Guidance on CIP applicability to bank issued prepaid cards
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CFPB eases mortgage requirements
CFPB Know Before You Owe webinar recording available
CFPB issues review of 2015 servicemembers complaints
CFPB issues resources on preventing elder abuse
An
advisory
and
report
issued last week by the CFPB provided recommendations for banks and credit unions about how to prevent, recognize, report and respond to the financial exploitation of older Americans. Financial exploitation - meaning the illegal or improper use of a person's funds, property or assets - is the most common form of elder abuse and costs seniors billions of dollars per year.
Among the recommendations offered by the report, the CFPB suggested that financial institutions:
- Provide staff training to recognize abuse,
- Use fraud detection technologies,
- Offer age-friendly services and
- Report suspicious activity to authorities.
Consumer tips about how to work with financial institutions to protect against financial abuse
can be found here
. To read Director Cordray's prepared remarks,
click here
.
[iii]
CFPB monthly complaint snapshot
- Collection on debts not owed
- Debt collectors repeatedly calling consumers
- Consumers unable to verify debts owed
- Most complained about debt collection companies
CFPB updates three mortgage rule guides
CFPB Community Bank Advisory Council to focus on elder abuse
CFPB's Cordray reports to Congress
CFPB blog
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FDIC issues video on outsourcing technology services
FDIC Approves DIF Changes
FDIC state profiles
FDIC community banking conference video available
FDIC issues corporate governance edition of
Supervisory Insights
- "A Community Bank Director's Guide to Corporate Governance: 21st Century Reflections on the FDIC Pocket Guide for Directors" is intended as a commentary and review of the Pocket Guide and incorporates more recent guidance and technical resources.
- The Pocket Guide, first issued in 1988, remains unchanged because the basic responsibilities of bank directors are timeless. However, all bank directors will benefit from remaining up-to-date on the corporate governance lessons and experiences of other bankers and bank supervisors.
- This special edition highlights key governance concepts, roles, and responsibilities of directors and senior management, and discusses how FDIC examiners evaluate governance at community banks. A list of resources, with links to regulations, guidance and training materials, is included to help community bank directors fulfill their duties.
FDIC Advisory Committee on Community Banking
FDIC issues supplemental deposit insurance Q&As
FDIC rescinds de novo period extension
FDIC highlights educational opportunities
This month, two webinars overviewed FDIC educational resources:
- FDIC Resources Available in Spanish (conducted in Spanish), Tuesday, April 12, 2016 from 3:00 pm - 4:30 pm. Money Smart (Spanish) or Conferences & Events (English)
- Money Smart Product Family and Implementation Examples (conducted in English), Wednesday, April 20, 2016 from 1:00 pm - 3:30 pm. Money Smart (English)
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OCC updates oil & gas lending booklet
- expands descriptions of the oil and gas business, types of oil and gas reserves, and lending structures.
- expands descriptions of prudent risk management for this line of business.
- expands and clarifies regulatory rating characteristics and factors that examiners should consider when evaluating oil and gas exploration and production loans, including application of accrual accounting guidelines.
- clarifies the differences between traditional asset-based lending and oil and gas reserve-based lending.
- expands the discussion of the allowance for loan and lease losses.
Fictitious correspondence about funds supposedly controlled by the OCC
OCC Mortgage Metrics Report, 4th Quarter 2015
OCC Enterprise Risk Appetite Statement
OCC assesses $35M penalty against HSBC Bank
- Ensure compliance with the FTC Act, which prohibits unfair and deceptive acts or practices;
- Improve governance of third party vendors with add-on products;
- Develop a risk management program for add-on consumer products marketed or sold by the bank or its vendors; and
- Develop a consumer compliance internal audit program for add-on consumer products.
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Fed updates bank holding company supervisory manual
Fed releases mobile financial services report
Fed issues April Beige Book
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FinCEN issues FAQs on prepaid access
President signs bill extending SCRA foreclosure protection
FTC hosts Fintech forum series in D.C.
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NMLS issues mortgage industry report
- During 2015, the number of state-licensed mortgage companies and individuals remained essentially flat, but the number of licenses held by MLOs grew by 13.5%.
- All state agencies saw net growth in the number of MLOs licensed by their agency.
