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

NCUA released interim guidance on serving hemp businesses, which discusses how federally insured credit unions may provide certain financial services to legally operating hemp businesses. The guidance may be viewed at: https://www.ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/serving-hemp-businesses


FDIC released its August 2019 FDIC Consumer News featuring an article warning about scams involving fake checks. The article also included a number of tips for spotting fake checks and steps a consumer should take if a bogus check scam is suspected. The article may be viewed at: https://www.fdic.gov/consumers/consumer/news/august2019.pdf


FFIEC announced the availability of data on mortgage lending transactions at 5,683 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). Covered institutions include banks, savings associations, credit unions, and mortgage companies. Released are loan-level HMDA data covering 2018 lending activity that were submitted on or before August 7, 2019.  The announcement may be viewed at: https://www.consumerfinance.gov/about-us/newsroom/ffiec-announces-availability-2018-data-mortgage-lending/


FDIC updated it Risk Management Manual of Examination Policies to incorporate a new section titled Risk-Focused, Forward-Looking Safety and Soundness Supervision. The latter describes the FDIC’s long-standing philosophy and methods for supervising institutions by focusing on the areas presenting the greatest risks. The new section has been included in the new Part VI of the Manual titled “Appendix: Examination Processes and Tools,” and describes communication and risk-tailoring principles followed during safety and soundness examination activities. The notice may be viewed at: https://www.fdic.gov/news/news/financial/2019/fil19047.html


CFPB launched the American Consumer Financial Innovation Network (ACFIN), a network to enhance coordination among federal and state regulators to facilitate financial innovation. CFPB invited all state regulators to join ACFIN, and the initial members of ACFIN are the Attorneys General of: Alabama, Arizona, Georgia, Indiana, South Carolina, Tennessee, and Utah. The announcement may be viewed at: https://www.consumerfinance.gov/about-us/newsroom/bureau-state-regulators-launch-american-consumer-financial-innovation-network/


OCC issued a bulletin to remind banks of the new registration requirement for appraisal management companies (AMC) that became effective on August 10, 2019. Under this requirement, AMCs must register with the state or states in which they do business and must be subject to state supervision. Federal law bars AMCs from providing appraisal management services to financial institutions for consumer credit transactions secured by a consumer’s principal dwelling that are federally related transactions if the AMCs are not registered as required. This bulletin discusses considerations for banks with regard to confirming AMC registration as part of sound third-party risk management and suggests alternatives that banks can use when no registered AMCs are available. The bulletin may be viewed at: https://www.occ.gov/news-issuances/bulletins/2019/bulletin-2019-43.html


ABA released an article on preparing for a lapse in flood insurance. When the NFIP lapses, either due to a shutdown of the federal government or because Congress does not reauthorize it, many loan closings in these areas are delayed or otherwise complicated, resulting in additional costs and borrower frustrations. Unfortunately, the potential for lapse has become increasingly common, with 10 short-term extensions of the program and two brief lapses since 2016. The current authorization for the NFIP will expire at midnight on Monday, Sept. 30, 2019. The article may be viewed at: https://bankingjournal.aba.com/2019/09/how-banks-should-prepare-for-a-flood-insurance-lapse/. FRB, FDIC, OCC, and FCA also have issued an interagency statement on lapses in the NFIP. The statement may be viewed at: https://www.fdic.gov/news/news/press/2018/pr18106.html 


FDIC released results of its annual survey of branch office deposits for all FDIC-insured institutions as of June 30, 2019. The FDIC’s Summary of Deposits (SOD) provides deposit totals for each of the more than 86,000 domestic offices operated by more than 5,300 FDIC-insured commercial and savings banks, savings associations, and U.S. branches of foreign banks. The results may be viewed at: https://www5.fdic.gov/sod/sodMarketBank.asp?barItem=2


FHFA announced a revised cap structure on the multifamily businesses of Fannie Mae and Freddie Mac (the Enterprises).  The new multifamily loan purchase caps will be $100 billion for each Enterprise, a combined total of $200 billion in support to the multifamily market, for the five-quarter period Q4 2019 – Q4 2020.  The new caps apply to all multifamily business – no exclusions. The announcement may be viewed at: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Revises-Multifamily-Loan-Purchase-Caps-for-Fannie-Mae-and-Freddie-Mac.aspx


FTC charged the operators of two similar student loan debt relief schemes, and a financing company that assisted them, with bilking millions of dollars from consumers. The defendants allegedly charged illegal upfront fees that they led consumers to believe went towards consumers’ student loans, and falsely promised that their services would permanently lower or even eliminate consumers’ loan payments or balances. The defendants also signed customers up for high-interest loans to pay the fees without making required disclosures. The notice may be viewed at: https://www.ftc.gov/news-events/press-releases/2019/09/ftc-takes-action-against-operators-student-loan-debt-relief


FDIC posted its state profile for second quarter 2019. FDIC State Profiles is a quarterly summary of banking and economic conditions in each state. The profiles may be viewed at: https://www.fdic.gov/bank/analytical/stateprofile/


HUD announced a significant expansion of its Rental Assistance Demonstration (RAD) to facilitate capital investment in senior housing developments assisted through HUD’s Section 202 Supportive Housing for the Elderly Project Rental Assistance Contracts (PRAC). Expanding RAD to include Section 202 PRAC units will now allow nonprofit housing developers to access capital investment to revitalize their aging properties and to ensure sustainable affordability for their very low-income elderly residents. There are approximately 120,000 units across 2,800 properties that will now become eligible to participate in RAD. The notice may be viewed at: https://www.hud.gov/sites/dfiles/OCHCO/documents/2019-09hsgn.pdf


NCUA Chairman Rodney E. Hood issued the following detailed statement in response to the Aug. 20, 2019, D.C. Circuit Court of Appeals decision in American Bankers Association v. National Credit Union Administration: “In response to the D.C. Circuit’s ruling, which largely upholds the NCUA’s field-of-membership rules, the NCUA will take a phased approach to implementing this decision. Such a phased approach is necessary because the D.C. Circuit’s ruling remains subject to requests for further review. With respect to credit unions serving rural districts, the NCUA Board will permit federal credit unions to submit applications seeking expanded rural districts serving geographic regions that encompass up to one million people and that meet the other requirements set forth in the agency’s field-of-membership rules. The NCUA will act on such applications at the appropriate time. The D.C. Circuit upheld the portion of NCUA’s 2016 rule, which allowed charters serving Combined Statistical Areas or a portion thereof, subject to a 2.5-million person limit. We will announce further guidance on this issue shortly. In the near future, the NCUA Board will consider a limited proposal that will address another issue raised by the D.C. Circuit regarding the definition of local community that includes portions of Core-Based Statistical Areas that do not include the urban core. The format of this proposal will be a notice of proposed rulemaking with public comment.” The announcement may be viewed at: https://www.ncua.gov/newsroom/press-release/2019/chairman-hood-ncua-will-take-phased-approach-implement-fom-rule


