SB 457 is signed into law.
Governor Evers signs SB 457 into law. Pictured (left to right): Catherine Haberland, DFI; Mike Semmann, WBA; Gary Kuter, Capitol Bank, Madison; Rose Oswald Poels, WBA; Governor Tony Evers (sitting); Nick Kruger, Rep. Katsma's office; Alex Richter, Rep. Katsma's office; Daryll Lund, WBA; and Jon Turke, WBA.
 

After months of meetings, drafts, debates, hearings, and everything else that goes into taking an idea and creating a law, the WBA-supported omnibus bill (SB 457) has been signed by Governor Tony Evers! 

A huge “thank you” goes out to all the bankers, WBA staff, and legislators who worked on making this proposal into a reality. The bill makes several changes to statutes relating to banking practices. Although many see these changes as tweaks to the law, they will have a huge impact on Wisconsin banks in the future.   

For more information on the bill, click here. 

By, Eric Skrum

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

The Wisconsin Court System’s Records Management Committee no longer maintains the transfer by affidavit form used to transfer property of decedents with estates of $50,000 or less. Currently, the State Bar of Wisconsin’s Real Property, Probate, and Trust Law Section maintains the transfer by affidavit form which has been updated and is available on the State Bar’s website along with form instructions. While the format of the form has changed, its purpose, function, and governing law under Wis. Stat. 867.03 has not changed.

One format change that WBA was made aware of was how the affiant completes the Wisconsin Department of Health Services (DHS) section. On the prior form, the affiant indicated that if they “did not know” whether the decedent received aid, that they had to submit notice to DHS. It is unclear on the new form whether such notice is required. However, WBA has heard from the Bar that it was not their intent to change the form in this way or any other. As such, notice should be submitted to DHS when “did not know” is selected on the form.


FFIEC revised the “Business Continuity Management” booklet, one of a series of booklets that make up the FFIEC Information Technology Examination Handbook (IT Handbook). The revised “Business Continuity Management” booklet provides information for examiners to assess the adequacy of a bank’s risk management related to the availability of critical financial products and services. The revised booklet replaces the “Business Continuity Planning” booklet issued in February 2015 and rescinds OCC Bulletin 2015-9, “FFIEC Information Technology Examination Handbook: Strengthening the Resilience of Outsourced Technology Services, New Appendix for Business Continuity Planning Booklet.” The booklet may be viewed at: https://ithandbook.ffiec.gov/it-booklets/business-continuity-management.aspx


FinCEN issued an advisory to inform financial institutions of updates to the FATF list of jurisdictions with strategic AML/CFT deficiencies. Financial institutions should be aware of these changes, which may affect their obligations and risk-based approaches with respect to these jurisdictions. The advisory also reminds financial institutions of the status of, and obligations involving, these jurisdictions, in particular the Democratic People’s Republic of Korea (DPRK) and Iran. The advisory may be viewed at: https://www.fincen.gov/sites/default/files/advisory/2019-11-12/FATF%20Advisory%20October%202019%20FINAL_508.pdf


FRB Chair Jerome Powell testified before the Joint Economic Committee of Congress, commenting on the outlook for the economy and monetary policy. Powell’s testimony may be viewed at: https://www.federalreserve.gov/newsevents/testimony/powell20191113a.htm


CFPB issued a report with state-by-state comparisons of financial well-being scores. The scores are based on Bureau analysis of the Financial Industry Regulatory Authority Foundation’s 2018 National Financial Capability Study. The report shows that the average financial well-being scores for all adults (ages 18 and older) in the United States ranged from a low of 50 in Mississippi to a high of 54 in California, the District of Columbia and Hawaii. For the United States, the average financial well-being score was 52. The repost may be viewed at: https://files.consumerfinance.gov/f/documents/201911_cfpb_fwb-state-report.pdf


FHFA issued its semi-annual Credit Risk Transfer Progress Report describing the status and volume of credit risk transfer (CRT) transactions through the second quarter of 2019.  Through the first half of 2019, Fannie Mae and Freddie Mac transferred 84 percent and 89 percent, respectively, of the allocated credit risk capital on 2018 acquisitions covered by credit risk transfer. Of the total single-family loan acquisitions of the Enterprises in 2018, 73 percent were targeted for credit risk transfer.  The full report may be viewed at: https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/CRT-Progress-Report-2Q19.pdf


FATF published the November 2019 edition of its Business Bulletin which lists the organizations strategic initiative. The bulletin may be viewed at: http://www.fatf-gafi.org/media/fatf/documents/bulletin/FATF-Business-Bulletin-November-2019.pdf


FRB issued its November 2019 Consumer & Community Context which covers the topic of small businesses’ access to capital, and includes articles on experiences of small business owners when searching for financing online, disparities in small business credit approval by race and ethnicity, and small businesses’ access to financial services in low- and moderate-income communities. The full publication may be viewed at: https://www.federalreserve.gov/publications/files/consumer-community-context-201911.pdf


FATF is developing guidance to clarify how digital identity (digital ID) systems can be used for customer due diligence (CDD). The draft guidance intends to help governments, financial institutions and other relevant entities apply a risk-based approach to the use of digital ID for CDD. The draft may be viewed at: http://www.fatf-gafi.org/publications/fatfrecommendations/documents/consultation-digital-id-guidance.html


FTC issued a new report which shows that adults aged 60 and older are less likely to report losing money to fraud than younger adults, but the amount of money they report losing is on the rise. Older consumers reported losing money most often to phone scams, with online scams coming in second place. Payment by gift cards became the most frequently reported method of payment by older adults in the second half of the year, but wire transfers persisted in the top spot for total dollars paid by older consumers. The report may be viewed at: https://www.ftc.gov/system/files/documents/reports/protecting-older-consumers-2018-2019-report-federal-trade-commission/p144401_protecting_older_consumers_2019_1.pdf


OCC issued revised “Branches and Relocations,” “Charters,” “Federal Branches and Agencies,” and “General Policies and Procedures” booklets of the Comptroller’s Licensing Manual. The revised booklets streamline licensing processes to reflect that the National Historic Preservation Act, and the National Environmental Policy Act. The notice may be viewed at: https://www.occ.gov/news-issuances/bulletins/2019/bulletin-2019-50.html

By, Ally Bates

The below article is the Regulatory Spotlight section of the November 2019 Compliance Journal. The full issue may be viewed by clicking here.

