Fall Regulatory Summit

Internal Use Only

Fall Regulatory Summit

September 25-27, 2023 Denver, CO

@ www.csbs.org ו @csbsnews

CONFERENCE OF STATE BANK SUPERVISORS 1300 I Street NW / Suite 700 / Washington, DC 20005 / (202) 296-2840

CSBS Fall Regulatory Summit September 25-27, 2023 | All Times Mountain Time Sheraton Denver Downtown

Monday, September 25 1:00 – 4:45 p.m.

Fall Regulatory Summit | Majestic Ballroom

Opening/Welcome Remarks Lise Kruse CSBS Chair & Commissioner North Dakota Department of Financial Institutions Sebastien Monnet

1:00 – 1:15 p.m.

Vice President, Learning & Development Conference of State Bank Supervisors

U.S. Economic Outlook Dr. Roger Tutterow Henssler Financial Endowed Chair & Professor of Economics Kennesaw State University

1:15 – 2:15 p.m.

Break

2:15 – 2:30 p.m.

Bank and Non-Bank Regulatory Policy and Legislative Update Dana Barbieri Vice President, Legislative Affairs Conference of State Bank Supervisors Nathan Ross Vice President, Policy Conference of State Bank Supervisors Tony Vasile Vice President, Non-Bank Supervision and Enforcement Conference of State Bank Supervisors

2:30 – 3:30 p.m.

Break

3:30 – 3:45 p.m.

Latest Developments in the Real Estate Appraisal Field James R. Park Executive Director Appraisal Subcommittee

3:45 – 4:45 p.m.

Networking Reception | Parlur, Street Level

5:30 – 7:30 p.m.

Tuesday, September 26 7:30 – 8:30 a.m.

Breakfast | Majestic Foyer

Legal Track Ethics: How Attorneys Use A.I. The Right Way | Vail Dr. Bruce Weinstein President & CEO The Ethics Guy LLC Supervision Track Supervisory Processes & Examination | Majestic Ballroom Mary Beth Quist Legal Track Ethics and Professional Responsibility in a Complex and Fast-Changing World | Vail Dr. Bruce Weinstein President & CEO The Ethics Guy LLC Supervision Track Bank Investment Portfolio Strategies in a Challenging Rate Environment | Majestic Ballroom Christopher J. Nelson President Bond Investment Mentor LLC Senior Vice President, Bank Supervision Conference of State Bank Supervisors Break

8:30 – 9:30 a.m.

9:30 – 9:45 a.m.

9:45 – 10:45 a.m.

Break

10:45 – 11:00 a.m.

Legal Track Implementation of Model Laws in the Non-Bank Space | Vail Marcus Adams Deputy General Counsel Texas Department of Banking Bo Fears Deputy Commissioner for Consumer and Legal Affairs Georgia Department of Banking and Finance Mark Hastie Director of Non-Depository Financial Institutions Minnesota Department of Commerce Mary Pfaff

11:00 a.m. – 12:00 p.m.

Senior Director, State Legislative Analysis Conference of State Bank Supervisors Supervision Track Funding and Liquidity Solutions for Community and Regional Banks | Majestic Ballroom Beth Pile Chief Risk Officer IntraFi Network LLC Diane Ellis Senior Managing Director IntraFi Network LLC

Lunch and District Conversations District I Lunch | Columbine, Terrace Level District II Lunch | Terrace, Terrace Level District III Lunch | Majestic Foyer District IV Lunch | Vail District V Lunch | Majestic Ballroom

12:00 – 2:00 p.m.

Resolution Readiness Refresher | Majestic Ballroom Varanessa Marshall Assistant Director, Monitoring & Risk Analysis, Division of Resolutions & Receiverships Federal Deposit Insurance Corporation

2:00 – 3:00 p.m.

Break & Networking

3:00 – 3:30 p.m.

Legal Track NMLS Policy Update | Vail Janine Bjorn

3:30 – 4:30 p.m.

Senior Director, NMLS Business Services Conference of State Bank Supervisors Lisa Tinsley Director, NMLS Business Services Conference of State Bank Supervisors Supervision Track Federal Regulators Panel | Majestic Ballroom Kristie Elmquist Regional Director, Division of Risk Management Supervision (Dallas) Federal Deposit Insurance Corporation Tara Humston Senior Vice President, Supervision and Risk Management Federal Reserve Bank of Kansas City

Wednesday, September 27 7:30 – 9:00 a.m.

Breakfast | Majestic Foyer

Leveraging A.I. to Democratize Lending | Majestic Ballroom Eric Lapin President FormFree

9:00 – 10:00 a.m.

Break

10:00 – 10:15 a.m.

Dialogue with FinCEN Dennis Kihm Section Chief Financial Crimes Enforcement Network

10:15 – 11:15 a.m.

District Conversations Debrief, Open Forum, and Closing Remarks Sebastien Monnet

11:15 a.m. – 12:00 p.m.

