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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 | May

June News

  • ABA Supports Proposed Changes to HMDA Reporting Thresholds (6/13/19)
    In a comment letter to the Consumer Financial Protection Bureau, ABA concurred with the CFPB's proposed increase to the threshold for closed-end mortgage loans, recommending that the new threshold be set at 100 and possibly higher (up from 25). ABA also urged the CFPB to remove any requirements related to reporting open-end transactions under HMDA, “as this data lacks value in advancing relevant legislative objectives while imposing very high compliance costs.” At a minimum, the association called for the permanent extension of the temporary coverage threshold of 500 open-end lines of credit. For more information, contact ABA’s Rod Alb.
  • Trade Groups Weigh In on Proposed Changes to Lender Certification Requirements (6/11/19)
    ABA joined three other financial and housing trade organizations in a comment letter to the Federal Housing Administration offering feedback on proposed changes to its single-family loan and lender-level certifications. FHA proposed the changes last month in an effort to encourage greater bank participation in the program. In the letter, the groups called on FHFA to either rescind the annual certification requirement or replace the current annual certifications with “a certification that reinforces the obligation of each mortgagee to establish and operate in accordance with a corporate risk management plan.” They added that such an approach “would more meaningfully foster compliance by each mortgagee with FHA requirements.” For more information, contact ABA’s Rod Alba.
  • FCC Releases Text of Call-Blocking Ruling (6/11/19)
    The Federal Communications Commissions has released the text of its ruling that permitted telephone companies to enroll customers automatically in a call-blocking program designed to identify unwanted calls. The final ruling included important changes to address the erroneous blocking of calls placed by banks and other legitimate businesses, and was effective immediately following the FCC’s vote. For more information, contact ABA’s Jonathan Thessin.
  • CFPB Extends Compliance Date of Underwriting Provisions in Payday Rule (6/7/19)
    The Consumer Financial Protection Bureau extended the compliance date for the mandatory underwriting provisions of its final rule governing short-term, small-dollar loans, from Aug. 19, 2019, to Nov. 19, 2020. The CFPB has separately proposed to rescind those underwriting requirements. For more information, contact ABA’s Jonathan Thessin.
  • FCC Adopts Call-Blocking Declaratory Ruling (6/7/19)
    The Federal Communications Commission unanimously adopted a ruling permitting voice service providers to enroll customers automatically in a call-blocking program designed to identify unwanted calls. The ruling, which is effective immediately, requires that customers be able to opt out of the program. "Our members share the FCC’s goal of eliminating illegal, automated calls," said ABA EVP Virginia O'Neill. "Today's declaratory ruling advances that goal, while at the same time taking an initial step to prevent consumers from missing critically important and time-sensitive calls affecting their financial well-being, health and safety."
  • McWilliams: CRA Reform to Clarify Qualifying Activities, Lending Assessment (6/5/19)
    In remarks at a meeting of community development bankers, FDIC Chairman Jelena McWilliams highlighted several ongoing initiatives at the agency to strengthen and sustain the nation’s community banks, including the highly anticipated reform of the Community Reinvestment Act (CRA) regulations.

May News

  • OCC Issues Long-Awaited Final Rule on HOLA Flexibility (5/30/19)
    The OCC on May 24 issued a long-awaited final rule implementing a new section of the Home Owners' Loan Act (HOLA) permitting certain federal stock and mutual savings associations to elect the rights and duties of national banks. The provision—long advocated for by ABA—was included as part of last year's S. 2155 regulatory form law. Under the final rule—which takes effect July 1—federal savings associations with total consolidated assets of $20 billion or less as of Dec. 31, 2017, may at any time elect to become “covered associations.” Making this election will remove portfolio asset restrictions that have limited some banks’ ability to respond to changing needs in their communities. Contact Joe Pigg for more information.
