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Rose Oswald PoelsBy Rose Oswald Poels

In recent conversations with state bankers associations across the country, as well as bankers here in Wisconsin, it is clear that regulators, particularly the Federal Deposit Insurance Corporation (FDIC), are very focused on certain deposit-related activities citing them as violations in examinations, and also identifying them as potential unfair, deceptive, or abusive acts or practices (UDAAP) violations. As a result, I want to highlight these concerns again for the membership as a follow-up to my April 5 Executive Letter e-pub.

In that document, I shared information about how FDIC has identified (a) the assessment of overdraft fees for “force pay” transactions and (b) charging multiple non-sufficient funds fees (NSF fees) for the same transactions presented multiple times against insufficient funds as deposit-related activities which FDIC believes may result in a heightened risk of violations of UDAAP. In that same publication, I made recommendations to help banks take action.

In Wisconsin, as in other states, current FDIC compliance examinations include a review of disclosures and charges for these activities. FDIC examiners have been aggressive with their new interpretations, and time is of the essence for banks to act. In some cases, WBA understands that banks receiving these violations are told to go back at least 12 months to determine consumer harm.

With FDIC adopting a new interpretation that disclosing that one NSF fee would be charged “per item” or “per transaction” is not clearly defined and does not explain that the same transaction might result in multiple NSF fees if re-presented, banks should review disclosures to determine whether FDIC’s new interpretation affects the bank. If it does, banks should revise disclosure language accordingly and consider other risk-mitigating steps as outlined by FDIC in the recent publications included in the April 5 Executive Letter.

A bank needs to also understand its actual presentment process and whether it has any ability or inability to identify items resubmitted by a merchant for payment. Review should also include whether the bank can track or identify when a check — presented in physical form the first time — is represented as Automated Clearing House (ACH) the second time by the merchant. Banks should be prepared to explain to examiners their processes and any operational and system limitations in the ability to identify represented items or to trace items if an item was converted when represented.

With respect to the issue of assessing overdraft fees for “force pay” transactions, if a “no pay” bank used the Regulation E model Form A-9 to solicit a consumer’s authorization or opt-in to assess overdraft fees for ATM and one-time point-of-sale (POS) debit card transactions in “force pay” transactions, that model form should not be used in that manner. It was not intended for such transactions. In such situations, banks should review how best to disclose their practice for “force pay” transactions with their counsel.

Failure of a bank to take action will likely result in FDIC citing a UDAAP violation and potentially imposing consumer reimbursement of charges in connection with these deposit-related activities.

With the mandatory compliance date for the new, revised General QM loan definition just on the horizon, banks should ensure their implementation plans are in place. In terms of a quick-look at dates, CFPB issued a final rule on December 29, 2020 (Final Rule) which amends the General QM loan definition in Regulation Z. The Final Rule included a mandatory compliance date of July 1, 2021. However, on April 27, 2021, CFPB extended that mandatory compliance date to October 1, 2022. The General QM Final Rule was effective on March 1, 2021 and, among other things, replaces the existing 43 percent debt-to-income ratio limit with price-based thresholds. As such, it presents the potential for significant changes to a bank’s mortgage lending operation.

To expand upon the new price-based thresholds with a general summary: a loan meets the revised General QM definition only if the annual percentage rate exceeds the average prime offer rate for a comparable transaction by less than the applicable threshold set forth in the Final Rule as of the date the interest rate is set. Additionally, the Final Rule removes Appendix Q as well as any requirements to use Appendix Q for General QM loans. Consequently, it amends the consider and verify requirements in Regulation Z and its associated commentary. First, it outlines the minimum considerations required by creditors, including, for example, the consumer’s current or reasonably expected income or assets. Second, it requires that creditors verify those considerations using reasonably reliable third-party records and reasonable methods and criteria.

Banks have likely already taken time to evaluate the categories of QMs they originate, and how the revised General QM definition may or may not affect its current loan policy and underwriting procedures. Even banks which originate Small Creditor QMs should still consider the extent to which they may or may not original General QMs. For example, does bank originate General QMs? Will it continue to do so, or will it exclusively utilize the Small Creditor QM exception, if applicable?

Given the mandatory compliance date of October 1, 2022 banks should confirm that their implementation steps are in place. Banks should prepare to fully transition current policies and procedures to conform with the new definition and consider what training might be necessary in advance of and after the transition.

As an additional resource, WBA has prepared an ATR/QM Toolkit to assist bankers.

Rose Oswald Poels By Rose Oswald Poels

Last week, the Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) released a joint statement proposing changes to the Community Reinvestment Act (CRA) regulations. The joint proposal would both strengthen and modernize the regulations by expanding access to credit, investment, and basic banking services; adapt to internet and mobile banking changes; provide greater clarity and consistency with both banks and their customers; and create unique CRA evaluations requirements.

