Compliance Monthly is intended to keep you informed of regulatory changes in advance of their effective date so your institution can have the necessary policies, procedures and processes in place to be compliant at the time of enactment.
March Compliance Monthly Newsletter
Banks and Credit Unions now have a better opportunity to ensure that they meet consumers’ needs for short-term, small-dollar loans. The CFPB has proposed to remove the underwriting provisions from the small-dollar (payday) lending rule it issued in October 2017. The rule imposes an ability-to-pay test on a wide range of small-dollar loans of 45 days or less, including payday loans, auto title loans and bank-provided loans with balloon payments. The CFPB’s proposal maintains the complete exemption in the rule for banks and other depository institutions that made 2,500 or fewer small-dollar loans in each of the current and previous years and for which these loans account for less than 10 percent of revenues. The CFPB is also proposing to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the 2017 final rule to November 19, 2020. The extension is intended to help lenders avoid expending unnecessary resources to comply with provisions that the CFPB has proposed to rescind. Comments on the proposal to delay the compliance date for the ATR provisions are due on or before March 18, 2019. Comments on the proposal to rescind the ATR provisions are due on or before May 15, 2019.Download
February Compliance Monthly Newsletter
The long-awaited private flood insurance rule is now here. The Biggert-Waters Act of 2012 required the Agencies to issue a rule to direct regulated lending institutions to accept private flood insurance, as defined by the Biggert-Waters Act, and to notify borrowers of the availability of flood insurance coverage issued by private insurers. There was an original proposal in 2013 regarding private flood insurance, which was later re-proposed in November 2016. The November 2016 Proposed Rule significantly revised the October 2013 Proposed Rule. The final rule is effective July 1, 2019.Download
January Compliance Monthly Newsletter
Agencies Update CRA Asset-Size Thresholds
The financial regulatory agencies announced the annual adjustment to the asset-size thresholds they will use to differentiate small and intermediate banks and savings associations under the Community Reinvestment Act. A “small bank” or “small savings association” will be defined as an institution that, as of December 31st of either of the prior two calendar years, had assets of less than $1.284 billion. An “intermediate small bank” or “intermediate small savings association” will be defined as a small institution with assets of at least $321 million as of December 31st of both of the prior two calendar years, and less than $1.284 billion as of December 31st either of the prior two calendar years. These adjustments will be effective January 1, 2019.Download
December Compliance Monthly Newsletter
New Rating System for Large Financial Institutions
The Federal Reserve finalized a new supervisory rating scale for large bank holding companies to better align the ratings system with its existing supervisory program. The new rating system will apply to all domestic bank holding companies and non-insurance, non-commercial savings and loan holding companies with $100 billion or more in total consolidated assets, which is a change from the $50 billion threshold originally proposed. The new rating system will also apply to U.S. intermediate holding companies of foreign banking organizations with $50 billion or more in total consolidated assets. The new scale assigns ratings for capital planning, liquidity risk management and governance and controls. Banks will be assigned ratings in each category, rather than receiving a standalone composite rating, and each category must be highly rated for the bank holding company to be considered “well-managed.” The rule is effective February 1, 2019.Download
November Compliance Monthly Newsletter
Agencies Provide CIP Relief for Premium Finance Loans
On September 28, 2018, FinCEN and the Federal Reserve Board, FDIC, NCUA, and OCC have jointly issued an order granting an exemption from customer identification program requirements for premium finance loans. The exempted transactions are extended by banks and Credit Unions and their subsidiaries to commercial customers to facilitate purchases of property and casualty insurance policies (premium finance loans or premium finance lending).Download
October Compliance Monthly Newsletter
Permanent Relief from Beneficial Ownership Rule for Certain Transactions
FinCEN issued a ruling (FIN-2018-R003) granting permanent exceptive relief from Beneficial Ownership requirements for legal entity customers for certain account rollovers, renewals, modifications and extensions. The permanent relief broadens the scope of relief provided by the temporary ruling, but maintains strict definitional limits on which accounts are affected. Financial institutions will continue to be required to identify and verify the identity of beneficial owners of legal entity customers at the initial account opening of all accounts (including those affected by the exceptive relief) occurring on or after May 11, 2018. The exceptive relief applies to:
- A rollover of a certificate of deposit that does not allow additional deposits during its term;
- A renewal, modification, or extension of a loan (e.g., setting a later payoff date) that does not require underwriting review and approval;
- A renewal, modification, or extension of a commercial line of credit or credit card account (e.g., a later payoff date is set) that does not require underwriting review and approval; and
- A renewal of a safe deposit box rental.
September Compliance Monthly Newsletter
CFPB Clarifies HMDA Partial Exemptions
The CFPB issued an interpretive rule clarifying several changes to Home Mortgage Disclosure Act regulations made under S. 2155, the bipartisan regulatory reform law. The rule is intended to address concerns raised by banks about S. 2155’s partial exemptions for certain financial institutions from reporting an expanded set of HMDA data points. The CFPB also published an executive summary on the rule and updated the Filing Instructions Guide for HMDA data collected in 2018 and the Regulatory and Reporting Overview Reference Chart. The rule will be effective upon publication in the Federal Register.Download
August Compliance Monthly Newsletter
Mandated stress tests under the Dodd-Frank Act have ended for banks and bank holding companies (BHCs) with less than $100 billion in assets. As required by the regulatory reform law S. 2155 that was enacted in May, BHCs with less than $100 billion were immediately exempted from company-run stress tests and other enhanced prudential standards, but not banks.Download
July Compliance Monthly Newsletter
NCUA Adjusts Member Business Lending Rule In one of the first regulatory changes implementing the Economic Growth, Regulatory Relief, and Consumer Protection Act (P. Law 115-174), the NCUA Board
has approved a change to its Member Business Lending rule that removes the member’s occupancy requirement for loans secured by liens on 1-to-4-unit family dwellings. The member business lending rule previously required those dwellings to be the primary residence of a member in order to be excluded from limitations on member business loans. The rule is effective June 5, 2018.
June Compliance Monthly Newsletter
FinCEN Temporarily Delays Beneficial Ownership Requirements for Rollovers & Automatic Renewals and Grants Relief for Premium Finance Cash Refunds FinCEN announced a temporarily suspension of the application of the beneficial ownership requirements for certificate of deposit rollovers and loans that renew automatically. The relief is retroactive to the May 11 compliance date and will
continue until August 9, 2018. During that time, FinCEN will re-evaluate the requirement to determine if more permanent relief is needed.
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