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Compliance News

The latest compliance news items. Past months’ news items are found under the specific Compliance Topic page related to the news item.

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June 2018 | July 2018

July News

  • Bureau Announces Director of New Office of Innovation (7/18/18)
    The Bureau of Consumer Financial Protection announced that Paul Watkins will lead the Bureau's new Office of Innovation. Watkins was previously with the Arizona Office of the Attorney General, where he was in charge of the office's fintech initiatives. Bureau Acting Director Mick Mulvaney created the Office to focus on encouraging consumer-friendly innovation. The new office will focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators, and reviewing outdated or unnecessary regulations.
  • ABA Recommends Changes to Bureau's Complaint Handling Process (7/16/18)
    In a comment letter to the Bureau today — the twelfth and final one that the association will submit as part of the Bureau's ongoing feedback initiative — ABA urged the Bureau to encourage consumers to contact their bank directly to express a concern with the bank's product or service prior to filing a formal complaint with the Bureau. ABA also asserted that it is the responsibility of the Bureau to respond to consumer inquiries, as part of the Bureau's statutory mission to promote consumer financial education. Contact ABA's Jonathan Thessin with questions.
  • OIG Updates Work Plan (7/16/18)
    The Office of Inspector General (OIG) on July 16 announced its updated Work Plan (current as of July 1) publishing initiated, in development, and planned projects the OIG conducted to assist the Bureau of Consumer Financial Protection and the Board. Since its last update, the OIG has completed the following tasks: audit of the Bureau's compliance with the Improper Payments Information Act of 2002, as Amended (IPIA); audit of the Bureau's GMMB Inc. contract, which assessed the Bureau's compliance with the Federal Acquisition Regulation, the Bureau's procurement policy, and any other relevant laws and regulations; and, the security control review of the Bureau's Mosaic System. See the list of completed tasks.
  • Bankers Call for Revisions to TRID for Single-Family Construction Loans (7/13/18)
    In a letter to the Bureau of Consumer Financial Protection, more than 100 bankers from across the country called on the Bureau to revise the TILA-RESPA Integrated Disclosure rule to exempt single-family residential construction loans from onerous disclosure requirements that have created confusion for consumers and caused many banks to exit the market. In addition to calling for revisions to TRID, bankers urged the Bureau to reduce liability enforcement until such revisions can be crafted and implemented. They also asked the Bureau to consider adopting a more straightforward disclosure process for single-family construction loans that would allow banks to provide borrowers with information about the loan amount, interest amount, term of loan and funding and disbursement schedule in any format they choose. Contact Rod Alba with questions.
  • Trade Associations Urge Congress to Take Action on Flood Reauthorization (7/11/18)
    A group of 22 trade associations wrote to congressional leaders urging them to take swift action to extend the National Flood Insurance Program to avoid a lapse in the program, which is set to expire on July 31. Congress has previously approved short-term stop-gap extensions for the program as the debate continues over its reform, and the NFIP lapsed briefly in 2017 and 2018. The groups raised concerns that the program’s lapse during the height of hurricane season could leave millions of Americans at risk and could slow the ongoing recovery in areas stricken by hurricanes in 2017. For more information, contact ABA's Joe Pigg.
  • Bureau Names New Acting Deputy Director (7/11/18)
    The Consumer Financial Protection Bureau on Monday named Brian Johnson as acting deputy director, shortly after Leandra English announced her departure. Johnson is currently principal policy director at the Bureau and as such is Acting Director Mick Mulvaney's top aide. Before joining the Bureau, Johnson was senior counsel to the House Financial Services Committee.
  • Agencies Issue Statements on Implementing S. 2155’s HMDA Reporting Exemptions (7/5/18)
    The Bureau, FDIC and OCC each issued statements acknowledging the partial exemptions granted under S. 2155 — the new regulatory reform law — for certain Home Mortgage Disclosure Act data reporting requirements for some insured depository institutions. The law provides a partial exemption to banks and credit unions for closed-end mortgage loans if the institution originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years, and for open-end lines of credit if the institution originated fewer than 500 open-end lines of credit in each of the two preceding calendar years.