The CRA, originally enacted in 1977, encourages banks and savings associations to help meet the need of all borrowers — including low- and moderate-income individuals. In recent years, the industry has seen the agencies attempt to modernize CRA to better address new technologies and community-investment opportunities. However, those efforts left much frustration for the industry when OCC implemented its own “updated” CRA regulation in June 2020, while FDIC and FRB retained existing standards, interpretations, and regulations.

WBA advocated heavily against separate CRA regulations in meetings with the agencies and in filed comment letters. Successfully, late last year, OCC repealed its independent CRA regulation and now the agencies are once again acting together in proposing a unified CRA regulation. I am pleased to see the expansion of transparency between agencies.

The new joint proposal has the following key elements:

  • Expand access to credit, investment, and basic banking services in low- and moderate-income communities. Under the proposal, the agencies would evaluate bank performance across the varied activities they conduct and communities in which they operate so that CRA is a strong and effective tool to address inequities in access to credit. The proposal would promote community engagement and financial inclusion. It would also emphasize smaller value loans and investments that can have high impact and be more responsive to the needs of LMI communities.
  • Adapt to changes in the banking industry, including internet and mobile banking. The proposal would update CRA assessment areas to include activities associated with online and mobile banking, branchless banking, and hybrid models.
  • Provide greater clarity, consistency, and transparency. The proposal would adopt a metrics-based approach to CRA evaluations of retail lending and community development financing, which includes public benchmarks, for greater clarity and consistency. It also would clarify eligible CRA activities, such as affordable housing, that are focused on LMI, undeserved, and rural communities.
  • Tailor CRA evaluations and data collection to bank size and type. The proposal recognizes differences in bank size and business models. It provides that smaller banks would continue to be evaluated under the existing CRA regulatory framework with the option to be evaluated under aspects of the new proposed framework.
  • Maintain a unified approach. The proposal reflects a unified approach from the bank regulatory agencies and incorporates extensive feedback from stakeholders.

I highly encourage you to join WBA in commenting on this joint proposal by August 5, 2022. Please contact WBA’s Heather Mackinnon, vice president – legal, at hmackinnon@wisbank.com and Scott Birrenkott, assistant director – legal, at sbirrenkott@wisbank.com if you have any questions regarding the proposed regulation updates.

Rose Oswald PoelsBy Rose Oswald Poels

In two separate publications, FDIC has recently identified deposit-related activities which, depending upon how banks disclose charges for such activities, may result in a heightened risk of violations of Section 5 of the FTC Act — otherwise known as unfair, deceptive, or abusive acts or practices (UDAAP).

FDIC has identified the assessment of overdraft fees for “force pay” transactions and charging multiple NSF fees for same transactions presented multiple times against insufficient funds as the deposit-related activities of concern. I have outlined both scenarios below.

Potential Issues with Assessing Overdraft Fees for “Force Pay” Transactions  

In a quarterly newsletter issued by its Dallas Region, FDIC outlined potential issues with assessing overdraft fees for “force pay” transactions in certain situations. There may be times when a bank authorizes an ATM or one-time POS debit card transaction based on sufficient funds in a consumer’s account at the time of authorization; however, at settlement, the account has insufficient funds to cover the transaction. Due to a bank’s contract with its payment network providers, the bank is required to pay these transactions even though the customer does not have sufficient funds in their account at settlement. FDIC refers to this type of transaction as a “force pay” transaction.

As outlined by FDIC, some banks have a policy and practice of declining to authorize and pay any ATM or one-time POS debit card transactions when a customer has insufficient funds available in the account to cover the transaction. FDIC refers to these banks as “no pay” banks. Other banks may offer an overdraft program, but some consumers do not qualify, have not yet met all eligibility requirements, or do not opt-in to participate.

FDIC has identified that some “no pay” banks solicit a consumer’s authorization or opt-in, using an overdraft opt-in form similar to the Regulation E model form A-9, to assess overdraft fees for ATM and one-time POS debit card transactions in “force pay” transactions.

FDIC stated it believes the use of the A-9 model form for this purpose may be considered deceptive, as a reasonable consumer may be misled into believing that the bank would generally pay all overdrafts caused by ATM and one-time POS debit card transactions. Additionally, the A-9 model form does not disclose that force pay transactions would be paid regardless of whether the consumer opts in. FDIC also identified how force pay transactions could lead to concerns at banks that offer overdraft programs, although those are more nuanced transactions and are not discussed here.

FDIC offered the following suggestions to mitigate risks:

  • Maintain policies and procedures to ensure compliance with applicable regulatory requirements under Regulation E;

  • Ensure that disclosures provided to consumers are clear and conspicuous, accurately reflect bank practices, and do not suggest that the bank offers an overdraft program when it does not;

  • Confirm a customer’s opt-in is deactivated in the deposit processing platform when he/she does not have access to the overdraft program;

  • Verify a customer’s opt-in is deactivated in the deposit processing platform when he/she revokes his/her opt-in election or when the bank terminates the customer’s access to the overdraft program; and

  • Notify customers as soon as possible if the bank independently terminates their access to the overdraft program.

