All in Regulatory Update

New Flood FAQs Proposed

Adam Witmer
Regulatory Update, Flood

On 6/26/2020, the OCC, Federal Reserve, FDIC, Farm Credit Administration, and the NCUA issued a joint proposal to update the interagency flood FAQs. If issued as proposed, these revisions would be the first updates to the Interagency Questions and Answer Regarding Flood Insurance since they were last updated in 2011.

As you might recall, there have been several updates to flood insurance rules since 2011 including the Biggert-Waters Flood Insurance Reform Act of 2012, the Homeowner Flood Insurance Affordability Act of 2014, interagency guidance on the detached structure exemption, rules on the escrow of flood insurance premiums, and private flood insurance guidance. In addition to updating the questions and answers to align with most of the current flood insurance laws and guidance, the proposal would also…

Interagency Examiner Guidance for COVID-19

Adam Witmer
Regulatory Update

On 6/23/2020, the joint regulators issued interagency examiner guidance for assessing the safety and soundness of financial institutions considering the effect of the COVID-19 pandemic on institutions. The guidance states that the purpose is to outline the supervisory principles for assessing the safety and soundness of institutions given the ongoing impact of the COVID-19 pandemic. In assessing an institution under the principles in this document, the joint guidance explains that examiners will consider the institution’s asset size, complexity, and risk profile, as well as the industry and business focus of its customers and that examiners will consider the unique, evolving, and potentially long-term nature of the issues confronting institutions and exercise appropriate flexibility in their supervisory response.

CFPB Interpretive Rule for Determining Underserved Areas

Adam Witmer
Regulatory Update, Regulation Z

On 6/23/2020, the CFPB issued an interpretive rule to provide guidance to creditors information on the way in which the CFPB determines which counties qualify as “underserved” for a given calendar year. The CFPB’s list of rural and underserved counties and areas is used by financial institutions for two main purposes: 1) for an exemption from the requirement to establish an escrow account for higher-priced mortgage loans and 2) to qualify for the ability to originate balloon-payment qualified mortgages and balloon-payment high cost mortgages.

CFPB Announces Pilot Program for Issuing Advisory Opinions

Adam Witmer
Regulatory Update

On 6/18/2020, the CFPB announced the establishment of a new pilot advisory opinion program. In their release, the CFPB explains that they are establishing this pilot program in response to feedback received from external stakeholders encouraging the Bureau to provide written guidance in cases of regulatory uncertainty. Specifically, the CFPB states they are establishing the advisory opinion pilot program to provide guidance with interpretive content that is:

SBA Revises PPP Loan Forgiveness Application

Adam Witmer
Regulatory Update

On 6/17/2020, the Small Business Administration (SBA) posted a revised version of the Paycheck Protection Program (PPP) loan forgiveness application. According to the SBA, this revised application is more “borrower-friendly” than the original application. In addition, the SBA released an EZ version of the application that requires fewer calculations and less documentation for eligible borrowers, who include borrowers that:

OCC BUlletin Provides CRA Guidance

Adam Witmer
CRA, Regulatory Update

On 6/17/2020, the Office of the Comptroller of the Currency (OCC) issued Bulletin 2020-61 to inform national banks about how the recently issued “host state loan-to-deposit ratios” are used to determine compliance with laws relating to Interstate Banking and branching efficiency. Specifically, the OCC’s CRA regulation (12 CFR 25, subpart E") includes specific tests for determining whether an interstate bank is lending appropriately in host states where it has branches. The OCC’s new bulletin explains how national banks can use this data.

CFPB Issues FAQs on Credit Reporting

Adam Witmer
Regulatory Update, FCRA

On 6/16/2020, the CFPB issued a new compliance aid to provide financial institutions with additional information relating to the CARES Act and this COVID-19 pandemic. This new guide (Version 1) reiterates the Bureau’s April 1, 2020 “Statement on Supervisory and Enforcement Priorities Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act” and provides ten questions and answers to assist financial institutions in understanding Bureau expectations.

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