CFPB released the results of a pilot study, Planning for tax-time savings, launched with the tax preparation company H&R Block that shows that simple messages encouraging customers to use their prepaid card to save at tax time increased the likelihood that they would do so. The pilot study, conducted during the 2017 tax filing season, randomly assigned a subset of H&R Block’s prepaid card customers to one of three groups. One group was sent an email with a message encouraging them to save using a savings feature on the prepaid card, one was sent an email message offering them a $5 incentive to save on the card, and one was not sent any savings message. The study may be viewed at: https://files.consumerfinance.gov/f/documents/cfpb_planning-for-tax-time-savings_report.pdf


FHFA announced it is expanding its foreclosure prevention options to allow borrowers in Presidentially Declared Major Disaster Areas (PDMDAs) with delinquent FHA-insured mortgages to bring their mortgages current without increasing their interest rates or principal and interest payments. The notice may be viewed at: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_19_132


FRB released the latest issue of the Consumer Compliance Outlook. This issue features articles on effective change management, and vendor considerations for flood insurance requirements. The issue may be viewed at: https://consumercomplianceoutlook.org/    


FinCEN has launched its Global Investigations Division (GID), which will be responsible for implementing targeted investigation strategies rooted in FinCEN’s unique authorities under the Bank Secrecy Act (BSA) to combat illicit finance threats and related crimes, both domestically and internationally. FinCEN Director Kenneth A. Blanco announced that Matthew Stiglitz, a former Principal Deputy Chief in the Department of Justice’s Criminal Division, will lead GID. The announcement may be viewed at: https://www.fincen.gov/news/news-releases/new-fincen-division-focuses-identifying-primary-foreign-money-laundering-threats


FDIC updated its Risk Management Manual of Examination Policies (the Manual) to incorporate a new section titled Risk-Focused, Forward-Looking Safety and Soundness Supervision. The latter describes the FDIC’s long-standing philosophy and methods for supervising institutions by focusing on the areas presenting the greatest risks. The new section has been included in the new Part VI of the Manual titled “Appendix: Examination Processes and Tools,” and describes communication and risk-tailoring principles followed during safety and soundness examination activities. The announcement may be viewed at: https://www.fdic.gov/news/news/financial/2019/fil19047.html


CFPB released its fourth biennial report on the state of the credit card market for the period 2017-2018. In 2009, the Credit Card Accountability Responsibility and Disclosure Act (Act) made substantial changes to the legal requirements applicable to the credit card market, with Section 502 of the Act also requiring that a report be issued every two years with respect to the market. The report may be viewed at: https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2019.pdf


FRB conducted a floating-rate offering of term deposits through its Term Deposit Facility on August 22, 2019. The operation offered seven-day term deposits with the rate set equal to the sum of the interest rate paid on excess reserves plus a fixed spread of 1 basis point. The results of the offering may be viewed at: https://www.federalreserve.gov/newsevents/pressreleases/monetary20190822a.htm


OCC will host two workshops at the OCC Central District Office in Chicago, October 1 and 2, for directors of national community banks and federal savings associations supervised by the OCC. The workshops are taught by experienced OCC staff and are two of the 24 offered nationwide to enhance and expand the skills of national community bank and federal savings association directors. Registration information may be viewed at: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-96.html


OFAC and FinCEN announced coordinated actions to bring additional financial pressure upon those who manufacture, sell, or distribute synthetic opioids or their precursor chemicals. The announcement may be viewed at: https://home.treasury.gov/news/press-releases/sm756

By, Ally Bates

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

Agencies Request Comment on Information Collection.

  • The Board of Governors of the Federal Reserve System (FRB), and the Federal Deposit Insurance Corporation (FDIC) announced they seek comment on the information collection titled Regulation I: Disclosure Requirements for Depository Institutions Lacking Federal Deposit Insurance. The agencies also gave notice that they sent the collection to OMB for review. Comments are due 10/28/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-29/pdf/2019-18606.pdf. Federal Register, Vol. 84, No. 168, 08/29/2019, 45491-45494.
  • The Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) announced they seek comment on the information collection titled Country Exposure Report and Country Exposure Information Report. The agencies also gave notice that they sent the collection to OMB for review. Comments are due 10/09/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-09/pdf/2019-19369.pdf. Federal Register, Vol. 84, No. 174, 09/09/2019, 47264.

CFPB Requests Comment on Information Collections.

  • CFPB announced it seeks comment on the information collection titled Regulation I: Disclosure Requirements for Depository Institutions Lacking Federal Deposit Insurance. CFPB also gave notice that it sent the collection to OMB for review. Comments are due 09/23/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-23/pdf/2019-18249.pdf. Federal Register, Vol. 84, No. 164, 08/23/2019, 44289-44290.
  • CFPB announced it seeks comment on the information collection titled Generic Information Collection Plan for the Collection for Qualitative Consumer Education, Engagement and Experience Information Collections. CFPB also gave notice that it sent the collection to OMB for review. Comments are due 09/25/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-26/pdf/2019-18251.pdf. Federal Register, Vol. 84, No. 165, 08/26/2019, 44603-44604.
  • CFPB announced it seeks comment on the information collection titled Truth In Lending Act (Regulation Z). CFPB also gave notice that it sent the collection to OMB for review. Comments are due 09/25/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-26/pdf/2019-18252.pdf. Federal Register, Vol. 84, No. 165, 08/26/2019, 44604-44605.
  • CFPB announced it seeks comment on the information collection titled Generic Information Collection Plan for Surveys Using the Consumer Credit Panel. CFPB also gave notice that it sent the collection to OMB for review. Comments are due 11/04/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-03/pdf/2019-18933.pdf. Federal Register, Vol. 84, No. 170, 09/03/2019, 45998-45999.
  • CFPB announced it seeks comment on the information collection titled Truth in Savings. CFPB also gave notice that it sent the collection to OMB for review. Comments are due 11/08/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-09/pdf/2019-19385.pdf. Federal Register, Vol. 84, No. 174, 09/09/2019, 47264.

FRB Finalizes Amendments to Regulation A.

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 amendments are effective 08/12/2019. The rate changes for primary and secondary credit were applicable on 08/01/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-12/pdf/2019-17173.pdf. Federal Register, Vol. 84, No. 155, 08/12/2019, 39723-39724.