- In the first quarter of 2015, mortgage originations by state-licensed MLOs reached their lowest point since the third quarter of 2011, but recovered somewhat during the rest of 2015.
- Federally registered institutions and mortgage loan originators remained flat in 2015.
HUD/Census Bureau report February new residential sales
FedFocus
- Capital Bank embraces the ease and automation of the FedPayments® Reporter Service
- Putting All Our Payment Eggs in a Single Basket
- Fed Facts: Cash in on a wealth of personal finance resources
- Spring into your FEDucation
FedFlash
- FedReceipt® RTN list article discontinuation
- Check Adjustments Tip: Review case scenarios on adjustment requests and CA1100 messages
- Federal Reserve Banks to publish new FedReceipt® RTNs
- Effective September 23, 2016, stale-dated ACH entries will result in a fee
- Tax refunds and the FedACH Risk® RDFI Alert Service
- Hope to see you at Payments 2016
- Reminder - New EUAC Onboarding Kit available in FedLine® Home
- FedTransaction Analyzer® now carries more historical data
- Reminder - Risk Management Toolbox now available
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Proposed rules are included only when community banks may want to comment.
COMMENTS
CLOSE SUMMARY OF PROPOSED RUL
04.25.2016
Operations in Rural Areas Under the Truth in Lending Act Interim Final Rule
.
[i]
This interim final rule amends certain provisions of Regulation Z in light of title LXXXIX of the Fixing America's Surface Transportation Act, entitled the Helping Expand Lending Practices in Rural Communities Act, Public Law 114-94. The amendments to Regulation Z concern two matters: The eligibility of certain small creditors that operate in rural or underserved areas for special provisions that permit the origination of balloon-payment qualified mortgages and balloon-payment high cost mortgages and for an exemption from the requirement to establish an escrow account for higher-priced mortgage loans and the determination of whether an area is rural for the purposes f Regulation Z. DATES: This final rule is effective on March 31, 2016. Comments may be submitted on or before April 25, 2016
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Not all final rules are included. Only rules affecting community banks are reported, but we make no guarantees that these are all the final rules your bank needs to know about.
EFFECTIVE
DATE: SUMMARY OF FINAL RULE:
03.31.2016
Operations in Rural Areas Under the Truth in Lending Act Interim Final Rule
.
[i]
This interim final rule amends certain provisions of Regulation Z in light of title LXXXIX of the Fixing America's Surface Transportation Act, entitled the Helping Expand Lending Practices in Rural Communities Act, Public Law 114-94. The amendments to Regulation Z concern two matters: The eligibility of certain small creditors that operate in rural or underserved areas for special provisions that permit the origination of balloon-payment qualified mortgages and balloon-payment high cost mortgages and for an exemption from the requirement to establish an escrow account for higher-priced mortgage loans and the determination of whether an area is rural for the purposes f Regulation Z. DATES: This final rule is effective on March 31, 2016. Comments may be submitted on or before
April 25, 2016.
07.01.2016
Assessments
.
[ii]
Pursuant to the requirements of the Dodd-Frank Act and the FDIC's authority under section 7 of the Federal Deposit Insurance Act (FDI Act), the FDIC is imposing a surcharge on the quarterly assessments of insured depository institutions with total consolidated assets of $10 billion or more. The surcharge will equal an annual rate of 4.5 basis points applied to the institution's assessment base (with certain adjustments). If the Deposit Insurance Fund (DIF or fund) reserve ratio reaches 1.15 percent before July 1, 2016, surcharges will begin July 1, 2016. If the reserve ratio has not reached 1.15 percent by that date, surcharges will begin the first day of the calendar quarter after the reserve ratio reaches 1.15 percent. (Lower regular quarterly deposit insurance assessment (regular assessment) rates will take effect the quarter after the reserve ratio reaches 1.15 percent.) Surcharges will continue through the quarter that the reserve ratio first reaches or exceeds 1.35 percent, but not later than December 31, 2018. The FDIC expects that surcharges will 18 commence in the second half of 2016 and that they should be sufficient to raise the DIF reserve ratio to 1.35 percent in approximately eight quarters, i.e., before the end of 2018. If the reserve ratio does not reach 1.35 percent by December 31, 2018 (provided it is at least 1.15 percent), the FDIC will impose a shortfall assessment on March 31, 2019, on insured depository institutions with total consolidated assets of $10 billion or more. The FDIC will provide assessment credits (credits) to insured depository institutions with total consolidated assets of less than $10 billion for the portion of their regular assessments that contribute to growth in the reserve ratio between 1.15 percent and 1.35 percent. The FDIC will apply the credits each quarter that the reserve ratio is at least 1.38 percent to offset the regular deposit insurance assessments of institutions with credits.
