Page 4 - August 22, 2024 Bulletin

BANKING
ARTICLES

House and Senate in August Recess automated teller machines and remote service units from the
definition of branch. The agency said it has received several inquiries
The U.S. House and Senate are in their August recess. Both will be on whether ITMs would fall under that exemption given the
back in session on September 9th. technology allows customers to remotely interact with live tellers.

NDBA Joins ABA, ICBA & The FDIC said it would not consider an ITM to be a “domestic
branch” subject to approval as long as two conditions are met. First,
State Bankers Associations in the ITM is an automated, unstaffed banking facility owned or
Comment to FCC on Use of Weiss operated exclusively for the bank. Second, customers must be able
Safety Rating to perform transactions without the involvement of bank personnel
and must have the sole discretion to initiate and terminate interactive
NDBA joined the ABA, ICBA and over 70 state banking sessions with bank personnel.
associations across the United States to urge the Federal “ITMs that operate outside of these parameters may require a branch
Communications Commission (FCC) to discontinue its application,” FDIC said.
requirement that banks obtain a Weiss safety rating in order to be
eligible to provide a letter of credit (LOC) to recipients of the FCC’s Read more: https://bankingjournal.aba.com/2024/08/fdic-interactive-
Rural Digital Opportunity Fund (RDOF). teller-machines-not-considered-bank-branches/
In the letter, the associations argue that the Weiss rating “should Contract-for-deed Deals
be eliminated altogether from the rules” stating that the rating
organization is not a “nationally recognized statistical rating Subject to Truth in Lending Act
organization that is registered with the U.S. Securities and Exchange Protections
Commission (SEC)” and that there is no transparency as to the
formula used for generating their bank safety ratings and several “Contract-for-deed” real estate transactions are subject to the
comments on their website raise concerns as to the reliability of their protections associated with residential mortgage loans under the
analysis.” Truth in Lending Act, the Consumer Financial Protection Bureau
said in an advisory opinion.
Read more: https://ndba.com/uploads/23/
FCCRDOFSBACommentLtr080524.pdf In a contract-for-deed deal, a seller agrees to turn over a home’s deed
only after the buyer completes a series of payments. In a statement,
Interactive Teller Machines Not the bureau said that such deals “often have little oversight, and
investment groups and other sellers can set a series of traps that leave
Considered Bank Branches buyers in unlivable homes, on the hook for tax liens and expensive
repairs, and at risk of losing their down payments and homes.”
State nonmember banks do not need the FDIC’s consent to
establish a bank branch when setting up interactive teller machines The CFPB said that home prices are often inflated under contract-
in locations without a physical branch, the agency said in a financial for-deed deals because sellers are not competing against banks or
institution letter. other mainstream mortgage lenders, and the homes come without
the benefit of inspections associated with mainstream mortgage
Nonmember banks must obtain the FDIC’s permission before
establishing a new branch. However, federal law specifically excludes financing. Under TILA, larger sellers, such as investment groups,

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