Those working to close a mortgage may have an easier time finding and understanding information that might be important to them due to new rules and disclosures that recently went into effect from the Consumer Financial Protection Bureau. Its Know Before You Owe initiative is designed to help consumers understand their loan options, shop for the mortgage that’s best for them, and avoid costly surprises at the closing table.
“Most banks, ours included, have been preparing for this change for a while,” said Amy Dunkley, mortgage department manager at Bank of American Fork. “We believe the new Loan Estimate resulting from the new rules and disclosures is preferable over the old Good Faith Estimate and Truth-In-Lending forms. It provides straightforward information in a much easier-to-read and understand format that consumers will probably appreciate.”
Under Know Before You Owe, four disclosures are replaced with just two. The former Good Faith and Preliminary Truth-In-Lending disclosures are replaced by the new Loan Estimate. The HUD-1 Settlement Statement and the final Truth-In-Lending disclosure are replaced by the new Closing Disclosure. The disclosures are redesigned to highlight the information consumers typically look for and need to know to be prepared.
The new Closing Disclosure has potential to delay a closing since it needs to be given to borrowers at least three business days before the closing date. But if everyone involved pays close attention it doesn’t have to cause a delay, and as the process becomes more familiar with real estate agents, lenders and borrowers, delays should decrease.
The new rules and disclosures went into effect Oct. 3.
Bank of American Fork Strategy Kept Bank Profitable Benefiting its Community
Case Study Wins First Place in CSBS Competition – Will Be Presented at Community Bank Research and Policy Conference
During the Great Recession of 2008 to 2011, Bank of American Fork was able to succeed when many Utah community banks either went out of business or struggled immensely according to a University of Utah study. (Video)
The study conducted in 2014 reports that Bank of American Fork was successful during the Great Recession because it performed an extensive workout process, acted early to mitigate loss and found new sources of capital.
The University of Utah study won first place at the 2015 Community Banking Competition Case Study of the Conference of State Bank Supervisors.
According to the study, in 2008 the housing bubble popped on community banks with high concentrations of acquisition, development, and construction loans forcing both regulators and bankers to explore “new territory.”
“Bank of American Fork’s success directly benefits its community.”
“The Great Recession presented a difficult situation to Bank of American Fork [and other community banks] because of its high concentration in commercial real estate lending,” according to the study. “[Bank of American Fork] was able to overcome these high concentrations and continue lending throughout the downturn.”
More than 20 percent of Utah community banks closed from 2009 through 2011.
“Bank of American Fork succeeded through the downturn because it acted early to limit exposure, it performed an extensive workout process on troubled loans, and it was innovative in pooling new funds,” said the report.
Bank of American Fork accomplished this due to its strong relationships with its customers to accurately assess the recoverability of individual loans. The bank was able to adjust the loan-loss allowance account early in anticipation of increasing foreclosures.
“The bank formed the Special Assets Department (SAD) Committee during the downturn to discuss problem loans,” said the report. “It [SAD] met weekly and created workout plans for each borrower. This helped Bank of American Fork employees, from the top to the bottom, have a clear workout strategy throughout the recession.
“The bank’s strategic success afforded it the opportunity to be innovative in sourcing new capital. It created a foreclosed property fund, interest paying checking accounts, and remained profitable throughout the downturn.
“Its strategy kept the bank profitable,” said the report. “And its profitability allowed it to keep lending.”
One of the most important aspects of the report centers on the benefits successful and creative community banks play within their local areas.
“[Bank of American Fork] contributed to its local economy throughout the downturn,” said the report. “Because it interacts directly with its customers, it knows the quality of its assets. During the downturn it boosted allowances early, did an extensive workout process, and innovated capital sources.
“Bank of American Fork’s success directly benefits its community.”
Bank of American Fork was founded in 1913 in American Fork, Utah, where its headquarters remain. It currently has 14 locations in communities throughout Utah and more than $1.4 billion in assets. The bank prides itself on its community focus and community participation.
“It’s as simple as this,” said Richard Beard, CEO of Bank of American Fork. “A community bank succeeds if the community succeeds. We have every interest in the world of the community succeeding.”
The University of Utah students who conducted the study include Jenny Flatberg, Changsu Lee, Kurt Moore, Brett Welker and student advisor, Jack Brittain. The case study will be presented at the Federal Reserve/Conference of State Bank Supervisors Third Annual Community Banking Research and Policy Conference, Sept. 30 – Oct. 1 in St. Louis.
The competition was established by CSBS to build a further understanding of the community banking business model, to connect students with senior bank management, and to serve as a research tool for uncovering new and innovative perspectives regarding the role of community banks in the economy.
