All in Regulatory Update

CFPB Issues Advisory Opinion on Special Purpose Credit

Adam Witmer
Regulatory Update, Regulation B

On 12/21/2020, the CFPB issued an advisory opinion related to special purpose credit programs (SPCPs) as it relates to uncertainty under Regulation B. The ECOA and Regulation B prohibit discrimination on certain prohibited bases in any aspect of a credit transaction, but they clarify that it is not discrimination for for-profit organizations to provide SPCPs designed to meet special social needs. In their release, the Bureau clarifies that they have issued this advisory opinion to clarify the content that a for-profit organization must include in a written plan that establishes and administers a SPCP under Regulation B. The advisory opinion also clarifies the type of research and data that may be appropriate to inform a for-profit organization’s determination that a SPCP would benefit a certain class of people.

2021 HMDA Exemption Threshold

Adam Witmer
HMDA, Regulatory Update

On December 22, 2020, the CFPB adjusted the HMDA exemption threshold from $47 million to $48 million. The adjustment is based on the 1.3 percent increase in the average of the CPI-W for the 12-month period ending in November 2020 (down from 2.6 in 2018 and 1.6 in 2019). Therefore, banks, savings associations, and credit unions with assets of $48 million or less as of Dec. 31, 2020, are exempt from collecting data in 2021.

Escrow Exemption Threshold for 2021

Adam Witmer
Regulatory Update, Regulation Z

On December 22, 2019, the CFPB announced the annual adjustment to the asset size threshold for small creditors under Regulation Z. This threshold applies to both the exemption to the requirement to establish an escrow account for higher-priced mortgage loans as well as the thresholds for small creditors to originate small-creditor portfolio and balloon-payment qualified mortgages.

FinCEN Proposes Virtual Currency Rule

Adam Witmer
Regulatory Update, BSA

On 12/18/2020, the Financial Crimes Enforcement Network (FinCEN) requested comments on a new proposed requirements for certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status. Under the proposal, banks and money services businesses (MSBs) would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving CVC/LTDA wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.

OCC Proposes SAR Exemptions

Adam Witmer
BSA, Regulatory Update

On 12/17/2020, the OCC issued a proposal to modify the requirements to file suspicious activity reports (SARs) for OCC regulated institutions (national banks and federal savings associations). According to the OCC’s release, the proposed rule would allow the OCC to issue exemptions from SAR reporting requirements. The proposed rule would make it possible for the OCC to grant relief to national banks or federal savings associations that develop innovative solutions intended to meet Bank Secrecy Act requirements more efficiently and effectively.

It should be noted, however, that OCC regulated banks that are also subject to FinCEN’s SAR regulations, would need to gain an exemption from both the OCC and FinCEN in order to be exempt from SAR reporting requirements.

FTC Enforces Deceptively Marketed CBD Products

Adam Witmer
BSA, Regulatory Update

On 12/17/20020, the Federal Trade Commission (FTC) announced the first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. The FTC is taking action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. The FTC is requiring each of the companies, and individuals behind them, to stop making such unsupported health claims immediately, and several will pay monetary judgments to the agency. The orders settling the FTC’s complaints also bar the respondents from similar deceptive advertising in the future, and require that they have scientific evidence to support any health claims they make for CBD and other products.

CRA Small Bank Thresholds Announced by FDIC & Federal Reserve

Adam Witmer
CRA, Regulatory Update

On 12/17/2020, the FDIC and Federal Reserve Board jointly announced the annual adjustment to the asset-size thresholds used to define small bank and intermediate small bank under their Community Reinvestment Act (CRA) regulations. The definitions of small and intermediate small institutions regulated by the FDIC or Federal Reserve will change as follows:

  • “Small bank” means an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.322 billion.

  • “Intermediate small bank” means a small institution with assets of at least $330 million as of December 31 of both of the prior two calendar years and less than $1.322 billion as of December 31 of either of the prior two calendar years.

FinCEN Provides Clarification on 314(a) Sharing

Adam Witmer
BSA, Regulatory Update

On 12/10/2020, the Financial Crimes Enforcement Network (FinCEN) announced that Director Ken Blanco had provided guidance regarding 314(a) sharing. This guidance was provided through a speech presented by Director Blanco, a release by FinCEN and an updated Fact Sheet. In their release, FinCEN explains that they are providing three main clarifications as a result of industry feedback.

CFPB Finalizes to QM Rules

Adam Witmer
Regulatory Update, Regulation Z

On 12/10/2020, the CFPB issued two new final rules that update the Qualified Mortgage (QM) rules. Specifically, some changes have been made to the QM definitions in order to transition away from the “Temporary GSE” QM definition which is set to expire in the coming months. As you would expect, this topic will be covered in our upcoming Winter 2021 Quarterly Compliance Update that will be available in our store in early 2021.

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