FinCEN Advisory on COVID-19 Health Care Fraud

Adam Witmer
BSA

On 2/2/2021, FinCEN issued their first advisory of the year, FIN-2021-A001, which focuses on COVID-19-related fraud involving the health care industry. The advisory contains descriptions of COVID-19-related fraud involving health care benefit programs and health insurance, associated financial red flag indicators, select case studies, and information on reporting suspicious activity. Of particular note, FinCEN requests financial institutions reference this new advisory in SAR field 2 (Filing Institution Note to FinCEN) and the narrative by including the following key term: “FIN-2021-A001” and select SAR field 34g (health care – public or private health insurance). Additional guidance for filing SARs appears near the end of this advisory.

SBA & FinCEN Add PPP FAQs

Adam Witmer
BSA

On 1/29/2021, the Small Business Administration (SBA) reissued their list of Frequently asked questions regarding PPP loans. The updated version of the FAQs explains that FAQs 1-53 are in the process of being revised and do not yet reflect the changes made by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act enacted on December 27, 2020. On 2/1/2021, FinCEN also updated their FAQs to correspond with the updated SBA FAQs.

OCC Issues Info for New CRA Rule

Adam Witmer
Regulatory Update, CRA

On 1/29/2021, the OCC announced the availability of three things which apply to OCC-regulated institutions: the availability of the 2021 list of bank type determinations, the 2021 list of distressed and underserved areas, and the banking industry median hourly compensation value. This information applies to the OCC’s new CRA regulations that were published in the Federal Register on 6/5/2020.

Harper Named NCUA Board Chairman

Adam Witmer
Compliance Management, Regulatory Update

On 1/25/2021, the NCUA announced that President Biden had designated National Credit Union Administration Board Member Todd M. Harper as the twelfth Chairman of the NCUA Board. Harper succeeds Rodney Hood, who was designated Board Chairman in April 2019. Hood continues to serve as an NCUA Board Member. Harper was nominated to the NCUA Board on Feb. 6, 2019. Following Senate confirmation, he took office as an NCUA Board Member on April 8, 2019. As some might recall, it was Mr. Harper who, in October of 2020, requested comments regarding the NCUA’s approach to supervising institutions for regulatory compliance.

CFPB Director Kraninger Resigns

Adam Witmer
Regulatory Update

On 1/20/21, CFPB Director Kathleen Kraninger announced via Twitter that she was resigning from the CFPB at the request of newly sworn in President, Joe Biden. This request and subsequent resignation comes as no surprise as national media outlets have recently reported that Biden was set to nominate Rohit Chopra as the Director of the CFPB. Chopra, a former McKinsey & Company consultant, worked with Senator Elizabeth Warren on establishing the CFPB before heading up the student lending division of the CFPB in 2011. These changes in the CFPB, along with other future changes, should help to facilitate an interesting four years for regulatory compliance professionals.

VIDEO: TRID Prepayment Penalty to Recoup Costs

VIDEO: TRID Prepayment Penalty to Recoup Costs

Adam Witmer
Regulation Z, TRID

In this Compliance Clip (video), Adam answers a questions about disclosing a prepayment penalty on the Loan Estimate (and Closing Disclosure) when the note allows for a fee to recoup some costs if the loan is paid off with the first 36 months after consummation. While this shouldn’t be a day-to-day TRID question for any lender, this is something that should be looked at as this could be a systemic violation of Regulation Z if not disclosed properly. Click the link to watch this 5 minute video.

CFPB Issues Final Rule on HPML Escrow Exemption

Adam Witmer
Regulatory Update, Regulation Z

On 1/29/2021, the CFPB issued a final rule that exempts certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). This final rule implements a requirement of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

According to the CFPB’s release, the final rule takes effect upon publication in the Federal Register and exempts from the HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if (1) the institution has assets of $10 billion or less; (2) the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and (3) certain of the existing HPML escrow exemption criteria are met.

FinCEN Reopens Comment Period for Digital Currency Rule

Adam Witmer
BSA, Regulatory Update

On 1/15/2021, FinCEN issued a “Notice of Proposed Rulemaking; Reopening of Comment Period” to allow more time for comments to be received from their December 23, 2020 Notice of Proposed Rulemaking which requested feedback for potential new rules on certain transactions involving convertible virtual currency or digital assets with legal tender status. The comment period is reopened for 15 days for comments on the proposed reporting requirements and for 45 days for comments on the proposed requirements to report counterparty information and the proposed recordkeeping requirements. Written comments are now therefore due with respect to the proposed reporting requirements (except with respect to reporting of counterparty information) on February 1, 2021, and with respect to all other aspects of the proposed rule on March 1, 2021.

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