FRB Finalizes Amendments to Regulation D.

FRB is amending Regulation D 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 2.10 percent and IOER is 2.10 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 (FOMC). The amendments are effective 08/12/2019. The IORR and IOER rate changes were applicable on 08/01/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-12/pdf/2019-17175.pdf. Federal Register, Vol. 84, No. 155, 08/12/2019, 39724-39725.

FRB Issues Correction to Availability of Funds and Collection of Checks.

FRB published a final rule in the Federal Register on 07/03/2019 amending Regulation CC, which implements the Expedited Funds Availability Act (EFA Act), to implement a statutory requirement in the EFA Act to adjust the dollar amounts under the EFA Act for inflation, incorporate the Economic Growth, Regulatory Relief, and Consumer Protection Act and made certain other technical amendments. The notice corrects errors in amendatory instructions affecting FRB’s rules. The correction in effective 07/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-29/pdf/2019-18658.pdf. Federal Register, Vol. 84, No. 168, 08/29/2019, 45403.

FRB Requests Comment on Information Collections. 

  • FRB announced it seeks comment on the information collection titled Reporting and Disclosure Requirements Related to Securities of State Member Banks as Required by Regulation H. FRB also gave notice that it sent the collection to OMB for review. Comments are due 10/11/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-12/pdf/2019-17185.pdf. Federal Register, Vol. 84, No. 155, 08/12/2019, 39845-39847.
  • FRB announced it seeks comment on the information collection titled Interchange Transaction Fees Survey. FRB also gave notice that it sent the collection to OMB for review. Comments are due 10/11/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-12/pdf/2019-17186.pdf. Federal Register, Vol. 84, No. 155, 08/12/2019, 39847-39849.
  • FRB announced it seeks comment on the information collection titled Notice of Mutual Holding Company Reorganization, Application for Approval of a Stock Issuance by a Subsidiary Holding Company of a Mutual Holding Company, Application for Conversion of a Mutual Holding Company to Stock Form, Proxy Statement, Offering Circular, and Order Form. FRB also gave notice that it sent the collection to OMB for review. Comments are due 10/11/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-12/pdf/2019-17190.pdf. Federal Register, Vol. 84, No. 155, 08/12/2019, 39841-39843.
  • FRB announced it seeks comment on the information collection titled Savings Association Holding Company Report. FRB also gave notice that it sent the collection to OMB for review. Comments are due 11/12/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19445.pdf. Federal Register, Vol. 84, No. 175, 09/10/2019, 47514-47516.
  • FRB announced it seeks comment on the information collection titled Consumer Satisfaction Questionnaire, the Federal Reserve Consumer Help—Consumer Survey, the Consumer Online Complaint Form, and the Appraisal Complaint Form. FRB also gave notice that it sent the collection to OMB for review. Comments are due 11/12/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19446.pdf. Federal Register, Vol. 84, No. 175, 09/10/2019, 47507-47509.
  • FRB announced it seeks comment on the information collection titled Transfer Agent Registration and Amendment Form. FRB also gave notice that it sent the collection to OMB for review. Comments are due 11/12/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19447.pdf. Federal Register, Vol. 84, No. 175, 09/10/2019, 47512-47513.
  • FRB announced it seeks comment on the information collection titled Notice of Branch Closure. FRB also gave notice that it sent the collection to OMB for review. Comments are due 11/12/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19489.pdf. Federal Register, Vol. 84, No. 175, 09/10/2019, 47516-47517.
  • FRB announced it seeks comment on the information collection titled Payments Research Survey. FRB also gave notice that it sent the collection to OMB for review. Comments are due 11/12/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19490.pdf. Federal Register, Vol. 84, No. 175, 09/10/2019, 47511-47512.
  • FRB announced it seeks comment on the information collection titled Banking Organization Systemic Risk Report. FRB also gave notice that it sent the collection to OMB for review. Comments are due 11/12/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19522.pdf. Federal Register, Vol. 84, No. 175, 09/10/2019, 47509-47511.

FDIC Proposes Amendments to Securitization Safe Harbor Rule.

The Federal Deposit Insurance Corporation (FDIC) is proposing a rule that would revise certain provisions of its securitization safe harbor rule, which relates to the treatment of financial assets transferred in connection with a securitization or participation transaction, in order to eliminate a requirement that the securitization documents require compliance with Regulation AB of the Securities and Exchange Commission in circumstances where Regulation AB by its terms would not apply to the issuance of obligations backed by such financial assets. Comments are due 10/21/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-22/pdf/2019-15536.pdf. Federal Register, Vol. 84, No. 163, 08/22/2019, 43732-43737.

FDIC Proposes Removal of Transferred OTS Regulation Regarding Deposits.

FDIC proposes to rescind and remove the “Deposits” regulations because they are unnecessary and duplicative of currently applicable provisions of law with respect to the maintenance of deposit account records at State savings associations. These regulations apply solely to State savings associations, and were included in the regulations that were transferred to the FDIC from the Office of Thrift Supervision (OTS) on 07/21/2011, in connection with the implementation of title III of the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Comments are due 09/25/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-26/pdf/2019-18268.pdf. Federal Register, Vol. 84, No. 165, 08/26/2019, 44558-44563.

FDIC Proposes Interest Rate Restrictions on Institutions That Are Less Than Well Capitalized.  

FDIC issued proposed revisions to its regulations relating to interest rate restrictions that apply to less than well capitalized insured depository institutions. Under the proposed rule, the FDIC would amend the methodology for calculating the national rate and national rate cap for specific deposit products. The national rate would be the weighted average of rates paid by all insured depository institutions on a given deposit product, for which data are available, where the weights are each institution’s market share of domestic deposits. The national rate cap for particular products would be set at the higher of the 95th percentile of rates paid by insured depository institutions weighted by each institution’s share of total domestic deposits, or the proposed national rate plus 75 basis points. The proposed rule would also greatly simplify the current local rate cap calculation and process by allowing less than well capitalized institutions to offer up to 90 percent of the highest rate paid on a particular deposit product in the institution’s local market area. Comments are due 11/04/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-04/pdf/2019-18360.pdf. Federal Register, Vol. 84, No. 171, 09/04/2019, 46470-46495.

FDIC Issues Notice on Terminations of Receiverships.

