How Recent Headlines Impact Business & Banking
During its June meeting, the Fed announced it will not yet raise interest rates, citing that the economy has not improved rapidly enough to warrant an increase. Spending by households and the housing market in general showed some improvement, but business fixed investments and exports were “soft,” and inflation was running below targets. While a rate increase is expected by the end of the year, it will be likely be a modest 0.25% or so – barring a reversal in economic conditions – and will have minimal impact on business as we move into 2016.
The Supreme Court issued their opinion that Affordable Care Act premium subsidies are valid even in states that did not set up their own insurance exchanges. This means qualifying citizens in states that did not establish their own exchanges also can receive subsidies in the form of a tax credit. Despite numerous challenges and votes, the law seems to be sitting solidly in place and will likely remain until the administration changes. Significant disagreement about the law persists – even among the healthcare community – but the latest ruling was a big win for the current administration.
Many of you may be familiar with the Dodd-Frank Act’s requirement to combine the necessary Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures into one set of Integrated Disclosures. Many bankers now refer to these new rules as TRID. That’s a lot of acronyms, but the rules essentially require system and documentation changes for residential mortgage disclosures. Once they take effect, lenders must provide disclosures with additional information specific to each transaction in a new format. These changes make it much more complicated for banks to produce the mandatory disclosures and require significant system changes. The August 1 deadline was fast approaching, and banks were begging and pleading for an extension. The Consumer Financial Protection Bureau recently delayed TRID compliance to October 3 but – ironically – only because they failed to meet filing deadlines to put the compliance regulation into effect.
Last, but certainly not least, is some exciting news for Bank SNB and our customers. We have announced an agreement to acquire the parent of First Commercial Bank. This merger, which is expected to be complete early in the fourth quarter, enhances our presence in Oklahoma City with five additional branches and expands our footprint into Colorado with branches in Denver and Colorado Springs. It will broaden our service and product capacity as well, ultimately providing better and more convenient service to our customers. It’s an exciting time.
On the Mark was written by Bank SNB President and CEO Mark Funke.