  • Payday Lenders Lawsuit Against the FDIC and OCC Dismissed (5/28/19)
    A group of payday lenders has dismissed a lawsuit against the OCC and FDIC. The lawsuit alleged that the agencies had unfairly interfered with the plaintiffs' access to banking services through Operation Choke Point. In a press release, the OCC stated that, "[t]his resolution of the case confirms what the OCC has long told the U.S. District Court and Congress: namely, that the agency did not participate in 'Operation Choke Point' or in any purported conspiracy to force banks to terminate the bank accounts of plaintiffs or of other payday lenders."
  • FinCEN Announces Innovation Hours (5/25/19)
    FinCEN has announced a new program to help with innovative approaches to combatting money laundering and terrorist financing. The program is designed to assist fintech and regtech companies present new and emerging products to FinCEN and demonstrate how they can be used by financial institutions. Primary consideration will be given to companies that are already operational. This is part of the overall innovation program that FinCEN announced at the ABA/ABA Financial Crimes Enforcement Conference last December.
  • CFPB Expands Financial Education Tool to Serve Active-Duty Servicemembers (5/24/19)
    The Bureau expanded its “Misadventures in Money Management,” a financial education tool initially developed for future servicemembers. The CFPB is expanding the program to serve all servicemembers on active duty, including in the Reserve or the National Guard. The program covers topics including consumer financial decision-making, choosing a financial institution, understanding protections under the Servicemembers Civil Relief Act, and understanding how debt can affect a military career.
  • ABA, Trade Groups Welcome DOL Rewrite of 'Overtime Rule' (5/22/19)
    ABA, along with several other industry trade groups under the Partnership to Protect Workplace Opportunity, expressed support for the U.S. Department of Labor’s proposed rewrite of the Obama administration’s 2016 overtime rule, which was overturned in federal court. The groups welcomed DOL’s proposal to set the salary level at which an employee could be exempted from federal overtime and minimum wage requirements at $679 per week, or $35,308 per year. The groups also expressed support for DOL’s use of a nationwide uniform salary level and rejection of automatic updating of the salary level. For more information, contact ABA’s Jonathan Thessin.
  • CFPB Publishes Spring 2019 Regulatory Agenda (5/22/19)
    The CFPB published its Spring 2019 Agenda. The agenda lists the regulatory matters that the Bureau anticipates having under consideration during the period from May 1, 2019, to April 30, 2020. ABA is reviewing the agenda will soon issue a summary. For more information, contact ABA’s Jonathan Thessin.
  • FinCEN Recognizes Agencies that Use BSA Reporting to Prosecute Criminals (5/16/19)
    The Financial Crimes Enforcement Network (FinCEN) on May 16 held its Fifth Annual Law Enforcement Awards Program to recognize the efforts of several law enforcement agencies that use Bank Secrecy Act (BSA) reporting to successfully pursue and prosecute criminal investigations. Yesterday's awards program concluded the Bank Secrecy Act Advisory Group (BSAAG) Plenary. BSAAG advises the U.S. Treasury Department on the operations of the BSA. Rob Rowe who currently serves as the ABA representative to the BSAAG, presented the award for Significant Fraud on behalf of ABA.
  • ABA Updates Enforcement Action Database (5/15/19)
    ABA recently updated the enforcement database to include eight enforcement actions. The FDIC issued four enforcement actions. The FDIC assessed a total of $200,000 in civil money penalties against a bank for UDAP and TCPA violations. The FDIC also issued a cease and desist order against two banks for BSA and CMS violations. The Federal Reserve entered into a consent order with a bank for BSA/AML violations and deficiencies with OFAC regulations. The OCC also entered into a consent order with a bank relating to deficiencies with its BSA compliance program. Lastly, Treasury issued two enforcement actions relating to OFAC violations. For the OFAC violations, one bank entered into a settlement for $1.3 billion and the other bank was assessed a $1.1 billion civil money penalty. Contact Teshale Smith with questions.