FDIC as Receiver for former depository institutions, intends to terminate its receivership for the institutions listed in the notice. The liquidation of the assets for each receivership has been completed. To the extent permitted by available funds and in accordance with law, the Receiver will be making a final dividend payment to proven creditors. Based upon the foregoing, the Receiver has determined that the continued existence of the receiverships will serve no useful purpose. Consequently, notice is given that the receiverships shall be terminated, to be effective no sooner than thirty days after the date of this notice. If any person wishes to comment concerning the termination of any of the receiverships, such comment must be made in writing, identify the receivership to which the comment pertains, and be sent within thirty days of the date of this notice to: Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Department 34.6, 1601 Bryan Street, Dallas, TX 75201. No comments concerning the termination of the above-mentioned receiverships will be considered which are not sent within this time frame. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-29/pdf/2019-18552.pdf. Federal Register, Vol. 84, No. 168, 08/29/2019, 45491.

FDIC Requests Comment on Information Collections.

FDIC announced it seeks comment on the information collection titled Interagency Charter and Federal Deposit Insurance Application. FDIC also gave notice that it sent the collection to OMB for review. Comments are due 09/26/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-27/pdf/2019-18414.pdf. Federal Register, Vol. 84, No. 166, 08/27/2019, 44895.

OCC Finalizes Assessment of Fees.

The Office of the Comptroller of the Currency (OCC) is adopting a final rule to revise its assessment rule to provide partial assessment refunds to national banks, Federal savings associations, and Federal branches and agencies of foreign banks (collectively, banks under the jurisdiction of the OCC) that exit the OCC’s jurisdiction within the first half of each six-month period beginning the day after the date of the second or fourth quarterly Consolidated Report of Condition and Income (Call Report). The final rule will not change the current payment due dates for assessments nor will it change the way assessments are calculated for banks that remain under the OCC’s jurisdiction. The final rule will also make technical changes to the assessment rules. The final rule is effective 09/20/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-21/pdf/2019-17535.pdf. Federal Register, Vol. 84, No. 162, 08/21/2019, 43475-43479.

OCC Requests Comment on Information Collections.

  • OCC announced it seeks comment on the information collection titled Bank Secrecy Act/Money Laundering Risk Assessment. OCC also gave notice that it sent the collection to OMB for review. Comments are due 09/23/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-23/pdf/2019-18158.pdf. Federal Register, Vol. 84, No. 164, 08/23/2019, 44352-44353.
  • OCC announced it seeks comment on the information collection titled Guidance Regarding Unauthorized Access to Customer Information. OCC also gave notice that it sent the collection to OMB for review. Comments are due 09/23/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-23/pdf/2019-18159.pdf. Federal Register, Vol. 84, No. 164, 08/23/2019, 44354-44355.
  • OCC announced it seeks comment on the information collection titled Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies and Diversity Self-Assessment Template for OCC-Regulated Entities. OCC also gave notice that it sent the collection to OMB for review. Comments are due 11/04/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-04/pdf/2019-18992.pdf. Federal Register, Vol. 84, No. 171, 09/04/2019, 46604-46606.
  • OCC announced it seeks comment on the information collection titled Securities Exchange Act Disclosure Rules. OCC also gave notice that it sent the collection to OMB for review. Comments are due 10/10/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19516.pdf. Federal Register, Vol. 84, No. 175, 09/10/2019, 47631-47632.

HUD Finalizes Rule on Project Approval for Single-Family Condominiums. 

The Department of Housing and Urban Development (HUD) finalized a rule implementing HUD’s authority under the single-family mortgage insurance provisions of the National Housing Act to insure one-family units in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semidetached, or detached, and an undivided interest in the common areas and facilities which serve the project. The rule provides for requirements for lenders to obtain approval under the Direct Endorsement Lender Review and Approval Process (DELRAP) authority for condominiums, and for standards that projects must meet to be approved for mortgage insurance on individual units. The rule provides for flexibility with respect to the concentration of Federal Housing Administration (FHA)- insured units, owner-occupied units, and the amount that can be set aside for commercial and non-residential space. This will enable HUD to vary these standards, within parameters, to meet market needs. The final rule is effective 10/15/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-15/pdf/2019-17213.pdf. Federal Register, Vol. 84, No. 158, 08/15/2019, 41846-41877.

HUD Proposes Amendments to Disparate Impact Standard.

HUD proposes to amend its interpretation of the Fair Housing Act’s disparate impact standard to better reflect the Supreme Court’s 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., and to provide clarification regarding the application of the standard to State laws governing the business of insurance. The proposal follows a 06/20/2018, advance notice of proposed rulemaking, in which HUD solicited comments on the disparate impact standard set forth in HUD’s 2013 final rule, including the disparate impact rule’s burden-shifting approach, definitions, and causation standard, and whether it required amendment to align with the decision of the Supreme Court in Inclusive Communities Project, Inc. Comments are due 10/18/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-19/pdf/2019-17542.pdf. Federal Register, Vol. 84, No. 160, 08/19/2019, 42854-42863.

HUD Issues Notice of Demonstration to Assess the National Standards for the Physical Inspection of Real Estate and Associated Protocols.

HUD issued a notice that it will be demonstrating the National Standards for the Physical Inspection of Real Estate (NSPIRE), which will further one of HUD’s highest priority strategic outcomes—resident health and safety. HUD is looking at the implementation of NSPIRE as an opportunity to reduce regulatory burden through alignment and consolidation compared to either maintaining or increasing the number of standards and protocols to evaluate HUD-assisted housing across multiple programs. During this demonstration, HUD will solicit volunteers to test the NSPIRE standards and protocols as the means for assessing the physical conditions of HUD-assisted and -insured housing. The demonstration, which will include approximately 4,500 properties, will be implemented on a rolling, nationwide basis and will assess all aspects of the physical inspection line of business of the Real Estate Assessment Center—the collection, processing, and evaluation of physical inspection data and information, including a new scoring model. As the first step in the implementation of NSPIRE, HUD is soliciting comment on this proposed, voluntary demonstration. HUD will consider the comments and incorporate them into the demonstration. Subjecting the NSPIRE model to a multistage demonstration will serve as an opportunity to refine processes and ensure all mechanisms are in place to facilitate the transition to a nationwide implementation. The demonstration will also serve as the precursor to any required rulemaking. Comments are due 10/21/2019, the notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-21/pdf/2019-17910.pdf. Federal Register, Vol. 84, No. 162, 08/21/2019, 43536-43542.

HUD Requests Comment on Information Collection.

  • HUD announced it seeks comment on the information collection titled FHA Lender Approval, Annual Renewal, Periodic Updates and Required Reports by FHA-Approved Lenders. HUD also gave notice that it sent the collection to OMB for review. Comments are due 09/13/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-14/pdf/2019-17453.pdf. Federal Register, Vol. 84, No. 157, 08/14/2019, 40435-40437.
  • HUD announced it seeks comment on the information collection titled Multifamily Mortgagee’s Application for Insurance Benefits. HUD also gave notice that it sent the collection to OMB for review. Comments are due 11/08/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-09/pdf/2019-19414.pdf. Federal Register¸ Vol. 84, No. 174, 09/09/2019, 47315-47316.

FEMA Issues Final Flood Hazard Determinations.

The Federal Emergency Management Agency (FEMA) has issued a final notice which identifies communities in the state of Wisconsin, where flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final. The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in FEMA’s National Flood Insurance Program (NFIP). The final notice is effective 12/09/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-28/pdf/2019-18550.pdf. Federal Register, Vol. 84, No. 167, 08/28/2019, 45160-45162.

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, Michigan, Minnesota, Nebraska, and Wisconsin. 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-2019-08-16/pdf/2019-17577.pdf. Federal Register, Vol. 84, No. 159, 08/16/2019, 41996-42000.
  • 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 Indiana, Michigan, and Minnesota. 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-2019-08-16/pdf/2019-17578.pdf. Federal Register, Vol. 84, No. 159, 08/16/2019, 41994-41996.
  • 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 Minnesota, and Wisconsin. 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-2019-08-29/pdf/2019-18691.pdf. Federal Register, Vol. 84, No. 168, 08/29/2019, 45511-45513.

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 state of 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 11/27/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-29/pdf/2019-18695.pdf. Federal Register, Vol. 84, No. 168, 08/29/2019, 45509-45510.

FEMA Requests Comment on Information Collection.

FEMA announced it seeks comment on the information collection titled Community Disaster Loan (CDL) Program. FEMA also gave notice that it sent the collection to OMB for review. Comments are due 09/27/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-28/pdf/2019-18544.pdf. Federal Register, Vol. 84, No. 167, 08/28/2019, 45162-45163.

FEMA Issues Correction to Revisions to Methodology for Payments to Write Your Own Companies. 

FEMA corrects the preamble to an Advance Notice of Proposed Rulemaking (ANPRM) which FEMA published on 07/08/2019, seeking comment regarding possible approaches to incorporating actual flood insurance expense data into the payment methodology that FEMA uses to determine the amount of payments to WYO companies. https://www.govinfo.gov/content/pkg/FR-2019-09-03/pdf/2019-18982.pdf. Federal Register, Vol. 84, No. 170, 09/03/2019, 45933-45934.

FinCEN Requests Comment on Information Collection.

The Financial Crimes Enforcement Network (FinCEN) announced it seeks comment on the information collection titled Renewal of Information Collection Requirements in connection with the Imposition of a Special Measure concerning North Korea as a Jurisdiction of Primary Money Laundering Concern. FinCEN also gave notice that it sent the collection to OMB for review. Comments are due 11/12/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19486.pdf. Federal Register, Vol. 84, No. 175, 09/10/2019, 47632-47633.

Treasury Announces Pricing for 2019 Apollo 11 50th Anniversary Commemorative Coins.

The Department of the Treasury (Treasury) is announcing pricing for the 2019 Apollo 11 50th Anniversary Commemorative Coins and Kennedy/Apollo 11 Intaglio Prints. The notice contains a table containing the pricing. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-19/pdf/2019-17793.pdf. Federal Register, Vol. 84, No. 160, 08/19/2019, 42991.

Treasury Issues Correction to Multiple Employer Plans.

Treasury issued a correction to a notice of proposed rulemaking that was published in the Federal Register on 07/03/2019. The proposed regulations relate to the tax qualification of plans maintained by more than one employer. As published, the notice of proposed rulemaking contains errors which may prove to be misleading and need to be clarified. Comments are still being accepted and are due 10/01/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-21/pdf/2019-17849.pdf. Federal Register, Vol. 84, No. 162, 08/21/2019, 43542-43543.

Treasury Requests Comment on Information Collection.

  • Treasury announced it seeks comment on the information collection titled Supporting Statement of Ownership for Overdue United States Bearer Securities. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 09/27/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-28/pdf/2019-18495.pdf. Federal Register, Vol. 84, No. 167, 08/28/2019, 45217.
  • Treasury announced it seeks comment on the information collection titled TreasuryDirect. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 09/27/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-28/pdf/2019-18479.pdf. Federal Register, Vol. 84, No. 167, 08/28/2019, 45216-45217.

FASB Issues Interpretation of SFFAS 5 and SFFAS 6.

The Federal Accounting Standards Advisory Board (FASB) has issued Interpretation of Federal Financial Accounting Standards 9, Cleanup Cost Liabilities Involving Multiple Component Reporting Entities: An Interpretation of SFFAS 5 & SFFAS 6. The Interpretation is available on the FASB website at https://www.fasab.gov/accounting-standards/. Copies can be obtained by contacting FASB at (202) 512–7350. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-21/pdf/2019-18047.pdf. Federal Register, Vol. 84, No. 162, 08/21/2019, 43599.

FASB Issues Exposure Draft of Technical Bulletin.

FASB issued an exposure draft of a proposed Technical Bulletin titled Loss Allowance for Intragovernmental Receivables. The exposure draft is available on the FASB website at https://www.fasab.gov/documents-forcomment/. Copies can be obtained by contacting FASB at (202) 512–7350. Comments are due 10/01/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-05/pdf/2019-19191.pdf. Federal Register, Vol. 84, No. 172, 09/05/2019, 46732.

FHFA Finalizes Rule on Credit Score Models.

The Federal Housing Finance Agency (FHFA) is issuing a final rule on the process for validation and approval of credit score models by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the Enterprises). The final rule defines a four-phase process for an Enterprise to validate and approve credit score models. The process begins with the Credit Score Solicitation (a solicitation by the Enterprises of applications from credit score model developers), followed by the Submission and Initial Review of Applications (an initial review by the Enterprise of submitted applications). The third phase is a Credit Score Assessment by the Enterprise, and the fourth phase is an Enterprise Business Assessment. The final rule establishes criteria for each of the four phases and includes required timing and notices for Enterprise decisions under the process. The final rule is effective 10/15/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-16/pdf/2019-17633.pdf. Federal Register, Vol. 84, No. 159, 08/16/2019, 41886-41908.

SBA Extends Decrease in Surety Bond Guarantee Program Fees.

The Small Business Administration (SBA) announces a one-year extension of the temporary decrease in the guarantee fees that SBA charges all Surety companies and Principals on each guaranteed bond (other than a bid bond) issued in SBA’s Surety Bond Guarantee (SBG) Program. The temporary initiative to test lower fees will be extended through 09/30/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-14/pdf/2019-17442.pdf. Federal Register, Vol. 84, No. 157, 08/14/2019, 40466-40467.