People encouraged to help build toys at Tiny Tim’s Foundation for Kids
Bank of American Fork has arranged a day of service for its customers and the community in support of one of the bank’s long term customers, Alton Thacker, founder of Tiny Tim’s Foundation for Kids. on Sept. 17 at 1:00 pm.
Tiny Tim’s Foundation for Kids builds and delivers 64,000 toys every year to needy children around the globe. They are also sent to hospitals where patients can play with and keep them; including Primary Children’s and Shriners hospitals.
The day of service will be held Sept. 17 at 1:00 pm at the Tiny Tim’s factory at 1423 W 8120 S, West Jordan, Utah. Up to 20 participants will help build toy cars that will be used to distribute to children. The materials used to make the toys are provided by various donors throughout Utah.
To participate, interested people should RSVP to Heidi Carmack Pfaffroth at 801-642-3139, or Christopher Liechty at 801-642-3094.
“As a community bank, it is important for us to provide opportunities for people to support great causes,” said Bill Swadley, vice president CRA/business development officer for Bank of American Fork. “Mr. Thacker, our longtime friend and customer, brings great joy to children in need throughout Utah and around the world. We are grateful that we can help him in one small way by arranging a day of service where people can go and help him in this great cause.”
Bank of American Fork also made a cash donation in support of Tiny Tim’s Foundation for Kids.
Guest post by Richard Gray
A bill was approved a few weeks ago on July 28 to increase the loan limits for the Small Business Administration 7(a) loan program for the fiscal year. The program authorization ceiling was increased to $23.5 billion from $18.75, which the program already reached earlier in July. The same afternoon the bill was approved, the SBA was back to processing loans under the 7(a) program.
This is big news for small-business owners who want to grow their business. After the program loan limits were reached on July 23, new loan applications were placed on hold and small-business owners and lenders were told no new applications would be approved for financing until the new fiscal year, which begins October 1, 2015. The fast approval on increasing the limits means that small-business owners can again be approved for financing.
I know the value of SBA loans for small-business owners in our community. I help local small-business owners to get financing to start or grow their businesses. For more than 25 years I have been able to watch as people are able to move their dreams forward because of SBA loans. There are small-business owners here in our community with great ideas and solid businesses but may have less cash for a down payment than lenders usually require, have a short operating history, require a longer-term loan than lenders usually provide or need financing for very specialized equipment or unusual financing needs. Many of these small-business owners have been able to get financing through SBA loans. The 7(a) program is the SBA’s primary and most flexible loan program.
President Barack Obama electronically signed H.R. 2499 into law the morning of July 28, effective immediately. Reopening the 7(a) loan program was so urgent that the president, who was out of the country, authorized the use of the autopen for only the sixth time during his presidency.
The quick action by Congress and the president shows how important the SBA loan program is to the small-business community at large and the economic impact of small business to the economy. Business owners looking to grow will be able to take advantage of the SBA 7(a) loan program, which helps creditworthy small businesses to get financing.
The SBA welcomed the action by Congress to increase the authorization ceiling that would “[allow] the SBA to continue supporting American small businesses as they grow and create jobs to strengthen the nation’s economy,” according to the SBA website.
“Because of the swift decisions of Congress and the president, the short-term lack of funding for the program should not affect or impede to the capital necessary for small-business owners,” said my colleague Aga Merx, an SBA department manager for Bank of American Fork.
Despite the short suspension of the program, demand on the SBA 7(a) loan program this year was unprecedented, proving that U.S. businesses are growing. The amount already approved a week prior to when the program reached its loan guaranty limit was a 25 percent increase over the same period last year. The SBA has approved more than 45,000 loans that total more than $16.5 billion.
The SBA 7(a) loan program was designed to help expand access to capital for small businesses, and its success in doing that created a stronger demand than what the SBA was prepared for.
The Office of the Comptroller of the Currency explains how the 7(a) program operates:
“The program helps creditworthy small businesses acquire financing when they cannot otherwise obtain credit at reasonable terms. The program covers business borrowing requests in which the business has sufficient cash flow to repay the loan but may not have the necessary collateral or history required by a bank’s lending policy.
“The SBA does not provide funds to the borrower. Instead, the SBA guarantees a portion of the lender’s loan, which is conditional based on the lender following certain requirements established by the SBA. If the borrower defaults, the SBA pays off the guaranteed portion of the remaining loan balance. This conditional guaranty covers a portion of the risk of borrower repayment default.”
Small-business loans are critical to helping keep communities growing and people working. The SBA 7(a) loan program is an excellent program for many small-business owners in obtaining financing to start or grow their business. Despite the concern felt by many when loan applications were put on hold, reaching the limits shows that small businesses are growing and the quick approval of increasing the limits shows that many government leaders place value on small-business growth.
Richard Gray is senior vice president of SBA lending at Bank of American Fork, Utah’s community bank leader, an Equal Housing Lender and Member FDIC. Richard has assisted local small businesses in obtaining SBA funding for more than 25 years. He served on the board of directors for nonprofit Kostopolus Dream Foundation and was the chairman for nonprofit Utah Microenterprise Loan Fund, Salt Lake City.
We anticipate being able to offer Apple Pay in early 2016.
We have been pursuing Apple Pay™ with our credit and debit card processors—we have told you before that we’re excited about Apple Pay. We anticipate being able to offer Apple Pay processing during the last quarter of 2015 or the first quarter of 2016.
This is a later date than we were hoping to be able to offer Apple Pay and we’re sorry for any inconvenience this may have caused.
In order to offer you Apple Pay, we have to make sure we have our applications and networks ready and the vendors we offer credit and debit cards through have to be ready. We are ready. We have been working hard to make sure we can offer the most important technologies, as a part of our pattern and commitment to innovation. However, our vendors aren’t ready—we are making a change with a vendor and another vendor is beta testing Apple Pay with some clients.
We will keep you updated. We are excited about this product and we care about the products that will make your financial life easier. Feel free to call 800-815-BANK with questions, comments or concerns, or leave us feedback at www.bankaf.com.
Apple Pay is a trademark of Apple, Inc. The Apple logo, Apple, iPhone and Passbook are registered trademarks of Apple, Inc.
Utah recently earned the top spot for states with the best economic outlook, according to the new edition of Rich States, Poor States released by the American Legislative Exchange Council.
This economic outlook is meant to be a forward-looking measure and ALEC uses 15 areas they have determined to be the best determinants of economic success. The measure is meant to show how each state can expect to perform.
We love Utah over here at Bank of American Fork. As community bankers, we get to help local business owners to finance their dreams and grow. We find that our customers are hard-working, ambitious and intelligent.
What else do you think makes Utah’s economy and business owners successful?
Guest post by Richard H. Tyson, CEObuilder
My most recent article focused on the importance of competency training to assure operational effectiveness and efficiency—which, in turn, create positive customer outcomes and generate financial success. Competency, however, is only one leading indicator that drives operational success. There is a second, equally critical driver: the health and wellness of your people.
Clearly, sick or injured employees cannot deliver 100 percent of their competency. Even if they show up for work, they generally drag through the day, creating a fraction of the value they would give if they were well. And obviously, if they are absent from work, the problem is exacerbated.
Recent data provided by the Centers for Disease Control shows how significant this is. For every 100 workers in U.S. corporations, 65 are overweight, 33 have high blood pressure, 27 have heart disease and 10 have diabetes. These conditions are not mutually exclusive; many employees have two or more of these conditions.
Over time these issues lead to long-term health crises, including premature death. In the short term they regularly zap the productivity of individual businesses and the economy through absenteeism. It is estimated that about 2.5 percent of the American workforce is not at work on any given workday due to unscheduled absences. Even more significant is what has become known as presenteeism, or attending work while sick.
A 2004 Harvard Business Review article “Presenteeism: At Work—But Out of It” popularized the term. It referenced a study of worker productivity at Lockheed Martin Corporation, which found that employees who came to work with common ailments, such as back pain, arthritis, headaches, colds, flu and allergies, cost the company $34 million in one year. The article reported that presenteeism from these ailments can cut individual productivity by one-third or more.
What is the best strategy for reducing the impact of both absenteeism and presenteeism? To discover that, we must examine the root causes of the ailments that contribute to these issues. Fortunately, the CDC has also documented some of the more significant causes. They include smoking, unhealthy nutrition, sedentary lifestyle, high stress and depression. Any strategy that significantly reduces absenteeism and presenteeism must address these causes.
A 2014 Rand Corporation study found that wellness programs aimed at reducing health risks, such as weight control and stress, saved 48 cents for every $1 spent, taking into account the impact on both healthcare costs and absenteeism. Savings were even higher when programs were focused on high-risk employees with multiple risk factors and chronic disease.