Agencies Finalize Appraisals for Higher-Priced Mortgage Loans Exemption Threshold. 

The Bureau of Consumer Financial Protection (CFPB), the Board of Governors of the Federal Reserve System (FRB), and the Office of the Comptroller of the Currency (OCC) are finalizing amendments to the official interpretations for their regulations that implement section 129H of the Truth in Lending Act (TILA). Section 129H of TILA establishes special appraisal requirements for “higher-risk mortgages,” termed “higher-priced mortgage loans” or “HPMLs” in the agencies’ regulations. The Agencies issued joint final rules implementing these requirements, effective 01/18/2014. The Agencies’ rules exempted, among other loan types, transactions of $25,000 or less, and required that this loan amount be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). If there is no annual percentage increase in the CPI–W, OCC, FRB, and CFPB will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage increase in the CPI– W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI–W had been taken into account. Based on the CPI–W in effect as of 06/01/2019, the exemption threshold will increase from $26,700 to $27,200, effective 01/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-30/pdf/2019-21559.pdf. Federal Register, Vol. 84, No. 210, 10/30/2019, 58013-58017.

Agencies Finalize Amendments to Consumer Leasing.

The Bureau of Consumer Financial Protection (CFPB), and the Board of Governors of the Federal Reserve System (FRB) are finalizing amendments to the official interpretations and commentary for the agencies’ regulations that implement the Consumer Leasing Act (CLA). The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the CLA by requiring that the dollar threshold for exempt consumer leases be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). If there is no annual percentage increase in the CPI–W, FRB and CFPB will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage change in the CPI–W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI–W had been taken into account. Based on the annual percentage increase in the CPI–W as of 06/01/2019, the exemption threshold will increase from $57,200 to $58,300 effective 01/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-30/pdf/2019-21554.pdf. Federal Register, Vol. 84, No. 210, 10/30/2019, 58017-58020. 

Agencies Finalize Amendments to Truth in Lending.

The Bureau of Consumer Financial Protection (CFPB), and the Board of Governors of the Federal Reserve System (FRB) are publishing final rules amending the official interpretations and commentary for the agencies’ regulations that implement the Truth in Lending Act (TILA). The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended TILA by requiring that the dollar threshold for exempt consumer credit transactions be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). If there is no annual percentage increase in the CPI– W, FRB and CFPB will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage change in the CPI–W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI–W had been taken into account. Based on the annual percentage increase in the CPI–W as of 06/01/2019, the exemption threshold will increase from $57,200 to $58,300 effective 01/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-30/pdf/2019-21557.pdf. Federal Register, Vol. 84, No. 210, 10/30/2019, 58020-58026.

Agencies Finalize Changes to Applicability Thresholds for Regulatory Capital and Liquidity Requirements.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) are adopting a final rule to revise the criteria for determining the applicability of regulatory capital and liquidity requirements for large U.S. banking organizations and the U.S. intermediate holding companies of certain foreign banking organizations. The final rule establishes four risk-based categories for determining the applicability of requirements under the agencies’ regulatory capital rule and liquidity coverage ratio (LCR) rule. Under the final rule, such requirements increase in stringency based on measures of size, cross-jurisdictional activity, weighted short-term wholesale funding, nonbank assets, and off-balance sheet exposure. The final rule applies tailored regulatory capital and liquidity requirements to depository institution holding companies and U.S. intermediate holding companies with $100 billion or more in total consolidated assets as well as to certain depository institutions. The final rule is effective 12/31/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-01/pdf/2019-23800.pdf. Federal Register, Vol. 84, No. 212, 11/01/2019, 59230-59283.

Agencies Finalize Rule on Resolution Planning.

The Board of Governors of the Federal Reserve System (FRB), and Federal Deposit Insurance Corporation (FDIC) are jointly adopting this final rule implementing the resolution planning requirements of section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). This final rule is intended to reflect improvements identified since the agencies finalized their joint resolution plan rule in November 2011 (2011 rule) and to address amendments to the Dodd-Frank Act made by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The final rule also extends the default resolution plan filing cycle, allows for more focused resolution plan submissions, and improves certain aspects of the resolution planning rule. The rule is effective 12/31/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-01/pdf/2019-23967.pdf. Federal Register, Vol. 84, No. 212, 11/01/2019, 59194-59228.

Agencies Propose Interagency Guidance on Credit Risk Review Systems.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA) proposed guidance for credit risk review systems. The proposed guidance is relevant to all institutions supervised by the agencies. The proposed guidance discusses sound management of credit risk, a system of independent, ongoing credit review, and appropriate communication regarding the performance of the institution’s loan portfolio to its management and board of directors. Comments are due 12/16/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22656.pdf. Federal Register, Vol. 84, No. 201, 10/17/2019, 55679-55684.

Agencies Propose Interagency Policy Statement on Allowances for Credit Losses.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA) proposed interagency policy statement on allowances for credit losses (ACLs). The agencies are issuing this proposed interagency policy statement in response to changes to U.S. generally accepted accounting principles (GAAP) as promulgated by the Financial Accounting Standards Board (FASB) in Accounting Standards Update (ASU) 2016–13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments issued since June 2016. These updates are codified in Accounting Standards Codification (ASC) Topic 326, Financial Instruments—Credit Losses (FASB ASC Topic 326). Comments are due 12/16/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22655.pdf. Federal Register, Vol. 84, No. 201, 10/17/2019, 55510-55522.

