All in Regulatory Update

On August 21, 2019, the Financial Crimes Enforcement Network (FinCEN) issued an advisory (FIN-2019-A006) to alert financial institutions to possible schemes related to the trafficking of fentanyl and other synthetic opioids.  FinCEN explains that this new advisory will assist financial institutions in detecting and reporting suspicious activity, ultimately making it harder and more costly for criminals to (i) commit crimes related to the trafficking of synthetic opioids; (ii) hide and use their illicit money; and (iii) continue fueling the opioid epidemic that is currently occurring in the United States. 

Fin-2019-A006 highlights the

On 8/19/19, the NCUA issued guidance for federally insured credit unions on how they can serve lawfully operating hemp businesses.  As the 2018 Farm Bill made a number of changes to how hemp is treated under federal law, some credit unions have lawfully operating hemp businesses within their fields of membership.  The NCUA explains that credit unions may provide the customary range of financial services for business accounts, including loans, to lawfully operating hemp related businesses within their fields of membership.

In the guidance, the NCUA explains that

As we explained before, Fannie Mae & Freddie Mac (the GSEs) announced in June 2019 that the optional use period for the new version of the Uniform Residential Loan Application (URLA) and automated underwriting system (AUS) implementations would be postponed. In a more recent release, the GSEs explained that they have now been directed to make specific modifications to the redesigned URLA, which is going to delay the February 1, 2020 implementation date. The following changes will be made to the redesigned URLA:

The CFPB has again updated the TRID FAQs on their website. This update incorporates five new questions and answers relating to providing loan estimates to consumers. As has been the case with the previously released FAQs, these five new questions don’t really tell us anything we didn’t already know. That said, we will be including a review of these FAQs in our 3Q 2019 Quarterly Compliance Update program (planned to be released sometime in October 2019.

As we reported last month, the CFPB decided this summer to reopen two comment periods relating to the Home Mortgage Disclosure Act (HMDA). On July 31, 2019, the CFPB announced the reopening of the comment period for specific aspects of the proposed rule published by the Bureau in the Federal Register on May 13, 2019 (84 FR 20972) (May 2019 Proposal). In their announcement, the Bureau explained that one of the main reasons for reopening the original 30-day comment period is to allow commenters to be able to

On July 25, 2019, the CFPB announced an Advance Notice of Proposed Rulemaking (ANPR) seeking information relating to the expiration of the temporary qualified mortgage (QM) provision applicable to certain mortgage loans eligible for purchase or guarantee by the Government Sponsored Enterprises (GSE - i.e. Fannie Mae & Freddie Mac). This provision, also known as the GSE patch, is scheduled to expire no later than Jan. 10, 2021.

As the ANPR states that the Bureau currently plans to allow the GSE Patch to expire around January 2021, financial institutions…

At the Compliance Cohort, we understand that keeping up with regulatory changes is one of the most challenging aspects for you as a compliance professional. On one hand, you have hundreds of daily tasks that must get done and you really don’t even have time to do them all. On the other hand, changing rules are somewhat difficult to keep up on and can take considerable amounts of time to both comprehend and then understand how a rule applies to your specific organization.

To assist you and your financial institution with “regulatory change management,” we have created our Quarterly Compliance Update program. The way this program works is that each quarter, we release a new training class that covers all of the regulatory activity from the prior quarter of the year. For example, our 2Q 2019 Quarterly Compliance Update covers all of the regulatory changes that took place during the months of April, May, and June - and boy was there quite a bit of activity. (The full curriculum for the program can be viewed at the link below.)

Using our “virtual classroom approach,” we deliver each Quarterly Compliance Update class with you in mind, answering these two questions: what has happened and what do you need to know? Our goal is to save you considerable amounts of time sifting through regulatory updates and provide you with the need-to-know information so that you can take quick and efficient action. We want to make your job easier, and we try to focus everything in this program around this focus. We’ve been told that our program not only helps you understand new rules, but also helps you understand what needs to be done - helping you to form a game-plan to tackle regulatory change.

If you think that our Quarterly Compliance Update might be beneficial for you, be sure to check out our new 2Q 2019 class as it available at a pretty nice discounted price now through Thursday August 1, 2019.

On July 22, 2019, the joint agencies issued a statement to improve transparency of risk-focused BSA/AML supervision. The statement outlines common practices for assessing a bank's money laundering/terrorist financing risk profile, assisting examiners in scoping and planning the examination and initially evaluating the adequacy of the BSA/AML compliance program. Using this approach, the agencies generally are able to allocate more resources to higher-risk areas and fewer resources to lower-risk areas when conducting BSA/AML examinations. The statement does not establish new requirements, and also notes that having a risk-based compliance program enables a bank to allocate compliance resources commensurate with its risk.

On July 18, 2019, the NCUA released a rule that amends their policy requiring appraisals for certain transactions, including increasing the threshold below which appraisals are not required for commercial real estate transactions from $250,000 to $1,000,000. In addition to this, the rule does three other things: (1) it restructurs the rule to enhance clarity; (2) it exempts from the rule certain federally related transactions involving real estate in a rural area; and (3) is makes conforming amendments to the definitions section. The rule is not yet final, but will be so 90 days after publication in the federal register.