  • ABA Comments on the Bureau's RFI Regarding Financial Education (7/3/18)
    In a comment letter to the Bureau of Consumer Financial Protection — the eleventh of twelve that the association will submit as part of the Bureau's ongoing feedback initiative — ABA urged the Bureau to embrace its statutory mandate to promote financial education, recommending that the Bureau increase its collaboration with the private sector and its amplification of existing financial literacy efforts. The association also encouraged the Bureau to offer education on topics that have not been well-covered to date, including consumer use and navigation of arbitration proceedings, PLUS student loans, financial aggregation services, and avoiding online schemes that steal personal information. In addition, we also emphasized the need for research on financial education, financial stability, and wealth building. Contact Diana Banks with questions.
  • ABA Comments on Bureau's RFI Regarding Bureau Guidance and Implementation Support (7/2/18)
    ABA filed comments on the Bureau of Consumer Financial Protection's Request for Information Regarding Bureau Guidance and Implementation Support — the tenth of 12 that the association will submit in response to the Bureau's ongoing feedback initiative. In the letter, ABA notes that guidance that is appropriately developed, disseminated, and applied by agency staff plays a key role in assisting banks and other supervised institutions in improving and maintaining compliance with laws and supervisory standards, including those related to consumer compliance. Contact Rob Rowe with questions.
  • ABA Seeks Collaborative Approach to Promote Faster Payments Adoption (7/2/18)
    ABA commented on a proposal from the Governance Framework Formation Team, a group of private-sector representatives working in collaboration with the Federal Reserve. ABA welcomed the proposal's focus on "private-sector approaches to solving problems and removing barriers to achieving ubiquity." The formation team’s proposal envisions a Faster Payments Council, a private-sector body that would be independent of the Fed. Ideally, ABA said, this council would foster greater interaction among faster payments solutions, a high-quality customer experience and more efficient cross-border transactions. 
  • FATF Statement on North Korea (7/2/18)
    The Financial Action Task Force (FATF), in a recent public statement, continued to call on the international community to apply counter-measures against the Democratic People's Republic of Korea (DPRK) to protect the international financial system from money laundering and financing of terrorism risks emanating from the country. "In addition to enhanced scrutiny, the FATF further calls on its members and urges all jurisdictions to apply effective counter-measures, and targeted financial sanctions in accordance with applicable United Nations Security Council Resolutions, to protect their financial sectors from money laundering, financing of terrorism and WMD proliferation financing (ML/FT/PF) risks emanating from the DPRK," the statement said.
  • California Enacts Controversial Data Privacy Law (7/2/18)
    California Gov. Jerry Brown signed a bill creating new data privacy requirements for businesses that handle consumer data in the state. For financial companies subject to the privacy provisions of the Gramm-Leach-Bliley Act, the law provides a narrow exception for consumer data collected, processed, sold or disclosed pursuant to GLBA, if the requirements of the state law are in conflict with GLBA. The California Bankers Association and other business groups will continue urging California lawmakers to amend the law as the compliance date draws closer. ABA is closely following the process. For more information, contact ABA's Sabrina Bergen.
  • ABA Updates Enforcement Action Database (7/2/18)
    ABA recently updated the enforcement database to include four new enforcement actions. Two of the enforcement actions concerned BSA/AML violations and resulted in civil monetary penalties of $12.5 million. The other two enforcement actions were issued by the Bureau for TILA and FCRA violations. Contact Teshale Smith or Rick Freer with questions.
  • Senate Banking Committee to Hold CFPB Nomination Hearing July 19 (7/2/18)
    In related news, the Senate Banking Committee has said it will hold a nomination hearing on July 19 for Kathy Kraninger, President Trump’s nominee to be the next director of the CFPB. Currently, Kraninger is an associate director at the Office of Management and Budget (OMB) responsible for financial regulatory agency budgets, and previously served as Senate staff on Capitol Hill and at the Department of Homeland Security.

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June News

  • OCC Revises Comptroller's Handbook Booklets (6/29/18)
    The OCC issued several revised or updated booklets as part of the Comptroller's Handbook. The reissued booklets cover the bank supervision process, community bank supervision, compliance management systems, large bank supervision and supervision of federal branches and agencies.
