Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 268

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 268
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 and making loans without a reasonable expectation that the borrowers will be able to repay the loans irrespective of the value
of the underlying property. Over the course of 2013, the CFPB issued several rules on mortgage lending, notably a rule requiring all
home mortgage lenders to determine a borrower’s ability to repay the loan. Loans with certain terms and conditions and that otherwise
meet the definition of a “qualified mortgage” may be protected from liability to a borrower for failing to make the necessary
determinations. In response to these laws and related CFPB rules, we have tightened, and in the future may further tighten, our mortgage
loan underwriting standards to determine borrowers’ ability to repay. Although it is our policy not to make predatory loans and
to determine borrowers’ ability to repay, these laws and related rules create the potential for increased liability with respect
to our lending and loan investment activities. They increase our cost of doing business and, ultimately, may prevent us from making certain
loans and cause us to reduce the average percentage rate or the points and fees on loans that we do make.

We
are subject to federal and state fair lending laws, and failure to comply with these laws could lead to material penalties.

Federal and state fair
lending laws and regulations, such as the Equal Credit Opportunity Act and the Fair Housing Act, impose nondiscriminatory lending requirements
on financial institutions. The U.S. Department of Justice, CFPB and other federal and state agencies are responsible for enforcing these
laws and regulations. Private parties may also have the ability to challenge an institution’s performance under fair lending laws
in private class action litigation. A successful challenge to our performance under the fair lending laws and regulations could adversely
impact our rating under the Community Reinvestment Act and result in a wide variety of sanctions, including the required payment of damages
and civil money penalties, injunctive relief, imposition of restrictions on merger and acquisition activity and restrictions on expansion
activity, which could negatively impact our reputation, business, financial condition and results of operations.

The
Federal Reserve may require us to commit capital resources to support the Bank.

The Federal Reserve
requires a bank holding company to act as a source of financial strength to a subsidiary bank and to commit resources to support such
subsidiary bank. Under the “source of strength” doctrine, the Federal Reserve may require a bank holding company to make
capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound