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All in Regulatory Update
In this Compliance Clip (video), Adam takes a brief look at the recent interim final rule from the Federal Reserve which lifts the requirement to monitor for excessive transactions on savings deposits. Adam even gives a brief overview of why this was done and explains the monetary policy behind all of these changes. While economics and compliance typically don’t mix, hold on for a slightly extended video of excitement and danger… or maybe just a good overview of the changes.
On April 30, 2020, the FFIEC issued a statement on risk management for cloud computing services and security risk management principles in the financial services sector. The new statement highlights examples of risk management practices for a financial institution’s safe and sound use of cloud computing services and safeguards to protect customers’ sensitive information from risks that pose potential consumer harm. The statement also provides a list of government and industry resources and references to assist financial institutions using cloud computing services.
On April 29, 2020, the CFPB released a factsheet to explain the coverage requirements under the Equal Credit Opportunity Act “Valuations Rule” and addresses frequently asked questions the CFPB has received since it went into effect. As a background on this, the Bureau published the original Rule in 2013, which amended Regulation B to require creditors to provide applicants free copies of all appraisals and other written valuations developed in connection with an application secured by a first lien on a dwelling and to notify applicants of their right to receive copies of appraisals within three business days. The new factsheet addresses all three components of coverage and discusses common questions received regarding the three criteria for coverage.
On April 29, 2020, the CFPB took steps to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic. Specifically, the CFPB has issued an interpretive rule to clarify that consumers can exercise their rights to modify or waive certain required waiting periods under the TILA-RESPA Integrated Disclosure Rule and Regulation Z rescission rules. The Bureau also issued an FAQ document to address when creditors must provide appraisals or other written valuations to mortgage applicants in order to expedite access to credit for consumers affected by the COVID-19 pandemic.
On April 24, 2020, the Federal Reserve Board announced an interim final rule that amends Regulation D to delete the six-per-month limit on convenient transfers from the “savings deposit” definition. The rule was published in the Federal Register on April 28, 2020 and allows depository institutions to immediately suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent. As justification for this change, the Fed explains that the Board’s recent action to reduce all reserve requirement ratios to zero has rendered this regulatory distinction unnecessary.
On April 27, 2020, the U.S. Immigration and Customs Enforcement agency (ICE) released an online resource page to combat COVID-19 fraud schemes. Tagged “Operation Stolen Promise,” the new dedicated web page provides information to the public on COVID-19-related fraud schemes. In addition, the page also highlights the investigative efforts the agency is taking to counter threats posed by individuals and criminal organizations seeking to exploit the pandemic for illicit financial gain.
Similarly, the Department of Homeland Security issued a Fact Sheet on April 24, 2020 to highlight the steps the agency has taken to combat COVID-19-related fraud.
On April 27, 2020, the OCC issued a bulletin (2020-45) to clarify and rescind its prior statement in Bulletin 2020-44, which was issued on April 25, 2020. The revised bulletin encourages banks providing loans under the SBA PPP to prudently document their implementation and lending decisions. Additionally, the bulletin further encourages banks to identify and track the PPP loans made to small business borrowers that have annual revenues of $1 million or less and are located in low- to moderate-income (LMI) areas.
On April 25, 2020, the FDIC updated their FAQs on the Small Business Administration’s Paycheck Protection Program. This FAQ answers several PPP related questions for FDIC-regulated financial institutions.
On April 24, 2020, the CFPB updated their guide to assist consumers in understanding their mortgage relief options during the COVID-19 pandemic. Originally published on March 31, 2020, the guide was updated on April 24, 2020, to add more information including updated information about forbearance options.
On April 16, 2020, the FDIC announced it will temporarily postpone its efforts to modify its signage and advertising requirements, known as the advertising of membership rules. In their release, the FDIC explained that they remain committed to modernizing these rules at a future date to better reflect how banks and savings associations are transforming their business models to take deposits via physical branches, digital, and mobile banking channels.
