CFPB said consumers should also be able to escalate the issue to the buy now/pay later lender, who must then investigate and issue a credit if necessary" "The agency indicated that BNPL customers should receive clear disclosures detailing fees, pricing structures, and their rights when issuing billing disputes and requesting refunds on purchases. When facing a billing dispute, CFPB said consumers should also be able to escalate the issue to the buy now/pay later lender, who must then investigate and issue a credit if necessary." "The agency is taking comments through August 1." #fintech #lending #credit #consumer

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How DSCR is Calculated for SBA 7(a) Loans? If you’re considering an SBA 7(a) loan, understanding how Debt Service Coverage Ratio (DSCR) is calculated can make a big difference in your loan application. DSCR is a key metric that lenders look at to ensure your business generates enough cash flow to cover debt payments comfortably. Here’s how DSCR is calculated: DSCR = Adjusted Net Operating Income (NOI) / Total Debt Service • Adjusted Net Operating Income (NOI): This is your business's EBITDA (earnings before interest, taxes, depreciation, and amortization), but here’s the important part: we also add back certain expenses that don’t reflect ongoing business performance. Common add-backs can include: -Owner’s salary and perks (above reasonable compensation) -Non-recurring expenses (one-time costs like legal fees or relocation expenses) • Total Debt Service: This includes all principal and interest payments on existing and proposed debt. Example: If your business has $250,000 in adjusted NOI (after add-backs) and $200,000 in annual debt payments, your DSCR would be 1.25 ($250,000 / $200,000). What’s a Good DSCR? Lenders usually look for a DSCR of 1.25 or higher for SBA 7(a) loans. This cushion means your business can cover debt and still manage fluctuations in cash flow. If you’d like to understand more about the DSCR calculation, feel free to reach out—I’m here to help! Loans are subject to approval in accordance with SBA eligibility and lending guidelines. #SBA #BusinessLoans #smbbuyers #sba7a #businessbuyer #businessbroker #businessacquisition

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Considering subordinated debt to enhance your #creditunion's growth and stability? At CUCollaborate, we boast a 100% approval rate for #subordinateddebt applications! Our services include: 🔹 Detailed Project Planning 🔹 Strategic Application Completion 🔹 Direct Regulatory Liaison 🔹 Financial Projections & Analysis 🔹 NCUA Compliance & Due Diligence Click below to schedule a meeting with us and learn more! https://lnkd.in/gp4jCjE8 #CreditUnions #FinancialGrowth #FinancialServices #CreditUnionGrowth #RegulatoryCompliance #StrategicPlanning

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If you’re operating an ACH integration, you’ll sometimes receive return requests beyond the allowed window. NACHA rules for late return requests require that you provide the receiving institution with evidence that the debit was authorized by the account holder. At scale, this process can be manual and toilsome. Luckily, we’ve built an API for responding to these requests that can automate this workflow. Learn more at: https://lnkd.in/gEpn23sn 

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Household Debt & Credit Report shows delinquency rates unchanged in Q2 while transitions into delinquency for credit cards & auto loans increasing above pre-pandemic levels, especially for younger and lower income groups. https://lnkd.in/dMiXnXk5

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Now you can prevent failed incoming ACH debits 🛟 This new feature enables your customers to automatically move money from a different account to keep an incoming ACH debit from failing due to insufficient funds. https://lnkd.in/gwb_VbVf 

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"How Many People ACTUALLY Work for FINRA? We're About to Find Out!" So FINRA officially reports about 4,200 employees to supposedly handle just 2,876 broker-dealers! And yet... LinkedIN reports over 6,000 people who claim to CURRENTLY work for FINRA. IKR!? I've already started our https://crowdbuilder.works Robotic Process Automation engine to build a model that maps out their entire employee base and build the analytics necessary to demonstrate that the vast majority of their employees do not have a single faq'ing clue what to actually do on a daily basis and that their business model is a ponzi scheme extracting 80% of their total revenue from about 30 firms in total -- those numbers are according their own data on their own website. That and to surface the number of "cockroaches" who should get fired, retired and become unhireable. After all, "Sunshine is the best disinfectant!" I'm David V Duccini -- I'm smart, incapable of fearing non-governmental purportedly not-for-profit privately held corporations, I report to no one, I have vast resources, and I'm INCREDIBLY pissed off at the moment... It's time to end FINRA's reign of error. #IfNotNowThenWhen #IfNotUsThenWhom #thelittleduke