Agencies Propose Margin and Capital Requirements for Covered Swap Entities.

The Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Federal Housing Finance Agency (FHFA), and the Farm Credit Administration (FCA) issued a proposed rule that would amend the agencies’ regulations that require swap dealers and security-based swap dealers under the agencies’ respective jurisdictions to exchange margin with their counterparties for swaps that are not centrally cleared (Swap Margin Rule). The Swap Margin Rule as adopted in 2015 takes effect under a phased compliance schedule spanning from 2016 through 2020, and the dealers covered by the rule continue to hold swaps in their portfolios that were entered into before the effective dates of the rule. Such swaps are grandfathered from the Swap Margin Rule’s requirements until they expire according to their terms. The proposed rule would permit swaps entered into prior to an applicable compliance date (legacy swaps) to retain their legacy status in the event that they are amended to replace an interbank offered rate (IBOR) or other discontinued rate, repeal the inter-affiliate initial margin provisions, introduce an additional compliance date for initial margin requirements, clarify the point in time at which trading documentation must be in place, permit legacy swaps to retain their legacy status in the event that they are amended due to technical amendments, notional reductions, or portfolio compression exercises, and make technical changes to relocate the provision addressing amendments to legacy swaps that are made to comply with the Qualified Financial Contract Rules, as defined in the Supplementary Information section. Comments are due 12/09/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-07/pdf/2019-23541.pdf. Federal Register, Vol. 84, No. 216, 11/07/2019, 59970-59989.

Agencies Request Comment on Reporting of Data on Loans to Small Businesses and Small Farms.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) are requesting comment on ways to modify the current requirements for reporting data on loans to small businesses and small farms in the Consolidated Reports of Condition and Income (Call Report) so that the reported data better reflect lending to these sectors of the U.S. economy. Comments are due 12/16/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22568.pdf. Federal Register, Vol. 84, No. 201, 10/17/2019, 55687-55690.

Agencies Request Comment on Information Collection.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) announced they seek comment on the information collection titled Market Risk Regulatory Report for Institutions Subject to the Market Risk Capital Rule. The agencies also gave notice that they sent the collection to OMB for review. Comments are due 11/18/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22654.pdf. Federal Register, Vol. 84, No. 201, 10/17/2019, 55685-55686.

Agencies Request Comment on Application of the Uniform Financial Institutions Rating System.

The Board of Governors of the Federal Reserve System (FRB), and Federal Deposit Insurance Corporation (FDIC) are seeking information and comments from interested parties regarding the consistency of ratings assigned by the agencies under the Uniform Financial Institutions Rating System (UFIRS). The assigned ratings are commonly known as CAMELS ratings. The agencies also are interested in receiving feedback concerning the current use of CAMELS ratings by the agencies in their bank application and enforcement action processes. Comments are due 12/30/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-31/pdf/2019-23739.pdf. Federal Register, Vol. 84, No. 211, 10/31/2019, 58383-58386.

CFPB Finalizes Amendments to Regulation C.

The Bureau of Consumer Financial Protection (CFPB) is amending Regulation C to adjust the threshold for reporting data about open-end lines of credit by extending to 01/01/2022, the current temporary threshold of 500 open-end lines of credit. CFPB is also incorporating into Regulation C the interpretations and procedures from the interpretive and procedural rule that CFPB issued on 08/31/2018, and implementing further the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule is effective on 01/01/2020, except for the amendments to § 1003.2 in amendatory instruction 6, the amendments to § 1003.3 in amendatory instruction 7, and the amendments to supplement I to part 1003 in amendatory instruction 8, which are effective on 01/01/2022. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-29/pdf/2019-22561.pdf. Federal Register, Vol. 84, No. 209, 10/29/2019, 57946-58004.

CFPB Requests Comment on Information Collections.

  • CFPB announced it seeks comment on the information collection titled Evaluation of Financial Empowerment Training Program. CFPB also gave notice that it sent the collection to OMB for review. Comments are due 11/18/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-18/pdf/2019-22770.pdf. Federal Register, Vol. 84, No. 202, 10/18/2019, 55945-55946.
  • CFPB announced it seeks comment on the information collection titled Generic Information Collection Plan for Information on Compliance Costs and Other Effects of Regulations. CFPB also gave notice that it sent the collection to OMB for review. Comments are due 11/18/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-18/pdf/2019-22771.pdf. Federal Register, Vol. 84, No. 202, 10/18/2019, 55944-55945.

FRB Finalizes Amendments to Extensions of Credit by Federal Reserve Banks.

The Board of Governors of the Federal Reserve System (FRB) has adopted final amendments to its Regulation A to reflect FRB’s approval of a decrease in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically decreased by formula as a result of FRB’s primary credit rate action. The rule is effective 11/07/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-07/pdf/2019-24273.pdf. Federal Register, Vol. 84, No. 216, 11/07/2019, 59923-59924.

FRB Finalizes Amendments to Reserve Requirements of Depository Institutions.

FRB is amending Regulation D (Reserve Requirements of Depository Institutions) to revise the rate of interest paid on balances maintained to satisfy reserve balance requirements (IORR) and the rate of interest paid on excess balances (IOER) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORR is 1.55 percent and IOER is 1.55 percent, a 0.25 percentage point decrease from their prior levels. The amendments are intended to enhance the role of such rates of interest in moving the Federal funds rate into the target range established by the Federal Open Market Committee. The amendments are effective 11/07/2019, and the rates are applicable 10/31/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-07/pdf/2019-24272.pdf. Federal Register, Vol. 84, No. 216, 11/07/2019, 59924-59926. 

FRB Proposes Risk-Based Capital Requirements for Depository Institution Holding Companies Significantly Engaged in Insurance Activities. 

