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June 2020 - Compliance Alert

Consumer Financial Protection Bureau (CFPB)

CFPB Issues Two NPRMs Regarding Expiration of GSE Patch

The Consumer Financial Protection Bureau issued two Notices of Proposed Rulemaking (NRPMs) that aim to ensure a smooth transition as the Government-Sponsored Enterprises Patch (GSE) expires as scheduled in January 2021 and the temporary qualified mortgage (QM) loan definitions of the GSE expire with it. The first NRPM proposes a change to the General QM definition in Regulation Z, replacing the DTI limit with an approach based on price. The second NRPM proposes amending Regulation Z to extend the expiration of the GSE to accommodate a final rule regarding the amendments made in the first NRPM.

The Office of the Comptroller of the Currency (OCC) 

The OCC Approves Interim Final Rule Reducing Assessments Due to COVID-19

The Office of the Comptroller of the Currency approved an interim final rule (IFR) that reduces the number of OCC assessments owed to the OCC on September 30, 2020. This IFR is aimed at providing relief to institutions affected by the national emergency declared to halt the spread of COVID-19. This one-time change will allow banks assessments due on September 30, 2020 to be calculated using the December 31, 2019 call report for each institution rather than the June 30, 2020 call report, reducing the number of assessments due.

 

Securities and Exchange Commission

SEC Announces Extension for In-Person Voting Relief

The Securities and Exchange Commission announced that it would extend the conditional relief originally established in March 2020 regarding in-person voting requirements for fund boards to at least December 31, 2020. The extension is designed to ease pressures with in-person meeting that may continue due to COVID-19. The SEC will continue to monitor the effects of COVID-19 on investors and market participants.

 

Federal Deposit Insurance Corporation 

FDIC and Other Agencies Release State Loan-to-Deposit Ratios

The Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency issued the host state loan-to-deposit ratios, replacing the rations from last year, released on May 28, 2019. These ratios are used in determining compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which requires a loan-to-deposit ratio test that compares the statewide ratio of the bank to the host state ratio for banks in a certain state.

Federal Resevce Board

FRB Releases FraudClassifier Model

The Federal Reserve recently published the FraudClassifier Model. The model is used to better classify and understand fraudulent activity – as well as the ways it occurs and how often it occurs across the financial industry. The model was developed by FRB fraud experts of the Fraud Definitions Work Group.

May 2020 - Compliance Alert

Consumer Financial Protection Bureau (CFPB)

CFPB Defines Financial Firms' Responsibilities During COVID-19 Pandemic

The Consumer Financial Protection Bureau released a document with an outline of the responsibilities of certain financial firms and FAQs during the COVID-19 pandemic. The statement defines credit card providers’ billing error obligations, as well as the obligations of open-end non-home secured creditors. It also encourages financial firms to continue to assist their communities by waiving fees, lowering minimum balance obligations, and changing account terms in a way that benefits customers.

The Office of the Comptroller of the Currency (OCC) 

OCC and other Agencies Share Standards in Issuing Sensible Small-Dollar Loans

The Office of the Comptroller of the Currency and other regulatory agencies issued guidance for financial institutions on how to responsibly offer small-dollar loans to their customers to meet the short-term credit needs of those customers during the COVID-19 pandemic or other extraordinary circumstances that may cause temporary cash-flow irregularities.

 

Securities and Exchange Commission

SEC Amends CAT NMS Plan Improving Transparency and Financial Accountability

The Securities and Exchange Commission voted to amend the national market system plan regulating the consolidation audit trail (“CAT NMS Plan”) that will add more transparency, authority, and financial responsibility to the application of the plan.  The amendments entail FINRA and the self-regulatory organizations involved in the CAT NMS Plan publishing and filing a comprehensive implementation plan for CAT and quarterly progress reports.

 

Federal Deposit Insurance Corporation 

FDIC Proposes Rule to Mitigate the Deposit Insurance Assessment Effects of Participation in the PPP, PPPLF, and the MMLF

The Federal Deposit Insurance Corporation approved a notice of proposed rulemaking that would mitigate the deposit insurance assessment effects of participating in the Paycheck Protection Program (PPP) established by the U.S. Small Business Administration and the Paycheck Protection Program Lending Facility (PPPLF) and Money Market Mutual Fund Liquidity Facility (MMLF) established by the Board of Governors of the Federal Reserve System. To provide certainty to insured depository institutions (IDIs) regarding the assessment effects of participating in these programs, the FDIC is proposing an effective date by June 30, 2020, and an application date of April 1, 2020, which would ensure that the changes are applied to assessments starting in the second quarter of 2020.

National Credit Union Administration

NCUA and Other Agencies Issue Policy Statement on Allowances for Credit Losses and Guidance on the Credit Risk Review Systems

The National Credit Union Association and four other federal regulatory agencies approved a policy statement encouraging uniformity in the interpretation and use of the Financial Accounting Standards Board’s credit losses accounting standard regarding the current expected credit losses methodology.

April 2020 - Compliance Alert

Consumer Financial Protection Bureau (CFPB)

CFPB Announces Remittance Transfer Guidance During Pandemic

The Consumer Financial Protection Bureau announced that it was taking action to ensure that customers can use remittance transfers without disruption during the COVID-19 Pandemic. Many people use these transfers to send money to family and friends overseas and the CFPB issued a policy statement that would make the Bureau’s supervision of remittance transfers more flexible, enabling insured institutions to better serve their customers.

CFPB and FHFA Begin New Borrower Protection Program

The Consumer Financial Protection Bureau and the Federal Housing Finance Agency announced a joint effort that allows these agencies to easily share service information, protecting borrowers during the COVID-19 pandemic. Through the new program, called the Borrower Protection Program, the CFPB will share complaint information and analytical tools with the FHFA and the FFHA will share information about forbearance, modifications and other loss mitigation initiatives by Fannie Mae and Freddie Mac.

