August 2019 Compliance Journal: Compliance Notes

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

FTC announced Equifax Inc. has agreed to pay at least $575 million, and potentially up to $700 million, as part of a global settlement with FTC, CFPB, and 50 U.S. states and territories, which alleged that the credit reporting company’s failure to take reasonable steps to secure its network led to a data breach in 2017 that affected approximately 147 million people. The announcement may be viewed at: https://www.ftc.gov/news-events/press-releases/2019/07/equifax-pay-575-million-part-settlement-ftc-cfpb-states-related


NCUA issued a regulatory alert regarding the 2018 Farm Bill and industrial hemp. NCUA states some credit unions have lawfully operating hemp businesses within their fields of membership. Businesses dealing with hemp and hemp-derived products include manufacturing, distribution, shipping, and retail, among others. With recent changes in federal law, more hemp-related businesses may be founded, and existing ones may expand. Growth in hemp-related commerce could provide new economic opportunities for some communities, and will create a need for such businesses to be able to access capital and financial services. Credit unions may provide the customary range of financial services for business accounts, including loans, to lawfully operating hemp related businesses within their fields of membership. The alert may be viewed at: https://www.ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/serving-hemp-businesses


FRB, FDIC, OCC, and NCUA issued a joint statement on risk-focused Bank Secrecy Act/anti-money laundering supervision. The statement is intended to improve transparency into the risk-focused approach used for planning and performing BSA/AML examinations. The extent of examination activities necessary to evaluate a bank’s BSA/AML compliance program generally depends on the risk profile of the bank and the quality of processes implemented by the bank to identify, measure, monitor, and control risk and to report potential money laundering, terrorist financing, and other illicit financial activity. The statement may be viewed at: https://www.fdic.gov/news/news/press/2019/pr19065a.pdf


OCC released an update to the Bank Accounting Advisory Series (BAAS). The BAAS covers a variety of topics and promotes consistent application of accounting standards among national banks and federal savings associations. The new edition of the BAAS reflects accounting standards issued by the Financial Accounting Standards Board on such topics as hedging and credit losses. Additionally, the new edition includes recent answers to frequently asked questions from the industry and examiners. The update may be viewed at: https://www.occ.gov/publications/publications-by-type/other-publications-reports/pub-bank-accounting-advisory-series.pdf


OFAC has opened registration for the OFAC 2019 Fall Symposium. The symposium will be a comprehensive review of OFAC and current U.S. economic sanctions, including presentations on OFAC regulations affecting all U.S. persons, as well as targeted reviews of sanctions concerns for new and updated OFAC programs. In addition to formal presentations, OFAC staff will be available throughout the day to answer questions on issues unique to a number of regulated industries. Registration information may be viewed at: http://www.cvent.com/events/ofac-2019-fall-symposium/event-summary-3b1af6025b1a4d5d9ca214e9e1f9701f.aspx?RefID=Event%20Summary


FASB formally issued its proposal to delay the implementation of the current expected credit loss standard until January 2023 for certain companies. The delay would apply to small reporting companies (as defined by the SEC), non-SEC public companies and private companies. The exposure draft of the proposal may be viewed at: https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176173176157&acceptedDisclaimer=true


FHFA is making make several changes to the Uniform Residential Loan Application, including the removal of a question asking applicants to indicate their preferred language. As a result of the changes, FHFA also announced that it will postpone the deadlines for the implementation of the URLA and automated underwriting system. FHFA said it plans to assess how the changes will affect the timeline and will provide a new implementation date soon. The notice may be viewed: https://www.fanniemae.com/content/news/urla-announcement-august-2019.pdf


The State Bar of Wisconsin has posted revised Transfer by Affidavit forms to its website. The forms may be viewed at: https://www.wisbar.org/forPublic/INeedInformation/Pages/Probate.aspx#affidavit


CFPB released TRID frequently asked questions on providing Loan Estimates to consumers. The FAQs may be viewed at: https://www.consumerfinance.gov/policy-compliance/guidance/tila-respa-disclosure-rule/tila-respa-integrated-disclosure-faqs/


FDIC has published its 2019 Risk Review. The Risk Review provides a summary of risks that ultimately may affect FDIC-insured institutions and the FDIC’s Deposit Insurance Fund. Much of the discussion focuses on risks that may affect community banks. The full review may be viewed at: https://www.fdic.gov/bank/analytical/risk-review/index.html


FDIC released its July 2019 edition of the FDIC Consumer News. The July edition provides information for consumers applying for their first mortgage. The FDIC Consumer News may be viewed at: https://www.fdic.gov/consumers/consumer/news/july2019.pdf


Treasury Department and the IRS introduced a redesigned Form W-4 for tax year 2020. Several changes were made to the draft form based on extensive feedback from stakeholders with the goal of developing a form that provides taxpayers with a more flexible and transparent withholding system. Treasury does not anticipate further changes to the redesign beyond minor updates for inflation. The announcement may be viewed at: https://home.treasury.gov/news/press-releases/sm753


HUD announced the FHFA will insure mortgages on mixed-use development under the agency’s Section 220 Program in thousands of lower income communities across the country. FHA’s Section 220 Program insures lenders against loss on mortgage default. Historically, Section 220 has provided good quality rental housing in downtown urban areas that have been targeted for overall revitalization. Today’s announcement expands eligibility of mortgages insured under this program to all 8,764 Opportunity Zones, including those located in rural areas. The announcement may be viewed at: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_19_120


The NMLS Industry Terms of Use have been updated. Effective August 10, when NMLS users log into the system, they will be required to accept the new terms of use. The updated Terms of Use may be viewed at: https://mortgage.nationwidelicensingsystem.org/about/Pages/Policies.aspx


FRB posted its June 2019 G.19 Consumer Credit statistics, which indicate consumer credit increased at a seasonally adjusted annual rate of 5 percent during the second quarter. Revolving credit increased at an annual rate of 5-1/4 percent, while nonrevolving credit increased at an annual rate of 4-3/4 percent. In June, consumer credit increased at an annual rate of 4-1/4 percent. The report may be viewed at: https://www.federalreserve.gov/releases/g19/current/default.htm

By, Ally Bates