Vice President, Learning & Development Conference of State Bank Supervisors Mary Beth Quist Senior Vice President, Bank Supervision Conference of State Bank Supervisors

September 25-27, 2023 Fall Regulatory Summit Denver, CO

ATTENDEES Alaska Division of Banking and Securities Hannasch, Dawn

dawn.hannasch@alaska.gov

Arizona Department of Insurance and Financial Institutions Foster, Shane

shane.foster@difi.az.gov

Arkansas State Bank Department Ahlen, John

jahlen@banking.state.ar.us eroberts@banking.state.ar.us

Roberts, Eric

California Department of Financial Protection and Innovation Lok, Sukyee

Sukyee.Lok@dfpi.ca.gov Avy.Mallik@dfpi.ca.gov

Mallik, Avy

Nahnsen-Robison, Catherine

Catherine.Nahnsen-Robison@dfpi.ca.gov

Prosperi, Aaron

Aaron.Prosperi@dfpi.ca.gov Greg.Young@dfpi.ca.gov

Young, Greg

Colorado Division of Banking Hunter, Kara

kara.hunter@state.co.us mary.stanfield@state.co.us

Stanfield, Mary

Connecticut Department of Banking Ahern, Hannah

Hannah.Ahern@ct.gov joseph.chambers@ct.gov

Chambers, Joseph

Delaware Office of the State Bank Commissioner Garey, Carrie

carrie.garey@delaware.gov christopherL.Hall@delaware.gov

Hall, Christopher

District of Columbia Department of Insurance, Securities and Banking Fuller, Samuel

samuel.fuller@dc.gov

Florida Office of Financial Regulation Smith, Jeremy

Jeremy.Smith@flofr.gov

Georgia Department of Banking and Finance Ensminger, Heather

hensminger@dbf.state.ga.us bfears@dbf.state.ga.us msneed@dbf.state.ga.us

Fears, Oscar Sneed, Melissa

Hawaii Division of Financial Institutions Murphy, Tara

tmurphy@dcca.hawaii.gov james.c.paige@hawaii.gov

Paige, James

Idaho Department of Finance Messerly, Loren

loren.messerly@finance.idaho.gov

Illinois Department of Financial & Professional Regulation Hines-Shah, Jay

Jayesh.Hines-Shah@illinois.gov susana.soriano@illinois.gov

Soriano, Susana

Indiana Department of Financial Institutions Bray, Miranda

Mbray2@dfi.in.gov NBuskill@dfi.in.gov

Buskill, Nicole

Dremonas, George Thompson, John D.

GDremonas1@dfi.in.gov DThompson@dfi.in.gov

Iowa Division of Banking Bergmann, Tracy

Tracy.Bergmann@idob.state.ia.us shauna.shields@idob.state.ia.us

Shields, Shauna

Kansas Office of the State Bank Commissioner Hass, James

James.Hass@osbckansas.org amory.lovin@osbckansas.org Pratik.Patel@osbckansas.org

Lovin, Amory Patel, Pratik

Kentucky Department of Financial Institutions Gibson, Marni Louisiana Office of Financial Institutions Finley, Jonathan Maine Bureau of Financial Institutions Barr, John Maryland Office of Financial Regulation Krach, Ken

marni.gibson@ky.gov

jfinley@ofi.la.gov

john.a.barr@maine.gov

kenneth.krach@maryland.gov

Michigan Department of Insurance and Financial Services Husa, Elizabeth

husae@michigan.gov WestrinJ1@michigan.gov

Westrin, James

Minnesota Department of Commerce Hastie, Mark

mark.hastie@state.mn.us

Henderson, Timothy Waldsmayate, Henok

timothy.henderson@state.mn.us henok.waldsmayate@state.mn.us

Mississippi Department of Banking & Consumer Finance Garrard, Mike

mike.garrard@dbcf.ms.gov stephanie.rogers@dbcf.ms.gov perryanne.thimmes@dbcf.ms.gov bridgette.wiggins@dbcf.ms.gov

Rogers, Stephanie Thimmes, Perry Anne Wiggins, Bridgette

Missouri Division of Finance Gallaher, Jamie

James.Gallaher@dof.mo.gov Bart.Stanley@dof.mo.gov

Stanley, Bart

Montana Division of Banking and Financial Institutions O'Sullivan, Kelly

kosullivan@mt.gov

Nebraska Department of Banking and Finance Bailar, Darcy

darcy.bailar@nebraska.gov william.lawrence@nebraska.gov

Lawrence, William

Nevada Financial Institutions Division Young, Mary

mmyoung@fid.state.nv.us

New Hampshire State Banking Department Lamberti, Robert

robert.j.lamberti@banking.nh.gov seth.m.zoracki@banking.nh.gov

Zoracki, Seth

New Mexico Financial Institutions Division Moore, Rebecca

Maya.Otero@state.nm.us

New York State Department of Financial Services Krafft, Nick

nick.krafft@dfs.ny.gov

McMahon, Terry Wuttke, Denise

terry.mcmahon@dfs.ny.gov denise.wu Ʃ ke@dfs.ny.gov

North Carolina Office of Commissioner of Banks Crowder, James

jcrowder@nccob.gov

Rice, Kristin

krice@nccob.gov

St. Andrews, Eugene

estandrews@nccob.gov rstewart@nccob.gov sthomas@nccob.gov

Stewart, Richard Thomas, Sidney

North Dakota Department of Financial Institutions DePountis, Constantinos

ddepountis@nd.gov

Kruse, Lise Spah, Ryan

lkruse@nd.gov rrspah@nd.gov

Ohio Division of Financial Institutions Coady, John

john.coady@com.ohio.gov

Green, Matthew

matthew.green@com.ohio.gov

Prude-Smithers, Pamela

pamela.prude-smithers@com.ohio.gov

Oklahoma State Banking Department Gilbert, Dudley Oregon Division of Financial Regulation Anderson, Kirsten

dudley.gilbert@banking.ok.gov

kirsten.l.anderson@dcbs.oregon.gov alex.cheng@dcbs.oregon.gov stephen.gordon@dcbs.oregon.gov

Cheng, Alexander Gordon, Stephen

South Dakota Division of Banking Dummer, Michael

michael.dummer@state.sd.us drew.haack@state.sd.us Brock.Jensen@state.sd.us jordan.labrie@state.sd.us

Haack, Drew Jensen, Brock LaBrie, Jordan

Tennessee Department of Financial Institutions Branch, Sarah

Sarah.Branch@tn.gov Daniel.Espensen@tn.gov Rachel.Gatlin@tn.gov Mark.Kilpatrick@tn.gov Troy.McPeak@tn.gov