  • ABA Urges FCC to Issue New TCPA Rules (6/28/18)
    ABA urged the Federal Communications Commission to issue new rules to ensure that customers can receive important communications from their banks. ABA's letter was submitted as the FCC considers issuing new Telephone Consumer Protection Act rules in light of a federal appellate court’s decision in March to strike down two key aspects of the FCC’s prior rules. ABA urged the FCC to issue a new interpretation of an “automatic telephone dialing system,” such that the statute’s restrictions would apply only to dialing equipment that generates telephone numbers in random or sequential order. ABA also asked the FCC to shield from liability calls made to customer numbers that have been reassigned to other consumers, and to confirm that banks may contract with their customers to limit the methods by which customers may revoke their consent to receive autodialed calls.
  • Agencies Issue 2018 List of Distressed, Underserved Non-Metro Areas (6/27/18)
    The federal banking agencies released the 2018 list of distressed or underserved nonmetropolitan middle-income geographies, where banks can receive Community Reinvestment Act (CRA) credit for revitalization activities. The designations reflect local economic conditions, including unemployment, poverty and population changes. Revitalization or stabilization activities in these geographies are eligible to receive CRA consideration under the community development definition for 12 months after publication of the current list.
  • ABA Compliance Article Examines Flood Insurance Compliance (6/26/18)
    With the National Flood Insurance Program's authorization set to expire in July, the cover story in the July/August issue of ABA Bank Compliance magazine takes a deep dive into complex flood insurance regulations and guidance. Kathryn Morris, CRCM, covers several flood insurance-related topics, including what happens if NFIP authorization lapses, the landscape for private flood insurance, the granular definition of a "building" requiring flood coverage and how to establish insurable value. Other stories in the issue cover why it pays to have a remediation policy, planning ahead for Community Reinvestment Act compliance in a time of uncertainty, business continuity planning and what's new with UDAP.
  • ABA Comments on Request for Information Regarding the Bureau's Inherited Regulations and Inherited Rulemaking Authorities (6/22/18)
    ABA filed comments on the Bureau of Consumer Financial Protection's Request for Information Regarding the Bureau's Inherited Regulations and Inherited Rulemaking Authorities — the ninth of 12 that the association will submit in response to the Bureau's ongoing feedback initiative. In general, ABA encouraged the Bureau to update regulations and related commentaries on a regular basis as issues and questions arise and markets evolve. ABA focused on a few important priorities, specifically, correction and clarification of fair lending standards under the Equal Credit Opportunity Act regarding disparate impact and modernization of disclosures in an electronic age. In addition, ABA offered specific recommendations for a number of other adjustments to regulations to promote compliance and correct impractical or inappropriate requirements. For more information, contact ABA's Nessa Feddis.
  • Federal Judge Rules Bureau's Structure Unconstitutional (6/22/18)
    A federal judge ruled that the Bureau's structure — a single powerful director who cannot be removed at will by the president — is unconstitutional. In her decision, Judge Loretta Preska forbade the Bureau from pursuing its lawsuit — which it filed together with the state of New York — against New Jersey-based RD Legal Funding. The lawsuit alleged that the company misled customers into entering cash advance agreements that functioned as usurious loans that were void under state law. She added that the New York attorney general would be permitted to proceed with its lawsuit independently. 
  • Fed Reschedules Webinar on Fair Lending, UDAP Implications of Fintech (6/21/18)
    The Federal Reserve rescheduled its Outlook Live event, Keeping Fintech Fair: Thinking About Fair Lending and UDAP Risks, due to a conflict with the ABA's Regulatory Compliance Conference, which starts this weekend. The webinar has been rescheduled to July 16. The webinar will explore guideposts for evaluating fair lending and UDAP risks that arise when banks adopt new technologies to serve customers, with a focus on alternative data.
  • HUD Issues Request for Public Comment on Disparate Impact Regulation (6/20/18)
    In a move long sought by the American Bankers Association, the Department of Housing and Urban Development is formally seeking public comment on whether its rule implementing the Fair Housing Act’s discriminatory effects standard is consistent with the Supreme Court decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project. HUD requested feedback on the rule's burden-of-proof standard, the rule's definition of "discriminatory effect" and whether it strikes the proper balance in encouraging legitimate legal claims, the need for clarification on the causality standard for a prima facie case under Inclusive Communities, the need for safe harbors and other revisions to the rule that could reduce uncertainty or undue burden. For more information, contact ABA's Rod Alba.
