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January 2020 - Compliance Alert

Consumer Financial Protection Bureau (CFPB)

CFPB Announces Actions Against Fraudulent Debt Relief Companies

The Consumer Financial Protection Bureau filed charges against several companies and individuals associated with illegal student debt relief practices. These companies and individuals were illegally obtaining consumer reports, charging illegal advance fees, and engaging in fraudulent conduct. These actions were filed against Chou Team Realty, LLC, which does business as Monster Loans, Land Tech Loans, and Docu Prep Center Inc.

 

The Office of the Comptroller of the Currency (OCC)

OCC and Other Agencies Announce Annual CRA Asset-Size Threshold Adjustments for Small and Intermediate Small Institutions

The Office of the Comptroller of the Currency and the other federal banking regulatory agencies announced the annual adjustments to the thresholds that are used to define which institutions are a small bank, small savings association, intermediate small bank, and intermediate small savings association. These definitions are based on asset-size thresholds set in the CRA, which requires they be adjusted each year.

 

 

Securities and Exchange Commission

SEC Proposes Improved Market Data Plan Governance

The Securities and Exchange Commission proposed a plan to modernize the governance of National Market System (NMS). The proposed order would require equities exchanges and FINRA to file a new NMS plan with the SEC to increase transparency and reduce conflicts of interest. The SEC is seeking public comment on this proposal.

 

Federal Deposit Insurance Corporation (FDIC)

The FDIC Updates Money Smart for Small Business Curriculum

The Federal Deposit Insurance Corporation and the US Small Business Association announced updates to the Money Smart for Small Business curriculum, which focuses on helping small business owners and entrepreneurs understand their relationship with their bank and how it can help them reach their goals. The updates focus on banking and credit and are now available.

 

 

Federal Reserve Board (FRB)

FRB Releases Preliminary Treasury Data for 2019

The Federal Reserve Board announced preliminary data showing that in 2019, Reserve Banks made approximately $54.9 Billion in payments to the US Treasury. The final financial statements for the 2019 audit of Reserve Banks will be published in March. The data released in March may adjust these preliminary figures. 

 

Compliance Alert - December 2019

The Consumer Financial Protection Bureau (CFPB)

CFPB Announces NPRM About Remittance Rule

The Consumer Finance Protection Bureau (CFPB) issued a Notice of Proposed Rulemaking (NPRM) that would change the Remittance rule. The new changes would allow certain financial institutions to give estimates rather than exact disclosures where exact disclosures might be economically illogical. The CFPB is also proposing an increase to the safe harbor threshold that currently determines if an entity makes remittance transfers during normal business, making it subject to the rule.

Office of the Comptroller of Currency (OCC)

OCC and FDIC Announce Proposal to Update CRA

The Office of the Comptroller of the Currency (OCC), in cooperation with The Federal Deposit Insurance Corporation (FDIC), announced proposed changes to the Community Reinvestment Act (CRA). It’s hoped that the proposed changes will increase banking activity in low to moderate-income communities where credit, responsible lending, better access to banking products, and infrastructure improvements are greatly needed.

Securities and Exchange Commission (SEC)

SEC Proposes Rule to Require Reporting of Payments Made to Governments by Resource Extraction Issuers

The Securities and Exchange Commission (SEC) announced that it was proposing rules that would mandate the reporting of payments that resource extraction issuers made to both the US Federal Government and foreign governments for the commercial development of oil, natural gas, or minerals.

The Federal Deposit Insurance Corporation (FDIC)

FDIC Issues Brokered Deposit Restrictions Rule

The Federal Deposit Insurance Corporation (FDIC) announced proposed rulemaking updating its brokered deposit regulations. The proposed rule would update the current regulatory framework, making it better suited to the current state of the industry by removing penalties for offering customers deposit accounts by other means.

 

The National Credit Union Administration (NCUA)

NCUA and Other Regulators Issue Statement Regarding the Use of Alternative Data in Credit Underwriting

The National Credit Union Association and four other financial regulators released a statement that marks the benefits for consumers, such as broadening credit access, when banks and credit unions use information not typically in a consumer’s credit report and other alternative data for underwriting.

 

 


November 2019 - Compliance Alert

The Consumer Financial Protection Bureau (CFPB)

CFPB Issues Interpretive Rule on Mortgage Loan Originator Training Requirements

The Consumer Financial Protection Bureau issued a new interpretive rule, clarifying that an employer is not responsible for the training of loan originators with temporary authority. The state will perform this training when the loan originator applies for a state loan originator license.

CFPB Announces Regulation Z and M Dollar Thresholds

The Consumer Financial Protection Bureau and the Federal Reserve Board announced dollar thresholds that will determine exempt consumer credit and lease transactions under Regulation M and Regulation Z. These thresholds are reviewed annually as specified by the Truth in Lending Act and the Consumer Leasing Act and adjusted according to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Based on that, the Truth in Lending Act and the Consumer Leasing Act will apply to credit transactions and consumer leases of $58,300 or less in 2020.

Office of the Comptroller of Currency (OCC)

OCC and Other Agencies Make Changes to Supplementary Leverage Ratio

The Office of the Comptroller of the Currency and the other federal bank regulatory agencies finalized changes to Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) requirements for banking entities that mostly engage in custodial activities. The changes modified a capital requirement of the EGRRCPA, which requires regulatory agencies to allow banking organizations mostly involved in custody, safekeeping, and asset servicing activities to dismiss some deposits at central banks from their supplementary leverage ratio.

Securities and Exchange Commission (SEC)

SEC Stops Ponzi Scheme

The Securities and Exchange Commission recently put a stop to an alleged $6 Million Ponzi scheme targeting seniors and small business owners. The SEC filed an emergency action and a restraining order and asset freeze on two people, Neil Burkholz and Frank Bianco, and the two companies they run. The SEC’s complaint states that the two defrauded investors by promising investors high returns from their trading strategies when in reality the investments resulted in almost total losses. They also misappropriated investments to repay other investors and transferring $880,000 to themselves and their spouses for personal use.

 

The Federal Reserve Board (FRB)

FRB and other Agencies Issue Final Rule on Treatment of High Volatility Real Estate

The Federal Reserve Board and other agencies issued a final rule on the treatment of high volatility commercial real estate (HVCRE) exposures as it relates to the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule clarifies terms in the HRVCE exposure definition and clarifies how to treat credit facilities that finance one- to four-family residential properties and the development of land.

 

 


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.

  

 

 

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