Espensen, Daniel Gatlin, Rachel Kilpatrick, Mark McPeak, Troy

Rogers, Eric Staley, Todd

Eric.Rogers@tn.gov Todd.Staley@tn.gov

Texas Department of Banking Adams, Marcus

marcus.adams@dob.texas.gov tony.adekoya@dob.texas.gov

Adekoya, Tony

Lena, Phil

phil.lena@dob.texas.gov

Rodriguez, Wendy Sebade, Marilyn

wendy.rodriguez@dob.texas.gov marilyn.sebade@dob.texas.gov

Texas Department of Savings & Mortgage Lending Berry, Iain

iberry@sml.texas.gov

Vermont Department of Financial Regulation Sherman, Diane

diane.sherman@vermont.gov

Washington Department of Financial Institutions Bouton, Drew

drew.bouton@dfi.wa.gov jeanju.choi@dfi.wa.gov matthew.harvey@dfi.wa.gov Catherine.mele@dfi.wa.gov rick.st.onge@d Į .wa.gov deborah.taellious@dfi.wa.gov

Choi, Jeanju Harvey, Matt

Mele, Catherine St. Onge, Rick Taellious, Deborah

Tushar, Shannon

Shannon.Tushar@dfi.wa.gov

West Virginia Division of Financial Institutions Lawson, Kathy Wisconsin Department of Financial Institutions Michels, Tara

klawson@wvdob.org

Tara.Michels@dfi.wisconsin.gov

Wyoming Division of Banking Floyd, Tyson

tyson.floyd@wyo.gov cole.vizina@wyo.gov

Vizina, Cole

SPEAKERS Appraisal Subcommittee Park, James Bond Investment Mentor LLC Nelson, Chris

jim@asc.gov

chris@bondinvestmentmentor.com

Federal Deposit Insurance Corporation Elmquist, Kristie

kelmquist@fdic.gov vamarshall@FDIC.gov

Marshall, Varanessa

Federal Reserve Bank of Kansas City Humston, Tara

tara.l.humston@kc.frb.org

Financial Crimes Enforcement Network Kihm, Dennis

Dennis.Kihm@fincen.gov

FormFree Lapin, Eric

elapin@formfree.com

IntraFi Network LLC Ellis, Diane

Dellis@intrafi.com bpile@intrafi.com

Pile, Beth

Kennesaw State University Tutterow, Roger

rtuttero@kennesaw.edu

The Ethics Guy LLC Weinstein, Bruce CSBS STAFF Azizzada, Ghazal Barbieri, Dana

bruce@theethicsguy.com

gazizzada@csbs.org dbarbieri@csbs.org jbjorn@csbs.org

Bjorn, Janine

Comber, Matt Dockter, Lauren Lambert, Matthew

mcomber@csbs.org ldockter@csbs.org mlambert@csbs.org rmadison@csbs.org smonnet@csbs.org mpfaff@csbs.org mbquist@csbs.org nross@csbs.org ltinsley@csbs.org tvasile@csbs.org

Madison, Rich

Monnet, Sebastien

Pfaff, Mary

Quist, Mary Beth

Ross, Nathan Tinsley, Lisa Vasile, Tony

Internal Use Only

On the Economic, Business & Political Landscape

Roger Tutterow, Ph.D. Coles College of Business Kennesaw State University rtuttero@kennesaw.edu CSBS Fall Regulatory Summit September 25, 2023 Denver, CO

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Topic #1:

After 10 years of growth, COVID-19 sidelined the economy . . . what parts of the “new normal” will remain . . . And where do we stand on the “R word”?

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Tale of 4 Recessions

-9.0% -8.0% -7.0% -6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0%

1990 2001 2008 2020

-11.0% -10.0%

Peak

Q1

Q2

Q3

Q4

Q5

Q6

(Source: Bureau of Economic Analysis )

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Contributions to GDP Growth (source: Bureau of Economic Analysis)

GDP = 7.00% 2.70% 7.00% -1.60% -0.60% 3.20% 2.60% 2.00% 2.10%

Consumption

Gross Investment

Government Net Exports

2021: Q2 2021: Q3 2021: Q4 2022: Q1 2022: Q2 2022: Q3 2022: Q4 2023: Q1 2023: Q2 2021: Q2 2021: Q3 2021: Q4 2022: Q1 2022: Q2 2022: Q3 2022: Q4 2023: Q1 2023: Q2

7.84% 1.98% 2.14% 0.91% 1.38% 1.54% 0.70% 2.79% 1.14%

0.30% 1.78% 5.14% 0.98% -2.83% -1.80% 0.79% -2.22% 0.57%

-0.60% -1.08% -0.16% -3.13% 1.16% 2.86% 0.42% 0.58% -0.22%

-0.54% -0.02% -0.16% -0.40% -0.29% 0.65% 0.65% 0.85% 0.58%

Gross Investment

Nonresidential

Residential

Inventory

0.3%

1.29% 0.10% 0.17% 0.98% 0.01% 0.80% 0.52% 0.08% 0.80%

-0.24% -0.29% -0.05% -0.15% -0.93% -1.42% -1.20% -0.16% -0.14%

-0.75% 1.96% 5.01% 0.15% -1.91% -1.19% 1.47% -2.14% -0.09%

1.78% 5.14% 0.98% -2.83% -1.80% 0.79% -2.22% 0.57%

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Industrial Production: From Peak By Component (source: Federal Reserve)

-30% -25% -20% -15% -10% -5% 0% 5% 10%

MFG

Mining

Util

Feb-20

Feb-21

Feb-22

Feb-23

Aug-20

Aug-21

Aug-22

Nov-20

Nov-21

Nov-22

May-20

May-21

May-22

May-23

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Industrial Production: From Peak (source: Federal Reserve)

5%

0%

-5%

-10%

Man

Durab

-15%

Non-Durab

-20%

-25%

-30%

Feb-20

Feb-21

Feb-22

Feb-23

Aug-20

Aug-21

Aug-22

Nov-20

Nov-21

Nov-22

May-20

May-21

May-22

May-23

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Consumer Sentiment (source: University of Michigan, Survey Research Center)

100 105 110 115 120

50 55 60 65 70 75 80 85 90 95

Jul-99

Jul-02

Jul-05

Jul-08

Jul-11

Jul-14

Jul-17

Jul-20

Jul-23

Oct-98

Oct-01

Oct-04

Oct-07

Oct-10

Oct-13

Oct-16

Oct-19

Oct-22

Jan-98

Apr-00

Jan-01

Apr-03

Jan-04

Apr-06

Jan-07

Apr-09

Jan-10

Apr-12

Jan-13

Apr-15

Jan-16

Apr-18

Jan-19

Apr-21

Jan-22

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Retail Sales (source: U.S. Bureau of the Census, annual rate of growth)

10% 15% 20% 25% 30% 35% 40% 45% 50% 55%

RS Total RS ex-auto RS ex auto & gas

0% 5%

-20% -15% -10% -5%

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Auto & Light Truck Sales

10 12 14 16

Autos Light Trucks

2 4 6 8

Jul-03

Jul-10

Jul-17

Oct-01

Oct-08

Oct-15

Oct-22

Apr-05

Apr-12

Apr-19

Jan-00

Jan-07

Jan-14

Jan-21

Mar-01

Feb-04

Jun-06

Mar-08

Feb-11

Jun-13

Mar-15

Feb-18

Jun-20

Mar-22

Sep-04

Sep-11

Sep-18

Dec-02

Dec-09

Dec-16

Nov-05

Nov-12

Nov-19

Aug-00

May-02

Aug-07

May-09

Aug-14

May-16

Aug-21

May-23

(Source: Department of Commerce, in millions)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Leading Economic Indicators (source: Conference Board, 6 month change)

12% 15%

0% 3% 6% 9%

-9% -6% -3%

-15% -12%

Jul-04

Jul-05

Jul-06

Jul-07

Jul-08

Jul-09

Jul-10

Jul-11

Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22

Jul-23

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Topic #2:

1 st major challenge – supply chain imbalances

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Freight: Shipments & Rate (source: Cass Freight Index, Seasonally Adjusted)

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

1.40

1.30

1.20

1.10

1.00

Shipments Rates

0.90

0.80

Jul-20

Jul-21

Jul-22

Jul-23

Jan-20

Jan-21

Jan-22

Jan-23

Oct-20

Oct-21

Oct-22

Apr-20

Apr-21

Apr-22

Apr-23

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Global Supply Chain Pressure (Source: Federal Reserve Bank of New York)

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

-2.5 -2.0 -1.5 -1.0 -0.5

Jul-19

Jul-20

Jul-21

Jul-22

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23

Mar-19

Mar-20

Mar-21

Mar-22

Mar-23

Sep-19

Sep-20

Sep-21

Sep-22

Nov-19

Nov-20

Nov-21

Nov-22

May-19

May-20

May-21

May-22

May-23

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Topic #3:

2 nd major challenge – tight labor markets!

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Change in Payroll Employment

200 400 600 800

-1000 -800 -600 -400 -200 0

Jul-05

Jul-16

Jan-00

Jan-11

Oct-02

Sep-03

Jun-06

Oct-13

Sep-14

Jun-17

Feb-10

Apr-08

Apr-19

Dec-00

Dec-11

Aug-04

Aug-15

Mar-09

Nov-01

Nov-12

May-07

May-18

(Source: Bureau of Labor Statistics, in thousands)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Change in Payroll Employment

10000

5000

0

-5000

-10000

-15000

-20000

-25000

Jul-19

Jul-06

Jan-13

Jan-00

Jun-18

Sep-21

Jun-05

Sep-08

Oct-09

Feb-14

Feb-01

Apr-16

Apr-03

Dec-11

Aug-20

Aug-07

Mar-15

Mar-02

Nov-10

May-17

May-04

(Source: Bureau of Labor Statistics)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Employment Below Peak

0% 2% 4%

-8% -6% -4% -2%

-16% -14% -12% -10%

Jul-23

Jul-22

Jul-21

Jul-20

Jan-23

Jan-22

Jan-21

Jan-20

Sep-22

Sep-21

Sep-20

Mar-23

Mar-22

Mar-21

Mar-20

Nov-22

Nov-21

Nov-20

Nov-19

May-23

May-22

May-21

May-20

(Source: Bureau of Labor Statistics)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Payrolls Growth (annualized 3-month growth rate)

7%

6%

5%

4%

3%

2%

1%

0%

Jul-23

Jul-22

Jul-21

Jan-23

Jan-22

Jun-23

Jun-22

Sep-22

Oct-22

Sep-21

Oct-21

Feb-23

Feb-22

Apr-23

Apr-22

Dec-22

Dec-21

Aug-23

Aug-22

Mar-23

Aug-21

Mar-22

Nov-22

Nov-21

May-23

May-22

(Source: Bureau of Labor Statistics)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Employment (Source: Bureau of Labor Statistics)

-50% -45% -40% -35% -30% -25% -20% -15% -10% -5% 0% 5% 10%

Mining Manuf

Const

T T & Util

Info

Fin

Prof & Biz Ser Leis & Hosp

Educ & HC Other Serv

Govt

Jun-22

Jun-21

Jun-20

Oct-22

Oct-21

Oct-20

Feb-23

Feb-22

Feb-21

Feb-20

Apr-23

Apr-22

Apr-21

Apr-20

Dec-22

Dec-21

Dec-20

Aug-22

Aug-21

Aug-20

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Recovery from Bottom (Source: Bureau of Labor Statistics)

115%

110%

105%

100%

95%

90%

85%

Utah

Ohio

Iowa

Idaho

Texas

Maine

Michigan Alaska

Illinois

Mississippi Kansas

Florida

Hawaii

Oregon

Nevada

Indiana

Tennessee Arizona

Georgia

Virginia

Vermont

Missouri

South Dakota Washington Alabama

Montana

Arkansas

Nebraska

Colorado

Kentucky

North Dakota Maryland

Delaware

Wyoming

Louisiana

California

New York

New Mexico Oklahoma

Massachusetts Wisconsin

Minnesota

New Jersey

Connecticut

Rhode Island

Pennsylvania

West Virginia

District of Col

South Carolina

North Carolina

New Hampshire

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Payroll Employment: “But For” Pandemic (source: Bureau of Labor Statistics, in thousand of jobs)

120000 125000 130000 135000 140000 145000 150000 155000 160000 165000

Actual But For

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23

Sep-18

Sep-19

Sep-20

Sep-21

Sep-22

May-18

May-19

May-20

May-21

May-22

May-23

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Labor Force Participation (Source: Bureau of Labor Statistics)

68

67

66

65

64

63

62

61

60

Jul-97

Jul-02

Jul-07

Jul-12

Jul-17

Jul-22

Jan-95

Jan-00

Jan-05

Jan-10

Jan-15

Jan-20

Sep-96

Sep-01

Sep-06

Sep-11

Sep-16

Sep-21

Mar-99

Mar-04

Mar-09

Mar-14

Mar-19

Nov-95

Nov-00

Nov-05

Nov-10

Nov-15

Nov-20

May-98

May-03

May-08

May-13

May-18

May-23

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

JOLTS: Openings

10000 11000 12000

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

Jul-02

Jul-05

Jul-08

Jul-11

Jul-14

Jul-17

Jul-20

Jul-23

Jan-01

Jan-04

Jan-07

Jan-10

Jan-13

Jan-16

Jan-19

Jan-22

Oct-01

Oct-04

Oct-07

Oct-10

Oct-13

Oct-16

Oct-19

Oct-22

Apr-03

Apr-06

Apr-09

Apr-12

Apr-15

Apr-18

Apr-21

(Source: Bureau of Labor Statistics)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Topic #4:

3 rd major challenge – inflation returns!

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Inflation: Transitory or Persistent? (source: Bureau of Labor Statistics)

• CPI by 0.6% in August – after being up 0.2% and 0.2% in July and June. Overall CPI up 3.7% over last 12 months. • Core CPI up 0.3% in August – after being up by 0.2% and 0.2% in July and June. Core up 4.3% over same period. • Energy component rose by 5.6% in August. The energy component is down 3.5% over the last 12 months. • Food component rose by 0.2% in August. The energy component is up 4.3% over the last 12 months. • PCE up 3.3% for 12 months ending in July, core PCE up 4.2% over the same period.

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Energy Cost: Oil & Natural Gas

$10.00 $12.00 $14.00 $16.00

$140

WTI

$120

Gas HH

$100

$- $2.00 $4.00 $6.00 $8.00

$80

$60

$40

$20

Jul-07

Jul-14

Jul-21

Jan-04

Jan-11

Jan-18

Sep-08

Sep-15

Sep-22

Mar-05

Mar-12

Mar-19

Nov-09

Nov-16

May-06

May-13

May-20

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Construction Cost w/o Energy

(Source: Bureau of Labor Statistics (PPI) & Associated Builders & Contractors)

-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80%

M/M Y/Y Since 2/2020

Iron and Steel

Prepared Asphalt

Softwood Lumber

Concrete Products

Steel Mills Products

Inputs to Construction

Plumb Fixtures and Fit

Inputs to Nonres Const

Copper Wire and Cable

Fabric Struct Metal Prod

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Topic #5:

Fed still tightening . . . But peak rates are close

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Federal Funds Rate 9 Up, 3 Down, back to ZLB – Now back up.

25%

20%

15%

10%

5%

0%

Jul-84

Jul-93

Jul-02

Jul-11

Jul-20

Jan-80

Jan-89

Jan-98

Jan-07

Jan-16

Oct-86

Oct-95

Oct-04

Oct-13

Oct-22

Apr-82

Apr-91

Apr-00

Apr-09

Apr-18

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Market’s Expectation for FFR (Source: CME Group)

80%

375-400 400-425 425-450 450-475 475-500 500-525 525-550 550-575 575-600

70%

60%

50%

40%

30%

20%

10%

0%

5/1/2024

11/1/2023

1/31/2024

3/20/2024

6/19/2024

7/31/2024

12/13/2023

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Market’s “Expected FFR”

3/8/23

4/10/23 7/7/2023 9/1/2023

6.0%

6/7/2023 8/6/2023 9/23/2023

5.5%

5.0%

4.5%

4.0%

3.5%

3.0%

11/1/2023

1/31/2024

3/20/2024

12/13/2023

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

10-Year Treasury Bonds (source: Board of Governors of Federal Reserve)

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%

Jul-13

Jul-20

Jan-10

Jan-17

Jun-09

Oct-11

Sep-14

Jun-16

Oct-18

Sep-21

Jun-23

Feb-14

Feb-21

Apr-15

Apr-22

Dec-12

Dec-19

Aug-10

Mar-11

Aug-17

Mar-18

Nov-15

Nov-22

May-12

May-19

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

10-Year less Fed Funds Rate (source: Board of Governors of Federal Reserve)

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0%

-8.0%

Jul-78

Jul-89

Jul-00

Jul-11

Jul-22

Jan-73

Jan-84

Jan-95

Jan-06

Jan-17

Sep-76

Sep-87

Sep-98

Sep-09

Sep-20

Mar-82

Mar-93

Mar-04

Mar-15

Nov-74

Nov-85

Nov-96

Nov-07

Nov-18

May-80

May-91

May-02

May-13

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Fed: Securities Held Outright (in millions, source: Board of Governors of Federal Reserve)

$9,000,000

$8,000,000

$7,000,000

$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$0

Jan-05

Jan-07

Jan-09

Jan-11

Jan-13

Jan-15

Jan-17

Jan-19

Jan-21

Jan-23

Sep-05

Sep-07

Sep-09

Sep-11

Sep-13

Sep-15

Sep-17

Sep-19

Sep-21

May-06

May-08

May-10

May-12

May-14

May-16

May-18

May-20

May-22

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Mortgages vs 10-Year T-Bonds (source: Board of Governors of Federal Reserve)

100 120 140 160 180 200 220 240 260 280 300

Jul-97

Jul-02

Jul-07

Jul-12

Jul-17

Jul-22

Jan-95

Jan-00

Jan-05

Jan-10

Jan-15

Jan-20

Sep-96

Sep-01

Sep-06

Sep-11

Sep-16

Sep-21

Mar-99

Mar-04

Mar-09

Mar-14

Mar-19

Nov-95

Nov-00

Nov-05

Nov-10

Nov-15

Nov-20

May-98

May-03

May-08

May-13

May-18

May-23

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Mortgage Activity: Purchase & Refinance (Source: Mortgage Bankers Association)

0 100 200 300 400 500 600 700 800 900

Purchase Refinance

1997 - Q1

1997 - Q4

1998 - Q3

1999 - Q2

2000 - Q1

2000 - Q4

2001 - Q3

2002 - Q2

2003 - Q1

2003 - Q4

2004 - Q3

2005 - Q2

2006 - Q1

2006 - Q4

2007 - Q3

2008 - Q2

2009 - Q1

2009 - Q4

2010 - Q3

2011 - Q2

2012 - Q1

2012 - Q4

2013 - Q3

2014 - Q2

2015 - Q1

2015 - Q4

2016 - Q3

2017 - Q2

2018 - Q1

2018 - Q4

2019 - Q3

2020 - Q2

2021 - Q1

2021 - Q4

2022 - Q3

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Net Interest Margin (source: FDIC)

4.0%

3.5%

3.0%

All > $250B

2.5%

2.0%

1.5%

2008 Q1

2008 Q4

2009 Q3

2010 Q2

2011 Q1

2011 Q4

2012 Q3

2013 Q2

2014 Q1

2014 Q4

2015 Q3

2016 Q2

2017 Q1

2017 Q4

2018 Q3

2019 Q2

2020 Q1

2020 Q4

2021 Q3

2022 Q2

2023 Q1

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only CRE Loan Standards: Net Tightening (Source: Federal Reserve System, Senior Officers Lending Survey)

10 20 30 40 50 60 70 80

A&D Non-Res Multifam

-20 -10 0

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

2016 Q3

2016 Q4

2017 Q1

2017 Q2

2017 Q3

2017 Q4

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

2020 Q4

2021 Q1

2021 Q2

2021 Q3

2021 Q4

2022 Q1

2022 Q2

2022 Q3

2022 Q4

2023 Q1

2023 Q2

2023 Q3

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only CRE Loan Demand: Net Change (Source: Federal Reserve System, Senior Officers Lending Surv y)

10 20 30 40 50

-80 -70 -60 -50 -40 -30 -20 -10 0

A&D Non-Res Multifam

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

2016 Q3

2016 Q4

2017 Q1

2017 Q2

2017 Q3

2017 Q4

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

2020 Q4

2021 Q1

2021 Q2

2021 Q3

2021 Q4

2022 Q1

2022 Q2

2022 Q3

2022 Q4

2023 Q1

2023 Q2

2023 Q3

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only C&I Loan Standards: Net Tightening (Source: Federal Reserve System, Senior Officers Lending Survey)

10 20 30 40 50 60 70 80 90

Large & Med Small

-30 -20 -10 0

2007 Q1

2007 Q3

2008 Q1

2008 Q3

2009 Q1

2009 Q3

2010 Q1

2010 Q3

2011 Q1

2011 Q3

2012 Q1

2012 Q3

2013 Q1

2013 Q3

2014 Q1

2014 Q3

2015 Q1

2015 Q3

2016 Q1

2016 Q3

2017 Q1

2017 Q3

2018 Q1

2018 Q3

2019 Q1

2019 Q3

2020 Q1

2020 Q3

2021 Q1

2021 Q3

2022 Q1

2022 Q3

2023 Q1

2023 Q3

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only C&I Loan Demand: Net Change (Source: Federal Reserve System, Senior Officers Lending Survey)

10 20 30 40

-70 -60 -50 -40 -30 -20 -10 0

Large & Med Small

2007 Q1

2007 Q3

2008 Q1

2008 Q3

2009 Q1

2009 Q3

2010 Q1

2010 Q3

2011 Q1

2011 Q3

2012 Q1

2012 Q3

2013 Q1

2013 Q3

2014 Q1

2014 Q3

2015 Q1

2015 Q3

2016 Q1

2016 Q3

2017 Q1

2017 Q3

2018 Q1

2018 Q3

2019 Q1

2019 Q3

2020 Q1

2020 Q3

2021 Q1

2021 Q3

2022 Q1

2022 Q3

2023 Q1

2023 Q3

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only 90+ Days Delinquent by Loan Type (source: Federal Reserve Bank of New York Credit Panel/Equifax)