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In the ever-evolving landscape of finance, the question of whether lenders should be required to serve all industries, regardless of their expertise, is becoming increasingly relevant. Randell Leach, CEO at Beneficial State Bank, puts it succinctly: "Requiring all banks to lend to all industries — no matter their model, expertise, or customer base — doesn’t make business sense. Corporate lending is complex and nuanced. A bank that specializes in residential lending can’t apply that same expertise to financing tar sands refinement." #TLG #TheLoringGroup #CorporateLending #BankingExpertise #FinancialStability #EconomicGrowth #SpecializedBanking #RiskManagement #BankingRegulations #LendingStrategies #FinancialSystem #BankingSector #EconomicPolicy #RandellLeach #BeneficialStateBank #IndustryExpertise Read the full blog on our website: https://lnkd.in/dxPcuVtg

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94% of small businesses have deposit accounts at banks or credit unions, but only 48% use these same institutions for financing. Banks and credit unions have a significant opportunity to expand their SMB lending portfolio and recapture market share. Lendio can help by pre-qualifying and cross-selling your small business depositors with funding products they’re looking for. #Lendio #IntelligentLending #SMB #SmallBusinessLending

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Cash Flow is King when applying for a SBA loan... Lenders prioritize one key factor above all: your ability to repay the loan. While credit scores and collateral are important, cash flow is the most critical indicator. It demonstrates whether your business can comfortably manage monthly loan payments. Consistent and reliable cash flow gives you a significant advantage. Lenders want to see that your revenue not only covers operating expenses but also provides enough margin to repay debt without strain. 🔑 Tip: Before submitting your application, review your financials carefully. Is your cash flow sufficient to support a new loan? If you’re uncertain, consulting with an SBA loan advisor can help you assess your financial position and strengthen your application. Ultimately, cash flow is the foundation of loan approval, and it’s the factor lenders rely on most. #SBAloans #SmallBusinessFinance #CashFlow #USAFunding

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Can Credit Unions Survive the CFPB? When I began my career with credit unions a long time ago there was an active discussion to decide whether credit unions represented a new social movement or only a financial alternative for consumers who were not eligible for bank loans and whose only other option were small loan companies charging 45% interest. Closed fields of membership were strictly observed. Interest rates were capped at 12%. Members were often rewarded with annual dividends as high as 6%. Employers provided office space and payroll deduction as an employee benefit. Thanks to my friend Ed Callahan’s tenure as Administrator of the NCUA, the credit union industry as we know it now was born. Through economic good times and bad credit unions not only survived---but with assets approaching 2 Trillion dollars they have become a major provider of consumer credit in the United States. However, the success and growth of credit unions has had a price, The social contract that existed between members and their credit union has diminished and now credit unions mostly function as lenders for vehicle financing and home equity loans with small limit personal unsecured loans. Today, growing asset size is the most important cu objective. Let’s look ahead. Do you really understand what the CFPB is planning with the new Personal Financial Data Rights rule? Better read up. Some credit unions will be required to comply by April 2026. Most others by April 2030. When implemented I believe many credit unions regardless of asset size will probably be extinct.  What changed? Back then members tried to avoid the predatory lending practices of car dealerships. Today credit unions depend on auto dealers using the same sales practices. Why have we adopted rules and score ranges dictated by auto dealers? Why are credit unions soliciting members to purchase insurance products that cost more than any theoretical savings in interest? Have any members ever been paid a claim for AD&D or any other of the high-cost variety of rip-off insurance products we offer? What are members being charged for “bumper-to-bumper” service contracts posing as warrantees? Why are we still misusing credit scores to grant loans that result in biased and non-inclusive decisions? Have credit unions forgotten how to evaluate risk? AI is a wonderful tool with unlimited positive applications. But loan decisions? No one has proved that AI benefits members yet. Why are credit unions standing in line to buy some unproven process they do not understand? How many applications have you declined this year? What percentage of denials were made to minorities? A solution? Our industry must reestablish the social contract and personal relationship with our members by offering more inclusion and focusing on products that fulfill the real day-to-day needs for members.  Begin 2025 with a critical evaluation of how you are doing business today and seek to become more meaningful to our members again.

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The OCC recommends stressing collateral values on commercial loans. Apply filters to focus on specific concentrations, apply the LTV parameters and stress criteria quickly, and generate professional reports. Customers use the Qualtik software to drill into individual loans with just a click, generate reports for management or your board of directors from multiple perspectives in moments, and quickly generate reports whenever conditions change. Experience the Qualtik difference: www.qualtik.com #loanportfolioanalysissoftware #CREportfoliostresstesting #builtforcommunitybanks #CREportfolioriskmanagement #stresstestingforcommunitybank #commercialloanportfolioanalysis

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