FRB is inviting comment on a proposal to establish risk-based capital requirements for depository institution holding companies that are significantly engaged in insurance activities. FRB is proposing a risk-based capital framework, termed the Building Block Approach, that adjusts and aggregates existing legal entity capital requirements to determine an enterprise-wide capital requirement, together with a risk-based capital requirement excluding insurance activities, in compliance with section 171 of the Dodd-Frank Act. FRB is additionally proposing to apply a buffer to limit an insurance depository institution holding company’s capital distributions and discretionary bonus payments if it does not hold sufficient capital relative to enterprise-wide risk, including risk from insurance activities. The proposal would also revise reporting requirements for depository institution holding companies significantly engaged in insurance activities. Comments are due 10/23/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-24/pdf/2019-21978.pdf. Federal Register, Vol. 84, No. 206, 10/24/2019, 57240-57301.

FDIC Finalizes Company-Run Stress Testing Requirements.

The Federal Deposit Insurance Corporation (FDIC) is adopting a final rule to amend the FDIC’s company-run stress testing regulations applicable to state nonmember banks and state savings associations, consistent with section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). Specifically, the final rule revises the minimum threshold for applicability from $10 billion to $250 billion, revises the frequency of required stress tests by FDIC-supervised institutions, and reduces the number of required stress testing scenarios from three to two. The final rule also makes certain conforming and technical changes. The rule is effective 11/25/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-24/pdf/2019-23036.pdf. Federal Register, Vol. 84, No. 206, 10/24/2019, 56929-56935.

FDIC Proposes Removal of Transferred OTS Regulations.

FDIC proposes to rescind and remove certain regulations transferred in 2011 to the FDIC from the former Office of Thrift Supervision pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). In addition to the removal of part 390, subpart S, FDIC proposes to make technical changes to other parts of FDIC’s regulations so that they may be applicable on their terms to State savings associations. Following the removal of the identified regulations, the regulations governing the operations of State savings associations will be substantially the same as those for all other FDIC-supervised institutions. FDIC invites comments on all aspects of this proposed rulemaking. Comments are due 12/02/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-31/pdf/2019-23115.pdf. Federal Register, Vol. 84, No. 211, 10/31/2019, 58492-58520.

FDIC Requests Comment on Information Collections.

  • FDIC announced it seeks comment on the information collection titled Notification of Performance of Bank Services. FDIC also gave notice that it sent the collection to OMB for review. Comments are due 12/30/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-29/pdf/2019-23527.pdf. Federal Register, Vol. 84, No. 209, 10/29/2019, 27869-27874.
  • FDIC announced it seeks comment on the information collection titled Information Collection for Innovation Pilot Programs. FDIC also gave notice that it sent the collection to OMB for review. Comments are due 01/06/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-06/pdf/2019-24209.pdf. Federal Register, Vol. 84, No. 215, 11/06/2019, 59808-59809.

FDIC Appointed Receiver, Liquidator, or Manager.

FDIC has been appointed the sole receiver for the financial institutions listed in the table in the notice effective as of the Date Closed as indicated in the listing. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-01/pdf/2019-23820.pdf. Federal Register, Vol. 84, No. 212, 11/01/2019, 58718.

OCC Requests Comment on Information Collections.

  • The Office of the Comptroller of the Currency (OCC) announced it seeks comment on the information collection titled OCC Supplier Registration Form. OCC also gave notice that it sent the collection to OMB for review. Comments are due 11/14/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-15/pdf/2019-22407.pdf. Federal Register, Vol. 84, No. 199, 10/15/2019, 55228-55229.
  • OCC announced it seeks comment on the information collection titled Regulation C—Home Mortgage Disclosure. OCC also gave notice that it sent the collection to OMB for review. Comments are due 12/16/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-16/pdf/2019-22473.pdf. Federal Register, Vol. 84, No. 200, 10/16/2019, 55378-55379.
  • OCC announced it seeks comment on the information collection titled Regulation Z—Truth in Lending Act. OCC also gave notice that it sent the collection to OMB for review. Comments are due 12/04/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-04/pdf/2019-23960.pdf. Federal Register, Vol. 84, No. 213, 11/04/2019, 59446-59449.

HUD Requests Comment on Information Collections.

  • The Department of Housing and Urban Development (HUD) announced it seeks comment on the information collection titled HUD Certified Housing Counselor Registration. HUD also gave notice that it sent the collection to OMB for review. Comments are due 12/10/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-11/pdf/2019-22334.pdf. Federal Register, Vol. 84, No. 198, 10/11/2019, 54915-54916.
  • HUD announced it seeks comment on the information collection titled Continuum of Care Homeless Assistance—Technical Submission. HUD also gave notice that it sent the collection to OMB for review. Comments are due 12/10/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-11/pdf/2019-22332.pdf. Federal Register, Vol. 84, No. 198, 10/11/2019, 54916-54917.
  • HUD announced it seeks comment on the information collection titled Emergency Solutions Grants Program Recordkeeping Requirements. HUD also gave notice that it sent the collection to OMB for review. Comments are due 12/10/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-11/pdf/2019-22333.pdf. Federal Register, Vol. 84, No. 198, 10/11/2019, 54917-54919.
  • HUD announced it seeks comment on the information collection titled Ginnie Mae Mortgage-Backed Securities Guide 5500.3, Revision 1. HUD also gave notice that it sent the collection to OMB for review. Comments are due 11/20/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-21/pdf/2019-22918.pdf. Federal Register, Vol. 84, No. 203, 10/21/2019, 56199-56201.
  • HUD announced it seeks comment on the information collection titled Application for FHA Insured Mortgages. HUD also gave notice that it sent the collection to OMB for review. Comments are due 12/24/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-25/pdf/2019-23240.pdf. Federal Register, Vol. 84, No. 207, 10/25/2019, 57464-57468.
  • HUD announced it seeks comment on the information collection titled HUD-Owned Real Estate Sales Contract and Addendums. HUD also gave notice that it sent the collection to OMB for review. Comments are due 12/30/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-31/pdf/2019-23790.pdf. Federal Register, Vol. 84, No. 211, 10/31/2019, 58406-58407.
  • HUD announced it seeks comment on the information collection titled Mortgage Insurance Termination Application for Premium Refund or Distributive Share Payment. HUD also gave notice that it sent the collection to OMB for review. Comments are due 12/30/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-31/pdf/2019-23791.pdf. Federal Register, Vol. 84, No. 211, 10/31/2019, 58408.
  • HUD announced it seeks comment on the information collection titled Ginnie Mae Multiclass Securities Program Documents. HUD also gave notice that it sent the collection to OMB for review. Comments are due 01/03/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-04/pdf/2019-23961.pdf. Federal Register, Vol. 84, No. 213, 11/04/2019, 59412-59414.

