Maine Bureau Proposes New Regulation 28: Lending Limits for State-Chartered Institutions

On October 12, 2012, the Maine Bureau of Financial Institutions issued notice that it has proposed a complete repeal and replacement of Regulation 28: Loans to One Borrower Limitations.  Regulation 28 establishes certain lending limits for Maine-chartered financial institutions.  The purpose of the new Regulation is to establish guidelines for determining credit exposure from derivative transactions in connection with loans.  Derivative transactions can include swaps, loans, options and other financial agreements, and are an important tool in managing the risks underlying financial transactions.  Beginning in January of 2013, the Dodd-Frank Act will prohibit state-charted financial institutions from engaging in derivative transactions unless state law requires them to identify and manage credit risks associated with derivative transactions.  The proposed Regulation 28 implements various methods for financial institutions to use in considering these risks, adopting a number of methodologies used in the OCC’s new interim final rule for national banks.

The Bureau anticipates that it may amend the proposed Regulation 28 before it becomes final, to incorporate future amendments to the OCC’s rule.  The deadline for public comment on the new regulation is November 19, 2012.

Jim Cohen Gives Presentation on Fair Lending at MBA Bank Expo 2012

On Wednesday, April 11, Jim Cohen, along with Andrea Shaw, Esq., from TD Bank, presented "Fair Lending Hot Topics" to a group of attendees atthe Maine Bankers Association's Bank Expo 2012.  The presentation focused largely on disparate impact discrimination in lending practices. It was one of 18 educational sessions offered at the event.  Click here for a copy of the presentation materials.

Maine financial institutions, in the news . . .

• Julie Case and Brian Cirone to join Gorham Savings Bank.
• Maine Housing continues to be in limelight regarding affordable housing costs.
• Bangor Savings recognized by Small Business Administration for lending.

Maine Bureau of Financial Institutions Updates Bulletin #8

On November 1, 2011, the Maine Bureau of Financial Institutions published a revision to Bulletin #8.  The primary purpose of the revision was to update the list of staff at the Maine Bureau of Financial Institutions.  More generally, the bulletin reminds supervised financial institutions extending credit to BFI professional personnel and examiners or their family members that such loans must be disclosed to the Superintendent (or the Department of Professional and Financial Regulation in the case of a loan to the Superintendent).  The bulletin also reminds financial institutions that, under federal law, extensions of credit to examiners are prohibited in certain instances, and otherwise must be on terms generally available to other borrowers.

FHFA Announces Modification to Home Affordable Refinance Program

On October 24, the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, announced changes to the Home Affordable Refinance Program.  The program was originally introduced two years ago to help homeowners struggling with their mortgage payments, but the program failed to help as many homeowners as predicted.  According to the FHFA announcement, the modified HARP program will include lower fees and closing costs to better enable consumers to refinance their homes.  More detailed guidance on the program is expected by November 15, but the FHFA noted that the availability of the program will depend on individual lenders since the program is not mandatory.