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 tells the story of a lender who basically bought her way into the hearts of the Realtors in her area. And the CFPB answers the question of whether gifts and promotions are appropriate for federally related mortgage loans. This is a must see video for lending teams.
On October 7, 2020, the Office of the Comptroller of the Currency (OCC) announced that they had assessed a $400 million civil money penalty (CMP) against Citibank due to deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls. In their release, the OCC explained that these measure were taken “based on the bank’s unsafe or unsound banking practices for its long-standing failure to establish effective risk management and data governance programs and internal controls.”
On 10/7/2020, the CFPB released fourteen new frequently asked Questions (FAQs) on their website. These FAQ are divided into four main categories including sections on general information, section 8(a), gifts and promotional activity, and marketing services agreements. In conjunction with the release of these FAQs, the CFPB also explained - in a blog post - that it is rescinding Compliance Bulletin 2015-05, RESPA Compliance and Marketing Services Agreements. In the blog post, the CFPB explained that the compliance bulletin does not provide the regulatory clarity needed on how to comply with RESPA and Reg X so, therefore, this guidance is being rescinded.
On October 1, 2020, the US Department of the Treasury issued a pair of advisories regarding ransomware. The first advisory was issued by FinCEN and is titled Advisory on Ransomware and the Use of the Financial System to Facilitate Ransom Payments. This advisory provides information on the role of financial intermediaries in payments, ransomware trends and typologies, and related financial red flags.
The second advisory was issued by OFAC and is titled Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments. This advisory explains the sanctions risks associated with making ransomware payments. For example, some individuals or entities who install ransomware and demand payment are actually found on the OFAC list, making it illegal for businesses who get ransomware on their computers to pay these entities and regain access to their systems and data.
On 10/1/2020, the CFPB issued a formal review of its TRID rule, as required by the Dodd-Frank Act. To complete this required report, the CFPB began work on the assessment in early 2019 and solicited public comment on its research plan and other questions. The report begins with a message from Director Kathleen Kraninger, and she highlights some key findings and conclusions of the report.
On 10/1/2020, the OCC issued its bank supervision operating plan for fiscal year 2021. This yearly release provides a foundation for policy initiatives and for supervisory strategies the OCC will apply to financial institutions under its supervision.
On 10/1/2020, President Trump signed H.R.8337 which extends the National Flood Insurance Program (NFIP) through September 30, 2021. While funding for the flood program, and other government programs, expired for about an hour after the September 30, 2020 deadline had passed, CNBC reports that President Trump signed the bill early Thursday after apparently getting back from a campaign trip to Minnesota. While the bill only extends many government functions through December 31, 2020, it does specifically extend the NFIP through September 30, 2021.
On 9/30/2020, the Office of the Comptroller of the Currency rescinded their “Truth in Lending Act” booklet from the Comptroller’s Handbook and instructed examiners to rely on revised interagency procedures. In their release, the OCC explains that the FFIEC has adopted revised interagency examination procedures for the Truth in Lending Act and the revised interagency procedures reflect amendments to Regulation Z published in the Federal Register through May 18, 2018.
On 9/29/2020, FinCEN Director, Kenneth Blanco, presented a speech at the ACAMS Virtual AML Conference. After beginning the speech with a discussion on FinCEN’s response to the global health crisis, Director Blanco shared some fraud trends FinCEN is seeing related to COVID-19. Though much was a reiteration of applicable advisories issued by FinCEN, it was explained that the most common trend seen in COVID-19 related SARs involves fraudsters “targeting multiple COVID-19 related government stimulus programs, employing money mules and cyber techniques.”
On 9/29/2020, the Federal Reserve, FDIC, and OCC jointly finalized two interim final rules that are currently in effected and were issued in light of the COVID-19 pandemic. The rules include:
A final rule that temporarily defers appraisal and evaluation requirements for up to 120 days after the closing of certain residential and commercial real estate transactions; and
A final rule that neutralizes—due to the lack of credit and market risk—the regulatory capital and liquidity effects for banks that participate in certain Federal Reserve liquidity facilities.