  • ABA, Trade Groups Urge Fixes to Bureau Remittance Rule (6/20/18)
    As part of the Bureau’s ongoing feedback initiative, the American Bankers Association and its transaction banking subsidiary BAFT, joined by the Clearing House and the Consumer Bankers Association, urged the Bureau to make several much-needed rule changes to its remittance rule. Specifically, the groups urged the Bureau to exclude transfers that are outside the commonly understood scope of remittances; preserve depository institutions' ability to estimate fees and exchange rates, rather than providing third parties' actual rates and fees; provide more flexibility and reducing redundancy in disclosures; and modify error resolution provisions. Contact Rob Rowe with questions.
  • ABA Asks Bureau to Review New and Adopted Rules (6/18/18)
    The Bureau of Consumer Financial Protection should consider whether the rules it has written since opening its doors are "consistent with the law, clear, and whether they promote the financial interests of consumers in a strong, vibrant, and innovative market that offers the variety of financial products and services that consumers want and value," the American Bankers Association said in a comment letter to the Bureau today. The letter—the eighth of 12 that the association will submit in response to the Bureau's ongoing feedback initiative—identified the banking industry's key priorities for reform of the rules governing remittance transfers, mortgage origination and servicing, and prepaid cards. For more information, contact ABA's Virginia O'Neill.
  • Trump to Nominate Kathy Kraninger to Lead Bureau (6/18/18)
    President Trump will nominate Kathy Kraninger, a top aide at the Office of Management and Budget, as director of the Bureau of Consumer Financial Protection, the White House confirmed Saturday. Kraninger is an associate director at OMB responsible for financial regulatory agency budgets, and previously served as Senate staff on Capitol Hill and at the Department of Homeland Security. Upon confirmation, Kraninger would replace CFPB Acting Director Mick Mulvaney, who is also the confirmed director of OMB. Kraninger’s nomination comes at a key moment for the CFPB; under the Federal Vacancies Reform Act, Mulvaney’s stint as acting director would have expired this month, but when a permanent replacement is nominated, the clock resets, allowing Mulvaney to remain as acting director until Kraninger is confirmed.
  • OCC Bulletin Clarifies CRA Supervisory Policies and Processes (6/15/18)
    While its efforts to modernize Community Reinvestment Act regulations proceed along a separate track, the OCC on Friday issued a bulletin to clarify current OCC policies and processes for assessing banks' CRA performance. These policy clarifications, which are effective immediately, address: implementation of full-scope and limited-scope reviews; consideration of activities that promote economic development; use of demographic, aggregate, and market share data; evaluation of the borrower distribution of loans outside bank assessment areas; evaluation frequency and timing; the CRA performance evaluation period; and, evaluation of home mortgage loans.
  • Agencies Rescind Policy Statement on Interagency Notification of Formal Enforcement Actions (6/13/18)
    The Federal Financial Institutions Examination Council rescinded its revised policy statement on "Interagency Coordination of Formal Corrective Action by the Federal Bank Regulatory Agencies," dated Feb. 20, 1997. This guidance applies to all OCC-supervised institutions.
  • ABA Foundation Releases Free Guide to Partnerships That Protect Senior Customers (6/11/18)
    To mark World Elder Abuse Awareness Day on Friday, the ABA Foundation this week is releasing a free new guide to help bankers combat financial exploitation of seniors. The new guide provides an overview of the state of financial exploitation; addresses top scams currently in play; examines what banks can do, including how to report suspected fraud; and outlines the distinct roles of law enforcement agencies and adult protective services and how to partner with them. It also includes several sample resources, including introduction letters to law enforcement, APS, senior-focused nonprofits and senior living facilities. Learn more at
  • Mulvaney: Bureau Working to Create 'Community Networks' to Counter Elder Abuse (6/11/18)
    The Bureau of Consumer Financial Protection Acting Director Mick Mulvaney said at a town hall event in Topeka, Kan., on Friday that the Bureau is working to form "community networks" of local law enforcement agencies and state financial regulators that can work together with the Bureau to counter elder financial abuse and "find where the problems are." "We are good at collecting data, but you're on the ground," Mulvaney said, calling on state attorneys general to play an active role in building these community networks over the next several months. "You are where the rubber meets the road. And you have a much better chance of focusing on solving that problem." He added that "it is our goal to have this in place by the end of the calendar year."
