All in Regulatory Update

On May 16, 2022, the CFPB announced that they are launching a new system to provide guidance to other agencies with consumer financial protection responsibilities on how the CFPB intends to enforce federal consumer financial law. To promote consistency among enforcers and fair competition in the market, the CFPB will issue Consumer Financial Protection Circulars to the different government agencies responsible for enforcing federal consumer financial law.

On May 16, 2022, the State Department, Treasury and FBI issued an advisory to alert the international community, the private sector, and the public to attempts by the Democratic People’s Republic of Korea (DPRK) and DPRK information technology workers to obtain employment while posing as non-DPRK nationals. The advisory provides detailed information on how DPRK IT workers operate and identifies red flags to help companies avoid hiring DPRK freelance developers and to help freelance and digital payment platforms identify DPRK IT workers abusing their services.

On May 13, 2022, the U.S. Department of the Treasury issued its 2022 National Strategy for Combatting Terrorist and Other Illicit Financing, which identifies measures to increase transparency in the U.S. financial system and strengthen the AML/CFT framework. The 2022 Strategy addresses the key risks from the 2022 National Money Laundering, Terrorist Financing, and Proliferation Financing risk assessments and reflects the challenges posed by a world impacted by the Covid-19 pandemic, the increasing digitization of financial services, and increasing levels of corruption and fraud.

On May 17, 2022, the FDIC issued a final rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo. The FDIC has observed an increasing number of instances where financial services providers or other entities or individuals have misused the FDIC’s name or logo or have made false or misleading representations about deposit insurance. The final rule establishes the process, standards, and procedures for investigating potential violations of the Federal Deposit Insurance Act and enforcing necessary provisions of the law.

On May 17, 2022, Acting Comptroller of the Currency Michael J. Hsu discussed the importance of risk management in remarks at Bloomberg Risk & Regulation Week 2022. According Hsu, banks need to assess exposures and adjust risk profiles ahead of possible uncertainty and volatility in interest rates and loan performance.

On May 16, 2022, the CFPB released a second metrics report providing the observations of data obtained from 16 large mortgage servicers to identify areas of risk in the servicers’ COVID-19 pandemic response. The report addresses similar topics, including call center data, COVID-19 hardship forbearance exits, delinquency, and borrower profiles for the period May through December 2021.

On May 11, 2022, five federal regulatory agencies jointly issued revised questions and answers (Q&As) regarding federal flood insurance law and the agencies’ implementing regulations. The Q&As supersede those originally published by the agencies in 2009 and 2011 as well as consolidate Q&As proposed by the agencies in 2020 and 2021. The revised Q&As also include the changes to the flood insurance requirements made by federal law in recent years. We plan to release a training program coving the Flood FAQs during the summer of 2022, so contact us with more information regarding this future program.

On May 9, 2022, the CFPB issued an Advisory Opinion to affirm that the Equal Credit Opportunity Act and Regulation B protect not only those actively seeking credit but also those who sought and have received credit. ECOA is a civil rights law that protects individuals and businesses against discrimination in accessing and using credit on the basis of race, color, religion, national origin, sex, marital status, age.