UNDER THE MICROSCOPE

Register now

No Surprise: Dodd-Frank Is Biggest Compliance Concern

LAGUNA HILLS, Calif.-The Dodd-Frank Act ranks as the greatest mortgage compliance concern in 2011, according to QuestSoft's third annual compliance survey of lenders.

The series of laws passed last year replace the Real Estate Settlement Procedures Act (RESPA) as the highest concern, which topped the list the previous two years.

The survey polled 405 lenders on their level of concern for regulatory changes affecting the mortgage industry in 2011. Seventy percent of lenders responded to the implementation of new regulations under Dodd-Frank as the most significant compliance concern. Rounding out the top 3 identified concerns were RESPA fee-tolerance rules (50% cited major concern) and other RESPA issues (46%).

"It was no surprise to see Dodd-Frank changes as the highest ranking compliance concern among lenders, since the changes will significantly impact lenders of all sizes and the associated rules are being announced right now," said Leonard Ryan, president of QuestSoft. "It also is interesting to see that even a year after the RESPA's major overhaul; lenders are still concerned with how to comply with fee tolerance rules and other RESPA-related loan disclosure issues."

Loan officer compensation, which officially became active in April, and SAFE Act changes, both tied as the fourth highest concern, with 40% of lenders citing these regulations as a major concern. Though loan officer compensation received fewer medium concern percentage points, it placed fourth due to more survey participants indicating they were subject to the ruling.

Concern for the multi-state exams that many lenders will face this year remained at the bottom of the list for the second consecutive year, with only 19% of respondents citing them as a major concern.

For info: www.questsoft.com

Per Capita Domestic Deposits Up Sharply In Last Decade

SAN ANSELMO, Calif.-Per capita domestic deposits in FDIC-insured institutions nearly doubled in the last 20 years, according to new analysis from Market Rates Insight.

From 1990 to 2010, per capita domestic deposits increased from $13,274 to $25,479-an increase of $12,205 per capita or 92%. However, most of the growth in per capita domestic deposits occurred in the last decade.

In 1990, per capita domestic deposits stood at $13,274, and by the end of that decade domestic deposits increased to $14,975 per capita-an increase of 12.8%. During the same decade (1990s), the population of the United States grew by 13.2%, to 281 million from 246 million.

During the decade of the 2000s, per capita domestic deposits increased from $14,975 in the beginning of the decade to $25,479 at the end of the decade-an increase of $10,504 or 70.1%. During the last decade, the rate of deposit growth far exceeded the rate of population growth. In the year 2000, the U.S. population stood at 281 million and by 2010, it grew to 309 million-an increase of 28 million or 9.7%.

"It is impossible to tell from the available data whether the increase in per capita deposits is because more consumers are saving, or some consumers are saving more," said Dan Geller, Ph.D., EVP at Market Rates Insight. "The only way to answer this question is by comparing the number of deposit-account holders, which is proprietary information of each financial institution."

For more information on the report: www.marketratesinsight.com

Data From Equifax Indicate Widespread Credit Growth

ATLANTA-Multiple portfolio metrics indicate the U.S. credit market is stabilizing and is growing, according to Equifax's monthly National Credit Trends Report for March 2011.

The most recent trend data indicates sustained new credit growth is underway within a number of markets, with year-over-year increases in the number of auto (23% increase), bankcard (14% increase), consumer finance (5% increase), and home equity (9% increase) loans.

According the report issued monthly by Equifax, consumers continue to more consistently pay credit bills on time, while simultaneously paying down existing debt, resulting in an increase in the average credit risk score nationally.

Although credit available today represents about half of pre-recession levels in 2006, it is steadily increasing, with 2010 levels exceeding 2009 and that trend is expected to continue for this year (2011 month-to-date new credit is $51 billion versus 2010 year-to-date new credit of $45 billion -an increase of more than 13%).

The report also found that the average loan amounts in auto financing that were generated through captive finance companies was up 88% compared with 2009 levels.

For more information on the report: www.equifax.com.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER