Pub 12 2021 Issue 1

As banks seek innovation and efficiency, now is a prime opportunity to consider a strategy targeting financial technology (fintech). Evaluating the risk appetite for fintech can be beneficial not only for increasing technology and digital transformation but also to bolster customer acquisition efforts. In this article, we will explore business structure options as well as benefits from this alliance.

Awave of forbearance expirations expected this spring has investors anxiously awaiting clarity on what it will mean for the mortgage market. COVID-19 forbearance plans introduced by the CARES Act last year make it possible for any borrower with a mortgage backed by Fannie/Freddie/Ginnie to stop paying their loan for a maximum of 12 months due to pandemic-related hardship. The majority of loans in forbearance today entered forbearance in April 2020. With the deadlines on those loans fast approaching, what happens next is front of mind.

According to the U.S. Small Business Administration’s 2018 Small Business Profile Report, U.S. small business accounts for 99% of the businesses in the U.S., and more than 47% of all U.S. employees. Small business has often been referred to as the backbone of the U.S. economy. It is no secret that COVID-19 has resulted in financial distress for many of these small businesses. The first round of the Paycheck Protection Program (“PPP”) was designed to address the financial hardship created by the COVID pandemic and experienced by this hugely significant sector of the economy. Round two of PPP is here with the same goal in mind, but the program has undergone significant changes designed to infuse more deserving small businesses with the cash necessary to continue operations. As the Biden administration takes shape, more changes to COVID relief programs are sure to come. In fact, a new round of stimulus legislation was proposed on his second day in office and started making its way through the legislative process.

Core processing and the associated fintech ancillary systems remains one of the top three costs within most banks. Core evaluations no longer involve the natural progression of rubber-stamping the incumbent vendor’s renewal contract every five to seven years. When implementing “best of breed” ancillary solutions, organizations can become overwhelmed with these software decisions.

COVID-19 and the Future of Banking
It is apparent that 2021 and the future going forward is not going to be the same. But what does this really mean for banking? I would like to provide some considerations and thoughts (general and technical) on a few topics related to the future of banking and being prepared for crisis situations.

Recently, we have seen a flurry of congressional and executive activity on the issue of nondiscrimination in banking. In October 2020, Senators Warren and Booker, along with other Democratic senators, introduced the Fair Access to Financial Services Act of 2020. This bill seeks to prevent discrimination in banking based on “race, color, religion, national origin, and sex (including sexual orientation and gender identity).” In November 2020, the Office of the Comptroller of the Currency (“OCC”) issued a proposed rule to promote fair trade banking by prohibiting discrimination against customers who are members of legal but disfavored groups. The Fair Access to Bank Services Rule codifies more than a decade of OCC guidance advising that banks should conduct an individualized risk assessment of customers rather than making broad-based decisions affecting whole categories or classes of customers when provisioning access to services, capital and credit. The OCC finalized the Rule on Jan. 14, 2021, and it was scheduled to take effect on April 1, 2021.

A bank’s employees, clients, and trade secrets are among the most crucial assets that help keep it profitable. Financial institutions must know the best ways to protect those assets.

As impossible as it is to believe, we have been living in a global pandemic for an entire year. What began as a headline from a distant corner of the world quickly became a worldwide health crisis that continues to wreak havoc on our way of life and has, unfortunately, claimed the lives of too many of our fellow citizens.

Alan Brill, longtime CEO of Capon Valley Bank, retired in December 2020. Recently, WVBA had the opportunity to visit with Michael McDonald, colleague, heir-apparent, and friend of Alan’s to talk about Alan and his contributions to Capon Bank and the local banking industry.

VP Bruce Fitzwater presents the Calhoun County EMS with
Tudor’s and Gino’s gift cards for each employee as a thank you for their hard work!