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Weekly Rewind...News from Your Regulators!

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CFPB Updates Compliance Management System Manual

Compliance Management Review – IT Exam – In September, the CFPB published a new section of its Supervision and Examination Manual, Compliance Management Review-Information Technology. The new section supplements the existing section on Compliance Management Review to provide examination procedures to be used by CFPB examiners to assess information technology (IT) and IT controls as part of a Compliance Management System review.

CFBP Issues Joint Statement on LIBOR Transition

LIBOR Transition – The Federal Reserve, FDIC, OCC, NCUA, and the CFPB issued a Joint Statement on Managing the LIBOR Transition. The Statement emphasizes the expectation that supervised institutions with LIBOR exposure continue to progress toward an orderly transition away from LIBOR. Additionally, this Statement includes clarification regarding new LIBOR contracts, considerations when assessing appropriateness of alternative reference rates, and expectations for fallback language. Failure to adequately prepare for LIBOR’s discontinuance could undermine financial stability and institutions’ safety and soundness and create litigation, operational, and consumer protection risks.

CFPB Monitors Big Business

Big Data – The CFPB is ordering business practice data from large technology companies (Amazon, Apple, Facebook, etc.) to better understand how the firms use personal payments data and manage data access, “so the Bureau can ensure adequate consumer protection. The orders are specifically looking for information on data harvesting and monitoring, access restrictions and user choice, and other consumer protections, such as from the GLBA.

FIG Gets an Update

HMDA Reporting - The CFPB released an update to the Filing Instructions Guide (FIG) for data collected in 2022. The FIG is a technical resource to help financial institutions file HMDA data collected in 2022 and reported in 2023.

From the FDIC:

Real Estate Lending Standards - The FDIC adopted a final rule to amend the Interagency Guidelines for Real Estate Lending Policies to incorporate consideration of the capital framework established in the community bank leverage ratio (CBLR) rule into the method for calculating the ratio of loans in excess of the supervisory loan-to-value limits (LTV limits). The amendment provides a consistent approach for calculating the ratio of loans in excess of the supervisory LTV limits at all FDIC-supervised institutions without requiring the computation of total capital.

FinCEN Releases Ransomware Trends

Ransomware Trends – FinCEN released a Trend Analysis on ransomware in BSA data covering the first half of the year. The report states that 635 ransomware-related SARs were filed between Jan. 1 and June 30 of this year, up 30% from the 487 such reports filed in all of 2020. The value of such activity reported was $590 million, up 42% from the $416 million reported in all of 2020.

Along with the Trend Analysis, the U.S. Treasury issued a press release explaining their ongoing efforts to combat ransomware, and additional steps to help the virtual currency industry prevent exploitation by sanctioned persons and other illicit actors.

OFAC Addresses Virtual Currency

Report on Climate-Related Financial Risk - The Financial Stability Oversight Council reports that climate change represents an “emerging threat” to U.S. financial stability and includes more than 30 specific recommendations that its member agencies can take to identify and address climate-related financial risk. Among other things, the report recommends regulators continue their efforts to consider and incorporate climate-related risks into their regulatory and supervisory programs, determine whether new guidance or additional regulations are needed, and use scenario analysis as a tool for assessing climate-related financial risk.

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