All in Regulatory Update

On April 17, 2019, new CFPB Director, Kathleen Kraninger presenter her first public speech at the Bipartisan Policy Center.  In this speech, Director Kraninger outlined her agenda for the direction of the CFPB by explaining that she intends to utilize all available tools to prevent consumer harm including education, regulation, supervision, and enforcement.  The speech began by discussing how the CFPB hopes to…

On March 20, 2019, the Federal Trade Commission (FTC) announced that the FTC and CFPB provided their joint annual report to Congress regarding the agencies efforts to administer the Fair Debt Collection Practices Act.  This report is just one more indicator of the increasing focus of debt collection practices of financial institutions.

In this joint report the CFPB explained that it plans to provide a Notice of Proposed Rulemaking relating to debt collection practices sometime in the spring of 2019.

The bottom line is that debt collection practices continue to be an increasing hot topic with regulators.  Therefore, we will be including the annual report to Congress in our next Quarterly Compliance Update, which will be available for purchase later in April.

On March 12, 2019, the CFPB published their 2019 Winter Edition of Supervisory Highlights, which marks the eighteenth issue of this publication, and the first under Director Kathy Kraninger.

As has been the case with prior editions, this edition of the publication included five main sections including an introduction, supervisory observations, remedial actions, supervision program developments, and conclusion - and includes topics like automobile and mortgage servicing, deposits, and remittances.

On the first day of spring, the Federal Deposit Insurance Corporation (FDIC) today issued the Winter 2018 issue of Supervisory Insights, which includes a feature article examining the future of, and alternatives to, the London Inter-bank Offered Rate (LIBOR).

LIBOR is a popular reference rate for commercial loans, residential mortgages, derivatives and swaps, and other credit instruments.  While LIBOR often is viewed as a reference rate used by larger financial institutions, it is also important to smaller community banks and savings institutions.  Initiatives are underway that could transition financial markets away from the use of LIBOR as a reference rate after 2021. Therefore, financial institutions must plan for this potential change and the FDIC provides guidance in this article.

On March 29, 2019, the Consumer Financial Protection Bureau (CFPB) released the Home Mortgage Disclosure Act (HMDA) Modified Loan Application Registers (LARs).  This data was published for about 5,400 financial institutions and is the first year in which the “expanded data fields” - required by the 2015 HMDA rule - are available for public viewing, though some data has been modified for public viewing for privacy purposes.

The modified LAR data is required by statute to be available by March 31 of each year.  Prior to the implementation of the 2015 HMDA rule, financial institutions had to make their Modified LARs available to members of the public who requested them.  The 2015 rule, which became effective on 1/1/2018, eliminated this requirement.

On March 25, 2019, the OCC released Bulletin 2019-15 as a reminder to supervised banks that certain nonpublic OCC information generally cannot be disclosed.  In the bulletin, the OCC explains that reports of examination and other nonpublic OCC information are the property of the OCC. Except in very limited circumstances, a bank may not disclose this information without the prior written permission of the OCC. This prohibition applies to any portion of a report of examination, supervisory correspondence, and any representations concerning the report or supervisory correspondence, or their findings, including the assigned CAMELS rating. Any unauthorized disclosure or use of nonpublic information may be subject to criminal penalties.

On March 25, 2019, the CFPB announced the availability of the FFIEC 2019 HMDA Getting it Right (GIR) Guide.  Updated each year, the GIR guide is a valuable resource for assisting all institutions in their HMDA reporting. It includes a summary of responsibilities and requirements, directions for assembling the necessary tools, and instructions for reporting HMDA data.

The full GIR guide can be found at…

The 2019 edition is effective January 1, 2019, and applies to 2019 HMDA data that must be submitted by March 1, 2020.  This updated edition reflects amendments made to HMDA by the Economic Growth, Regulatory Relief, and Consumer Protection Act and the 2018 HMDA interpretive and procedural rule issued by the Consumer Financial Protection Bureau.

On March 6, 2019, the FFIEC issued a joint statement to promote consistency, clarify and ease of reference for the presentation of information in examination reports.  The FFIEC has been working on an Examination Modernization Project - which is aimed at reducing unnecessary regulatory burden on community financial institutions - and this policy statement is aimed to provide consistency upon exam agencies in regards to the structure of examination reports.

On 3/18/19, the FDIC finally rescinded their annual disclosure statement requirement.  This rule comes a few months after the October 25, 2018 proposal, and over twenty years after two other agencies rescinded similar guidance due to the internet and availability of such data.  This new final rule rescinds and removes the FDIC’s regulations entitled Disclosure of Financial and Other Information By FDIC-Insured State Nonmember Banks. Once the regulations are removed, state nonmember banks and insured state-licensed branches of foreign banks will no longer be subject to the annual disclosure statement as the information required to be disclosed by this rule is also available publicly through the FDIC’s website.

It should be noted that this rule will become effective on April 17, 2019 - meaning that applicable banks must ensure that the disclosure statement requirements are met for 2019 as the deadline is (at least) March 31 of each year.