Adverse Action Reasons Chart

Adam Witmer
Regulation B, Fair Lending

When a financial institution denies an application, Regulation B sets forth several requirements that must be met.  Among other things, financial institutions are required to notify an applicant of the denial and (as applicable) provide the applicant with a “statement of specific reasons” for denial.  One of the biggest challenges in providing the specific reasons for denial is determining which adverse action reasons should be listed on the denial notice. As Regulation B does not explain what reasons should be used, financial institutions benefit from creating an Adverse Action Reasons Chart. This article provides a sample adverse action chart that could be used by financial institutions.

CFPB Issues Statement on Payday Rule Reconsideration and Delayed Compliance Date

Adam Witmer
Regulatory Update

On October 26, 2018, the CFPB issued a statement regarding their planned payday rule.  Specifically, the CFPB explained that they expect to issue proposed rules in early 2019 that will reconsider the Payday, Vehicle Title, and Certain High-Cost Installment Loans rule.  They also plan to address the rule’s compliance date in this 2019 issuance. In their statement, the CFPB explained that they will make final decisions regarding the scope of the proposal closer to the issuance of the proposed rules. They also said, however, that

FDIC Proposes to Rescind Annual Disclosure Statement Requirements

Adam Witmer
Regulatory Update

On October 25, 2018, the Federal Deposit Insurance Corporation (FDIC) issued a proposed rule to rescind and remove its regulations relating to the disclosure of financial and other information by FDIC-insured state nonmember banks. Upon the removal of the regulations, applicable FDIC-regulated banks would no longer be subject to the annual disclosure statement requirement found in those regulations. The financial and other information that has been subject to disclosure by individual banks pursuant to these regulations is publicly available through the FDIC's website.

The TRID Loan Purpose Hierarchy

Adam Witmer
Regulation Z, TRID

Although TRID rules have been around for a while now, there still seems to be some confusion when it comes to understanding the TRID loan purpose that should be listed on the Loan Estimate (LE).  Much of the reason behind this confusion is that the rules actually contradict the loan purpose rules of Regulation C and the Home Mortgage Disclosure Act (HMDA). Therefore, it is important for each creditor to fully understand the TRID loan purpose hierarchy and when each TRID loan purpose should be listed on the Loan Estimate.

Bank Compliance Requirements for Facebook Contests

Bank Compliance Requirements for Facebook Contests

Adam Witmer

"Sign up for our Facebook page and get entered into a drawing to win a free trip to Fiji!" (Warning! This is NOT a contest and this statement is for example purposes only.) The truth is that Facebook (and other social media) contests are one of the trendiest ways marketers have been using to get customer engagement. The challenge is that there are several things that must be considered when a financial institution runs a Facebook contest. This Compliance Clip (video) explains several considerations that every compliance professional (and marketing employee) should review before running a Facebook contest.

CFPB Adds Innovation Page to Website

Adam Witmer
Regulatory Update

Earlier this month, the CFPB launched a new “Innovation” page on their website which promotes the initiatives of the newly formed Office of Innovation.  The Office of Innovation was formed in July of 2018 with a goal of encouraging consumer-friendly innovation and carrying on the work that was being done under Project Catalyst.  The new Innovation webpage comes just about a month after the CFPB proposed a revision to their policy to encourage trial disclosure programs (9/10/18).

Fall 2018 CFPB Rulemaking Agenda

Adam Witmer
Regulatory Update

On October 17, 2018, the CFPB published its rulemaking agenda for the Fall of 2018.  This is the second rulemaking agenda under Acting Director Mick Mulvaney. The agenda indicates that the information is current as of August 30, 2018 and identifies items the  CFPB “reasonably anticipates having under consideration during the period from October 1, 2018, to September 30, 2019.”

CIP Requirements for Banks and Credit Unions

Adam Witmer
BSA

One of the most challenging parts of any financial institution’s Bank Secrecy Act (BSA) program is to have an effective Customer Identification Program (CIP) that forms a reasonable belief that the institution knows the true identity of the person they are opening account for.  Understanding CIP requirements is essential as an insufficient CIP program can lead to significant consequences such as regulator enforcement actions and civil money penalties (fines). This article discusses some of the general CIP requirements for Banks and Credit Unions.

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