Potential Issues with Re-Presentment of Unpaid Transactions 

In a separate publication, Consumer Compliance Supervisory Highlights, FDIC outlined potential issues with charging multiple NSF fees for re-presentment of unpaid transactions. FDIC found disclosing that one NSF fee would be charged “per item” or “per transaction” is not clearly defined and did not explain that the same transaction might result in multiple NSF fees if re-presented. FDIC stated it believes there is risk of unfairness if multiple fees are assessed for the same transaction in a short period of time without sufficient notice or opportunity for consumers to bring their account to a positive balance.

FDIC also addressed that re-presented transactions have been the subject of recent class action lawsuits involving banks, including FDIC-supervised institutions. The lawsuits typically allege breach of contract due to the omission of important information about when the fee would be assessed.

FDIC again offered suggestions to mitigate risks, including:

  • Eliminating NSF fees

  • Declining to charge more than one NSF fee for the same transaction, regardless of whether the item is represented

  • Disclosing the amount of NSF fees and how such fees will be imposed, including:

  • Information on whether multiple fees may be assessed in connection with a single transaction;

  • The frequency with which such fees can be assessed; and

  • The maximum number of fees that can be assessed in connection with a single transaction.

  • Reviewing customer notification practices related to NSF transactions and the timing of fees to provide the customer with an ability to avoid multiple fees for re-presented items

  • Conducting a comprehensive review of policies, practices, and disclosures related to re-presentments to ensure the manner in which NSF fees are charged is communicated clearly and consistently

  • Working with service providers to retain comprehensive records so that re-presented items can be identified

Conclusion 

I would not recommend the use of Regulation E model form A-9 as a means to obtain a consumers’ authorization or opt-in for a force pay transaction. There is not a model form for such transactions and banks need to review how best to disclose their practice for force pay transactions with their counsel. For banks offering overdraft programs, banks need to be careful how it treats a consumer’s opt-in if the opt-in election was provided but access to the overdraft protection coverage has not yet begun and when the bank terminates access to the overdraft program.

I would also recommend banks review their deposit account disclosures, statement of fees, and account rules documents to further determine how to accurately disclose an NSF fee on a re-presented item, if applicable.

If using FIPCO forms, the WBA 384 Deposit Account Rules document was revised in March 2021 to further clarify that a financial institution may charge a fee each time the same check, transfer request, or withdrawal request is returned unpaid. Language was also added to state that the depositor should review the schedule of fees for a listing and amount of such fees. Additionally, the revised form instruction also set forth that if the user intends to charge a fee each time the same check, transfer request, or withdrawal request is returned unpaid, it is important that the schedule of fees explains the financial institution’s intent to charge a fee each time rather than one fee regardless of the number of times the check, transfer request, or withdrawal request is returned unpaid.

If scrutinized by a regulator for charging multiple NSF fees for a re-presented item, I recommend the bank explain to the regulator the actual presentment process and any inability to identify items resubmitted by a merchant for payment.

Wisconsin DFI sets escrow interest rate at 0.09% for 2022

By Scott Birrenkott

Q: Has the Wisconsin Department of Financial Institutions set the Interest Rate on Required Residential Mortgage Loan Escrow Accounts for 2022?

A: Yes. The Wisconsin Department of Financial Institutions, Division of Banking (DFI), has calculated the interest rate required to be paid on escrow accounts for residential mortgage loans subject to Wisconsin Statute Section 138.052(5) to be 0.09% for 2022. The interest rate shall remain in effect through December 31, 2022.

Note that while Wisconsin Section 138.052 previously required financial institutions to pay interest on the balance on any required escrow accounts, Wisconsin Act 340 modified this requirement so that it only applies to loans originated prior to the effective date of the Act (April 18, 2018). Thus, financial institutions must continue to pay interest on required escrow accounts prior to April 18, 2018. Any escrow account associated with a loan originated after the effective date of Act 340, 138.052 no longer requires payment of interest. Wis. Stat. Section 138.052 applies to loans secured by a first lien or first lien equivalent in a 1-4 family dwelling that is used as the borrower’s principal residence.

The escrow rate notice may be found here.

By Scott Birrenkott

Q: Has CFPB Released its Truth in Lending (Regulation Z) Annual Threshold Adjustments for 2022?

A: Yes. The Consumer Financial Protection Bureau has revised the threshold dollar amounts for Regulation Z, which implements the Truth in Lending Act (TILA). Specifically, has revised the dollar amounts for provisions implementing amendments to TILA under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity Protection Act (HOEPA) and the ability to repay/qualified mortgage (ATR/QM), and the dollar threshold for exempt consumer credit transactions. Effective January 1, 2022, the following thresholds will be adjusted to the new dollar amounts.

For HOEPA loans, the adjusted total loan amount threshold is $22,969, an increase from $22,052 in 2021. The adjusted points and fees dollar trigger for high-cost mortgages is $1,148, an increase from $1,103 from 2021.