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Not all final rules are included. Only rules affecting community banks are reported, but we make no guarantees that these are all the final rules your bank needs to know about.
EFFECTIVE
DATE: SUMMARY OF FINAL RULE:
06.30.2016
Joint Agencies: Loans in Areas Having Special Flood Hazards
[i]
A lender who doesn't qualify for the small lender exemption shall mail or deliver to the borrower no later than June 30 a notice in writing, or if the borrower agrees, electronically, informing the borrower of the option to escrow all premiums and fees for any required flood insurance and the method(s) by which the borrower may request escrow, using language similar to the model clause in appendix B
.
A lender with
≥
$1 billion in assets does not qualify for the exemption.
This applies to any loan secured by residential improved real estate or a mobile home that is outstanding on January 1, 2016.
Also, see January 1, 2016 above. For lenders that lose the exemption, see September 30, 2017 below.
07.01.2016 The Secretary of Education amended the cash management regulations and other sections of the Student Assistance General Provisions regulations issued under the Higher Education Act of 1965, as amended. These final regulations are intended to ensure that students have convenient access to their title IV, HEA program funds, do not incur unreasonable and uncommon financial account fees on their title IV funds, and are not led to believe they must open a particular financial account to receive their Federal student aid. In addition, the final regulations update other provisions in the cash management regulations and otherwise amend the Student Assistance General Provisions. The final regulations also clarify how previously passed coursework is treated for title IV eligibility purposes and streamline the requirements for converting clock hours to credit hours.
Comment: This rule amendment is meant to stop educational institutions from prioritizing the deposits of financial aid into institutional-sponsored accounts. Marketing material must be presented in a neutral way that enables the student to choose either his or her existing account or a campus account.
10.03.2016
Limitations on Terms of Consumer Credit Extended to Service Members and Dependents
.
[ii]
The Department of Defense issued a final rule amending the implementing regulations of the Military Lending Act of 2006. The final rule expands specific protections provided to service members and their families under the MLA and addresses a wider range of credit products than the DOD's previous regulation.
FDIC-supervised institutions and other creditors must comply with the rule for new covered transactions beginning October 3, 2016
. For credit extended in a new credit card account under an open-end consumer credit plan, compliance is required beginning October 3, 2017.
FIL-37-2015
[iii]
12.24.2016
Credit Risk Retention
.
The OCC, Board, FDIC, Commission, FHFA, and HUD (the agencies) are adopting a joint final rule (the rule, or the final rule) to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934, as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act or Dodd-Frank Act). Section 15G generally requires the securitizer of asset-backed securities to retain not less than 5 percent of the credit risk of the assets collateralizing the asset-backed securities. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as ''qualified residential mortgages,'' as such term is defined by the agencies by rule. The final rule was effective February 23, 2015. Compliance with the rule with respect to asset-backed securities collateralized by residential mortgages is required beginning December 24, 2015.
Compliance with the rule with regard to all other classes of asset-backed securities is required beginning December 24, 2016
.
09.30.2017
Joint Agencies: Loans in Areas Having Special Flood Hazards
[iv]
A lender that loses the small lender exemption shall mail or deliver to the borrower no later than September 30 of the first calendar year in which the lender loses its small lenders exemption a notice in writing, or if the borrower agrees, electronically, informing the borrower of the option to escrow all premiums and fees for any required flood insurance and the method(s) by which the borrower may request escrow, using language similar to the model clause in appendix B. A lender loses the exemption when its assets are
≥
$1 billion.
This applies to any loan secured by residential improved real estate or a mobile home that is outstanding on July 1 of the first calendar year in which the lender no longer qualifies for the small lender exemption (exception is for lenders with <$1 billion in assets).
Also, see January 1, 2016 above and September 30, 2017 below
10.03.2017
Limitations on Terms of Consumer Credit Extended to Service Members and Dependents
.
