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October 2019 - Compliance Alert

The Consumer Financial Protection Bureau (CFPB)

CFPB Issues Final HMDA to Relieve Smaller Institutions

The Consumer financial protection bureau issued a final rule regarding its Notice of Proposed Rule Making for the Home Mortgage Disclosure Act (HMDA). The rule extends the current threshold for collecting and reporting data about open-end lines of credit under HMDA by two years. The rule also clarifies certain HMDA exemptions regarding rules created by the Economic Growth, Regulatory Relief, and Consumer Protection Act.

Office of the Comptroller of Currency (OCC)

OCC and Other Agencies Seek Comment for Statement on Allowances for Credit Losses and for Guidance on Credit Risk Review Systems

The Office of the Comptroller of the Currency and three other federal agencies requested comments on a proposed Interagency Policy Statement on Allowances for Credit Losses. The goal of this statement is to make sure that the interpretation of the Financial Accounting Standards Board’s credit losses accounting standard is consistent. They also requested comment on a proposed Interagency Guidance on Credit Risk Review Systems, which gives the fundamentals of establishing an ongoing credit risk review in accord with safety standards.

Securities and Exchange Commission (SEC)

SEC Announces Proposed Rule Amendments to Exemptive Applications Procedures

The Securities and Exchange Commission announced that it has proposed rule changes to establish a faster review process for Investment Company Act applications that are notably similar to recent precedents. The rule changes would also establish a new procedure for handling applications that do not meet the new, faster process.

The Federal Deposit Insurance Company (FDIC)

FDIC and Other Agencies Finalize Volcker Rule Changes

The Federal Deposit Insurance Corporation and four other federal agencies announced that they have finalized revisions to the Volcker Rule. The goal of these changes was to simplify compliance requirements for institutions that do not have significant trading activities and make compliance requirements stricter for those that do have significant trading activities.

The Federal Reserve Board (FRB)

FRB Announces Final Rule to Tailor Domestic and Foreign Bank Regulation Based on Their Risk Profile

The Federal Reserve Board announces that I had finalized a rule that modifies regulations for both domestic and foreign banks, making these regulations fit the institution's risk profile. This rule will increase compliance requirements for banks with higher risk and reduces them for banks with lower risks.

 

 

 


What is HMDA?

 

 What is HMDA?  

There are a lot of banking regulations and each one is incredibly important. This is true in both their purpose keeping the banking industry safe and secure and their ability to keep lending, trading, and other activities fair. Recently, the Consumer Financial Protection Bureau finalized rules that clarified exemptions and extended the current threshold for collecting and reporting data about open-end lines of credit under HMDA. But what is HMDA?

 

The Home Mortgage Disclosure Act or HMDA is a federal law in the US. It was enacted by the 94th congress of the United States and went into effect on December 31, 1975, signed into law by President Gerald Ford.

 

HMDA rose from the noticeable shortage of credit offered by banks and financial institutions in certain urban areas. As many of these urban areas declined, Congress came to believe that the decline was caused by institutions not providing home finance loans with good terms to qualified borrowers.

 

HMDA doesn’t necessarily prohibit financial institutions from certain actions, though. It is essentially a law that requires financial institutions to disclose important data, not only to regulatory authorities but to the public.

 

HMDA requires institutions to provide information to the public, allowing the people who live in a community to assess whether the institution is actually serving that community. A 1989 amendment to the law requires institutions to also provide information about the characteristics of borrowers and applicants. This information is used to ensure that lenders are not discriminating against certain individuals in their lending practices and is also used to enforce anti-discrimination laws.

 

HMDA and other banking regulations are an important part of the banking industry. And that’s why the understanding of regulations is important to compliance training. If you’re looking for compliance training for your financial institution, Contact us today for more information.

  

 

 

What Kind of Training is Out There and Who Needs It?

 

 What Kind of Training is Out There and Who Needs It?  

It’s easy to assume that only certain industries need to train their employees. It’s definitely a necessity for certain lines of work, especially government-regulated industries with specific compliance training needs. Other businesses may be mandated to use training courses, though. But what kind of training is out there?

Financial Industry Compliance Training

One of the major reasons that certain businesses need compliance training is because the government requires it for that industry. A good example of this would be banks and other financial institutions. These financial institutions have to train employees and executives alike. The government requires these institutions to train their employees in specific and general areas. Some of the training required can be about in-depth financial regulations and other training may be simpler but just as vital. For example, training a bank teller to spot potential warning signs of fraud is just as important as a bank’s officers knowing about the latest regulations regarding loans.

HR Compliance Training

Another type of training often required or, at least, recommended by government bodies is HR compliance training. This type of training often focuses on teaching employees and executive about diversity, sexual harassment, discrimination, and similar issues in the workplace. There’s no single industry that uses this type of training. Many businesses, even federal and local governments require their employees to take this type of training. Even if it’s not required by law, many businesses make it part of their own initiatives to use this kind of training. There are very few industries that couldn’t benefit from a better understanding of ethical issues in the workplace.