For qualified mortgages (QMs) under the General QM loan definition in §1026.43(e)(2), the thresholds for the spread between the annual percentage rate (APR) and the average prime offer rate (APOR) in 2022 will be: 2.25 or more percentage points for a first-lien covered transaction with a loan amount greater than or equal to $114,847; 3.5 or more percentage points for a first-lien covered transaction with a loan amount greater than or equal to $68,908 but less than $114,847; 6.5 or more percentage points for a first-lien covered transaction with a loan amount less than $68,908; 6.5 or more percentage points for a first-lien covered transaction secured by a manufactured home with a loan amount less than $114,847; 3.5 or more percentage points for a subordinate-lien covered transaction with a loan amount greater than or equal to $68,908; or 6.5 or more percentage points for a subordinate-lien covered transaction with a loan amount less than $68,908.

For all categories of QMs, the thresholds for total points and fees in 2022 will be 3 percent of the total loan amount for a loan greater than or equal to $114,847; $3,445 for a loan amount greater than or equal to $68,908 but less than $114,847; 5 percent of the total loan amount for a loan greater than or equal to $22,969 but less than $68,908; $1,148 for a loan amount greater than or equal to $14,356 but less than $22,969; and 8 percent of the total loan amount for a loan amount less than $14,356.

For open-end consumer credit plans under the CARD Act amendments to TILA, the adjusted dollar amount in 2022 for the safe harbor for a first violation penalty fee will increase to $30 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will increase to $41.

Lastly, based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers as of June 1, 2021, the dollar threshold for exempt consumer credit transactions under Regulation Z will increase from $58,300 to $61,000 effective January 1, 2022.

If you have any questions on this topic or other matters of compliance, contact WBA’s legal call program at 608-441-1200 or wbalegal@wisbank.com.

On Tuesday, WBA hosted a virtual meeting with bankers and OCC to discuss concerns of the industry and to gather insight of OCC’s perspective as Wisconsin’s banking industry continues moving forward through pandemic recovery. Discussion included: CTR filings for bank cash orders handled by Thillens, continued efforts of CECL implementation, monitoring CRE and the impact of vacancies as office space needs change, thinking through liquidity contingencies, LIBOR, cybersecurity and importance of good business resumption plans, importance of strong underwriting practices, awareness of loan downpayments amounts, and careful review of evaluations due to the current hot real estate market. Bankers shared concerns over exams losing the focus of being risk-based.  

Those attending the meeting included National Bank of Commerce President and CEO Steven Burgess, National Exchange Bank & Trust President and CEO James Chatterton, OCC Assistant Deputy Comptroller Mike Larabee, OCC Associate Deputy Comptroller Ben Lemanski, and OCC Central District Deputy Comptroller Brian James. WBA staff present included Rose Oswald Poels, Daryll Lund, Scott Birrenkott, and Heather MacKinnon.

When asked of their current expectations regarding struggling borrowers, OCC stated they are using the same approach as was taken during the pandemic; banks should continue to work with struggling borrowers, document position taken, and to feel free to have further conversations with the exam team and OCC district office regarding the treatment or classification of a particular borrower. OCC also shared that discussions continue at a high level on the topics of fair lending, climate changes, bank collaborations with fintechs, and OCC’s efforts to work collaboratively on CRA.  

WBA continues to engage in small group virtual meetings with each of the banking regulators over the course of the next few months. Normally, we host these meetings in person in Madison in addition to visiting the industry’s regulators in Washington each fall. If you are interested in participating in a small group virtual conversation with your bank’s regulator, please contact WBA’s VP-Legal Heather MacKinnon at hmackinnon@wisbank.com. In addition to sharing which regulator is your bank’s primary federal regulator, please also provide Heather with any specific topic or issue you’d like to make sure is raised during these conversations.   

By, Alex Paniagua

The below article is the Compliance Notes section of the January 2020 Compliance Journal. The full issue may be viewed by clicking here.

OCC issued an alert that Stephenson National Bank & Trust, Marinette, Wis., has reported that counterfeit cashier’s checks using the bank’s routing number of 075901011 are being presented for payment nationwide in connection with secret shopper employment scams. There are a variety of counterfeit items in circulation, none of which resemble the bank’s authentic item. Further information may be viewed in the full alert: https://www.occ.gov/news-issuances/alerts/2020/alert-2020-2.html


On Dec. 20, 2019, President Donald Trump signed into law the provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) which contains several provisions that will impact qualified retirement plans. A summary of the Act may be viewed at: https://www.wisbank.com/articles/2020/01/secure-act-summary/


The Wisconsin Department of Financial Institutions, Division of Banking, has calculated the interest rate to be paid on escrow accounts subject to s. 138.052 (5) (am) 2., Stats., to be 0.17% for 2020. The interest rate shall remain in effect through December 31, 2020. The notice may be viewed at: https://docs.legis.wisconsin.gov/code/register/2019/768A2/register/public_notices/public_notice_2020_interest_rate_on_escrow_accounts/public_notice_2020_interest_rate_on_escrow_accounts.pdf


