2019 Journal of Community Bank Case Studies

Eastern Kentucky University

SECOND PLACE:

community banks, the adjustment of TRID to not require a delayed closing if the APR was reduced helps prevent certain closing delays, which Kentucky Bank finds important and relevant in today’s economy. The updated Closing Disclosure document for TRID that replaced the Truth in Lending Disclosure and HUD-1 was designed to help consumers and borrowers understand all of the total costs that are associated with their mortgage loan (What is a Closing Cost). These requirements applied to most closed-end consumer credit transactions that were secured by real property. Although some loan categories are exempt from the TILA-RESPA rule such as HELOCs, reverse mortgages or mortgages that are not secured by real property, the rule does still apply for certain trusts for tax and/or estate planning purposes. Part IV: Looking Forward Kentucky Bank has reported that EGRRCPA provisions will allow the bank to reduce regulatory burden, expense and provide better customer service. We asked the management team to provide suggestions for future bank legislation reform. In addition to Kentucky Bank’s suggestions for future reform, we include proposals suggested by our research conducted for this project. Kentucky Bank suggested CRA requirements for peer groups be evaluated. Currently, Kentucky Bank is approaching an asset size that will soon surpass $1.3 Billion. Under existing guidelines they will soon be in the same peer group as Bank of America, an institution with over $2 Trillion in assets. This distinction

Kentucky Bank also suggests that Bank Secrecy Act reporting thresholds be reconsidered.

suggests that any action taken by Kentucky Bank could potentially affect the market with the same magnitude as a similar action from Bank of America, resulting in an inaccurate risk assessment. Kentucky Bank also suggests that Bank Secrecy Act reporting thresholds be reconsidered. In the 1970’s, the mandatory minimum amount reported to curb illegal activities financed through banks was established at $5,000. According to the US Bureau of Labor Statistics an amount of $5,000 in 1975 would be equivalent to approximately $24,400 in 2019 (CPI Inflation Calculator). Kentucky Bank states that adjusting mandatory reporting amounts would allow them to serve customers more efficiently as customers routinely process transactions exceeding $5,000. Credit and debit card security was also an important topic for Kentucky Bank. Specifically, they suggested Regulation E and PCI could be overhauled to place increased responsibility

39