Professional Skills Training

Outside of required training, many businesses use courses to teach their staff important professional skills. Professional skills training is often an important part of the onboarding process for many businesses. This type of training isn’t usually mandated by government bodies but can definitely help a business hone their employee’s skills and teach them valuable lessons about everything from anger management to answering calls.

Your Source

If you’re interested in financial compliance training, HR compliance training, or professional skills training for your business, Banker’s Academy can help. With a focus on the financial industry, we stay abreast of the latest in banking regulations and compliance requirements and can provide you with relevant and thorough training for your institution. Contact us today for more information.

  

 

 

September 2019 - Compliance Alert

The Consumer Financial Protection Bureau (CFPB)

CFPB Plans to Enhance Consumer Complaint Database

The Consumer Financial Protection Bureau announced it would continue to publish consumer complaints and that it would enhance the information that’s available to those who use the database. The CFPB will also improve the database itself, including dynamic visualization tools on more recent complaints.

Office of the Comptroller of Currency (OCC)

OCC to Hold Compliance and Operational Risk Workshops in LA

The Office of the Comptroller of the Currency will hold two workshops in Los Angeles on October 22 and 23. The workshops, held at the Federal Reserve Bank of Los Angeles, will be for national community bank and federal saving association directors. The workshops will focus on compliance, risks, and major regulations.

Securities and Exchange Commission (SEC)

SEC to Update Statistical Disclosures

The Securities and Exchange Commission announced that it had proposed rule changes to update the statistical disclosures that some institutions must provide to investors. The changes would get rid of some disclosures, eliminating overlap with some SEC rules.

Once published in the Federal Register, there will be a sixty-day public comment period.

The Federal Deposit Insurance Company (FDIC)

FDIC Releases Annual Survey Results

The Federal Deposit Insurance Committee announced the results of its annual branch office deposits survey. The survey included all FDIC-insured institutions as of June 30, 2019. The Summary of Deposits survey includes data that goes as far back as 1994. The survey collects deposit totals for thousands of institutions in the US.

National Credit Union Administration (NCUA)

NCUA Approves Three Final Rules

The National Credit Union Administration approved three final rules during its eighth 2019 open meeting. The NCUA approved the following:

  • Federal credit unions can offer additional alternative payday loans
  • Clarification of regulations regarding credit union supervisory committee audits and audit process flexibility
  • Finalization and simplification of federal credit union bylaws

 

 

 


Changes to the Volcker Rule

 

Changes to the Volcker Rule

On August 20th, the Office of the Comptroller of the Currency (OCC) announced that they, along with the Federal Deposit Insurance Corporation (FDIC), had approved amendments to the Volcker Rule, an important regulation that prevents certain financial institutions from participating in proprietary, or “prop”, trading and limits their involvement with covered funds. The new amendment, which is expected to be approved by other federal regulators soon, would ease some of these exclusions and eliminate a “rebuttal presumption” that labels financial instruments being held for less than sixty days “prop” trading.

History

The Volcker Rule came about as a response to the financial crises that the US has endured. Following the Great Depression and the Great Recession, regulators tried to find ways to prevent federally insured banks from making certain types of potentially risky investments. The Volcker Rule came on the heels of the Great Recession as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, creating rules for implementing section 13 of Bank Holding Company Act of 1956, which is an act of congress that restricts bank holding companies from certain actions.

The Volcker Rule came into effect in April of 2014 with full compliance required before July 21, 2015. However, things quickly became complicated as discerning the difference between regular trading and “prop” trading became difficult. The Volcker Rule has subsequently proven to be one of the harder regulations to implement and in 2018, the Federal Reserve Board unanimously decided to push forward the proposal loosening some of the Volcker Rule’s restrictions. The goal was to streamline the requirements of the rule, making compliance much easier, specifically for banks that do very little trading.

Changes

These changes to the Volcker Rule would not remove the restrictions placed but relax them to allow certain institutions to more easily comply with The Rule. With another potential recession looming on the horizon, it will be interesting to see how the Volcker Rule may or may not change over the coming months and years.

The ever-changing landscape of financial regulation makes it difficult for banks to keep to relevant compliance training. As rules change, your compliance training should be changing too. Our team at Banker’s Academy are experts in compliance training and do our best to stay ahead of the curve as banking regulations change. That’s why you need to be sure you’re trusting your compliance training to us. If you’re interested in effective, relevant compliance training for your financial institution, contact our team today!

 

  • We switched to Banker’s Academy over a year ago from a different online training program. The cost savings was tremendous - which has been very helpful in this time of budget cuts. We found that the training content is precise, to the point, and always current. It doesn't have a lot Read More
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