14

AUTO CC MORTGAGE HELOC STUDENT LOAN OTHER

12

10

8

6

4

2

0

2004 Q1

2004 Q4

2005 Q3

2006 Q2

2007 Q1

2007 Q4

2008 Q3

2009 Q2

2010 Q1

2010 Q4

2011 Q3

2012 Q2

2013 Q1

2013 Q4

2014 Q3

2015 Q2

2016 Q1

2016 Q4

2017 Q3

2018 Q2

2019 Q1

2019 Q4

2020 Q3

2021 Q2

2022 Q1

2022 Q4

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Charge Off Rates at Banks (source: Board of Governors of the Federal Reserve System)

7.0%

Cons

6.0%

C&I

5.0%

RE

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

1998 Q2

1999 Q1

1999 Q4

2000 Q3

2001 Q2

2002 Q1

2002 Q4

2003 Q3

2004 Q2

2005 Q1

2005 Q4

2006 Q3

2007 Q2

2008 Q1

2008 Q4

2009 Q3

2010 Q2

2011 Q1

2011 Q4

2012 Q3

2013 Q2

2014 Q1

2014 Q4

2015 Q3

2016 Q2

2017 Q1

2017 Q4

2018 Q3

2019 Q2

2020 Q1

2020 Q4

2021 Q3

2022 Q2

2023 Q1

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Some Comments on Banks

• 2008 was about credit risk, 2023 is about interest rate risk. But, what if they intersect? • Assets & Liabilities mismatched – was SVB that unique? • Fed, FDIC & US Treasury response. • Are the other risk to banks?

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Topic #6:

Did Covid signal the death of “big box” and office?

And is housing market getting “frothy” again?

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Construction Spending (Source: U.S. Bureau of Census)

-50% -40% -30% -20% -10% 0% 10% 20% 30% 40%

Residential

Non-Residential

Jul-05

Jul-10

Jul-15

Jul-20

Jan-03

Jan-08

Jan-13

Jan-18

Jan-23

Sep-04

Sep-09

Sep-14

Sep-19

Mar-07

Mar-12

Mar-17

Mar-22

Nov-03

Nov-08

Nov-13

Nov-18

May-06

May-11

May-16

May-21

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Non-Residential Construction

40%

2017 2018 2019

30%

2020 2021 2022

20%

10%

0%

-10%

-20%

-30%

¬¬¬¬ Office

¬¬¬¬ Power

¬¬¬¬ Lodging

¬¬¬¬ Manufact

¬¬¬¬ Health care

¬¬¬¬ Educational

¬¬¬¬ Commercial

¬¬¬¬ Hiway and street

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Non-Residential Construction

80%

2020 2021 2022 2023 (F6)

60%

40%

20%

0%

-20%

-40%

¬¬¬¬ Office

¬¬¬¬ Power

¬¬¬¬ Lodging

¬¬¬¬ Manufact

¬¬¬¬ Health care

¬¬¬¬ Educational

¬¬¬¬ Commercial

¬¬¬¬ Hiway and street

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

US Housing Permits: SF and Total

1000 1200 1400 1600 1800 2000 2200 2400

Total SF

200 400 600 800

Jul-04

Jul-17

Oct-07

Oct-20

Jan-98

Apr-01

Jan-11

Apr-14

Jun-03

Jun-16

Feb-99

Mar-00

Feb-12

Mar-13

Sep-06

Dec-09

Sep-19

Dec-22

Nov-08

Nov-21

May-02

Aug-05

May-15

Aug-18

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

US Housing Permits: Multi-family

100 200 300 400 500 600 700 800

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

NAHB: Housing Market Index

0 10 20 30 40 50 60 70 80 90 100

Jul-01

Jul-14

Oct-04

Oct-17

Jan-95

Apr-98

Jan-08

Apr-11

Jan-21

Feb-96

Mar-97

Jun-00

Feb-09

Mar-10

Jun-13

Feb-22

Mar-23

Sep-03

Dec-06

Sep-16

Dec-19

Nov-05

Nov-18

May-99

Aug-02

May-12

Aug-15

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Case Shiller: National Index (source: Standard & Poor’s Case-Shiller)

10% 15% 20% 25%

6M 12M

0% 5%

-20% -15% -10% -5%

Jul-19

Jul-08

Jan-14

Jan-03

Oct-16

Sep-17

Jun-20

Oct-05

Sep-06

Jun-09

Feb-13

Apr-22

Apr-11

Dec-14

Dec-03

Aug-18

Aug-07

Mar-23

Mar-12

Nov-15

Nov-04

May-21

May-10

(source: Standard & Poor’s Case-Shiller)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Case Shiller: Pandemic Surge (source: Standard & Poor’s Case-Shiller)

10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70%

0% 5%

Dallas

Seattle

Miami

Boston

Tampa

Detroit

Denver

Atlanta

Phoenix

Chicago

Portland

Charlotte

Cleveland

Las Vegas

San Diego

New York

Washington

Los Angeles

Minneapolis

San Francisco

(source: Standard & Poor’s Case-Shiller)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Housing Affordability: Mortgage Rate Effect (source: S&P Case-Shiller, Freddie Mac)

120%

CS-NAT PAYMENT

100%

80%

60%

40%

20%

0%

-20%

Jul-22

Jul-21

Jul-20

Jan-23

Jan-22

Jan-21

Jan-20

Sep-22

Sep-21

Sep-20

Mar-23

Mar-22

Mar-21

Mar-20

Nov-22

Nov-21

Nov-20

May-23

May-22

May-21

May-20

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Topic #7:

Shared governance in 2023 . . . But can each party govern themselves?