[v]
The Department of Defense issued a final rule amending the implementing regulations of the Military Lending Act of 2006. The final rule expands specific protections provided to service members and their families under the MLA and addresses a wider range of credit products than the DOD's previous regulation. FDIC-supervised institutions and other creditors must comply with the rule for new covered transactions beginning October 3, 2016.
For credit extended in a new credit card account under an open-end consumer credit plan, compliance is required beginning October 3, 2017
. FIL-37-2015
[vi]
01.01.2018
Home Mortgage Disclosure (Regulation C)
.
[vii]
The CFPB amended Regulation C to implement amendments to HMDA made by section 1094 of the Dodd-Frank Act. Consistent with section 1094 of the Dodd-Frank Act, the CFPB is adding several new reporting requirements and clarifying several existing requirements. The CFPB is also modifying the institutional and transactional coverage of Regulation C. The final rule also provides extensive guidance regarding compliance with both the existing and new requirements.
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Our list of effective dates of past final federal rules is limited to approximately 12 months.
EFFECTIVE
DATE: SUMMARY OF FINAL RULE:
01.01.2016
Joint Agencies: Loans in Areas Having Special Flood Hazards
[i]
Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) relating to the escrowing of flood insurance payments and the exemption of certain detached structures from the mandatory flood insurance purchase requirement. The final rule also implements provisions in the Biggert-Waters Flood Insurance Reform Act of 2012 (the Biggert-Waters Act) relating to the force placement of flood insurance. In accordance with HFIAA, the final rule requires regulated lending institutions to escrow flood insurance premiums and fees for loans secured by residential improved real estate or mobile homes that are made, increased, extended or renewed on or after January 1, 2016, unless the loan qualifies for a statutory exception. In addition, certain regulated lending institutions are exempt from this escrow requirement if they have total assets of less than $1 billion. Further, the final rule requires institutions to provide borrowers of residential loans outstanding as of January 1, 2016, the option to escrow flood insurance premiums and fees. The final rule includes new and revised sample notice forms and clauses concerning the escrow requirement and the option to escrow. The final rule includes a statutory exemption from the requirement to purchase flood insurance for a structure that is a part of a residential property if that structure is detached from the primary residence and does not also serve as a residence. However, under HFIAA, lenders may nevertheless require flood insurance on the detached structures to protect the collateral securing the mortgage. (Lenders with assets < $1 billion, see June 30, 2016 and September 30, 2017.)
01.01.2016
CFPB: Reg. Z Annual Threshold Adjustments (CARD ACT, HOEPA and ATR/QM)
:
[ii]
The CFPB issued this final rule amending the regulatory text and official interpretations for Regulation Z. The CFPB is required to calculate annually the dollar amounts for several provisions in Reg. Z; this final rule reviews the dollar amounts for provisions implementing amendments to TILA under the CARD Act, HOEPA, and the Dodd-Frank Act. These amounts are adjusted, where appropriate, based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2015. The minimum interest charge disclosure thresholds will remain unchanged in 2016
12.24.2015
Credit Risk Retention
. The OCC, Board, FDIC, Commission, FHFA, and HUD (the agencies) are adopting a joint final rule (the rule, or the final rule) to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934, as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act or Dodd-Frank Act). Section 15G generally requires the securitizer of asset-backed securities to retain not less than 5 percent of the credit risk of the assets collateralizing the asset-backed securities. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as ''qualified residential mortgages,'' as such term is defined by the agencies by rule. The final rule was effective February 23, 2015. Compliance with the rule with respect to asset-backed securities collateralized by residential mortgages is required beginning December 24, 2015. Compliance with the rule with regard to all other classes of asset-backed securities is required beginning December 24, 2016.
10.03.2015
CFPB: Amendments to the 2013 Integrated Mortgage Disclosures Rule under Reg. X and Reg. Z and the Loan Originator Rule under Reg. Z
[ix]
(
80 FR 8767
[x]
)
Notice of final rule and official interpretations. This rule amending the integrated mortgage rule extends the timing requirement for revised disclosures when consumers lock a rate or extend a rate lock after the Loan Estimate is provided and permits certain language related to construction loans for transactions involving new construction on the Loan Estimate. This rule also amends the 2013 Loan Originator Final Rule to provide for placement of the NMLSR ID on the integrated disclosures. Additionally, the CFPB made non-substantive corrections, including citation and cross-reference updates and wording changes for clarification purposes, to various provisions of Regulations X and Z as amended or adopted by the 2013 TILA-RESPA Final Rule.