FRB has issued the December 2019 Consumer Compliance Supervision Bulletin. This issue discusses FRB supervisory observations regarding fintech, and the use of technological innovation to provide financial products and services. The bulletin may be viewed at: https://www.federalreserve.gov/publications/files/201912-consumer-compliance-supervision-bulletin.pdf


FinCEN released a new tool to visualize aggregated Suspicious Activity Reports filed by financial institutions in the United States. The interactive maps may be viewed at: https://www.fincen.gov/Reports/sar-stats/sar-stats-map


FDIC released its Fall 2019 Supervisory Insights. With the volume of commercial real estate loans held by FDIC-insured banks reaching a record of $2.4 trillion in 2019, FDIC focused on CRE risk management in the report. The report also focuses on leveraged lending. The report may be viewed at: https://www.fdic.gov/regulations/examinations/supervisory/insights/sifall19/si-fall-2019.pdf


OCC announced Brian James as Deputy Comptroller for the Central District. In this role, James will oversee 320 community banks and federal savings associations in Illinois, Indiana, Michigan, North Dakota, Ohio, Wisconsin, and parts of Kentucky, Minnesota and Missouri. James will manage more than 380 examiners and other professional personnel who ensure the financial institutions they supervise operate in a safe, sound, and fair manner. James assumes these duties in January 2020. OCC’s announcement may be viewed at: https://www.occ.gov/news-issuances/news-releases/2020/nr-occ-2020-3.html


FRB issued and updated User’s Guide for the Bank Holding Company Performance Report which provides definitions of the financial ratios and items presented on each page of the report. The guide may be viewed at: https://www.federalreserve.gov/publications/files/_A_Users_Guide_for_the_Bank_Holding_Company_Performance_Report_Final.pdf


Treasury announced it plans to issue a 20-year nominal coupon bond in the first half of calendar year 2020. Consistent with Treasury’s longstanding issuance practice, Treasury plans to issue this product in a regular and predictable manner in benchmark size. Additional information regarding the launch of the 20-year bond will be provided in Treasury’s quarterly refunding statement on Wednesday, February 5, 2020. The announcement may be viewed at: https://home.treasury.gov/news/press-releases/sm878


FDIC and SBA released two updates to the popular Money Smart for Small Business curriculum. The updated modules focus on banking and credit, and are now available for banks and small business development organizations to use to help small business owners succeed. The updated Banking Services module now includes a discussion of traditional banking products, non-bank financing options and sources, and how to avoid fraud and scams. Similarly, the updated Building Strong Credit module explains how a business owner’s personal credit history can impact their business, how business credit reporting works, and how a potential lender evaluates the overall creditworthiness of a small business. A case study brings both modules together and asks participants to put the lessons they have learned into practice. The materials were updated based on input from industry experts and other practitioners, including more than two dozen organizations that have used previous versions of the Money Smart materials. The updated modules may be viewed at: https://www.fdic.gov/consumers/banking/businesslending/index.html


OCC and FDIC issued an interagency statement on heightened cybersecurity risk. The statement focuses on risk management principles that can reduce the risk of a cyber-attack and minimize business disruptions. The statement elaborates on standards articulated in the Interagency Guidelines Establishing Information Security Standards as well as resources provided by FFIEC members, such as the FFIEC Statement on Destructive Malware. The statement may be viewed at: https://www.fdic.gov/news/news/financial/2020/fil20003a.pdf


The latest edition of the Consumer Compliance Outlook is now available. This issue focuses on fintech topics such as internet marketing, and developments in fintech regulation. The publication may be viewed at: https://consumercomplianceoutlook.org/


FRB has issued frequently asked questions (FAQs) in response to questions from institutions regarding the final rules to tailor certain prudential standards for large domestic and foreign banking organizations to more closely match their risk profiles. The FAQs may be viewed at: https://www.federalreserve.gov/supervisionreg/srletters/SR2002a1.pdf


CFPB announced it has filed suit against several companies and individuals involved in offering student loan debt-relief services for allegedly obtaining consumer reports illegally, charging unlawful advance fees, and engaging in deceptive conduct. The announcement may be viewed at: https://www.consumerfinance.gov/about-us/newsroom/cfpb-announces-action-against-monster-loans-lend-tech-loans-and-student-loan-debt-relief-companies/


Treasury’s Bureau of the Fiscal Service (Fiscal Service) today announced the selection of Comerica Bank as the financial agent for the Direct Express® prepaid debit card program. The new agreement is for five years, beginning in January 2020. The Direct Express® program provides 4.5 million Americans – the majority of whom do not have a bank account – with a prepaid debit card to receive their monthly Social Security or Veterans benefit payments. For most cardholders, this payment is their sole source of income and is essential for basic living needs such as housing, food, and medicine. The announcement may be viewed at: https://www.fiscal.treasury.gov/news/comerica-bank-continues-debit-card-for-unbanked.html


