TUESDAY3pt AUGUST stroke, 100% 31 size, 2021 for VOL.top of 186newspaper No. 167 = 8.9931 inches AMERICANBANKER.COM Follow us on Twitter @AmerBanker Barclays buying $3.8 billion Gap 5 card portfolio from Synchrony The move is part of CEO Jes Staley’s broader Meet the new boss strategy to beef up the British bank’s U.S. consumer business and strengthen Sandra Thompson, the recently appointed acting FHFA director, relationships with retailers who may has2.5pt tak enstroke se ve= 6.75ral inchesactions to strengthen the agency's housing and eventually need investment banking fair-lending focus, including: services. Page 5 See story on page 2 Brainard’s diaries show calls Issued policy requiring fair-lending reports from Fannie 6 with Warren, Biden-Harris Fed team 2pt stroke = 5.75 inches Mae and Freddie Mac Federal Reserve Gov. Lael Brainard spoke with the Biden-Harris Federal Reserve Eliminated “adverse market” fee meant to recoup transition team in January and with the pandemic-related losses president’s Council of Economic Advisers in May, her calendar shows. Page 5 Announced1.5pt stroke = 4.6667Fannie inches plan to include rental payment history in underwriting Shareholders call on Mexican 7 shadow bank to sell U.S. unit Signed agreement with HUD aimed at improving Shareholders in the troubled Mexican fair-lending enforcement nonbank lender Credito Real will vote 1pt stroke = 3 inches on proposals to sell the company’s U.S. Proposed housing goals with a new category for operations at a meeting on Sept. 10. Page 6 lending in minority communities Credit unions enlist fintechs to 8 vie with commercial, challenger banks Some credit unions are leaning heavily on dailybriefing Amazon jumps on the tech partners to speed payments and loan 3 buy now/pay later train decisions, offer online financial planning The e-commerce giant will partner with sessions and deploy virtual assistant ‘Night and day’: FHFA’s Affirm to offer installment payments as technology developed at MIT. Page 6 1 priorities rapidly changing point-of-sale credit becomes increasingly under new leader popular as a finance option. Page 3 Billionaire-backed stock picker The Federal Housing Finance Agency 9 says bubble talk is for boomers in the Trump administration had been The number of credit unions Blue Whale’s total managed funds recently preoccupied with Fannie Mae and Freddie 4 is shrinking. Can the trend be surpassed 1 billion pounds. Page 7 Mac’s capital position. Acting Director slowed? Sandra Thompson has shifted the agency’s Regulators are calling for creative alternatives Most banks aren’t ‘future focus to affordable housing and fair lending. to the arduous de novo process. Pairing 10 ready’ — and bankers (See chart above.) Page 2 groups that want to open credit unions with know it lagging institutions would be quicker and Just 6% of banks say they’re using cloud Regulators urge banks to could help preserve the sector, one credit computing, artificial intelligence and other 2 assess risk in teaming with union service organization says. Page 4 technologies to improve efficiency and fintechs maximize performance. Here’s what the The Fed, FDIC and OCC have issued other 94% should be doing. Page 8 guidance that says community banks should consider risk factors such as financial strength and business experience when evaluating potential fintech partners. Page 3 TUESDAY AUGUST 31, 2021 AMERICANBANKER.COM PAGE 2 development at Enterprise Community potential borrowers. AFFORDABLE HOUSING Partners. “It’s just night and day in terms of “We’ve been advocating for this for years, a change in priorities from what it previously because renters need an opportunity to had, as an agency.” build their credit,” said Doug Ryan, interim ‘Night and Since Thompson took the helm, the FHFA vice president for policy at Prosperity Now. has eliminated the adverse market fee on “Often renters, particularly renters of color, day’: FHFA’s most refinanced mortgages that was put in but also immigrant communities and place to protect Fannie and Freddie from others, have nonexistent credit files and pandemic-related losses, but that also raised credit portfolios, and this is an opportunity priorities costs for homeowners. to build it up.” Earlier this month, the FHFA also entered Factoring rental payments into a potential rapidly into an agreement with the Department of borrower’s credit assessment could also be Housing and Urban Development aimed at a step toward addressing the racial gaps in strengthening fair-lending enforcement for homeownership rates, said Jakabovics. changing the GSEs as well as the Federal Home Loan “Incorporating [rental payments] is banks. Also this month, the FHFA proposed really, really powerful, and I think reflects under new affordable housing goals for Fannie and the reality that there are a lot of people Freddie that included a subcategory who could be homeowners [and] should covering lending