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

Iowa Electronic Markets: Congress (source: University of Iowa)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only Internal Migration (source: Tax Foundation, 2022)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only The Demographics: Boom & Bust (source: U.S. Census Bureau)

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

Internal Use Only

On the Economic, Business & Political Landscape

Roger Tutterow, Ph.D. Coles College of Business Kennesaw State University rtuttero@kennesaw.edu CSBS Fall Regulatory Summit September 25, 2023 Denver, CO

FALL REGULATORY SUMMIT Denver, CO – September 25, 2023

CONFIDENTIAL

Bank & Non-Bank Regulatory Policy & Legislative Update 2023 Fall Regulatory Summit

CONFIDENTIAL

Spring Bank Closures

• Banking Agency Response • Reviews of Supervision – SVB, Signature Bank & First Republic Bank

• Reverse Large Bank (> $100B) Tailoring • FDIC Report on Deposit Insurance Reform • Congressional Response • Deposit insurance reform bills • RECOUP Act • Sen. Vance (R-OH) bill

CONFIDENTIAL

LBO Capital Requirements: 2019 Tailoring vs. NPR Current LBO Capital Requirements Proposed LBO Capital Requirements

Source: Deloitte

Source: FRB

CONFIDENTIAL

MTMA

• 2 Tracks: Adoption & Implementation • Implementation topics in focus: ¾ Tangible Net Worth ƒ Gross vs. Net Reporting ƒ Treatment of Customer Funds ¾ Payroll Service Providers • Consumer Protection Concerns ¾ Bankruptcies: FTX, BlockFi, Voyager… Money Transmission Modernization Act

RESOURCES: https://www.csbs.org/model-money-transmission modernization-act

CONFIDENTIAL

Money Transmission Modernization Act Adoption Status – 9/20/2023

Strategy 2, Measure 1 Money Transmission Modernization Act • 15 states by 12/31/2023 • 25 states by 12/31/2024 • 35 states by 12/31/2025

Enacted

13

Enacted Partial 2023 In Progress 5 2024 In Progress 19 Other 10 5

CONFIDENTIAL

Federal Legislative Update

• SAFER Banking Act • House Stablecoin Legislation • Government Funding

CONFIDENTIAL

Prudential Standards

Prudential Standards for Nonbank Mortgage Servicers

• Nonbank Mortgage Conversations in DC • Updates to FHFA and Ginnie eligibility requirements – new requirements effective Sept. 30, 2023 • Monitoring Delinquencies and Unemployment • Information Sharing

CONFIDENTIAL

Prudential Standards for Nonbank Mortgage Servicers Adoption Status – 8/1/2023

Strategy 2, Measure 3 Prudential Standards • 7 states by 12/31/2023 • 15 states by 12/31/2024 • 25 states by 12/31/2025

Enacted

6 2

Enacted Partial 2023 In Progress 3 2024 In Progress 16 Other 24

Action Owner: Kevin Byers (kbyers@csbs.org)

Member Sponsor: Charlie Clark

CONFIDENTIAL

Nonbank Data Security Model Law Framework for Safeguarding Sensitive Information • Persistent Threats • Determining the right level resources and training needed to adopt • Resources: ¾ Nonbank Exam Program (includes GLBA citations) ¾ Model law summary ¾ Compliance Checklists ¾ FTC Safeguards Rule Guidance

RESOURCES: https://www.csbs.org/datasecurity

CONFIDENTIAL

Model Data Security (Nonbank Cyber) Law Adoption Status – 8/1/2023

Strategy 2, Measure 4 Model Data Security Law • 2 states by 12/31/2023 • 10 states by 12/31/2024 • 20 states by 12/31/2025

Enacted

5 1 0 2

Enacted Partial 2023 In Progress 2024 In Progress

Other

43

Conference of State Bank Supervisors Fall 2023 Regulatory Summit

___________________________________________________________________________ Presented by Jim Park, Executive Director Appraisal Subcommittee

My comments are my own personal remarks and may not represent the views of the ASC or ASC member agencies .

Today’s Update ¾ Appraisal Regulatory System ¾ ASC State Appraisal/AMC Program Oversight ¾ PAVE Task Force ¾ NFHA Report

¾ ASC Grants Program ¾ Federal Legislation ¾ AARO

2

ASB AQB

State Regulatory Programs

Qualification Criteria

USPAP

Appraisal Subcommittee (ASC)

3

FFIEC Appraisal Subcommittee

Federal Reserve

CFPB

OCC

Appraisal Subcommittee (ASC)

FHFA

NCUA

HUD

FDIC

2010 Dodd-Frank Act Most significant amendments to Title XI since 1989 legislation . • States required to established AMC regulatory programs (FRTs) • AMCs required to be on ASC National Registry and pay a registry fee • Expanded ASC grant program from 1 eligible grantee to 56 • ASC required to establish a hotline to refer complaints of • USPAP violations • Appraiser independence violations • ASC required to hold public meetings • Interim enforcement authority over State appraisal programs • Increased, but still limited rule making authority

State Appraiser/AMC Compliance Reviews Restarted Major issues noted to date: 9 AMC Rules 9 Staffing changes 9 New State technology and processes 9 Backlogged investigations

ASC Focused on Appraisal Bias

• Study of USPAP and AQB Qualification Criteria ¾ National Fair Housing Alliance, Dane Law, Christiansen Law Firm

• PAVE Task Force Action Plan

¾ 13 federal agencies including the ASC and its member agencies

• ASC Hearings

Standards and Qualifications Review

• Report issued January 2022 • Purpose: • To ensure that neither the appraisal standards or appraiser qualifications

systematize or encourage bias and that they promote fairness, equity, objectivity and diversity