Excessive Obligations vs Insufficient Income

Adam Witmer
Adverse Action, Compliance Management, Regulation B

Over the years, I have seen many financial institutions struggle with the adverse action notice requirements under Regulation B, especially in regards to what denial reasons should be listed on the adverse action notice.  This is particularly true when an applicant is denied for a reason relating to income and the applicant’s debt-to-income (DTI) ratio as most adverse action notice vendors provide two similar, but different, options relating to income: excessive obligations in relation to income and insufficient income for the amount of credit requested.  

FinCEN Advisory on Corrupt PEPs

Adam Witmer
BSA, Regulatory Update

This week, on June 12, 2018, the Financial Crimes Enforcement Network (FinCEN) issued an advisory on human rights abuses enabled by corrupt senior foreign political figures - also known as Politically Exposed Persons (PEPs) - and their financial facilitators.  In their 15-page advisory, FIN-2018-A003, FinCEN explains that high-level political corruption “undermines democratic institutions and public trust, damages economic growth, and fosters a climate where financial crime and other forms of lawlessness can thrive.” FinCEN also explains that corrupt senior foreign political figures can also contribute directly and indirectly to human rights abuses.  Therefore, FinCEN has issued this guidance to, among other things, help financial institutions identify “red flags” for suspicious activity in relationship to senior foreign political figures.  The advisory also provides guidance for filing SARs on PEPs. (Read more.)

BSA Statement of Loan Purpose

BSA Statement of Loan Purpose

Adam Witmer
BSA

In this video, Adam discusses the BSA record retention requirements for obtaining a clear statement of purpose on certain loans. Adam explains the requirement in detail including which loans the rule applies to, common errors, and best practices to ensure compliance.

FDIC & OCC Release List of CRA Performance Evaluations for May 2018

Adam Witmer
CRA

As is the case each month, the OCC and FDIC released a list of Community Reinvestment Act (CRA) performance evaluations from May of 2018.  These evaluations are a fantastic tool for compliance professionals to understand the CRA requirements, what examiners expect, and best practices for improving CRA ratings.  Specifically, a great deal of information can be learned by reviewing both the Outstanding and Substantial Noncompliance performance evaluations. Therefore, we are again providing an overview of noteworthy trends from these recent performance evaluations. The following is a summary of highlights from these performance revi…

CIP Requirements for Business Account Signers

Adam Witmer
BSA

CIP requirements for business account signers can be a confusing subject for some.  While it would seem natural to require CIP for anyone opening an account, that isn’t technically what the rules require, especially when it comes to business accounts.  Therefore, let’s take a deep dive into the CIP requirements and how they apply to business account signers.

Regulation B 30 Day Rule

Adam Witmer
Adverse Action, Regulation B

When a financial institution receives a request for a loan, they are required to respond to that applicant within a certain amount of time to advise them of their credit decision.  That time, however, can vary based on the specific situation and/or financial institution, which has left many compliance professionals confused as to what actually is required. Therefore, let’s take a quick look at the rules and break down what they mean.

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