HUD Issues Debenture Interest Rate for Mortgage and Loan Insurance Programs.

HUD announced changes in the interest rates to be paid on debentures issued with respect to a loan or mortgage insured by the Federal Housing Administration under the provisions of the National Housing Act (the Act). The interest rate for debentures issued under Section 221(g)(4) of the Act during the 6-month period beginning 07/01/2019, is 2 3/8 percent. The interest rate for debentures issued under any other provision of the Act is the rate in effect on the date that the commitment to insure the loan or mortgage was issued, or the date that the loan or mortgage was endorsed (or initially endorsed if there are two or more endorsements) for insurance, whichever rate is higher. The interest rate for debentures issued under these other provisions with respect to a loan or mortgage committed or endorsed during the 6-month period beginning 07/01/2019, is 2 3⁄4 percent. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-31/pdf/2019-23789.pdf. Federal Register, Vol. 84, No. 211, 10/31/2019, 58405-58406.

FEMA Issues Final Rules on Suspensions of NFIP Community Eligibility.

The Federal Emergency Management Agency (FEMA) issued a final rule which identifies communities in the state of Illinois, where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on the effective dates listed within the final rule because of noncompliance with the floodplain management requirements of the program. If FEMA receives documentation that the community has adopted the required floodplain management measures prior to the effective suspension date given in the final rule, the suspension will not occur and a notice of this will be provided by publication in the Federal Register on a subsequent date. The effective date of each community’s scheduled suspension is the third date listed in the third column of the tables in the final rule. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-23/pdf/2019-23123.pdf. Federal Register, Vol. 84, No. 205, 10/23/2019, 56704-56705.

FEMA Issues Final Notices of Changes in Flood Hazard Determinations.

FEMA issued new or modified Base (1% annual-chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for communities in the states of Illinois, Indiana, Iowa, Minnesota, Nebraska, and Ohio. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents. The effective date for each LOMR is indicated in the table in the final notice. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-01/pdf/2019-23883.pdf. Federal Register, Vol. 84, No. 212, 11/01/2019, 58729-58732.

FEMA Issues Proposed Flood Hazard Determinations.

FEMA has requested comments on proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for communities in the states of Minnesota, and Iowa. The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP). Comments are due 01/14/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-16/pdf/2019-22455.pdf. Federal Register, Vol. 84, No. 200, 10/16/2019, 55324-55325.

FinCEN Finalizes Special Measure Against the Islamic Republic of Iran as a Jurisdiction of Primary Money Laundering Concern. 

The Financial Crimes Enforcement Network (FinCEN) issued a final rule, pursuant to Section 311 of the USA PATRIOT Act, to prohibit the opening or maintaining of correspondent accounts in the United States for, or on behalf of, Iranian financial institutions, and the use of foreign financial institutions’ correspondent accounts at covered U.S. financial institutions to process transactions involving Iranian financial institutions. The final rule is effective 11/14/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-04/pdf/2019-23697.pdf. Federal Register, Vol. 84, No. 213, 11/04/2019, 59302-59313.

Treasury Proposes Assessment of Fees to Cover the Expenses of the Financial Research Funds.

The Department of the Treasury (Treasury) issued a proposed rule to implement section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Economic Growth Act), which amends section 155 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). As amended, section 155 requires the Secretary of the Treasury to establish, by regulation, an assessment schedule applicable to bank holding companies with total consolidated assets of $250 billion or greater and nonbank financial companies supervised by the Board of Governors of the Federal Reserve System (FRB), to collect assessments equal to the total expenses of the Office of Financial Research (OFR). Treasury is also proposing other amendments to simplify the method for determining the amount of total assessable assets for foreign banking organizations, which have been made possible by the introduction of a new regulatory data source. Comments are due 12/04/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-04/pdf/2019-23906.pdf. Federal Register, Vol. 84, No. 213, 11/04/2019, 59320-59325.  

Treasury Proposes Rules Regarding Eligible Terminated S Corporations.

Treasury issued a proposed rulemaking regarding the definition of an eligible terminated S corporation (ETSC). In addition, these proposed regulations provide rules relating to distributions of money by an ETSC after the post-termination transition period (PTTP). Finally, these proposed regulations revise current regulations to extend the treatment of distributions of money during the PTTP to all shareholders of the corporation and to update and clarify the allocation of current earnings and profits to distributions of money and other property. These proposed regulations would affect certain C corporations and the shareholders of such corporations. Comments are due 12/23/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-07/pdf/2019-24098.pdf. Federal Register, Vol. 84, No. 216, 11/07/2019, 60011-60025.

Treasury Proposes Updated Life Expectancy and Distribution Period Tables. 

Treasury proposes regulations providing guidance relating to the life expectancy and distribution period tables that are used to calculate required minimum distributions from qualified retirement plans, individual retirement accounts and annuities, and certain other tax favored employer-provided retirement arrangements. The regulations affect participants, beneficiaries, and plan administrators of these qualified retirement plans and other tax-favored employer-provided retirement arrangements, as well as owners, beneficiaries, trustees and custodians of individual retirement accounts and annuities. Comments are due 01/07/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-08/pdf/2019-24065.pdf. Federal Register, Vol. 84, No. 217, 11/08/2019, 60812-60844.