  • CFPB Proposes Methodology for Review of Rules under the RFA and Review of the 2009 Overdraft Rule (5/13/19)
    The Bureau published two proposals: a request for comment on its proposed methodology for review of rules under the Regulatory Flexibility Act (RFA), and a request for comment on its first RFA review of the 2009 Overdraft Rule. The purpose of the periodic review of rules under the RFA is to minimize any significant economic impact of the rules upon a substantial number of small entities, consistent with the objectives of applicable statutes. The CFPB also announced the launch of its first RFA review, which is the 2009 Overdraft Rule. For questions on the review of rules under the RFA, contact Nessa Feddis. For questions on the Overdraft Rule review under the RFA, contact Jonathan Thessin.
  • FinCEN Issues Guidance on Convertible Virtual Currencies (5/10/19)
    The Financial Crimes Enforcement Network issued guidance on how its regulations apply to money transmission involving convertible virtual currencies. FinCEN said the guidance does not impose new regulatory requirements but rather consolidates existing regulations, administrative rulings and guidance. FinCEN also issued an Advisory to assist financial institutions in identifying and reporting suspicious activity related to criminal exploitation of CVCs for money laundering, sanctions evasion, and other illicit financing purposes.
  • FHA Proposes Changes to Lender Certification Requirements (5/10/19)
    The Federal Housing Administration issued a proposal making changes to its single-family loan and lender-level certifications in an effort to encourage greater bank participation in the FHA program. FHA is proposing to revise the addendum to the Uniform Residential Loan Application to provide greater clarity, streamline information and better align language in the addendum with existing statute and FHA policy. Comments on the proposal will be due June 8.
  • FHA Seeks Feedback on Single-Family Loan Sale Program (5/10/19)
    The Federal Housing Administration issued an advance notice of proposed rulemaking seeking public feedback on its single-family loan sale program as it looks to make the program permanent. Through the program, eligible single-family mortgage loans are assigned to FHA in exchange for claim payment, and mortgage notes are sold competitively to maximize recoveries and strengthen the FHA Mutual Mortgage Insurance Fund. Specifically, FHA is seeking feedback on program obstacles, benefits and drawbacks for single family loan servicers, bidders and purchasers. Comments are due by July 5. For more information, contact ABA's Rod Alba.
  • Fed Transfers SAFE Act Rulemaking Authority to CFPB (5/10/19)
    The Federal Reserve approved final amendments transferring its rulemaking authority for the Secure and Fair Enforcement Mortgage Licensing Act—which mandates a nationwide licensing and registration system for residential mortgage loan originators—to the CFPB. Entities previously subject to Fed rules are now subject to the CFPB rules. The amendments will be effective 30 days after publication in the Federal Register.
  • Fed Floats Extended Hours to Facilitate Same-Day ACH (5/10/19)
    The Federal Reserve sought public comment on whether the Fed banks should extend the daily operating hours of the National Settlement Service (NSS) and Fedwire Funds Service to facilitate adoption of a third same-day ACH processing and settlement window. The request for comment comes after NACHA, the electronic payments association, last fall approved a third same-day ACH window. The Fed proposed extending NSS operating hours by one hour to 6:30 p.m. ET, extending the time for initiating Fedwire transfers on behalf of third parties by 45 minutes to 6:45 p.m. ET and closing Fedwire half an hour later at 7 p.m. ET. The Fed also requested comment on corresponding changes to the Fed's Policy on Payment System Risk. Comments are due 60 days after the notice is published in the Federal Register. For more information, contact ABA's Steve Kenneally.
  • ABA Staff Analysis: OCC Pilot Program Proposal (5/8/19)
    ABA issued a Staff Analysis on the OCC's proposed Innovation Pilot Program, designed to provide a framework for banks to engage with the OCC on small-scale short-term tests. Under the proposed terms of the program, OCC-supervised banks could request OCC participation in a pilot of up to 24 months. Tools that the OCC might use would include interpretive letters, supervisory feedback and technical assistance. The legal permissibility of the proposed activity must be determined before any live test can begin. Pilot projects must include reasonable controls and exit strategies. Comments on the OCC's proposed program are due by June 14. For more information, contact ABA's Rob Morgan.
