October 2018 Compliance Journal: Compliance Notes

The below article is the Compliance Notes section of the October 2018 Compliance Journal. The full issue may be viewed by clicking here.

FDIC announced the release of a Spanish-language version of Money Smart for Older Adults. The curriculum, now offered in English and Spanish, has been updated to provide new information and resources to help older adults and their caregivers recognize and prevent fraud, scams, and other types of financial exploitation. The curriculum also includes information to help older adults plan for a secure financial future and make informed financial decisions. The curriculum may be viewed at: https://catalog.fdic.gov/money-smart-older-adults-download 


The Wisconsin Housing and Economic Development Authority (WHEDA) has announced its Contractors Loan Guarantee (CLG) program has $10 million available to partner with local lenders. The enhanced program guarantees 50 percent or up to $750,000 on new loans that help contractors pay expenses for working on qualified contracts. WHEDA’s Business and Community Engagement group is available to discuss the details of the program. To learn more, please contact WHEDA at (414) 227-4039 or toll free at (800) 628-4833 or via email at Engage@wheda.com.


OCC released its bank supervision operating plan for fiscal year (FY) 2019. The plan provides the foundation for policy initiatives and for supervisory strategies as applied to individual national banks, federal savings associations, federal branches, federal agencies, and technology service providers. OCC staff members use this plan to guide their supervisory priorities, planning, and resource allocations. Supervisory strategies for FY 2019 focus on cybersecurity and operational resiliency; commercial and retail credit loan underwriting, concentration risk management, and the allowance for loan and lease losses; Bank Secrecy Act/anti-money laundering (BSA/AML) compliance management; compliance-related change management to address regulatory requirements; and internal controls and end-to-end processes necessary for product and service delivery. The plan may be viewed at: https://www.occ.gov/news-issuances/news-releases/2018/nr-occ-2018-104a.pdf 


FDIC, FRB, and OCC issued an FAQ document in response to questions raised regarding the agencies’ appraisal regulations and guidance. The Agencies previously issued FAQs on appraisals and evaluations on 04/22/2005. With the issuance of these FAQs, the Agencies have incorporated the 2005 FAQs that remain relevant and are not directly addressed by the Interagency Appraisal and Evaluation Guidelines into these updated FAQs. The FAQs may be viewed at: https://www.fdic.gov/news/news/financial/2018/fil18062a.pdf


OCC issued updates to the “Agricultural Lending,” “Oil and Gas Exploration and Production Lending,” and “Trade Finance and Services” booklets of the Comptroller’s Handbook, which are used by examiners in their examination and supervision of these areas. The notice may be viewed at: https://www.occ.gov/news-issuances/bulletins/2018/bulletin-2018-38.html 


CFPB has released an updated Spanish Glossary of Financial Terms, which has been prepared in cooperation with other federal agencies. The glossary provides both financial educators and the industry with an extensive list of financial terms translated into Spanish. The glossary may be viewed at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_adult-fin-ed_spanish-style-guide-glossary.pdf 


The NMLS Annual Renewal Period begins November 1 and ends December 31 each year. According to federal regulations, both institutions and most individual mortgage loan originators (MLOs) must be renewed through NMLS annually. If the renewal process is not completed prior to December 31st, the MLO is placed in an “Inactive” registration status both on NMLS and NMLS Consumer Access. Inactive registrations must be reactivated in order to have an “Active” registration status. Information about renewal may be viewed at: https://fedregistry.nationwidelicensingsystem.org/Institutions/Pages/Renew.aspx 


FRB’s FedPayments Improvement team has released its Fall 2018 Progress Report. The progress report outlines important work completed since the spring progress report published this past April and highlights next steps. The report may be viewed at: https://fedpaymentsimprovement.org/wp-content/uploads/2018-10-progress-report.pdf 


OCC issued the “Truth in Lending Act” (TILA) booklet of the Comptroller’s Handbook. The updated booklet replaces a similarly titled booklet issued in December 2014. The booklet provides updated guidance and procedures to examiners in connection with changes made to Regulation Z (12 CFR 1026), which implements TILA. The updated OCC booklet includes procedures implementing the Bureau of Consumer Financial Protection’s rule: the Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), which became effective in October 2015. The booklet may be viewed at: https://www.occ.gov/publications/publications-by-type/comptrollers-handbook/truth-in-lending-act/pub-ch-tila.pdf 


FDIC is offering FDIC-supervised institutions the ability to receive a notification when the agency’s Examination Manuals are updated on its website. More information and how to sign up for the alerts may be found at: https://www.fdic.gov/news/news/financial/2018/fil18057.html


FTC issued a warning to consumers about charity scams in the wake of hurricane Florence. FTC and its state and local partners are getting reports about sham charities following Hurricane Florence’s devastating impact on North and South Carolina. The warning along with tips to avoid fraud may be viewed at: https://www.ftc.gov/news-events/press-releases/2018/10/ftc-warns-consumers-about-charity-scams-wake-hurricane-florence


FRB, FDIC, OCC, FinCEN, and NCUA issued a joint press statement to address instances in which banks may decide to enter into collaborative arrangements to share resources to manage their Bank Secrecy Act (BSA) and anti-money laundering (AML) obligations more efficiently and effectively. Collaborative arrangements as described in this statement generally are most suitable for banks with a community focus, less complex operations, and lower-risk profiles for money laundering or terrorist financing. The risk profile is bank-specific, and should be based on a risk assessment that properly considers all risk areas, including products, services, customers, entities, and geographic locations. The statement may be viewed at: https://www.fdic.gov/news/news/press/2018/pr18068a.pdf 


OCC issued a bulletin setting forth the guidelines and procedures by which OCC  implements its authority under section 38 of the Federal Deposit Insurance Act, entitled “Prompt Corrective Action.” This bulletin rescinds Banking Circular 268, “Prompt Corrective Action,” and OCC Bulletin 1994-43, “Prompt Corrective Action – Capital Restoration Plans Guidelines: Guidelines.” The bulletin may be viewed at: https://www.occ.gov/news-issuances/bulletins/2018/bulletin-2018-33.html


FTC and CFPB announced that starting 09/21/2018, consumers who are concerned about identity theft or data breaches can freeze their credit and place one-year fraud alerts for free. In addition, the new law extends the duration of a fraud alert on a consumer’s credit report from 90 days to one year. A fraud alert requires businesses that check a consumer’s credit to get the consumer’s approval before opening a new account. More information may be found at: https://www.ftc.gov/news-events/press-releases/2018/09/starting-today-new-law-allows-consumers-place-free-credit-freezes 


CFPB announced a new spending tracker for consumers. The tool is designed to give consumers a better idea of how they spend their money so they can make better financial decisions. The announcement may be viewed at: https://www.consumerfinance.gov/about-us/blog/track-your-spending-with-this-easy-tool/ 


CFPB has issued the 2019 HMDA Filing Instructions Guide. The guide is a technical resource to help financial institutions file HMDA data collected in 2019 and reported in 2020. The guide may be viewed at: https://s3.amazonaws.com/cfpb-hmda-public/prod/help/2019-hmda-fig.pdf 

By, Ally Bates