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February 2019 Compliance Journal: Compliance Notes

The below article is the Compliance Notes section of the February 2019 Compliance Journal. The full issue may be viewed by clicking here.

FRB and FDIC issued an advisory on Voluntary Private Education Loan Rehabilitation Programs to make financial institutions aware of an amendment to section 623 of the Fair Credit Reporting Act (FCRA). This amendment is contained in section 602 of the Economic, Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA). It gives consumers the opportunity to rehabilitate a private education loan with a previously reported default under certain conditions. Financial institutions that choose to establish a private education loan rehabilitation program under Section 602 of the EGRRCPA (Section 602 Program) that satisfies the statutory requirements, including written approval of the terms and conditions from their federal regulatory agency, are entitled to a safe harbor from potential claims under the FCRA related to removal of the reported default. The advisory may be viewed at: https://www.fdic.gov/news/news/financial/2019/fil19005a.pdf


CFPB published the Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart for Data Collected in 2019. The chart is intended to be used as a reference tool for data points required to be collected, recorded, and reported under Regulation C. The chart may be viewed at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_reportable-hmda-data_regulatory-and-reporting-overview-reference-chart-2019.pdf


FRB launched an interactive smartphone and tablet application, called Money Adventure Mobile App, designed to teach elementary school students about the security and design features of Federal Reserve notes. More information on the app may be viewed at: https://www.uscurrency.gov/educational-materials/classrooms/money-adventure-mobile-app


FRB, FDIC, and OCC released the Shared National Credit (SNC) Review. The review shows that the level of loans in the SNC portfolio with the lowest supervisory ratings (special mention and classified) declined, largely because of improving economic conditions in the oil and gas sectors. Despite the improvement, special mention and classified commitment levels remain elevated compared to prior economic cycles. The full review may be viewed at: https://www.fdic.gov/news/news/press/2019/pr19004a.pdf


CFPB released the 2019 Rural or Underserved Counties list. The list may be viewed at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_rural-underserved-list_2019.pdf


HUD awarded $74 million to hundreds of public housing authorities across the country to continue helping public housing residents participating in the Housing Choice Voucher Program and/or reside in public housing to increase their earned income and reduce their dependency on public assistance and rental subsidies. These grants renew HUD’s support of 688 public housing authorities through the Department’s Family Self-Sufficiency (FSS)) program. The announcement may be viewed at: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_19_010


CFPB issued FAQs related to TRID. The FAQs may be viewed at: https://www.consumerfinance.gov/policy-compliance/guidance/tila-respa-disclosure-rule/tila-respa-integrated-disclosure-faqs/


FDIC adopted revised interagency examination procedures to incorporate CFPB amendments to Regulation E and Regulation Z. The examination procedures may be helpful to financial institutions seeking to better understand how FDIC examiners will evaluate an institution’s compliance with these regulations. The procedures may be viewed at: https://www.fdic.gov/news/news/financial/2019/fil19009.pdf


FTC will host a forum on small business financing on May 8, 2019, to examine trends and consumer protection issues in this marketplace, including the recent proliferation of online loans and alternative financing products. Further information may be viewed at: https://www.ftc.gov/news-events/events-calendar/strictly-business-ftc-forum-small-business-financing


FRB announced that it will begin its Survey of Consumer Finances, a statistical study of household finances that will provide policymakers with important insight into the economic condition of a broad cross section of American families in March. The survey has been undertaken every three years since 1983. It is being conducted for FRB by NORC, a social science research organization at the University of Chicago, through December of this year. The announcement may be viewed at: https://www.federalreserve.gov/newsevents/pressreleases/other20190213a.htm


OCC will host two workshops in Milwaukee, Wisconsin, at the Hilton Garden Inn Milwaukee Downtown, March 26 and 27, for directors of national community banks and federal savings associations supervised by the OCC. The Compliance Risk workshop on March 26 combines lectures, discussion, and exercises on the critical elements of an effective compliance risk management program. The Operational Risk workshop on March 27 focuses on the key components of operational risk—people, processes, and systems. The notice may be viewed at: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-16.html


FRB announced a quality improvement initiative for Check Adjustments Services. The Federal Reserve Banks will charge a quality fee to depositing institutions for quality issues within work deposited with the Federal Reserve Banks. Additionally, the Federal Reserve Banks will charge a quality fee for cases submitted with incorrect or incomplete information that resulted in the prevention of automatic resolution of the request. These quality fees are designed to encourage greater efficiency through proper case submission and improved deposit practices. The announcement may be viewed at: https://www.frbservices.org/news/fed360/issues/011519/011519-check-adj-quality-initiative.html 


CFPB published an article on common errors in credit reports and how consumers can get them fixed. According to a study conducted by the Federal Trade Commission, one in five people have an error on at least one of their credit reports. The article may be viewed at: https://www.consumerfinance.gov/about-us/blog/common-errors-credit-report-and-how-get-them-fixed/


FRB issued changes to the Cash Services Manual of Procedures (CSMOP). The manual contains the requirements that apply to an Institution’s Currency and Coin transactions with a Federal Reserve Bank. An Institution that orders from and/or deposits Currency and Coin with a Federal Reserve Bank shall adhere to CSMOP, and/or such contract, which contains the prescribed procedures for FRB Cash Services. The manual may be viewed at: https://www.frbservices.org/assets/resources/rules-regulations/030119-operating-circular-2-csmop.pdf


CFPB has issued the 2019 edition of its List of Consumer Reporting Companies. The list may be viewed at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_consumer-reporting-companies-list.pdf 


The House Financial Services Committee has released a transcript of Chairwoman Maxine Waters first policy speech in the 116th Congress. The speech outlines Waters’ priorities for the Committee like housing and strengthening CFPB. The speech may be viewed at: https://financialservices.house.gov/news/email/show.aspx?ID=LSOOG4ZWMHVGE 


CFPB has issued the Complaint Snapshot: Mortgage, detailing consumer complaints generally and in relation to mortgages. The report indicates that CFPB received approximately 71,000 mortgage complaints between November 1, 2016 and October 31, 2018, representing 11 percent of total complaints. The report may be viewed at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_complaint-snapshot-mortage_2019-01_liwsYNV.pdf


FRB launched an interactive smartphone and tablet application designed to teach elementary school students about the security and design features of Federal Reserve notes. More information on the application may be viewed at: https://www.uscurrency.gov/educational-materials/classrooms/money-adventure-mobile-app  


CFPB the sixth annual report from the Office of Servicemember Affairs (OSA) highlighting issues and emerging trends facing servicemembers, veterans, and military families. The number of servicemembers, veterans, and military families turning to CFPB for help has continued to increase over time. As a result, the complaint volume from servicemembers has also risen over the years. From 2016 to 2017 there was a 47% increase in complaints received from servicemembers. The report may be viewed at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_osa_annual-report_2018.pdf


FRB announced Consumer & Community Context, an article series that features original analysis about the financial conditions and experiences of consumers and communities, including traditionally underserved and economically vulnerable households and neighborhoods. The inaugural issue covers the theme of student loans, and includes articles on the effect that rising student loan debt levels may have on homeownership rates among young adults; and the relationship between the amount of student loan debt and individuals’ decisions to live in rural or urban areas. The first issue may be viewed at: https://www.federalreserve.gov/publications/files/consumer-community-context-201901.pdf 

By, Ally Bates