The latest compliance news for you!

Weekly Rewind...News from Your Regulators

CFPB Cracks Down on Illegal Garnishments

Illegal Garnishments – The CFPB finalized an enforcement action against Bank of America for processing illegal, out-of-state garnishment orders against its customers’ bank accounts. Bank of America unlawfully froze customer accounts, charged garnishment fees, garnished funds, and sent payments to creditors based on out-of-state garnishment court orders that should have been processed under the laws and protections of the states where the consumers lived.

CRA Proposed Rulemaking

CRA Proposed Rulemaking – Along with the OCC, and Federal Reserve System, the FDIC released a Notice of Proposed Rulemaking (NPR) that would reform the Community Reinvestment Act (CRA) regulations. The CRA seeks to address inequities in access to credit for low- and moderate-income, as well as underserved and rural communities. The agencies seek public feedback on the joint proposal, and comments are due on or before August 5, 2022. On Wednesday, May 11, 2022, 3:00 p.m. ET, policy experts from the agencies will host a special Ask the Regulators webinar on the NPR to strengthen and modernize CRA regulations.

From the Federal Reserve

Consumer Compliance Outlook – The FRB published its latest version of the Consumer Compliance Outlook which provides an overview of community development financial institutions (CDFI) and guidance on the LIBOR sunset.

Prohibition Orders – The FRB issued prohibition orders against an ex-senior vice president and residential loan servicing director for embezzling $69,039 from a bank’s general ledger account and depositing the funds in relatives’ accounts.

Supervision and Regulatory Report – The FDIC issued May’s Supervision and Regulatory Report which summarizes banking conditions and the Federal Reserve’s supervisory and regulatory activities.

NACHA Creates Resource Guide For acceptance of Voice Payments

Voice Payments – NACHA has created a legal and risk mitigation resource guide for financial institutions seeking to implement voice payments capabilities and applications (skills) through smart devices, such as the Amazon Echo and Google Nest. The guide provides background on the importance of Terms and Conditions when offering voice payments services and how terms may be modified to best fit their skill. This guide also offers an overview of use cases, best practices for risk mitigation and a glossary of terms.

From the CFPB

Supervisory Highlights - The CFPB released its Supervisory Highlights report on legal violations identified during the CFPB’s supervisory examinations in the second half of 2021. Observations in the report include violations in auto servicing, consumer reporting, credit card management, mortgage origination, and more.

Federal Fair Housing Agency

Supplemental Consumer Information - The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac (the Enterprises) will require lenders to use the Supplemental Consumer Information Form (SCIF) as part of the application process for loans that will be sold to the Enterprises. The purpose of the SCIF is to collect information about the borrower's language preference, if any, and on any homebuyer education or housing counseling the borrower received, so lenders can better understand borrower needs during the home buying process. Lenders will be required to adopt these changes and reporting requirements for loans with application dates on or after March 1, 2023.

Geographic Targeting Orders - FinCEN renewed the GTOs that cover certain counties within the following major U.S. metropolitan areas: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle, and has expanded the geographic coverage to parts of the District of Columbia, Northern Virginia, and Maryland (DMV) metropolitan area, the Hawaiian islands of Maui, Hawaii, and Kauai, and Fairfield County, Connecticut. The purchase amount threshold remains $300,000 for each covered metropolitan area, with the exception of the City and County of Baltimore, where the purchase threshold is $50,000.

From the Washington DFI

The DFI announced that they are beginning rulemaking on permitting mortgage brokers and originators to work from their homes without having to license the residence as a branch office.

Approaches to Climate-related Risks – The FSB published an interim report on Supervisory and Regulatory Approaches to Climate-related Risks. This report aims to assist supervisory and regulatory authorities in developing their approaches to monitor, manage and mitigate risks arising from climate change and to promote consistent approaches across sectors and jurisdictions.

From the NCUA

Protecting Older Adults Against Exploitation – The NCUA is hosting a webinar on May 19 for credit unions to protect their older members. The CFPB’s Office of Older Americans will join with the NCUA’s Division of Consumer Affairs to give credit union participants an overview of elder financial exploitation, resources to inform prevention, and tools to report abuse.

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