SBA Extends 504 Loan Program Rural Initiative Pilot Program.

SBA’s 504 Loan Program Rural Initiative Pilot Program (504 Rural Pilot) authorizes Certified Development Companies (CDCs) to make 504 loans for projects in rural counties located in their SBA Region during the two-year period beginning 07/19/2018 and ending 07/20/2020. SBA announces the extension of the 504 Rural Pilot to 09/30/2021. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-28/pdf/2019-18609.pdf. Federal Register, Vol. 84, No. 167, 08/28/2019, 45060-45061.  

FSA Finalizes Agriculture Risk Coverage and Price Loss Coverage Programs.

The Farm Service Agency (FSA) issued a rule implementing the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) Programs authorized by the Agricultural Act of 2014 (the 2014 Farm Bill), as amended. The Agriculture Improvement Act of 2018 (2018 Farm Bill) amended 2014 Farm Bill provisions regarding ARC and PLC, and authorized the ARC and PLC Programs for the 2019 through 2023 program years. The ARC and PLC Programs are continuing, with some changes. This rule also includes conforming changes to Farm Service Agency (FSA) general regulations that apply to multiple programs. The ARC and PLC Programs provide producers a choice between a counter-cyclical payment support type program (PLC) and an income support program (ARC). In a defined election and enrollment period, producers can elect different programs for different covered commodities on a farm, for example, choosing PLC for corn and ARC for soybeans on the same farm. There is also an option to elect ARC individual coverage (ARC–IC); however, if that option is elected, all the farm’s covered commodities are elected with that option. The rule specifies the eligibility requirements, enrollment procedures, and payment calculations for the ARC and PLC Programs. The final rule is effective 09/03/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-03/pdf/2019-18853.pdf. Federal Register, Vol. 84, No. 170, 09/03/2019, 45877-45895.

RHS Delays Effective Date of Single Family Housing Guaranteed Loan Program.

The Rural Housing Service (RHS) published a final rule in the Federal Register on 07/22/2019 concerning construction to permanent loan financing, repair or rehabilitation financing, and the removal of a maximum the interest rate cap for the Single Family Housing Guaranteed Loan Program. The effective date was published as 08/21/2019 and is being deferred to 10/01/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-19/pdf/2019-17683.pdf. Federal Register, Vol. 84, No. 160, 08/19/2019, 42799.

RHS Proposes Amendments to Guaranteed Rural Rental Housing.

RHS is proposing to amend its regulation to remove the stated amount that RHS will charge for the initial and annual guarantee fees. The regulation change will allow RHS the flexibility to establish or make any future changes to the initial and annual guarantee fees without the need for a regulatory change. Comments are due 11/04/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-03/pdf/2019-18773.pdf. Federal Register, Vol. 84, No. 170, 09/03/2019, 45927-45929.

FTC Finalizes Amendments to Telemarketing Sales Rule Fees.

The Federal Trade Commission (FTC) is amending its Telemarketing Sales Rule by updating the fees charged to entities accessing the National Do Not Call Registry as required by the Do-Not-Call Registry Fee Extension Act of 2007. The final rule is effective 10/01/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-27/pdf/2019-18446.pdf. Federal Register, Vol. 84, No. 166, 08/27/2019, 44686-44687.

NCUA Requests Comment on Information Collection.

  1. The National Credit Union Administration (NCUA) announced it seeks comment on the information collection titled Corporate Credit Union Monthly Call Report and Report of Officers. NCUA also gave notice that it sent the collection to OMB for review. Comments are due 10/28/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-08-29/pdf/2019-18652.pdf. Federal Register, Vol. 84, No. 168, 08/29/2019, 45536-45537.
  2. NCUA announced it seeks comment on the information collection titled Records Preservation, 12 CFR part 749. NCUA also gave notice that it sent the collection to OMB for review. Comments are due 11/04/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-03/pdf/2019-18943.pdf. Federal Register, Vol. 84, No. 170, 09/03/2019, 46051.

VA Requests Comment on Information Collection.

The Department on Veterans Affairs (VA) announced it seeks comment on the information collection titled Supplement to VA Forms. VA also gave notice that it sent the collection to OMB for review. Comments are due 10/07/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-09-06/pdf/2019-19246.pdf. Federal Register, Vol. 84, No. 173, 09/06/2019, 47041-47042.

By, Ally Bates

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

On February 12, 2019 the Federal Financial Institutions Examination Council published a final rule on loans in areas having special flood hazards (2019 final rule). The 2019 final rule amends the flood regulations for the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Farm Credit Administration, and the National Credit Union Administration (Agencies). The Agencies issued the 2019 final rule to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act). The 2019 final rule was published in the Federal Register on February 20, 2019 and compliance is manditory on July 1, 2019; however, lenders may begin following the rule now.

Background

The Biggert-Waters Act includes a statutory definition of private flood insurance and directs the Agencies to implement acceptance through rulemaking. In 2013 the Agencies proposed a rule requiring the acceptance of private flood insurance pursuant to the statutory definition. The proposed rule generated interpretive uncertainties that ultimately resulted in the Agencies issuing a revised proposed rule in 2016. The 2019 final rule is an attempt to clarify the definition of private flood insurance under the Biggert-Waters Act.

2019 Final Rule

In addition to attempting to clarify the statutory definition of private flood insurance, the 2019 final rule includes a compliance aid to enable institutions to identify acceptable private policies. Additionally, subject to certain restrictions, it permits institutions to exercise discretionary acceptance of flood insurance policies that do not meet the definition of private flood insurance. Finally, the rule specifies how lenders may accept policies issued by “mutual aid societies” such as certain Amish Aid Plans.

Definition of Private Flood Insurance

The statutory definition of private flood insurance under the Biggert-Waters Act incorporated factors from the Federal Emergency Management Agency’s Mandatory Purchase of Flood Insurance Guidelines. The 2019 final rule attempts to clarify this statutory definition. As such, institutions familiar with the statutory definition will notice slight variations when compared to the 2019 final rule’s definition. For purposes of this article, the analysis will focus on the 2019 final rule’s definition and not make a comparison.

