All in Regulatory Update

FinCEN Issues Hemp Guidance

Adam Witmer
BSA, Regulatory Update

On 6/29/2020, FinCEN issued guidance (FIN-2020-G001) to address BSA/AML requirements for hemp-related business customers. This guidance supplements the December 3, 2019 interagency statement on providing financial services to customers engaged in hemp-related businesses and focuses on the due diligence for financial institutions servicing hemp-related businesses. The guidance also explains the type of information and documentation financial institutions can collect from hemp-related businesses to comply with BSA/AML rules.

CFPB Proposes QM Changes

Adam Witmer
Regulatory Update, Regulation Z

In June of 2020, the CFPB proposed two new rules to adjust the current Qualified Mortgage rules. The CFPB states that their objective with these proposals is to facilitate a smooth and orderly transition away from the Temporary GSE QM loan definition (which is a temporary QM category set to expire on 1/10/2021 that basically qualifies a mortgage as a QM if it is eligible for purchase or guarantee by Fannie or Freddie) and to ensure access to responsible, affordable mortgage credit upon its expiration.

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:

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