to minority neighborhoods be homeowners, and that the system isn’t leader for the first time. necessarily well-geared to adapt to the David Dworkin, the president and CEO circumstances that people are dealing with By Hannah Lang of the National Housing Conference, called now,” Jakabovics said. August 27, 2021 the actions the FHFA has taken under The disparity between Black and WASHINGTON — In her two months Thompson “extremely encouraging.” white homeownership has been widely as acting director of the Federal Housing “We absolutely need credit standards to be documented, and is even larger today Finance Agency, Sandra Thompson has relaxed, but they need to be relaxed in a way than it was in 1960, before the Civil Rights overseen a major shift in the regulator’s that is responsible, and that really embraces Act passed. The U.S. Census Bureau found focus, affordable housing advocates say, the idea of compensating factors,” he said. “I that as of the second quarter of 2020, Black pointing to policies her team has put in place think that certainly, Director Thompson gets homeownership stood at 47%, compared to bolster fair lending and expand access to that, and that we can responsibly expand with 76% for white Americans. credit for first-time homebuyers. the credit box without adding unnecessary That effort by Fannie is indicative of a President Biden named Thompson acting or irresponsible risk.” wider shift at the GSEs that has taken place director of the agency June 23 after removing The FHFA also announced this month as of late, Ryan said. Mark Calabria as head of the agency in that Fannie would begin to incorporate “I also see just from Fannie and Freddie, the wake of a Supreme Court ruling that rental payment history into its mortgage kind of informally, a new vigor in investing said the FHFA’s leadership structure was underwriting process starting in September, and exploring new opportunities to meet unconstitutional. a move that aims to increase access to their mission,” he said. Calabria — appointed by former President homeownership by widening the pool of Dworkin pointed to the FHFA’s new Donald Trump — largely devoted his tenure to putting the government-sponsored enterprises on a path out of conservatorship. Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 Under his leadership, the agency finalized Phone 212-803-8200 AmericanBanker.com a post-conservatorship capital framework 3pt stroke, 100% size for top of newspaper = 8.9931 inches and entered into an agreement with the Editor in Chief Alan Kline 571.403.3846 Copy Editor Neil Cassidy 212.803.8440 Treasury Department to allow Fannie Mae 2.5pt stroke = 6.75 inches and Freddie Mac to retain earnings and hold Managing Editor Dean Anason 770.621.9935 Reporters/Producers significantly more capital. 2pt stroke = 5.75 inches But many expressed concern that Calabria Executive Editor Bonnie McGeer 212.803.8430 Laura Alix 860.836.5431, Kate Berry 562.434.5432 prioritized the safety and soundness of Miriam Cross 571.403.3834 1.5ptWashington stroke = 4.6667 inches Bureau Chief Joe Adler 571.403.3832 the GSEs over the fundamental mission of Jim Dobbs 605.310.7780 Fannie and Freddie: facilitating affordable 1ptExecutive stroke = 3 inches Editor, Technology homeownership. Those same observers are Penny Crosman 212.803.8673 John Heltman 571.403.3847, Allissa Kline 716.243.2679 encouraged by what they see as a sea change Hannah Lang 571.403.3855 under Thompson. Community Banking Editor Paul Davis 336.852.9496 John Reosti 571.403.3864, Gary Siegel 212.803.1560 “The pace of announcements coming Contributing Editor Daniel Wolfe 212.803.8397 out of FHFA is fairly impressive,” said Kevin Wack 626.486.2341 Andrew Jakabovics, vice president of policy For up to date and complete coverage go to AmericanBanker.com TUESDAY AUGUST 31, 2021 AMERICANBANKER.COM PAGE 3 leadership as one of the reasons behind the “We think, along with lots of other people, guide suggesting that banks consider six announcement of the program at Fannie, that they could do a lot more in the three key pillars of due diligence when evaluating and added that he expected Freddie would components of the three underserved potential fintech partners. Banks should soon follow with a similar program. markets of duty to serve, and I honestly assess a fintech’s: business experience “I think there are two things here,” he said. believe that Fannie and Freddie think that and qualifications; financial condition; “One is the innovation itself is important, but too,” said Ryan. compliance with laws and regulations; the second is that the idea that the regulator Van Tol agreed, adding that Fannie and risk management and control processes; is looking at these kinds of innovations and Freddie have work to do to expand access information security; and operational approving them is also important.” to credit, which could be accomplished resilience, according to the guide.