NMLS issued a reminder that its Reinstatement Period will start January 2, 2020 and end at midnight ET on February 29, 2020. Further information on reinstatement may be viewed at: https://fedregistry.nationwidelicensingsystem.org/Institutions/Pages/Renew.aspx


FRB, FDIC, and OCC issued an interagency statement to explain that the federal banking agencies will exercise discretion to not take enforcement action against depository institutions or asset managers that become principal shareholders of institutions with respect to certain extensions of credit by institutions that otherwise would violate Federal Reserve Regulation O. The statement may be viewed at: https://www.fdic.gov/news/news/financial/2019/fil19085a.pdf


FRB has published its January 2020 Financial Accounting Manual for Federal Reserve Banks. The manual contains the accounting standards that should be followed by the Federal Reserve Banks. The manual may be viewed at: https://www.federalreserve.gov/aboutthefed/files/BSTfinaccountingmanual.pdf


CFPB issued its Financial Literacy Annual Report for fiscal year 2019. The report may be viewed at: https://files.consumerfinance.gov/f/documents/bcfp_financial-literacy_annual-report_2019.pdf


FRB released Uncertain Terms: What Small Business Borrowers Find When Browsing Online Lender Websites, a report that examines the information that prospective small business borrowers encounter when researching and comparing credit products offered by online lenders. Nonbank online lenders are becoming more mainstream alternative providers of financing to small businesses. In 2018, nearly one-third of small business owners seeking credit reported having applied at a nonbank online lender. The industry’s growing reach has the potential to expand access to credit for small firms, but also raises concerns about how product costs and features are disclosed. The report’s analysis of a sampling of online content finds significant variation in the amount of upfront information provided, especially on costs. The full report may be viewed at: https://www.federalreserve.gov/publications/files/what-small-business-borrowers-find-when-browsing-online-lender-websites.pdf


CFPB has published additional guidance relating to disclosing construction and construction-permanent loans under the TRID Rule. There are two new guides, one on disclosing construction and construction-permanent loans with a separate loan estimate and closing disclosure for each phase of the transaction, and one on using one combined loan estimate and one combined closing disclosure for both phases of a construction-permanent transaction. The guides may be viewed at:
https://files.consumerfinance.gov/f/documents/cfpb_trid-separate-construction-loan-guide.pdf
https://files.consumerfinance.gov/f/documents/cfpb_trid-combined-construction-loan-guide.pdf 

By, Ally Bates

The below article is the Regulatory Spotlight section of the January 2020 Compliance Journal. The full issue may be viewed by clicking here.

Agencies Finalize Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures.

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) are adopting a final rule to revise the definition of “high volatility commercial real estate (HVCRE) exposure” in the regulatory capital rule. This final rule conforms this definition to the statutory definition of “high volatility commercial real estate acquisition, development, or construction (HVCRE ADC) loan,” in accordance with section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The final rule also clarifies the capital treatment for loans that finance the development of land under the revised HVCRE exposure definition. The final rule is effective 04/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-13/pdf/2019-26544.pdf. Federal Register, Vol. 84, No. 240, 12/13/2019, 68019-68034.

Agencies Finalize Amendment to Community Reinvestment Act Regulations.

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) are amending their Community Reinvestment Act (CRA) regulations to adjust the asset-size thresholds used to define “small bank” or “small savings association” and “intermediate small bank” or “intermediate small savings association.” As required by the CRA regulations, the adjustment to the threshold amount is based on the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). The rule is effective 01/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-27288.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 71738-71740.

Agencies Propose Community Reinvestment Act Regulations.

The Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) propose regulations that could encourage banks to provide billions more each year in Community Reinvestment Act-qualified lending, investment, and services by modernizing the Community Reinvestment Act (CRA) regulations to better achieve the law’s underlying statutory purpose of encouraging banks to serve their communities by making the regulatory framework more objective, transparent, consistent, and easy to understand. To accomplish these goals, this proposed rule would strengthen the CRA regulations by clarifying which activities qualify for CRA credit, updating where activities count for CRA credit, creating a more transparent and objective method for measuring CRA performance, and providing for more transparent, consistent, and timely CRA-related data collection, recordkeeping, and reporting. Comments are due 03/09/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-09/pdf/2019-27940.pdf. Federal Register, Vol. 85, No. 6, 01/09/2020, 1204-1265.

Agencies Announce Review of Definitions in Credit Risk Retention Regulations.

The Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency (OCC), the Department of Housing and Urban Development (HUD), the Federal Housing Finance Agency (FHFA), and the Securities and Exchange Commission (SEC) are providing notice of the commencement of the review of the definition of qualified residential mortgage; the community-focused residential mortgage exemption; and the exemption for qualifying three-to-four unit residential mortgage loans, in each case as currently set forth in the Credit Risk Retention Regulations as adopted by the agencies. Comments on the review are due 02/03/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-20/pdf/2019-27490.pdf. Federal Register, Vol. 84, No. 245, 12/20/2019, 70073-70076.

Agencies Extend Comment Period for Application of the Uniform Financial Institutions Rating System.

