All in Regulatory Update

On 9/16/21, the Financial Crimes Enforcement Network (FinCEN) issued a notice (FIN-2021-NTC3) to call attention to an increase in online child sexual exploitation (OCSE). The Notice provides financial institutions with specific suspicious activity report (SAR) filing instructions, and highlights some financial trends related to OCSE.

On 9/8/2021, the OCC announced that it is soliciting comments on proposed rules to rescind the Community Reinvestment Act (CRA) rule issued in 2020 and replace it with rules adopted jointly by the Federal banking agencies in 1995, as amended. The OCC explains that the proposed rules would align the OCC’s CRA rules with the current Board of Governors of the Federal Reserve System and Federal Deposit Insurance Corporation rules and thereby facilitate the on-going interagency work to modernize the CRA regulatory framework and create consistency for all insured depository institutions.

It’s finally here. After a decade of anticipation of the Dodd-Frank Act’s requirement for the CFPB to establish small business data reporting, the CFPB has issued a proposal on how they plan to implement the requirement of the Dodd-Frank Act.

As you would expect, this topic will be covered in our Fall 2021 Quarterly Compliance Update, which should be available in mid-to-late October, 2021.

On 8/30/2021, the OCC and Department of Justice (DOJ) jointly announced an agreement to resolve allegations that Cadence Bank, which is headquartered in Atlanta, engaged in lending discrimination by “redlining” predominantly Black and Hispanic neighborhoods in the Houston, metro area. Under the department’s settlement, Cadence will invest over $5.5 million to increase credit opportunities for residents of those neighborhoods. In conjunction with this announcement, the OCC also announced that it has assessed penalties against the bank in the amount of $3 million related to the violations alleged in the department’s complaint.

On 8/27/2021, the Federal Reserve, FDIC, and OCC jointly issued a guide to help community banks assess risks when considering relationships with financial technology (fintech) companies. In the release, the agencies explained that community banks are entering into business arrangements with fintech companies to offer enhanced products and services to their customers, increase efficiency, and reduce internal costs. The agencies’ guide is intended to serve as a resource for community banks when performing due diligence on prospective relationships with fintech companies.

FinCEN has updated its “SAR Filings by Industry” webpage to include data from 2020. In addition to this webpage, FinCEN has an interactive map and and Interactive SAR Stats which allow BSA professionals to analyze what types of suspicious activity are being reported in their areas. As this data allows specific sorting of the data, BSA professionals are able to sort by many different fields including primary regulator, county,