Under the 2019 final rule, private flood insurance means an insurance policy that: 

  1. Is issued by an insurance company that is: 
    • Licensed, admitted, or otherwise approved to engage in the business of insurance by the insurance regulator of the State or jurisdiction in which the property to be insured is located; or 
    • Recognized, or not disapproved, as a surplus lines insurer by the insurance regulator of the State or jurisdiction in which the property to be insured is located in the case of a policy of difference in conditions, multiple peril, all risk, or other blanket coverage insuring nonresidential commercial property; 
  2. Provides flood insurance coverage that is at least as broad as the coverage provided under a Standard Flood Insurance Policy (SFIP) for the same type of property, including when considering deductibles, exclusions, and conditions offered by the insurer. To be at least as broad as the coverage provided under an SFIP, the policy must, at a minimum: 
    • Define the term “flood” to include the events defined as a “flood” in an SFIP; 
    • Contain the coverage specified in an SFIP, including that relating to building property coverage; personal property coverage, if purchased by the insured mortgagor(s); other coverages; and increased cost of compliance coverage; 
    • Contain deductibles no higher than the specified maximum, and include similar nonapplicability provisions, as under an SFIP, for any total policy coverage amount up to the maximum available under the National Flood Insurance Program (NFIP) at the time the policy is provided to the lender; 
    • Provide coverage for direct physical loss caused by a flood and may only exclude other causes of loss that are excluded in an SFIP. Any exclusions other than those in an SFIP may pertain only to coverage that is in addition to the amount and type of coverage that could be provided by an SFIP or have the effect of providing broader coverage to the policyholder; and 
    • Not contain conditions that narrow the coverage provided in an SFIP; 
  3. Includes all of the following:
    • A requirement for the insurer to give written notice 45 days before cancellation or non-renewal of flood insurance coverage to:  
      • The insured; and 
      • The lending institution that made the designated loan secured by the property covered by the flood insurance, or the servicer acting on its behalf; 
    • Information about the availability of flood insurance coverage under the NFIP; 
    • A mortgage interest clause similar to the clause contained in an SFIP; and 
    • A provision requiring an insured to file suit not later than one year after the date of a written denial of all or part of a claim under the policy; and
  4. Contains cancellation provisions that are as restrictive as the provisions contained in an SFIP.

Compliance Aid

Pursuant to the above definition, a national bank or Federal savings association must accept private flood insurance in satisfaction of the flood insurance purchase requirements. Thus, a financial institution is required to accept private flood insurance and must also ensure it meets the above definition. However, the 2019 final rule provides a compliance aid to assist in that mandatory acceptance. Pursuant to the compliance aid, a financial institution may determine that a policy meets the definition of private flood insurance without reviewing the policy, if the following statement is included within the policy or as an endorsement to the policy:

“This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.”

While the compliance aid provides a safe harbor to financial institutions that accept policies containing the above language, there is no requirement for insurers to include the compliance aid language. Furthermore, because the 2019 final rule prescribes mandatory acceptance of private flood insurance that meets the above definition, financial institutions must accept policies that meet the above definition whether it includes the compliance aid or not. Meaning, a financial institution cannot reject a policy for the sole reason that it does not contain the compliance aid language.

Discretionary Acceptance

The 2019 final rule provides financial institutions the discretionary ability to accept or reject policies that do not meet the above definition of private flood insurance. Lenders may accept such policies, at their own discretion, if the policy:

  1. Provides coverage in the amount required by the NFIP; 
  2. Is issued by an insurer that is licensed, admitted, or otherwise approved to engage in the business of insurance by the insurance regulator of the State or jurisdiction in which the property to be insured is located; or in the case of a policy of difference in conditions, multiple peril, all risk, or other blanket coverage insuring nonresidential commercial property, is issued by a surplus lines insurer recognized, or not disapproved, by the insurance regulator of the State or jurisdiction where the property to be insured is located; 
  3. Covers both the mortgagor(s) and the mortgagee(s) as loss payees, except in the case of a policy that is provided by a condominium association, cooperative, homeowners association, or other applicable group and for which the premium is paid by the condominium association, cooperative, homeowners association, or other applicable group as a common expense; and 
  4. Provides sufficient protection of the designated loan, consistent with general safety and soundness principles, and the national bank or Federal savings association documents its conclusion regarding sufficiency of the protection of the loan in writing.

Mutual Aid Societies

In order to meet the mandatory acceptance provisions for private flood insurance, the 2019 final rule permits lenders to accept policies written by mutual aid societies if:

  1. The applicable supervisory agency has determined that such plans qualify as flood insurance for purposes of the Act; 
  2. The plan provides coverage in the amount required by the NFIP; 
  3. The plan covers both the mortgagor(s) and the mortgagee(s) as loss payees; and
  4. The plan provides sufficient protection of the designated loan, consistent with general safety and soundness principles, and the national bank or Federal savings association documents its conclusion regarding sufficiency of the protection of the loan in writing.

In addition, the rule defines mutual aid society to mean an organization:

  1. Whose members share a common religious, charitable, educational, or fraternal bond; 
  2. That covers losses caused by damage to members’ property pursuant to an agreement, including damage caused by flooding, in accordance with this common bond; and
  3. That has a demonstrated history of fulfilling the terms of agreements to cover losses to members’ property caused by flooding.

Conclusion

With the 2019 final rule becoming effective July 1, 2019, and optional compliance available under the 2019 final rule now, WBA recommends financial institutions review their policies on acceptance of private flood insurance. Financial institutions will need to understand the definition of private flood insurance policies pursuant to the rule, even if they had previously adhered to the statutory definition, as the 2019 final rule implements slight changes. Furthermore, institutions should be prepared to understand the relation of the compliance aid to the mandatory acceptance requirements.

The 2019 final rule may be found here: https://www.govinfo.gov/content/pkg/FR-2019-02-20/pdf/2019-02650.pdf

By, Ally Bates

Events

In September 2016, the FFEIC completely rewrote the Information Security Handbook. The Handbook represents an integration of concepts from Cybersecurity Guidance, Management Guidance, and other elements released in the past 10 years. The FFIEC Information Security Handbook is the most comprehensive resource from the FFIEC on constructing an adequate Information Security Program. The Handbook focuses on the governance, culture, and responsibilities to make Information Security Programs successful. The creation of these programs is based on risk assessment processes that assist the institution in making control decisions; these decisions are then documented in policies, standards, and procedures. The last component of a successful program is to ensure that the controls are effectively implemented with assurance, testing, and auditing processes.

Covered Topics

  • Governance of the Information Security Program
  • Information Security Program Management
  • Security Operations
  • Information Security Program Effectiveness
  • Recurring requirements listed in the FFIEC Booklet

Who Should Attend
Information Security Officer, IT Manager, Risk Officer, Internal Auditor, Board members, or other management team members looking to understand the new FFIEC requirements and expectations.

Instructor Bio
Cody Delzer, CISA, is a VP Information Security Consultant for SBS CyberSecurity, LLC of Madison, SD who has a Bachelor of Science Degree in Computer and Network Security from Dakota State University and 9 years? experience in IT and IT Security; 2 years in Systems Operations and 7 years in Information Assurance. Delzer has worked with over 200 Financial Institutions and other private industry organizations across the United States.

