FRB Issues Final Rule on Debit Card Transactions

Adam Witmer
Regulatory Update

On October 3, 2022, the Federal Reserve Board issued a final rule that amends Regulation II to specify that debit card issuers should enable at least two payment card networks to process all debit card transactions, including "card-not-present" transactions, such as online payments. It also clarifies the requirement that debit card issuers ensure that at least two unaffiliated networks have been enabled to process a debit card transaction. The final rule will be effective July 1, 2023.

FinCEN Issues Final Rule on Beneficial Ownership Information Reporting

Adam Witmer
Regulatory Update, BSA

On September 30, 2022, FinCEN issued a final rule establishing a beneficial ownership information reporting requirement, pursuant to the bipartisan Corporate Transparency Act (CTA). This rule will require certain entities to file with FinCEN reports that identify two categories of individuals: the beneficial owners of the entity, and individuals who have filed an application with specified governmental authorities to create the entity or register it to do business. The requirements in the final rule are intended to help prevent and combat money laundering, terrorist financing, corruption, tax fraud, and other illicit activity, while minimizing the burden on entities doing business in the United States.

OFAC’s Sanctions Guidance for Instant Payment Systems

Adam Witmer
Regulatory Update, BSA

On September 30, 2022, the OFAC published the Sanctions Compliance Guidance for Instant Payment Systems, which emphasizes the importance of taking a risk-based approach to managing sanctions risks in the context of new payment technologies such as instant payment systems and to highlight considerations relevant to managing those risks. The guidance also encourages developers of instant payment systems to incorporate sanctions compliance considerations and features as they develop these systems.

Federal Reserve to Conduct Climate Scenario Analysis with Large Banks

Adam Witmer
Regulatory Update

On September 29, 2022, the Federal Reserve Board announced that six of the nation's largest banks will participate in a pilot climate scenario analysis exercise designed to enhance the ability of supervisors and firms to measure and manage climate-related financial risks. Scenario analysis is an emerging tool to assess climate-related financial risks, and there will be no capital or supervisory implications from the pilot. The banks in the pilot exercise are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.

CFPB Finds Violations by Student Loan Servicers and University-Owned Lenders

Adam Witmer
Regulatory Update

On September 29, 2022, the CFPB released a special edition of Supervisory Highlights on recent examination findings covering the practices of student loan servicers, and schools that lend to students directly. During supervisory examinations, the CFPB found that these schools had improper blanket policies of withholding transcripts to force students to make payments. The CFPB’s exams also found that student loan servicers illegally hampered borrowers’ access to federal student loan payment relief and cancellation programs including Income-Driven Repayment, Public Service Loan Forgiveness and Teacher Loan Forgiveness.

CFPB Orders Regions Bank to Pay $191 Million for Illegal Surprise Overdraft Fees

Adam Witmer
Regulatory Update

On September 28, 2022, the CFPB ordered Regions Bank to pay $50 million into the CFPB’s victims relief fund and to refund at least $141 million to customers harmed by its illegal surprise overdraft fees. Regions Bank is based in Alabama with more than $160 billion in consolidated assets and operates approximately 1,700 retail branches and 2,000 ATMs across 16 states. It offers and provides an array of financial products and services to consumers, including deposit accounts, credit cards, and lines of credit.

VIDEO: What is Redlining?

VIDEO: What is Redlining?

Adam Witmer
Fair Lending

In this Compliance Clip (video), Adam provides a general overview of one of the hottest topics in fair lending: redlining. In doing so, Adam provides examples of allegations of redlining as well as specific areas the Department of Justice has said it will focus on when determining whether a lender has redlined a particular area. Plus, Adam changes the way he ends this Compliance Clip, based on a recommendation from his son - that you won’t want to miss.

CFPB Rescinds No-Action Letters and Sandbox Policies

Adam Witmer
Regulatory Update

On September 27, 2022, the CFPB issued a statement through the Federal Register that the The Paperwork Reduction Act (PRA) authorization regarding the revised Policy on No-Action Letters and the Policy on the Compliance Assistance Sandbox (Policies) will expire on September 30, 2022. With the expiration of the PRA Authorization, the said policies will no longer be effective on the same date.

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