The Board of Governors of the Federal Reserve System (FRB), and the Federal Deposit Insurance Corporation (FDIC) published a request for information (RFI) in the Federal Register on 10/31/2019 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 agencies have determined that an extension of the comment period until 02/28/2020, is appropriate. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-27/pdf/2019-27848.pdf. Federal Register, Vol. 84, No. 248, 12/27/2019, 71413-71414.

Agencies Extend Comment Period for 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) are reopening the comment period for the notice of proposed rulemaking published in the Federal Register on 11/07/2019, to 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 (Proposed Swap Margin Amendments). Reopening the comment period that closed on 12/09/2019, will allow interested persons additional time to analyze and comment on the Proposed Swap Margin Amendments. The new comment due date is 01/23/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-28052.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 71833-71834.

CFPB Issues Fall 2019 Supervisory Highlights.

The Bureau of Consumer Financial Protection (CFPB) is issuing its twentieth edition of its Supervisory Highlights. In this special issue of Supervisory Highlights, CFPB reports examination findings in the areas of consumer reporting and furnishing of information to consumer reporting companies, pursuant to the Fair Credit Reporting Act and Regulation V. The report does not impose any new or different legal requirements, and all violations described in the report are based only on those specific facts and circumstances noted during those examinations. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-11/pdf/2019-26669.pdf. Federal Register, Vol. 84, No. 238, 12/11/2019, 67725-67732.

CFPB Amends Official Commentary on Regulation C.

CFPB is amending the official commentary that interprets the requirements of CFPB’s Regulation C (Home Mortgage Disclosure) to reflect the asset-size exemption threshold for banks, savings associations, and credit unions based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). Based on the 1.6 percent increase in the average of the CPI–W for the 12-month period ending in November 2019, the exemption threshold is adjusted to $47 million from $46 million. Therefore, banks, savings associations, and credit unions with assets of $47 million or less as of 12/31/2019, are exempt from collecting data in 2020. The commentary is effective 01/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-20/pdf/2019-27522.pdf. Federal Register, Vol. 84, No. 245, 12/20/2019, 69993-69995.

CFPB Amends Official Commentary of Regulation Z.

CFPB is amending the official commentary that interprets the requirements of the Bureau’s Regulation Z (Truth in Lending) to reflect a change in the asset-size threshold for certain creditors to qualify for an exemption to the requirement to establish an escrow account for a higher-priced mortgage loan. This amendment is based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). Based on the 1.6 percent increase in the average of the CPI–W for the 12-month period ending in November 2019, the exemption threshold is adjusted to $2.202 billion from $2.167 billion. Therefore, creditors with assets of less than $2.202 billion (including assets of certain affiliates) as of 12/31/2019, are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for higher-priced mortgage loans in 2020. The commentary is effective 01/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-23/pdf/2019-27523.pdf. Federal Register, Vol. 84, No. 246, 12/23/2019, 70410-70413.

CFPB Issues Semiannual Regulatory Agenda. 

CFPB published its agenda as part of the Fall 2019 Unified Agenda of Federal Regulatory and Deregulatory Actions. CFPB reasonably anticipates having the regulatory matters identified below under consideration during the period from 10/01/2019, to 09/30/2020. The next agenda will be published in spring 2020 and will update this agenda through spring 2021. Publication of this agenda is in accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The information is current as of 07/25/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-26/pdf/2019-26636.pdf. Federal Register, Vol. 84, No. 247, 12/26/2019, 71232-71236.

FSOC Finalizes Interpretive Guidance on Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies. 

The Financial Stability Oversight Council (FSOC) issued a final interpretive guidance, which replaces FSOC’s existing interpretive guidance on nonbank financial company determinations, describes the approach FSOC intends to take in prioritizing its work to identify and address potential risks to U.S. financial stability using an activities-based approach, and enhancing the analytical rigor and transparency in the processes FSOC intends to follow if it were to consider making a determination to subject a nonbank financial company to supervision by the Board of Governors of the Federal Reserve System (FRB). The guidance is effective 01/29/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-27108.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 71740-71770.

FRB Issues Risk-Based Capital Surcharges for Global Systemically Important Bank Holding Companies.

The Board of Governors of the Federal Reserve System (FRB) is providing notice of the 2019 aggregate global indicator amounts, as required under FRB’s rule regarding risk-based capital surcharges for global systemically important bank holding companies (GSIB surcharge rule). The aggregate global indicator amounts are in the table in the notice. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-19/pdf/2019-27414.pdf. Federal Register, Vol. 84, No. 244, 12/19/2019, 69744-69745.

FRB Issues Correction to Capital Simplification for Qualifying Community Banking Organizations.

FRB issued a notice regarding a final rule published in the Federal Register on 11/13/2019 that provides for a simple measure of capital adequacy for certain community banking organization. The final rule had two erroneous amendment instructions. The notice corrects those errors. The correction is effective 01/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-26/pdf/2019-27717.pdf. Federal Register, Vol. 84, No. 247, 12/26/2019, 70887.

