Weekly Rewind...News from Your Regulators

OCC Issues BSA/AML Civil Money Penalty


Enforcement Action – The OCC issued a $6,000,000 civil money penalty against a bank for reported unsafe or unsound practices related to real-estate lending and BSA/AML internal controls. The OCC claimed the bank: falsified applicants’ employment and income information as well as other supporting loan documents. 

FTC Issues Discrimination Enforcement Action


Discrimination Enforcement Action – The FTC is taking action against an auto dealer for deceiving consumers by tacking hundreds to thousands of dollars in illegal junk fees onto car prices and for discriminating against Black and Latino consumers with higher financing costs and fees. The FTC alleges that the dealership regularly advertises certified, reconditioned, or inspected cars at specific prices, but then adds extra certification, reconditioning, or inspection fees that it falsely claims consumers are required to pay. The FTC also alleges that the dealership charges Black and Latino consumers hundreds of dollars more in financing costs and fees, on average, than white consumers.


CFPB Publishes on Overdraft Fees & Older Adults

Overdraft Fees & Older Adults – The CFPB published an Issue Brief that examines how overdraft fees affect economically insecure older adults. Although older adults as a whole incur overdraft fees less frequently than other age groups, economically insecure older adults are particularly impacted by overdraft fees because they are often unable to adjust their carefully managed budgets to pay unexpected fees. The report states that older adults may be more susceptible to overdraft fees for a variety of reasons, including reliance on Social Security benefits, caregiving responsibilities, the loss of a partner, limited access to financial technology, or cognitive impairment.


financial-planner.jpg
risk_meter.jpg

NCUA Updates Automated Cybersecurity Evaluation Toolbox


Updated ACET – The NCUA released an update of its Automated Cybersecurity Evaluation Toolbox (ACET). The ACET is a resource designed to help credit unions — especially for small credit unions or credit unions with limited resources — understand cybersecurity preparedness levels. This latest version of the ACET includes security updates and performance improvements. 


FCRA Advisory Opinion

Advisory Opinion FCRA - On October 20, 2022, the CFPB issued an Advisory Opinion on consumer reporting agencies’ obligation to prevent inclusion of facially false data in consumer reports under the FCRA. The Advisory Opinion discusses when a consumer reporting agency that does not implement reasonable internal controls to prevent the inclusion of facially false data, including logically inconsistent information, in consumer reports it prepares is not using reasonable procedures to assure maximum possible accuracy under section 607(b) of the Fair Credit Reporting Act. 


From the FDIC


Updated RMS Manual – The FDIC updated Section 22.1-Examination Documentation Modules to the Risk Management Manual of Examination Policies. Updates to the section include revisions to the Risk Scoping Activities and Credit Card Related Merchant Activities modules.

woman_soldier_flag.jpg

The FDIC released three Financial Institution Letters. FIL-46-2022 follows up on the Board’s action to restore the Supervision Appeals Review Committee (SARC) and request for comment, the FDIC is soliciting further comment on proposed amendments to its Guidelines for Appeals of Material Supervisory Determinations (Guidelines). 

graphic-chart-people.jpg

FIL-47-2022 addresses the issuance of a final rule to incorporate updated accounting standards in the risk-based deposit insurance assessment system applicable to all large and highly complex insured depository institutions. The final rule amends the assessment regulations to include a new term, “modifications to borrowers experiencing financial difficulty,” in two financial measures—the underperforming assets ratio and the higher-risk assets ratio—used to determine deposit insurance assessments for large and highly complex insured depository institutions.

FIL-48-2022 addresses the final rule, applicable to all insured depository institutions, to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning in the first quarterly assessment period of 2023. The FDIC also concurrently maintained the Designated Reserve Ratio (DRR) for the DIF at 2 percent for 2023. The increase in assessment rate schedules is intended to increase the likelihood that the reserve ratio of the Deposit Insurance Fund (DIF) reaches the statutory minimum of 1.35 percent by the statutory deadline of September 30, 2028. The new assessment rate schedules will remain in effect unless and until the reserve ratio meets or exceeds 2 percent in order to support growth in the DIF in progressing toward the FDIC’s long-term goal of a 2 percent DRR. Progressively lower assessment rate schedules will take effect when the reserve ratio reaches 2 percent, and again when it reaches 2.5 percent.

Visit our Website!