CFPB blog on the disclosure
.
10.01.2015
Department of Defense: Limitations on Terms of Consumer Credit Extended to Service Members and Dependents
.
[xi]
The Department of Defense amended its regulation that implements the Military Lending Act, herein referred to as the "MLA." Among other protections for Service members and their families, the MLA limits the amount of interest that a creditor may charge on "consumer credit" to a maximum annual percentage rate of 36 percent. The Department amends its regulation primarily for the purpose of extending the protections of the MLA to a broader range of closed-end and open-end credit products. Among other amendments, the Department modifies the provisions relating to the optional mechanism a creditor could use when assessing whether a consumer is a "covered borrower," modifies the disclosures that a creditor must provide to a covered borrower, and implements the enforcement provisions of the MLA.
10.01.2015
Joint Agencies: Loans in Areas Having Special Flood Hazards
[xii]
The statutory force-placed insurance provision took effect upon the enactment of the Biggert-Waters Act on July 6, 2012. The statutory detached structure exemption took effect upon enactment of the HFIAA on March 21, 2014. The regulatory changes made by this final rule to incorporate these provisions are effective on October 1, 2015. See the final flood rule on 01.01.2016, below, for the statutory and escrow-related provisions.
08.01.2015
Joint Agencies: Loans in Areas Having Special Flood Hazards
.
[xiii]
The OCC, the Fed, the FDIC, the FCA, and the NCUA amended their regulations regarding loans in areas having special flood hazards to implement certain provisions of the Homeowner Flood Insurance Affordability Act of 2014, which amends some of the changes to the Flood Disaster Protection Act of 1973 mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters). The Agencies plan to address the private flood insurance provisions in Biggert-Waters in a separate rulemaking. Specifically, the final rule:
- Requires the escrow of flood insurance payments on residential improved real estate securing a loan, consistent with the changes set forth in HFIAA. The final rule also incorporates an exemption in HFIAA for certain detached structures from the mandatory flood insurance purchase requirement.
- Implements the provisions of Biggert-Waters related to the force placement of flood insurance.
- Integrates the OCC's flood insurance regulations for national banks and Federal savings associations.
05.01.2015
The Fed adopted final amendments
[xiv]
to the Small Bank Holding Company Policy Statement (Regulation Y, Appendix C) (Policy Statement) that: (i) raise from $500 million to $1 billion the asset threshold to qualify for the Policy Statement; and (ii) expand the scope of companies eligible under the Policy Statement to include savings and loan holding companies. The Board is also adopting final conforming revisions to Regulation Y and Regulation LL, the Board's regulations governing the operations and activities of bank holding companies and savings and loan holding companies, respectively, and Regulation Q, the Board's regulatory capital rules. Specifically, the Proposed Rule would allow bank holding companies and savings and loan holding companies with less than $1 billion in total consolidated assets to qualify under the Policy Statement, provided the holding companies also comply with three qualitative requirements (Qualitative Requirements). Previously, only bank holding companies with less than $500 million in total consolidated assets that complied with the Qualitative Requirements could qualify under the Policy Statement. The Board issued the Policy Statement in 1980 to facilitate the transfer of ownership of small community-based banks in a manner consistent with bank safety and soundness. The Board adopted the Policy Statement to permit the formation and expansion of small bank holding companies with debt levels that are higher than typically permitted for larger bank holding companies.
02.23.2015
Joint Agencies: Credit risk retention.
[xv]
The OCC, Board, FDIC, Commission, FHFA, and HUD adopted a joint final rule to implement the credit risk retention requirements of Section 15 of the Securities and Exchange Act of 1934, as added by section 941 of the Dodd-Frank Act. Section 15G generally requires the securitizer of asset-backed securities to retain not less than 5 percent of the credit risk of the assets collateralizing the asset-backed securities. Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages," as such term is defined by the agencies by rule.
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This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in the rendering of legal, accounting or other professional advice - from a Declaration of Principles adopted by the American Bar Association and a Committee of Publishers and Associations. © 2016 Independent Community Bankers of South Dakota;
All rights reserved. Shannon Phillips Jr., Editor
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