  • ABA Calls for Broader Application of TILA to PACE Loans (5/7/19)
    ABA offered feedback to the Consumer Financial Protection Bureau on its planned rulemaking on residential Property Assessed Clean Energy (PACE) loans, a controversial type of financing that allows homeowners to pay for energy-efficient retrofitting—such as solar panels and high-efficiency air conditioners—through their property tax assessments, and which often take lien priority over the first mortgage lien. Contact Joe Pigg with questions.
  • Bureau Issues Notice of Proposed Rulemaking to Implement FDCPA (5/7/19)
    The Bureau issued a Notice of Proposed Rulemaking to implement the Fair Debt Collection Practices Act (FDCPA). Among other things, the proposal would set clear limits on the number of calls debt collectors may place to reach consumers on a weekly basis; clarify how collectors may communicate lawfully using voicemails, emails and text messages; and require collectors to provide additional information to consumers to help them identify debts and respond to collection attempts. Read a summary and flowchart of the proposed rule. Comments are due 90 days after publication in the Federal Register. Contact Diana Banks with questions.
  • Bureau Releases ID Theft Protection Guide (5/7/19)
    The Bureau released Identity Theft Protection Guide to offer suggestions on ways to guard consumers against identity theft. The guide offers five ways to protect consumers from identity theft: first, if you suspect that your personal information was exposed in a data breach, consider placing a freeze on your credit reports; second, review your financial statements regularly; third, review your credit reports at least once a year; fourth, consider a fraud alert to add an extra layer of protection to your credit report; and finally, consider using identity and credit monitoring services to scan your credit reports and alert you when a change occurs.
  • CFPB Proposes to Raise HMDA Reporting Thresholds (5/3/19)
    The Consumer Financial Protection Bureau on May 2 issued a proposal to provide relief for smaller institutions from the Home Mortgage Disclosure Act (HMDA) data collection and reporting requirements. The proposal would increase the coverage threshold for closed-end mortgage loans from 25 loans to either 50 or 100. For open-end lines of credit, the CFPB is proposing to extend for another two years the current temporary coverage threshold of 500 open-end lines of credit. After that, the threshold would be permanently set at 200. Contact Rod Alba with questions.
  • CFPB Issues Fact Sheet on TRID Requirements for Assumptions (5/3/19)
    The Consumer Financial Protection Bureau issued a fact sheet to help lenders determine when the TILA-RESPA integrated disclosures—the Loan Estimate and the Closing Disclosure—are required when mortgages are assumed. The fact sheet addresses TRID requirements when a new consumer is added or substituted as an obligor on an existing closed-end credit transaction secured by real property and that is not a reverse mortgage.
  • OFAC Publishes Framework for OFAC Compliance (5/2/19)
    The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) on May 2 published "A Framework for OFAC Compliance Commitments." The framework is meant to assist U.S. and foreign entities that conduct business in or with the United States or use U.S.-origin goods or services, with a framework on the essential components of a sanctions compliance program. While OFAC acknowledges that each risk-based sanctions compliance program will vary depending on the company's size and location, each program should have at least five essential components of compliance: management commitment; risk assessment; internal controls; testing and auditing; and training.
  • ABA Comments on CFPB's RFI re: Consumer Credit Card Market (5/1/19)
    ABA, in a comment letter to the Bureau wrote that since the Bureau’s last credit card market report in 2017, credit card interest rates have increased across all tiers as the Federal Reserve Board has raised interest rates. Outdated debt collection rules need to be revised to improve the functioning of the debt collection market and improve consumer understanding and protection. The Bureau is expected to release its report on the credit card market in July 2019. Contact Nessa Feddis with questions.

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