Treasury Requests Comment on Information Collections.

  • Treasury announced it seeks comment on the information collection titled BEA Program Application. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 12/16/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-15/pdf/2019-22377.pdf. Federal Register, Vol. 84, No. 199, 10/15/2019, 55223-55228.
  • Treasury announced it seeks comment on the information collection titled Uses of Award Report Form. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 12/16/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22574.pdf. Federal Register, Vol. 84, No. 201, 10/17/2019, 55678-55679.
  • Treasury announced it seeks comment on the information collection titled Troubled Asset Relief Program—Making Home Affordable Participants. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 12/27/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-28/pdf/2019-23440.pdf. Federal Register, Vol. 84, No. 208, 10/28/2019, 57810.
  • Treasury announced it seeks comment on the information collection titled Requirements for Qualified Domestic Trust. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 12/24/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-25/pdf/2019-23397.pdf. Federal Register, Vol. 84, No. 207, 10/25/2019, 57551.

Treasury Issues Fee Schedule for the Transfer of U.S. Treasury Book-Entry Securities Held on the Fedwire Securities Service.

Treasury issued a new fee schedule applicable to transfers of U.S. Treasury book-entry securities maintained on the Fedwire Securities Service (Fedwire) that occur on or after 01/02/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-28/pdf/2019-23482.pdf. Federal Register, Vol. 84, No. 208, 10/28/2019, 57808.

SBA Requests Comment on Information Collection. 

The Small Business Administration (SBA) announced it seeks comment on the information collection titled Stockholders Confirmation (Corporation): Ownership Confirmation. SBA also gave notice that it sent the collection to OMB for review. Comments are due 12/09/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-07/pdf/2019-24313.pdf. Federal Register, Vol. 84, No. 216, 11/07/2019, 60134-60135.

RUS Repeals Rural Telephone Bank, Public Television Station Digital Transition Grant Program and the Local Television Loan Guarantee Program. 

The Rural Utilities Service (RUS) is repealing the Rural Telephone Bank, Public Television Station Digital Transition Grant Program and the Local Television Loan Guarantee Program from the Code of Federal Regulations (CFR). This action removes expired and terminated programs from the CFR as repealed by the 2018 Agricultural Improvement Act (2018 Farm Bill). The statutory changes result from the 2018 Farm Bill. Additionally, conforming changes are being made to other regulations as a result of the statutory changes. The final rule is effective 01/06/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-07/pdf/2019-24310.pdf. Federal Register, Vol. 84, No. 216, 11/07/2019, 59919-59923.

NCUA Amends Public Unit and Nonmember Shares Rule.

The National Credit Union Administration (NCUA) is amending NCUA’s public unit and nonmember share rule to allow federal credit unions (FCU) to receive public unit and nonmember shares up to 50 percent of the credit union’s net amount of paid-in and unimpaired capital and surplus less any public unit and nonmember shares. This final rule also makes a conforming change to NCUA’s regulations that apply the public unit and nonmember share limit to all federally insured credit unions (FICUs). The final rule is effective 01/29/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-31/pdf/2019-23679.pdf. Federal Register, Vol. 84, No. 211, 10/31/2019, 58305-58309.

NCUA Proposes Amendments to Chartering and Field of Membership Rules.

NCUA is proposing to amend its chartering and field of membership (FOM) rules with respect to applicants for a community charter approval, expansion, or conversion. Specifically, NCUA is proposing to re-adopt a provision to allow an applicant to designate a Combined Statistical Area (CSA), or an individual, contiguous portion thereof, as a well-defined local community (WDLC), provided that the chosen area has a population of 2.5 million or less. Separately, in accordance with an August 2019 opinion and order issued by the D.C. Circuit Court of Appeals (court) with respect to communities based on a Core-Based Statistical Area (CBSA) or a portion thereof, NCUA is providing further explanation and support for its elimination of the requirement to serve the CBSA’s core area as provided for in a 2016 rulemaking. In addition, NCUA is proposing to clarify existing requirements and add an explicit provision to its rules to address concerns about potential discrimination in the FOM selection for CSAs and CBSAs. Comments are due 12/09/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-07/pdf/2019-23680.pdf. Federal Register, Vol. 84, No. 216, 11/07/2019, 59989-60115.

NCUA Issues 2020-2021 Budget Justification Draft.

NCUA is making available it’s “Detailed Business-Type Budget” available for public review. The proposed resources w   ill finance the agency’s annual operations and capital projects, both of which are necessary for the agency to accomplish its mission. The briefing schedule and comment instructions are included in the supplementary information section. Comments are due 12/02/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-01/pdf/2019-23856.pdf. Federal Register, Vol. 84, No. 212, 11/01/2019, 59126-59192.

NCUA Requests Comment on Information Collections.

  • NCUA announced it seeks comment on the information collection titled Written Reimbursement Policy. NCUA also gave notice that it sent the collection to OMB for review. Comments are due 12/16/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-16/pdf/2019-22493.pdf. Federal Register, Vol. 84, No. 200, 10/16/2019, 55338.
  • NCUA announced it seeks comment on the information collection titled Supervisory Committee Audits and Verifications. NCUA also gave notice that it sent the collection to OMB for review. Comments are due 11/18/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22686.pdf. Federal Register, Vol. 84, No. 201, 10/17/2019, 55591-55592.
  • NCUA announced it seeks comment on the information collection titled Advertising of Excess Insurance. NCUA also gave notice that it sent the collection to OMB for review. Comments are due 12/23/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-24/pdf/2019-23212.pdf. Federal Register, Vol. 84, No. 206, 10/24/2019, 57056-57057.

VA Requests Comment on Information Collection.

