All in Regulatory Update

FinCEN CyberCrime Advisory

Adam Witmer
BSA, Regulatory Update

On 7/30/2020, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to alert financial institutions to potential indicators of cybercrime and cyber-enabled crime observed during the COVID-19 pandemic. This advisory provides a number of red flags for financial institutions to look for and includes SAR filing instructions of including the key term “COVID19-CYBER FIN-2020-A005”. Institutions filing SARs should also select SAR field 42 (Cyber Event) for each applicable filing.

CFPB Seeking Comments on Preventing Discrimination

Adam Witmer
Fair Lending, Regulatory Update

In July of 2020, the CFPB issued a Request for Informatino on the Equal Credit Opportunity Act and Regulation B which is seeking comments and information to identify opportunities to prevent credit discrimination, encourage responsible innovation, promote fair, equitable, and nondiscriminatory access to credit, address potential regulatory uncertainty, and develop viable solutions to regulatory compliance challenges under the Equal Credit Opportunity Act (ECOA) and Regulation B. Comments are due 60 days after publication in the Federal Register.

ICE Issue COVID-19 Fraud Warning

Adam Witmer
Regulatory Update

On 7/28/2020, the U.S. Department of Immigration and Customs Enforcement (ICE) issued a news release warning the public to remain vigilant about COVID fraud. In their release, ICE states that in “the first 100 days of Operation Stolen Promise [ICE had] more than 500 criminal investigations, over 900 seized shipments and more than $7 million in illicit proceeds seized.”

CFPB Settles with Mortgage Companies Regarding UDAAP

Adam Witmer
Regulatory Update, UDAAP

On 7/24/2020, the CFPB issued consent orders against two California-based mortgage lenders: Sovereign Lending Group, Inc. (Sovereign) and Prime Choice Funding, Inc. (Prime Choice). According to the CFPB, both companies had violated UDAAP by mailing consumers advertisements for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or lacked required disclosures. The consent orders require the companies to pay civil money penalties and impose requirements to prevent future violations.

2021 Reg Z Inflation Adjustments

Adam Witmer
Regulation Z, Regulatory Update

In July of 2020, the CFPB published a number of annual threshold adjustments in the Federal Register related to Regulation Z. Effective January 1, 2021, a Regulation Z final rule implements the Truth in Lending Act and satisfies the CFPB’s requirement to calculate annually the dollar amounts for several provisions in Regulation Z. While most of these thresholds will most likely be updated by a financial institution’s loan operating software (LOS) provider, managers should ensure these threshold changes are appropriately made.

HUD Terminates Fair Housing Rule

Adam Witmer
Fair Lending, Regulatory Update

On 7/23/2020, the U.S. Department of Housing and Urban Development (HUD) announced the termination of the Obama Administration’s Affirmatively Furthering Fair Housing (AFFH) regulation issued in 2015. According to HUD, this rule “proved to be complicated, costly, and ineffective— so much so that Secretary Carson essentially removed its burden on communities by suspending the regulation’s 92 question grading tool in January 2018.” Replacing this rule is a brand-new rule called Preserving Community and Neighborhood Choice. According to HUD, this rule

CFPB to Host Cost-Benefit Symposium

Adam Witmer
Regulatory Update

On 7/22/2020, the CFPB announced that it will hold a symposium on the use of cost-benefit analysis in consumer financial protection regulations. The event is scheduled for 7/29/2020 and will be streamed on the CFPB’s website. This symposium is the fifth symposium by the CFPB over the last year that explores consumer protection in today’s modern day financial services marketplace.

FEMA Updates Flood Rules

Adam Witmer
Flood, Regulatory Update

On 7/20/2020, FEMA published a final rule in the Federal Register updating the National Flood Insurance Program rules. This release is the final rule from FEMA’s 7/16/2018 Notice of Proposed Rulemaking that proposed to make several non-substantive changes to the flood program regulations to improve their readability, uniformity, and clarity. In addition, FEMA planned to include certain requirements of the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014.

FinCEN Alert on Twitter Virtual Currency Scam

Adam Witmer
BSA, Regulatory Update

On 7/16/2020, the Financial Crimes Enforcement Network (FinCEN) issued an alert regarding a high-profile scam that uses Twitter accounts to solicit fraudulent payments denominated in convertible virtual currency. In their release, FinCEN explains that hackers compromised the accounts of financial institutions, organizations, and even public figures to solicit payment to vertual currency accounts. The scam claimed that any virtual security sent to the wallet address provided by the hacked accounts would be doubled and returned to the sender.

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