 

The Office of the Comptroller of the Currency (OCC) 

Comptroller Releases FFIEC BSA/AML Manual Statement

The Comptroller of the Currency issued a statement that announced changes to the BSA/AML Examination Manual. The changes improve and clarify the examinations’ risk-focus by giving examiners more focused directions.

 

 

Securities and Exchange Commission

SEC Announces Formation of COVID-19 Market Monitoring Group

The Securities and Exchange Commission announced that they were creating a temporary cross-divisional COVID-19 Market Monitoring Group internally. This senior-level group will focus on assisting with actions and analysis of the effects of COVID-19 markets, issuers, etc. and responding to requests from other agencies for information, analysis and help.


 

Federal Deposit Insurance Corporation 

FDIC and Other Regulators to Defer Appraisals and Evaluation for Real Estate Transactions

The Federal Deposit Insurance Corporation and other federal agencies announced an interim final rule that would temporarily defer real estate appraisals and evaluations as a temporary relief, allowing regulated institutions to finance creditworthy households and businesses as quickly as possible during the COVID-19 Pandemic.

 

National Credit Union Administration

NCUA Approves Regulatory Relief During COVID-19 Pandemic

The board of the National Credit Union Administration approved three items during their third open meeting of 2020 which included a temporary final rule allowing regulatory relief that helps federally insured credit unions stay operational during the COVID-19 emergency, a final rule increasing the appraisal requirement threshold for resident real estate-related transactions and the deferral of real estate evaluations and appraisals to help with social distancing measures.

COVID-19 and Your Financial Institution

 

COVID-19 and Your Financial Institution

The current situation our nation faces is unprecedented and something no one alive has seen in their lifetime. Considering that, it’s important for financial institutions to understand that the new coronavirus, COVID-19, is a very serious matter from a health standpoint foremost, but also from a financial standpoint as Americans lose work, businesses are shuttered or limited and most people, by order of the government or by their own good sense, stay at home over the next few weeks.

You are probably well aware that this virus has affected the entire world and that most governments, including U.S. local governments and the U.S. federal government, are restricting travel, business and more in an effort to limit the spread of the virus and stave off an unmanageable influx of patients to hospitals. This has put a serious strain on the financial industry in many ways and some financial institutions are likely feeling the pressure much more acutely.

The federal financial regulatory agencies that govern banking laws in the U.S. have released a statement encouraging all financial institutions to work with customers and borrowers as much as possible, particularly by granting loan modifications in a prudent and proactive manner. These federal regulators are working with institutions to ease some of the strain as much as possible with careful changes to some regulations and reporting requirements, keeping up with this changing situation as much as possible.

The National Credit Union Association is also making urgent needs grants available to low-income credit unions that may be particularly struggling at the moment. The grants give these institutions up to $7,500 to buy vital equipment used to service customers, consulting services to aid affected businesses and marketing materials to reassure credit union members.

As this situation develops, there may be more changes to regulations meaning it would be prudent for institutions to keep abreast of developments.

It’s also a good idea to limit risk to yourself, institution employees and customers by being careful, limiting exposure and following the CDC’s guidance for how to handle this situation at work and properly clean and disinfect your institution.

The Edcomm team is weathering this storm with you and are here to help you keep abreast with the best way to handle this situation. Keep an eye on our blog for the latest information and contact us if you have questions about compliance training for your institution.

 

 

  

 

 

March 2020 - Compliance Alert

Consumer Financial Protection Bureau (CFPB)

CFPB Releases Report on Administration of Fair Debt Collection Practices Act and Extends Comment Period

The Consumer Financial Protection Bureau issued their yearly report on the administration of the Fair Debt Collection Practices Act (FDCPA). The report focuses on laws enforcement, consumer education, public outreach, policy proposals and other joint efforts of the CFPB and FTC to end illegal debt collection practices. The CFPB also announced an extension of the public comment period on its proposed rule that implements the FDCPA, which will now go to June 5, 2020.

 

The Office of the Comptroller of the Currency (OCC) 

OCC Makes Changes to Short-Term Investment Fund Rule

The Office of the Comptroller of the Currency announced an interim final rule to change a short-term investment fund (STIF) rule that allows the OCC to grant banks the ability to extend maturity limits of these funds for a limited time. The hope is to alleviate stress on banks trying to operate in compliance with maturity limits in our current unprecedented situation.

 

 

Securities and Exchange Commission

SEC Extends Filing Periods Included Under Conditional Reporting Relief in Federal Securities Laws

The Securities and Exchange Commission announced an extension of filing periods previously outlined by the conditional reporting relief obligation of certain public companies under federal security laws. It will also extend relief on regulations formerly provided to funds and investment advisers affected by COVID-19.  


 

Federal Deposit Insurance Corporation 

The FDIC and Other Regulatory Agencies Issue Statement Encouraging Institutions to Work with Borrowers Affected by COVID-19

The Federal Deposit Insurance Corporation and other federal regulatory authorities and state banking regulators issued a joint statement urging financial institutions to work with borrowers during the current situation with the new coronavirus. The agencies are asking institutions to provide prudent and proactive loan modifications for costumers affected by COVID-19.

 

National Credit Union Administration

NCUA Makes Urgent Needs Grants Available to Financial Institutions Affected by COVID-19

The National Credit Union Association has made urgent needs grants of up to $7,500 available to low-income credit unions for hardware, software and equipment used to service customers, consulting services to assist businesses affected, marketing materials to reassure members that their insured deposits are safe. 

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