The Department of Veterans Affairs (VA) announced it seeks comment on the information collection titled Statement of Purchaser or Owner Assuming Seller’s Loan. VA also gave notice that it sent the collection to OMB for review. Comments are due 12/17/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-18/pdf/2019-22750.pdf. Federal Register, Vol. 84, No. 202, 10/18/2019, 56020.

DOL Finalizes Regulations on Authorizing Electronic Payments of Civil Monetary Penalties.

The Department of Labor (DOL) revises its regulations issued pursuant to the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), the H–2A provisions of the Immigration and Nationality Act (H– 2A), the Fair Labor Standards Act (FLSA), and the Employee Polygraph Protection Act (EPPA) governing the payment of civil money penalties (CMPs) assessed by the Wage and Hour Division (WHD). The regulatory revisions expand the CMP payment methods beyond the options specified in the current text by allowing for the payment of CMPs through an electronic payment alternative, and otherwise amend the regulations to ensure uniform payment instructions. The existing MSPA, H–2A, FLSA, and EPPA regulations require persons assessed a CMP under those statutory schemes to remit payment in person or by mail using a certified check or money order. In recognition of modern payment methods, DOL is amending these regulations to allow for payment of the CMPs via an electronic payment alternative, any successor system, or by any additional payment method that DOL may deem acceptable in the future. The rule is effective 11/07/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-07/pdf/2019-23849.pdf. Federal Register, Vol. 84, No. 216, 11/07/2019, 59928-59931.

DOL Proposes Default Electronic Disclosure by Employee Pension Benefit Plans Under ERISA.

DOL proposed a new, additional safe harbor for the use of electronic media by employee benefit plans to furnish information to participants and beneficiaries of plans subject to the Employee Retirement Income Security Act of 1974 (ERISA). The proposal, if adopted, would allow plan administrators who satisfy specified conditions to provide participants and beneficiaries with a notice that certain disclosures will be made available on a website. Individuals who prefer to receive these disclosures on paper will be able to request paper copies and to opt out of electronic delivery entirely. DOL expects that the proposal, if adopted, would improve the effectiveness of the disclosures and significantly reduce the costs and burden associated with furnishing many of the recurring and most costly ERISA disclosures. This document also contains, in section D of the preamble, a Request for Information that explores whether and how any additional changes to ERISA’s general disclosure framework, focusing on design, delivery, and content, may be made to further improve the effectiveness of ERISA disclosures. Comments are due 11/22/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-23/pdf/2019-22901.pdf. Federal Register, Vol. 84, No. 205, 10/23/2019, 56894-56923.

SSA Issues Correction to Prohibiting Persons With Certain Criminal Convictions From Serving as Representative Payees.

The Social Security Administration (SSA) published final rules in the Federal Register on 02/15/2019 to prohibit persons convicted of certain crimes from serving as representative payees under the Social Security Act (Act), as required by the Strengthening Protections for Social Security Beneficiaries Act of 2018. Those final rules inadvertently included two words in three places that should not have been there, and omitted one word in two sections of the rules. The document corrects the inadvertent inclusions and omissions in the final rules. The correction is effective 10/25/2019, and applicable 03/18/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-10-25/pdf/2019-23235.pdf. Federal Register, Vol. 84, No. 207, 10/25/2019, 57319-57320. 

DoD Finalizes Rule on Obtaining Information From Financial Institutions.

The Department of Defense (DoD) issued a final rule removing the regulation which describes the procedures for complying with the Right to Financial Privacy Act (RFPA). On 05/29/2019, the DoD revised its overarching regulation for compliance with the RFPA which supersedes this part. This part is now unnecessary and should be removed from the CFR. The final rule is effective 11/06/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-11-06/pdf/2019-24030.pdf. Federal Register, Vol. 84, No. 215, 11/06/2019, 59723.

By, Ally Bates

The below article is the Special Focus section of the November 2019 Compliance Journal. The full issue may be viewed by clicking here.

The United States Department of Agriculture (USDA) published an interim final rule on October 31, 2019 specifying regulations to produce hemp. The rule is effective October 31, 2019 through November 1, 2021.

Introduction

The rule establishes a Federal program for producers in States that do not have their own USDA-approved plan. The program includes provisions for maintaining information on the land where hemp is produced, testing of THC levels, disposing of plants not meeting certain requirements, and licensing requirements. USDA has also outlined provisions under which States may submit their own plans for approval.

It is WBA’s understanding that the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) will submit a Hemp Program Plan to USDA. However, DATCP will continue under the 2014 Farm Bill provisions, and existing Wisconsin regulation at time of this article’s publication, in 2020. As of November 1, 2019, DATCP has begun its hemp licensing for the 2020 hemp season. At this time, DATCP is is preparing to write rules to align Wisconsin law with the 2018 Farm Bill, and expects to begin the new program under the 2018 Farm Bill, and USDA’s rule, in 2021. 

This article discusses the procedural aspects for submission of a State plan to USDA under its interim final rule. It also discusses the Federal program requirements placed upon hemp producers. While these procedures and the program requirements do not directly apply to banks, they will affect how hemp businesses operate in Wisconsin, and thus, bank customers seeking to engage in hemp-related activity. This article presents selected aspects of the interim final rule for banks to better understand what to expect in the coming years and the requirements that may apply to their customers.

Procedural Aspects

From a procedural standpoint, WBA reminds readers that as of publication of this article, much remains to be decided. November 26, 2019 Governor Tony Evers signed 2019 Senate Bill 188 establishing a new hemp program. It requires DATCP to write and submit a plan to USDA for approval. After USDA receives the plan, it will either approve or disapprove the plan no later than 60 calendar days after receipt.

If DATCP proposes a plan and it is rejected by USDA, the interim final rule provides for amended plan procedures. Under those procedures, hemp production continues under the existing plan. For example, production in Wisconsin would continue under current rules while DATCP and USDA work out amendments to the proposed plan. However, if an amended plan is not submitted within one year from the effective date of the rejected new law or regulation, the existing plan is revoked. 

