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All in Regulatory Update
In this Compliance Clip (video), Adam provides an overview of 5 things that will likely come from the Anti-Money Laundering Act of 2020. As this new law will have significant implications in the BSA/AML world, it will be important for BSA/AML professionals to watch applicable developments that result from the Anti-Money Laundering Act of 2020.
On 2/2/2021, the NCUA announced that they will be hosting a webinar on Thursday, February 11, 2021, that will provide participants with an update on Chairman Todd M. Harper’s priorities, the agency’s supervisory activities, and recently issued guidance and regulations, among other topics. As some may recall, Chairman Harper was announced on 1/25/2021 as President Biden’s designated Chairman of the NCUA Board. Harper is also the NCUA director who, in October of 2020, requested comments regarding the NCUA’s approach to supervising institutions for regulatory compliance. In the announcement about the upcoming webinar, Mr. Harper is quoted as saying that he will share his “regulatory philosophy” with stakeholders during this webinar. Credit union compliance professionals may want to consider taking part in this webinar as it may shed some light on the direction of regulatory compliance supervision and enforcement from the NCUA going forward.
On 1/29/2021, the OCC announced the availability of three things which apply to OCC-regulated institutions: the availability of the 2021 list of bank type determinations, the 2021 list of distressed and underserved areas, and the banking industry median hourly compensation value. This information applies to the OCC’s new CRA regulations that were published in the Federal Register on 6/5/2020.
On 1/25/2021, the NCUA announced that President Biden had designated National Credit Union Administration Board Member Todd M. Harper as the twelfth Chairman of the NCUA Board. Harper succeeds Rodney Hood, who was designated Board Chairman in April 2019. Hood continues to serve as an NCUA Board Member. Harper was nominated to the NCUA Board on Feb. 6, 2019. Following Senate confirmation, he took office as an NCUA Board Member on April 8, 2019. As some might recall, it was Mr. Harper who, in October of 2020, requested comments regarding the NCUA’s approach to supervising institutions for regulatory compliance.
On 1/20/21, CFPB Director Kathleen Kraninger announced via Twitter that she was resigning from the CFPB at the request of newly sworn in President, Joe Biden. This request and subsequent resignation comes as no surprise as national media outlets have recently reported that Biden was set to nominate Rohit Chopra as the Director of the CFPB. Chopra, a former McKinsey & Company consultant, worked with Senator Elizabeth Warren on establishing the CFPB before heading up the student lending division of the CFPB in 2011. These changes in the CFPB, along with other future changes, should help to facilitate an interesting four years for regulatory compliance professionals.
On 1/29/2021, the CFPB issued a final rule that exempts certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). This final rule implements a requirement of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).
According to the CFPB’s release, the final rule takes effect upon publication in the Federal Register and exempts from the HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if (1) the institution has assets of $10 billion or less; (2) the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and (3) certain of the existing HPML escrow exemption criteria are met.
On 1/19/2021, the FDIC, Federal Reserve, FinCEN, NCUA, and OCC jointly issued responses to frequently asked questions (FAQs) regarding suspicious activity reporting and other AML considerations for financial institutions that are required to submit Suspicious Activity Reports (SARs).
On 1/19/2021, the joint agencies (CFPB, Federal Reserve, FDIC, OCC, and NCUA) a final rule regarding the agencies use of supervisory guidance for its supervised institutions. The rule codifies the statement, with amendments, that the joint agencies issued in September 2018, which clarified the differences between regulations and supervisory guidance.
On 1/15/2021, FinCEN issued a “Notice of Proposed Rulemaking; Reopening of Comment Period” to allow more time for comments to be received from their December 23, 2020 Notice of Proposed Rulemaking which requested feedback for potential new rules on certain transactions involving convertible virtual currency or digital assets with legal tender status. The comment period is reopened for 15 days for comments on the proposed reporting requirements and for 45 days for comments on the proposed requirements to report counterparty information and the proposed recordkeeping requirements. Written comments are now therefore due with respect to the proposed reporting requirements (except with respect to reporting of counterparty information) on February 1, 2021, and with respect to all other aspects of the proposed rule on March 1, 2021.
On 1/15/21, the Financial Crimes Enforcement Network (FinCEN) announced that Capital One was assessed a $390,000,000 civil money penalty for engaging in both “willful and negligent violations of the Bank Secrecy Act (BSA) and its implementing regulations.” According to their release, FinCEN determined and Capital One admitted to willfully failing to implement and maintain an effective Anti-Money Laundering (AML) program to guard against money laundering. Capital One also admitted that it willfully failed to file thousands of suspicious activity reports (SARs), and negligently failed to file thousands of Currency Transaction Reports (CTRs), with respect to a particular business unit known as the Check Cashing Group.