As important as the financial impacts is the profound effect on worker perceptions. Healthways, a well-being improvement company, has developed a Well-Being Assessment it tracks with the Gallup organization. The WBA assesses well-being at the individual level. The assessment was recently completed by about 20,000 employees in three large companies. Those who said it was difficult to exercise or eat healthy at work proved to be twice as likely to have high presenteeism, as did those who said their company had little interest in helping employees become physically active. Those who said their employers did not support them emotionally were over four times more likely have high presenteeism.
The implications of these studies are clear: companies that want to be operationally effective and efficient must provide not only strong competency training and metrics but also health and wellness programs to assure employees are minimally impeded by physical or emotional ailments. Companies that actively engage in the health, nutrition and life balance of their employees reap substantial improvements in productivity and profitability through reductions of both absenteeism and presenteeism.
Small companies often find it difficult to implement an effective wellness program. The good news is that expert resources are available. Corporate Wellness by Vasa Fitness is one of the best here in Utah. Its consultants assist in setting up programs for businesses, small and large. They establish baseline metrics, including weight, blood pressure, BMI and cholesterol levels, against which the progress of each employee is tracked. They also help in setting corporate incentives that are HIPAA compliant.
Corporate wellness is yet another important element of a strong open-book management system. Not only does it represent another link in the chain of desired business outcomes, it is also a strong leading indicator driving morale and workplace satisfaction.
Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses. For 22 years, CEObuilder has successfully brought about an outstanding financial return for CEO and executive clients through providing leading-edge content in the areas of strategizing, team-building, problem-solving and managing for results, as well as the use of proprietary learning and coaching models.
Michelle, a Bank of American Fork employee, received a text alert about a zero dollar amount transaction on her debit card from retailer Amazon. Since Michelle only uses her credit card on Amazon, she knew right away it was a fraud attempt. She quickly had her card blocked to protect against any additional fraud attempts and filed a claim for the fraud against her.
Even though Michelle checks her transaction history regularly and feels she would have noticed the fraudulent transaction soon after it took place, she was glad she had signed up for smsGuardian™, a text alert service through Bank of American Fork that alerts customers to certain types of transactions. In her case, smsGuardian picked up on the zero dollar amount.
Here’s how you can help protect yourself with smsGuardian. When you sign up, you will receive text alerts that will alert you to certain transactions being conducted using your Bank of American Fork VISA® debit card via alerts to your mobile phone. Once enrolled, you will receive a text message each time your debit card is used for: international or out-of-state debit card transactions, purchase authorizations greater than $200, five or more transactions within a 24-hour period, card purchases where the card is not present and many other types of irregular transaction behavior. You can enroll by visiting www.bankaf.com >Products >Personal >Bank cards. On that page you will find a link to sign up for smsGuardian alerts.
After hearing Michelle’s story, I signed up for smsGuardian. It took me less than five minutes.
*Amazon, Kindle, Fire and all related logos are trademarks of Amazon.com, Inc. or its affiliates.
smsGuardian is a trademark of JHA Payment Processing Solutions, Inc.
Guest post by Quincy Fowler
You have probably read recent news about security breaches. Passwords are stolen and online accounts compromised. Online safety is a top priority for everyone who uses the internet for financial transactions. A strong password can help protect you online. Many people are under the impression that a strong password will be difficult to remember. There are effective techniques for creating a strong and memorable password that is difficult to guess by those close to you and by strangers who would want to either figure out your password through social engineering or various decryption methods.
One of the hallmarks of a strong password is the inclusion of special characters to prevent a person from creating a program to guess using standard dictionary words or letters in a random order. The old advice of using a pet’s name or birthdate is simply outdated and dangerous in this age of advanced computing power. In order to create a strong password, you should consider making up a sentence that is easily remembered, but long and complex enough to make it challenging to guess. After you create the sentence, use the first letter of each word to write your password. Include numbers in the sentence and incorporate them with digits. Finally, use any punctuation that may appear in the sentence. In addition, use some special characters such as the ampersand (&) or the “at” symbol (@) in place of letters or entire words as appropriate.
For example, if I chose my sentence to be “The quick brown fox jumped over the 2 lazy dogs”, my password would wind up being Tqbfjot2ld. Most people would be unable to remember this password without context, but I, the rightful owner of the password, would have context to help me figure it out if I forget. Think of your password as the key to the vault door of your online bank account. You want it sufficiently complex that a skeleton key won’t allow unauthorized access.
Quincy Fowler is one of our customers who has years of IT experience—and even more years of creating, forgetting and learning to remember passwords!
Want to plant the seeds for a successful loan application? Check out this graphic for some ways you can prepare for a business loan.
Questions? Ready to apply? Call 800-815-BANK or contact a business banker.