Note that as of publication of this article, the current DATCP program under ATCP 22 and 2017 Wisconsin Act 100 is still in effect. As discussed above, DATCP is currently issuing licenses for the 2020 season. If DATCP writes new rules under the new law, WBA will report on what banks need to know about the process.

USDA Plan Requirements

Because hemp production at the time of this article’s publication continues under existing Wisconsin law, and the future rule governing production is unknown, a full discussion of USDA’s rule and the Wisconsin bill would be premature. As such, this article will not discuss the Wisconsin bill which has yet to be signed by the governor. It will discuss USDA’s rule below, but from a conceptual standpoint rather than a full discussion. Note that the requirements as presented below have been edited to help banks understand their broader implications. As such, most technical requirements have been removed. For a full reading of the rule, please refer to the link at the end of this article.

A State plan must meet information collection requirements, to be reported to The Secretary of Agriculture of the United States regarding:

  1. Contact information for licensed producers;
    • A legal description of the land on which the producer will produce hemp including its geospatial location; and 
    • The status and number of the producer’s license or authorization. 
       
  2. A State plan must include a procedure for accurate and effective sampling of all hemp produced, requiring the following: 
    • Samples must be collected within 15 days prior to the anticipated harvest.
    • The method used for sampling must be within a level of 95% accuracy, that no more than 1% of the plants in the lot would exceed the acceptable hemp THC level.
    • During a scheduled sample collection, the producer or an authorized representative of the producer shall be present at the growing site. 
    • Representatives of the sampling agency shall be provided with complete and unrestricted access during business hours to all hemp and other cannabis plants, whether growing or harvested, and all land, buildings, and other structures used for the cultivation, handling, and storage of all hemp and other cannabis plants, and all locations listed in the producer license.
    • A producer shall not harvest the cannabis crop prior to samples being taken.
       
  3. The State plan must include procedures for testing that can accurately identify delta-9 tetrahydrocannabinol content concentration levels to specified levels and meet a specific methodology.
    • Any test resulting in higher than acceptable THC levels is considered conclusive evidence that the lot represented by the sample is not in compliance. Lots tested and not certified may not be further handled, processed or enter the stream of commerce and the producer shall ensure the lot is disposed of.
    • Samples of hemp plant material from one lot shall not be commingled with hemp plant material from other lots. 
    • Analytical testing for purposes of detecting the concentration levels of THC shall meet standards that are not presented in this summary.
       
  4. The State shall promptly notify USDA by certified mail or electronically of any occurrence of cannabis plants or plant material that do not meet the definition of hemp in this part and attach the records demonstrating the appropriate disposal of all of those plants and materials in the lot from which the representative samples were taken. 
     
  5. A State plan must include a procedure to comply with certain enforcement procedures.
     
  6. A State plan must include a procedure for conducting annual inspections of, at a minimum, a random sample of producers to verify that hemp is not produced in violation of this part. 
     
  7. A State plan must include a procedure for submitting a monthly report to USDA. All such information must be submitted to the USDA in a format that is compatible with USDA’s information sharing system. 
     
  8. The State must certify that it has the resources and personnel to carry out the practices and procedures necessary to comply.
     
  9. The State plan must include a procedure to share information with USDA.
    • The State plan shall require producers to report their hemp crop acreage to the Farm Service Agency. 
    • The State government shall assign each producer with a license or authorization identifier in a format prescribed by USDA. 
    • The State government shall require producers to report the total acreage of hemp planted, harvested, and, if applicable, disposed. The State government shall collect this information and report it to USDA. 

Final Takeaways

As expected, the rule requires testing, reporting, and monitoring to accurately identify whether hemp samples contain a delta-9 tetrahydrocannabinol (THC) content concentration level that does not exceed the acceptable level. To that extent, hemp is defined as the plant species Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a THC concentration of not more than 0.3 percent on a dry weight basis.

Another aspect to note is the rule’s use of the word “producer.” A producer is someone who is licensed or authorized to produce hemp, meaning to grow hemp plants for market, or for cultivation for market, in the United States. The rule does not distinguish between grower, producer, retailer, or any other type of hemp-related business. As such, it will remain important to see what DATCP proposes for categories of regulation in its rule.

Conclusion

While hemp businesses in Wisconsin still operate under DATCP’s current rule at time of this article’s publication, it is important to understand the track Wisconsin is currently on, and what possibilities the future holds, in order to prepare accordingly. WBA will continue to monitor and report on future hemp regulation as it continues to develop.

Click here to view USDA’s interim final rule.

By, Ally Bates

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By, Jen Harder

Q: Is There a Revised Transfer by Affidavit Form?

A: Yes. 

The transfer by affidavit form for estates of $50,000 or less is no longer maintained by the Wisconsin Court System’s Records Management Committee. The form is now maintained, for free, by the State Bar of Wisconsin Real Property, Probate, and Trust Law Section (Bar).

While the format of the form has changed, its purpose, function, and governing law under Wis. Stat. 867.03 has not changed. As such, financial institutions may want to review the new form to become familiar with it, but the law has not changed.

One format change that WBA was made aware of was how the affiant completes the Wisconsin Department of Health Services (DHS) section. On the prior form, the affiant indicated that if they “did not know” whether the decedent received aid, that they had submit notice to DHS. It is unclear on the new form whether such notice is required. However, WBA has heard from the Bar that it was not their intent to change the form in this way or any other.  

The new form and its instructions can be found through the links below. 

Form: https://www.wisbar.org/forPublic/INeedInformation/Documents/Transfer%20by%20Affidavit.PDF 

Instructions: https://www.wisbar.org/forPublic/INeedInformation/Documents/Transfer%20by%20Affidavit%20Instructions.pdf 

Birrenkott is WBA assistant director – legal. For legal questions, please email wbalegal@wisbank.com.

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance.

By, Ally Bates