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In this Compliance Clip (video), Adam answers a question many bankers have been asking: With COVID-19, do we still have to comply with the excessive transaction monitoring requirements of Regulation D? This video revisits the rules of Regulation D and reiterates what must be done for monitoring excessive transactions on savings accounts.
The Federal Reserve recently issued a series of FAQs regarding their announcement on March 15, 2020 of the elimination of reserve requirements. This announcement has resulted in many questions regarding the transaction restrictions on savings accounts under Regulation D. Specifically, many banks are seeing an increase of restricted transactions on Savings accounts due to customers following stay-at-home orders. The question bankers often have is this: Do we still need to follow Regulation D’s restrictions on Savings accounts, or can we allow customers to exceed those restrictions?
Fortunately, the Federal Reserve has provided guidance to financial institutions, which many comes down to this: the restrictions are still in place, but financial institutions can convert applicable accounts to transaction accounts.
On April 1, 2020, the CFPB released a policy statement outlining the responsibility of credit reporting companies and furnishers during the COVID-19 pandemic. In response to the pandemic, many lenders are being flexible when it comes to consumers’ making payments. As many lenders are now working to offer struggling borrowers payment accommodations, Congress last week passed the CARES Act which requires lenders to report to credit bureaus that consumers are current on their loans if consumers have sought relief from their lenders due to the pandemic. The Bureau’s statement informs lenders they must comply with the CARES Act and also encourages lenders to continue to voluntarily provide payment relief to consumers and to report accurate information to credit bureaus relating to this relief.
On March 31, 2020 the Treasury Department and the Internal Revenue Service launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50 percent of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.
On March 31, 2020, the Financial Action Task Force (FATF) released a report regarding the measures taken by the United States to strengthen their money laundering framework. In their report, FATF found that the United States has been in an enhanced follow-up process following the adoption of its mutual evaluation in 2016, after the 2016 FATF evaluation. In line with the FATF Procedures for mutual evaluations, the country has reported back to the FATF on the actions it has taken since then.
On April 1, 2020, the CFPB announced a settlement with Cottonwood Financial, Ltd., which does business under the name Cash Store, operating in several states and based in Texas. The CFPB found that in the course of marketing, servicing, and collecting on high-interest payday, auto-title, and unsecured consumer-installment loans Cash Store violated several consumer protection laws including the Consumer Financial Protection Act (CFPA), Fair Credit Reporting Act (FCRA), and Truth in Lending Act (TILA). The consent order includes $1.3 million in monetary restitutions and fines.
On 3/31/20, Fannie Mae and Freddie Mac announced through the Federal Housing Finance Agency (FHFA) . several loan processing flexibilities from Fannie Mae and Freddie Mac (The Enterprises) designed to help their customers.
On March 31, 2020, the CFPB released a guide to assist consumers with understanding their mortgage relief options. The guide is designed by those financially impacted by the coronavirus pandemic and who might be concerned about how to pay their mortgage or rent. Federal and state governments have announced plans to help struggling homeowners during this time and the CFPB guide provides information on what consumers can do now, and what their options are for mortgage and rental relief.
On March 26, 2020, the regulators jointly issued guidance encouraging banks, savings associations and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19.