  • ABA Urges Simpler, More Transparent Rulemaking Process at Bureau (6/8/18)
    The Bureau of Consumer Financial Protection should target its rulemaking process more precisely on the consumer harms it seeks to address and do so in a clear, simple and transparent manner, ABA said in a comment letter to the Bureau. "The Bureau's rulemaking record to date is best characterized as a series of ambitious undertakings riddled with unintended — but often foreseeable — consequences," ABA said. To mitigate these problems, ABA made several specific suggestions, including: simplifying the overall rulemaking process to avoid frequent and costly follow-up rules; better incorporating feedback from small business review panels; and creating a chief economist's office to conduct cost-benefit analysis, among others. Contact Shaun Kern with questions.
  • ABA Supports Creation of Database of Reassigned Phone Numbers (6/8/18)
    In a comment letter to the Federal Communications Commission, ABA urged the FCC to continue developing a centrally administered database of phone numbers that have been relinquished by one individual and reassigned to another. ABA also called on the FCC to provide a safe harbor for banks and other callers that use the database and to grant the joint petition submitted by ABA, the U.S. Chamber of Commerce and several other industry groups in early May asking for a new interpretation of the definition of an "automatic telephone dialing system," commonly known as an "autodialer." For more information, contact ABA's Jonathan Thessin.
  • Bureau to Retool Advisory Councils; Dismisses Current Members (6/7/18)
    The changes come after receiving requested feedback from ABA and others on its external affairs process. As part of this process, the Bureau dismissed all members of the Bureau's advisory boards and councils, including its community bank and credit union councils and the Consumer Advisory Board, which is mandated by the Dodd-Frank Act to meet twice a year. The Bureau will select new members through the current application cycle, for which applications were due in April. All three bodies will be smaller.
  • ABA Staff Analysis: FFIEC Customer Due Diligence and Beneficial Ownership Exam Procedures (6/6/18)
    ABA released a summary and guidance on the FFIEC's Customer Due Diligence (CDD) and Beneficial Ownership Exam Procedures issued on May 11. The exam procedures are in two parts, reflecting the two parts of the regulation. ABA members must login to view the Staff Analysis. For more information, contact ABA's Rob Rowe.
  • Treasury to Update OFAC Website on June 7 (6/5/18)
    The Treasury Department will be updating the HTTPS certificate it uses for the domain on June 7. Users may have to reinstall the root certificate for the site if they experience connection problems.
  • OIG Releases Semiannual Report to Congress (6/5/18)
    The Office of Inspector General (OIG) released its Semiannual Report to Congress, reporting on the Bureau's and the Federal Reserve's programs and operations from October 2017 through March 2018. The OIG found that since its last report in October, the Bureau has taken steps to mature its information security program to ensure that it is consistent with FISMA requirements. The OIG also reports that the Bureau has offboarding controls related to conflicts of interest for executive employees' postemployment restrictions; however, the Bureau has opportunities to strengthen controls related to other components of the employee offboarding process.
  • ABA Urges Bureau to Cease Public Complaint Database (6/4/18)
    In a comment letter to the Bureau — the sixth of 12 the association will submit as part of the Bureau’s ongoing feedback initiative — ABA urged the Bureau to cease the publication of individual consumer complaints, including complaint narratives. Congress in the Dodd-Frank Act did not authorize the Bureau to publish individual complaints, but the Bureau — under orders from former Director Richard Cordray — established a public database of complaints. ABA urged the Bureau to focus on its statutory mandate: overseeing the individual responses to consumer complaints, analyzing complaint data for supervisory oversight and policy-making purposes, and providing aggregate reporting to Congress. Contact Jonathan Thessin with questions.
  • Bureau's Complaint Snapshot Focuses on Debt Collection (6/1/18)
    Twenty-seven percent of total complaints received by the Bureau since 2011 have been debt collection complaints, according to the Bureau's Complaint Snapshot. Consumers reported that there were debts on their consumer credit reports but that they did not have prior written notice of the existence of the debt. Other consumers stated that they felt uncomfortable disclosing personal information to people who called asking for it because they were not sure whether the person calling was a legitimate debt collector. Consumers also complained about the communication tactics companies used when attempting to collect a debt.

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