Independent Banker - January 2022 - 29

Lending regulatory issues to watch in 2022
Lenders looking to stay on the right side of regulators will want to
keep an eye on two issues that could create hurdles.
One issue on the mortgage servicing side is that bankers must
ensure they are doing whatever they can to help people stay in
their homes to minimize foreclosures. " I believe that the CFPB
[Consumer Financial Protection Bureau] is going to be pretty
aggressive in looking at foreclosures, " says Ron Haynie, ICBA
senior vice president of mortgage finance policy. " The banking
regulators also are going to be very focused on how consumers
are being treated as they try to exit the forbearance process and
return to making regular payments. "
A second issue is new leadership at the CFPB. " I think [the
new leader is] going to be aggressive in terms of enforcement
actions, " Haynie adds. " So, that will be something to watch out
for as well. "
Another change taking shape in 2022 is the Section 1071
rule for small-business lending data collection and reporting,
often referred to as Small Business HMDA. The CFPB will likely
finalize that rule over the next year and implement it in 2023 or
2024. Section 1071 could create some new headwinds for small
business lending because of the data collection and reporting
process that banks will have to engage in.
80
For example, commercial lending
remained strong throughout the
pandemic at $1.1 billion-asset
Marquette Savings Bank in Erie, Pa.
In 2020, the community bank did just
as much commercial and industrial
(C&I) lending as it did in 2019, and
its C&I lending hit its highest annual
production volume ever year-to-date
through July 2021.
Although some business customers
had to work hard to keep their doors
open during the pandemic, others
have done really well, notes John C.
Dill, executive vice president and chief
lending officer at Marquette Savings
Bank. Some of the bank's clients saw
the pandemic as an opportunity to
innovate or improve their businesses,
such as by adding greater capacity or
developing new products.
" My expectation is that our C&I loan
volume will continue to remain strong
in 2022, " Dill says. As the community
bank has grown, it is doing modestly
larger C&I loans, which is helping to
grow its overall volume.
Other community banks,
however, saw flat or even negative
loan origination volume in 2021.
Heartland State Bank in Redfield,
S.D., is predominantly an ag lender
that serves customers in northeastern
and north central South Dakota. The
$110 million-asset bank's ag lending
dipped in this past year by about 5%
as farmers took advantage of PPP
loans and other government stimulus
money that was available.
" We're hoping for a flat year from
%
2x
in loan portfolios
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Independent Banker - January 2022

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