All in Regulatory Update

CFPB Issues Guidance on ECOA and PPP Loans

Adam Witmer
Regulatory Update, Regulation B

On May 6, 2020, the CFPB issued three clarifying FAQs, in a “Compliance Aid” document, to support small businesses who have applied for a loan from their financial institution under the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). In its FAQs, the Bureau clarifies that a PPP application is only a “completed application” once the creditor has received a loan number from the SBA or a response about the availability of funds. This ensures that the time awaiting this information from the SBA does not count towards the 30-day notice requirement, and that applications will therefore not “time out” during the process.

The FAQs also make clear that if the creditor denies an application without ever sending the application to the SBA, the creditor must give notice of this adverse action within 30 days. It further clarifies that a creditor cannot deny a loan application based on incompleteness where the creditor has enough information for a credit decision but has yet to receive a loan number or response about the availability of funds from the SBA.

SBA Updates PPP FAQs

Adam Witmer
Regulatory Update

On May 3, May 5, and May 6, 2020, the Small Business Administration updated their Frequently Asked Questions (FAQs) on the Paycheck Protection Program (PPP) loans. Specifically, questions 40 - 45 were added this week covering topics like Employee Retention Credit, SBA’s affiliation rules, certification on the Borrower Application Form, seasonal employers, and loan forgiveness.

Fed Releases Q&A On Flood Insurance Requirement during COVID-19

Adam Witmer
Regulatory Update, Flood

On May 6, 2020, the Federal Reserve released a letter to all state member banks supervised by the Federal Reserve titled “Flood Insurance Compliance in Response to the Coronavirus.” In their release, the Fed explains that they have received questions from state member banks regarding flood insurance compliance requirements during the national emergency due to the COVID-19 outbreak (COVID-19 emergency). This letter provides two flood insurance questions and answers to assist state member banks in their efforts to meet the financial needs of their customers.

Fannie Mae & Freddie Mac Extend Loan Processing Flexibilities

Adam Witmer
Regulatory Update

On May 5, 2020, the Federal Housing Finance Agency (FHFA), extended several loan origination flexibilities currently offered by Fannie Mae and Freddie Mac designed to help borrowers during the COVID-19 national emergency. Those flexibilities are extended until at least June 30th and include:

  • Alternative appraisals on purchase and rate term refinance loans;

  • Alternative methods for verifying employment before loan closing;

  • Flexibility for borrowers to provide documentation (rather than requiring an inspection) to allow renovation disbursements (draws); and

  • Expanding the use of power of attorney and remote online notarizations to assist with loan closings.​

CFPB Releases ECOA Appraisal Fact Sheets

Adam Witmer
Regulatory Update, Appraisals

On April 29, 2020, the CFPB released two fact sheets. The first fact sheet, titled “Transaction Coverage Under the ECOA Valuations Rule”, explains the coverage requirements under the Equal Credit Opportunity Act (ECOA) Valuations Rule (Rule) and addresses frequently asked questions the Bureau has received since it went into effect. The second fact sheet, titled "Delivery of Appraisals”, explains the delivery requirements for appraisals under the Equal Credit Opportunity Act (ECOA) Valuations Rule (Rule) and also addresses questions the Bureau has received since it went into effect.

FATF Evaluation of UAE

Adam Witmer
Regulatory Update, BSA

On April 30, 2020, the Financial Action Task Force (FATF) issued a mutual evaluation report with United Arab Emirates. In their release, FATF explains that UAE recently strengthened its legal framework to fight money laundering and terrorist financing but, as a major global financial center and trading hub, it must take urgent action to effectively stop the criminal financial flows that it attracts.

OFAC Cites American Express for Violation

Adam Witmer
BSA, Regulatory Update

On April 30, 2020, OFAC issued a “Finding of Violation” to American Express Travel Related Services Company (“Amex”) for violations resulting from processing transactions for a person designated as a “Specially Designated National” (i.e. SDN list). In their release, OFAC explains that they found that Amex issued a prepaid card to, and processed 41 transactions totaling $35,246.82 on behalf of, Gerhard Wisser, who was on the SDN list. OFAC explains that these violations were the result of human error and screening system defects and Amex remediated and disclosed the violations to OFAC. Fortunately for Amex, there is no monetary penalty associated with a Finding of Violation.

CFPB Releases 2019 Fair Lending Report to Congress

Adam Witmer
Regulatory Update, Fair Lending

On April 30, 2020, the CFPB released their annual Fair Lending Report to Congress that highlights how in 2019 the CFPB continued to focus their fair lending efforts on mortgage lending, student loans, small business lending and other market areas. The CFPB also explains that they encouraged consumer-friendly innovation to, among other things, expand access to unbanked and underbanked consumers and their communities.

VIDEO: Reg D Restrictions Lifted!

VIDEO: Reg D Restrictions Lifted!

Adam Witmer
Regulation D, 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.

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