Doug Johnson, a senior business process architect at Baker Hill, gave a presentation about leveraging Baker Hill's compliance tools. He began with an overview of the standard and consumer-specific compliance features in Baker Hill NextGen that help clients comply with credit origination regulations. He then discussed ongoing Home Mortgage Disclosure Act (HMDA) changes and how marketing and analytics solutions can help compliance efforts. Finally, he covered potential new privacy laws and proposals to change the small dollar rule and Community Reinvestment Act.

1. Doug Johnson – Senior Business Process Architect
Leveraging the Compliance Tools in
Your Baker Hill Solution

2. Introduction
Doug Johnson
Senior Business Process Architect

3. Legal disclaimer
The materials made available for or during this presentation are for
informational purposes only and not for the purpose of providing
legal advice. You should contact your institution’s legal counsel to
obtain advice with respect to any particular compliance matter.

4. Topics
• Overview of compliance features
• Why are we still talking about HMDA?
• Can your marketing and analytics solution help in your
compliance efforts?
• What’s new on the regulatory horizon?

5. Overview of compliance features
Baker Hill NextGen standard compliance features help you
comply with the regulations that govern credit origination
S T A N D A R D C O M P L I A N C E
T O O L S
C O N S U M E R - S P E C I F I C
C O M P L I A N C E T O O L S
 Customizable decline/approval letters
 FACTA/Red Flag alerts
 HMDA/CRA data gathering
 Appraisal notice
 Other regulation B/FCRA compliance-
enabled documents/features
 Optional LexisNexis OFAC/USA
PATRIOT Act search
 Risk-based pricing notices
 Support for the ability to
repay/qualified mortgage rules
 HPML and HOEPA determination
and alerts
 Home ownership counseling notice
 Military Lending Act search

6. Topics
• Overview of compliance features
• Why are we still talking about HMDA?
• Can your marketing and analytics solution help in your
compliance efforts?
• What’s new on the regulatory horizon?

7. More changes!
• Expanded for closed-end as
well as HELOC
• Multiple updates on filing
instructions
• Dwelling secured vs. Purpose
• And…

8. Dodd Frank Partial Rollback for smaller lenders
• Partial exemption of data
collection
• Available now in:
– Baker Hill Advisor
– Baker Hill Origination

9. Partial exemptions—2018 and after
• Optional reporting of the 26 new data points
• Thresholds:
– Fewer than 500 closed-end in each of two preceding calendar years
– Fewer than 500 HELOCs in each of two preceding calendar years
• Exceptions:
– “Needs Improvement” or “Substantial Noncompliance” CRA rating
– OCC and FDIC must still report reasons for denial

10. HMDA—2019 and after
• Credit score model name changes
• AUS results: 6 more options
• DTI accepts negative number
• Coming soon in:
– Baker Hill NextGen®
– Baker Hill Advisor
– Baker Hill Origination

11. Questions?
• Resources:
– A Guide to HMDA Reporting
– Resources for HMDA Filers

12. Topics
• Overview of compliance features
• Why are we still talking about HMDA?
• Can your marketing and analytics solution help in your
compliance efforts?
• What’s new on the regulatory horizon?

13. Marketing and Compliance??

14. The Marketing and Compliance partnership
• Stress importance of Marketing and Compliance partnering in
product development and advertising plans:
– Provides the right products to the community
– Understands the short-term and long-term goals and monitors results
– Compliance is prepared to speak to these goals during Fair Lending exams:
• HMDA
• CRA exams
• Complaints

15. FDIC Consumer Compliance Exam Manual for Fair Lending
Indicators of potential disparate treatment in Marketing of
residential products…
• Exclude geographies within institution’s marketing area
• Proportion of prohibited basis applicants is significantly lower than that
group’s representation in total population
• Advertising only in media serving non-minority areas

16. Topics
• Overview of compliance features
• Why are we still talking about HMDA?
• Can your marketing and analytics solution help in your
compliance efforts?
• What’s new on the regulatory horizon?

17. Hot topic

18. Privacy laws—abroad
• European Union General Data Protection Regulation
– GDPR came into force May 25, 2018
– Focuses heavily on the rights of individuals
– Laws protect residents of that country
• Extraterritorial reach when you collect
information of an international customer
– Often includes financial institutions without branch
locations located abroad
• Will the GDPR make its way to the U.S.?

19. Privacy laws—domestic
• California Consumer Privacy Act
– CCPA effective Jan. 1, 2020
• Several other states proposing similar
laws

20. Source: KirkpatricPrice.com

21. Federal proposed privacy bills
• Federal Proposed Bills:
– Social Media Privacy and Consumer Rights Act of 2019
– Data Privacy Act
– Genetic Information Privacy Act of 2019
– Commercial Facial Recognition Privacy Act of 2019
– Bill to Amend COPPA
– Bill to establish and protect individual privacy rights

22. What’s new on the regulatory horizon?
Small Dollar Rule

23. Confidential & Privileged DocumentConfidential & Privileged Document
Small dollar rule proposal
Feb. 6, 2019: Proposal to rescind mandatory underwriting
provisions and delay the August 19, 2019 compliance date to
November 19, 2020.
Poll:
How many believe that this rule will impact your financial institution?
Are you ready for the August 19, 2019 compliance date?

24. Community Reinvestment Act
• OCC Bulletin 2018-24 (August 28, 2018)
• Dr. Lael Brainard, Member of Board of Governors of the Federal
Reserve System roundtable (October 15, 2018)
– “We will be reading the comment letters in anticipation of working with the Comptroller and
Federal Deposit Insurance Corporation on a joint proposal”

25. Thank you!
Doug.Johnson@bakerhill.com