Welcome to the Compliance Cohort. We are a group of compliance professionals working to make compliance easier. Our goal is to take complex compliance concepts and put them in simple terms that apply to the real world. We are glad you have found us and look forward to collaborating in the future.
If you haven't done so already, make sure you sign up for our free membership where you get access to many member-only videos, articles, and other resources.
In this Compliance Clip (video), Adam discusses a recent FinCEN memo warning media outlets to not publicly disclose SARs illegally leaked to them… and they did! Adam gives a background on this situation and quotes a recent article that should be intriguing for anyone in the BSA world. And you won’t believe how many SARs were publicly released!
On 9/21/2020, the CFPB announced that it had settled with the auto-loan servicer, Lobel Financial Corporation. According to the CFPB’s release, the CFPB found “that Lobel engaged in unfair practices with respect to its Loss Damage Waiver (LDW) product, in violation of the Consumer Financial Protection Act (CFPA). When a borrower has insufficient insurance, rather than force-placing collateral-protection insurance, Lobel places the LDW product, which is not itself insurance, on borrower accounts and charges a monthly premium of approximately $70 for the LDW coverage. The LDW product provides that Lobel will pay for the cost of covered repairs and, in the event of a total vehicle loss, cancel the borrower’s debt. The Bureau found that Lobel continued to bill certain consumers for LDW coverage but then failed to provide it, and assessed fees from consumers that they were not obligated to pay.“
On 9/21/2020, the CFPB announced that it is extending the comment period on its notice of proposed rulemaking that will create a new category of qualified mortgages - known as “seasoned QMs” - by three days. This short extension is meant to accommodate for the Yom Kippur Jewish holiday. Originally required by September 28, 2020, comments must now be submitted by October 1, 2020.
On 9/21/2020, the Federal Reserve Board issued an Advance Notice of Proposed Rulemaking (ANPR) and invited public comment on an approach to modernize CRA regulations. The ANPR is looking for feedback on “ways to evaluate how banks meet the needs of low- and moderate-income (LMI) communities and address inequities in credit access.” This rule, of course, comes a few months after the OCC issued a final rule that requires financial institutions regulated by the OCC to comply with by October 1, 2020, January 1, 2023, or January 1, 2024. Therefore, it appears that this ANPR would only apply to financial institutions regulated by the Federal Reserve. The FDIC has not yet announced their intentions for CRA revisions, though they had originally issued the the proposal jointly with the OCC, but have not yet finalized the same rule as the OCC.
In this Compliance Clip (video), Adam answers a question about the unlawful internet gambling rules. Specifically, a question is asked about whether a certification form is required for commercial customers and whether there is any way to reduce the new account burden in relationship to Reg GG rules. This video a a fairly comprehensive review of the due diligence requirements under Reg GG, and would be good to review with your operations staff responsible for ensuring compliance with Reg GG.
On 9/16/20, the Financial Crimes Enforcement Network (FinCEN) issued an Advance Notice of Proposed Rulemaking (ANPRM) seeking public comment on a number of questions pertaining to potential regulatory amendments under the Bank Secrecy Act (BSA). Specifically, FinCEN explained in their advisory that they are seeking comment on creating a new AML program component, referred to as an “effective and reasonably designed” AML program component, so that financial institutions can be empowered to allocate resources more effectively. FinCEN also explained that this component would also seek to create an understanding between financial institutions and their regulators regarding which AML program elements are deemed necessary, while imposing minimal additional obligations under the existing supervisory framework.
On 9/15/20, the Consumer Financial Protection Bureau (CFPB) issued an “Outline of Proposals Under Consideration and Alternatives Considered for Section 1071 of the Dodd-Frank Act.” This release explains how the CFPB is currently working to implement Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that will create a requirement for financial institutions to compile, maintain, and report certain data on applications for credit from women-owned, minority-owned, and small businesses.
On 9/14/2020, the Financial Action Task Force (FATF) issued a report called “Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing.” This 24-page report was designed to help government agencies detect whether virtual assets are being used for criminal activity. Specifically, the report highlights key red flag indicators - that were identified through more than 100 case studies - that could suggest criminal behavior. The red flag indicators included in the report could assist financial institutions in detecting and reporting suspicious activity related to virtual assets.
During the third quarter of 2020, the CFPB has settled with several different mortgage companies in relationship to their advertising practices for VA-guaranteed loans. Referred to as a “sweeping effort” by the CFPB, several lenders throughout the country have been issued consent orders and fines related to their inappropriate advertising practices which often violated several laws including UDAAP and Regulation Z.
In early September, 2020, the CFPB released the Summer 2020 edition of their publication, Supervisory Highlights. This twice-a-year publication outlines the priorities of the CFPB and this specific issue includes findings from the CFPB from the period of September 2019 to December 2019.