Registration Options
Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts $279

Available Upgrades:

  • 12 Months OnDemand Playback + $110
  • 12 Months OnDemand Playback + CD + $140
  • Additional Live Access + $75 per person

Do you know about the BSA update trifecta? There were three updates to the BSA exam manual in 2021. Do those additions to the already hefty set of BSA regulations leave you wanting for answers? This is the update you need to ensure your program is compliant and will pass the next exam.

AFTER THIS WEBINAR YOU’LL BE ABLE TO:

  • Understand the factors to effectively identify high-risk customers
  • Use the updates to predict expected risk-mitigation steps
  • Anticipate examiner expectations in three new subsections for “Examiner Evaluation”
  • Determine if your BSA/AML program meets the standards for customer risk profiles
  • Evaluate procedures for monitoring independent ATM owners

WEBINAR DETAILS
The BSA exam manual was updated three times in 2021, most recently on December 1, 2021. While the FFIEC press release said the updates are not “new” requirements, they provide critical insight into the priorities for BSA exams. Is your BSA/AML program adequate and will it pass the next exam?

The December 1st update added a new introductory section. Additional changes were made to:

  • Charities and Nonprofit Organizations
  • Independent Automated Teller Machine Owners or Operators
  • Politically Exposed Persons (PEPs)

WHO SHOULD ATTEND?
This informative session is designed for staff who manage the BSA/AML program and train employees. It will benefit BSA officers and staff, senior management, security/risk managers, compliance officers, auditors, and legal counsel.

TAKE-AWAY TOOLKIT

  • Template for CDD policy and procedures
  • SAR checklist to identify, monitor, and report suspicious activity based on BSA exam procedures and the risk assessment process
  • Sample BSA responsibility matrix, including SAR monitoring and CIP
  • Format for quarterly BSA/AML/OFAC report to the board
  • PDF of slides and speaker’s contact info for follow-up questions
  • Attendance certificate provided to self-report CE credits
  • Employee training log
  • Interactive quiz

NOTE: All materials are subject to copyright. Transmission, retransmission, or republishing of any webinar to other institutions or those not employed by your agency is prohibited. Print materials may be copied for eligible participants only.

MEET THE PRESENTER – Susan Costonis, Compliance Training and Consulting for Financial Institutions
Susan Costonis is a compliance consultant and trainer who began her career in 1978. She specializes in compliance management along with deposit and lending regulatory training. Costonis has successfully managed compliance programs and exams for institutions that ranged from a community bank to large multi-state bank holding companies. She has been a compliance officer for institutions supervised by the OCC, FDIC, and Federal Reserve. Costonis has been a Certified Regulatory Compliance Manager since 1998, completed the ABA Graduate Compliance School, and graduated from the University of Akron and the Graduate Banking School of the University of Colorado. She regularly presents to financial institution audiences in several states and “translates” complex regulations into simple concepts by using humor and real-life examples.

REGISTRATION OPTIONS

  • $245 – Live Webinar Access
  • $245 – OnDemand Access + Digital Download
  • $320 – Both Live & On-Demand Access + Digital Download

The FFIEC released a complete re-write of the Business Continuity Planning booklet back in November 2019 titled Business Continuity Management. In addition to changing the title from Business Continuity Planning to Business Continuity Management, the booklet initially focuses on the principles and practices for managing continuity and resiliency as well as regulatory expectations for resiliency with third party service providers. In addition to business resiliency with third parties, the institution’s resilience through an enterprise risk management (ERM) perspective is addressed. ERM takes technology, operations, communication, training, testing, and maintenance into consideration. Have you updated your plan to address the new booklet? This webinar will provide recommendations on how to update your plan to meet regulators expectations.

What You Will Learn

  • Roles and responsibilities
  • Business impact analysis
  • Risk assessment process
  • Business resiliency
  • Third party resiliency
  • Training
  • Testing

Who Should Attend?
Information security and cybersecurity officers, IT managers, risk management officers, internal auditors, senior management, or anyone looking to gain insight into the business continuity planning process and FFEIC updates.

Presenter
Susan Orr is a leading financial services expert with vast regulatory, risk management, and security best practice knowledge and expertise.

As an auditor and consultant, Orr is dedicated to assisting financial institutions in implementing appropriate policies and controls to protect confidential information and comply with regulatory mandates and best practices. Her expertise as an auditor and former examiner provides her the knowledge and expertise to conduct comprehensive IT general control and data security reviews and assist banks in developing and updating policies and procedures and risk assessments, performing third party risk management, and facilitating testing and training. Orr is a certified information systems auditor (CISA), certified information security manager (CISM), certified in risk and information systems control (CRISC).

Registration Options

  • Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts – $279
  • Available Upgrades:
    • 12 Months OnDemand Playback + $110
    • 12 Months OnDemand Playback + CD  + $140
    • Additional Live Access + $75 per person

Being the information security officer for a financial institution is a big responsibility in today’s world of cyber threats and data breaches. This webinar is for those who are new to the role or have been the ISO for some time but want to review what is expected and how to be successful. As the ISO, part of your responsibility is building and maintaining the Information Security Program. While it has many important elements, there are really 3 basic components: risk assessment, ISP policies and procedures, and audit. The risk assessment will help you make decisions, the policies and procedures document the decisions for your institution to implement, and audit verifies that they have been completed and are adequate controls to protect your institution.

Building a strong Information Security Program is a fundamental component to a successful ISO. We will review various regulatory guidance that outlines ISO responsibilities and reporting structures. Additionally, various educational paths that can help develop your skills in the future.

What You Will Learn

  • FFIEC Roles and Responsibilities of the ISP
  • Building a Strong Cybersecurity Culture
  • Board Reporting
  • Educational and Certification Paths
  • Strong Risk Assessment Methodology
  • Creating your ISP with Policies and Procedures

Who Should Attend?

Information security officers, IT managers, risk officers, internal auditors, board members, or other management team members looking to more clearly define the roles of an information security officer to better enable success.

Presenter
Jeff Spann, is a SVP information security consultant for SBS CyberSecurity, LLC of Madison, SD and is a certified information systems auditor, an instructor for the certified banking security manager (CBSM) course, has seven years of IT auditing and consulting experience, and ten years experience as a bank CIO and ISO.

Registration Options

  • Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts – $279
  • Available Upgrades:
    • 12 Months OnDemand Playback + $110
    • 12 Months OnDemand Playback + CD  + $140
    • Additional Live Access + $75 per person