Pub 1 2020 Issue 5

Adjustable-rate mortgages (ARMs) have not been much of an issue for many banks and thrifts in recent years since fixed rates have been so low. But they are still an important tool for serving those customers who cannot meet the secondary market qualifications applied to most fixed-rate loans. Also, many institutions have a portfolio of existing ARM loans that they service. One potential complication for some lenders is the impending discontinuance of the LIBOR index, requiring them to find another comparable index for their ARMs.

The novel coronavirus pandemic has disrupted many aspects of our lives this year, with unprecedented business downturns or closings. Your clients may have found themselves suddenly unemployed as a result of COVID-19. Some may be fortunate enough to find new employment, while others remain without work. In either situation, these clients will likely have access to retirement plan assets, and they may be contemplating what they should do with them.

Stress testing and capital planning are important for financial institutions in good times. They are even more important in volatile times like these when the coronavirus and pressures on the energy sector result in a financial crisis.

It’s official — the U.S. economy is in full-swing recession. While formal confirmation by the National Bureau of Economic Research is always appreciated, the signs were pretty obvious: social distancing grinding business activity to a near halt, skyrocketing weekly unemployment claims at both a state and national level, and, of course, market volatility erasing three years’ worth of gains in a matter of weeks.

As the calendar turns to the fall, millions of Americans gear up for their favorite sport of football. Of course, with this being a year unlike any other, we’re still trying to figure out what it will look like…

What a different August this will be than in previous years. Yet, as much as things have changed, I find comfort in the fact that the core of what we do at ICBA and as community bankers is steadfast.