FDIC Proposes Amendments to Policy Regarding Requests for Participation in the Affairs of an Insured Depository Institution by Convicted Individuals.

The Federal Deposit Insurance Corporation (FDIC) proposes to revise the existing regulations requiring persons convicted of certain criminal offenses to obtain prior written consent before participating in the conduct of the affairs of any depository institution to incorporate the FDIC’s existing Statement of Policy, and to amend the regulations setting forth the FDIC’s procedures and standards applicable to an application to obtain the FDIC’s prior written consent. Following the issuance of final regulations, the FDIC’s existing Statement of Policy would be rescinded. The proposed incorporation of the Statement of Policy into the FDIC’s regulations would provide for greater transparency as to its application, provide greater certainty as to the FDIC’s application process and help both insured depository institutions and affected individuals to understand its impact and to potentially seek relief from its provisions. Comments are due 02/14/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-16/pdf/2019-26351.pdf. Federal Register, Vol. 84, No. 241, 12/14/2019, 68353-68363.

FDIC Rescinds Outdated Statements of Policy.

FDIC initiated a comprehensive review of its Statements of Policy to identify those that were outdated. Additionally, FDIC, in the 2017 report required by the Economic Growth and Regulatory Paperwork Reduction Act, committed to reviewing published guidance to identify any guidance that should be revised or rescinded because it is out-of-date or otherwise no longer relevant. In furtherance of these initiatives, the FDIC Board of Directors approved a proposal to rescind four FDIC Statements of Policy, which was published in the Federal Register on 09/30/2019, with a 30-day comment period. FDIC did not receive any comments on the proposed rescission of these Statements of Policy and is rescinding them effective 12/31/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-23/pdf/2019-27225.pdf. Federal Register, Vol. 84, No. 246, 12/23/2019, 70413-70415.  

FDIC Requests Comment on Information Collections.

  • FDIC announced it seeks comment on the information collection titled Transfer Agent Registration and Amendment Form. FDIC also gave notice that it sent the collection to OMB for review. Comments are due 01/15/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-16/pdf/2019-26981.pdf. Federal Register, Vol. 84, No. 241, 12/16/2019, 68446-68449.
  • 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 02/07/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-08/pdf/2020-00058.pdf. Federal Register, Vol. 85, No. 5, 01/08/2020, 895-901.

FDIC Issues Notice of Designated Reserve Ratio for 2020.

FDIC designates that the Designated Reserve Ratio (DRR) for the Deposit Insurance Fund shall remain at 2 percent for 2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-18/pdf/2019-27235.pdf. Federal Register, Vol. 84, No. 243, 12/18/2019, 69373.

FDIC Issues Response to Exception Requests Pursuant to Recordkeeping for Timely Deposit Insurance Determination.

FDIC is providing notice to covered institutions that it has granted a time-limited exception concerning the requirement to maintain official custodian information in deposit account records for government deposit accounts, a time-limited exception concerning the requirement to maintain accurate beneficiary information in deposit account records for informal revocable trust accounts, and an indefinite exception concerning the requirement to maintain certain identifying information for beneficial owners of deposits in low balance, short-term prepaid card accounts. The grants of exception relief were effective 11/26/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-23/pdf/2019-27626.pdf. Federal Register, Vol. 84, No. 246, 12/23/2019, 70527-70528.

FDIC Issues Termination 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-2019-12-19/pdf/2019-27397.pdf. Federal Register, Vol. 84, No. 244, 12/19/2019, 69743-69744.

OCC Proposes Amendments to Employment Contract Rule. 

The Office of the Comptroller of the Currency (OCC) issued a proposed rule that would implement changes recommended in the March 2017 Economic Growth and Regulatory Paperwork Reduction Act report, including the repeal of the OCC’s employment contract rule for Federal savings associations, and amend the OCC’s fiduciary rules. The proposed rule also would amend the OCC’s rule for conversions from mutual to stock form of a savings association to reduce burden, increase flexibility, and update cross-references. Additionally, the proposed rule would update cross-references to repealed and integrated rules, remove unnecessary definitions, and make technical changes to other OCC rules. Comments are due 03/09/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-08/pdf/2019-28074.pdf. Federal Register, Vol. 85, No. 5, 01/08/2020, 1052-1081.

OCC Requests Comment on Information Collections.

  • OCC announced it seeks comment on the information collection titled Extensions of Credit to Insiders and Transactions with Affiliates. OCC also gave notice that it sent the collection to OMB for review. Comments are due 02/10/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26809.pdf. Federal Register, Vol. 84, No. 239, 12/12/2019, 68010-68011.
  • OCC announced it seeks comment on the information collection titled Financial Management Policies— Interest Rate Risk. OCC also gave notice that it sent the collection to OMB for review. Comments are due 02/10/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26808.pdf. Federal Register, Vol. 84, No. 239, 12/12/2019, 68011-68012.
  • OCC announced it seeks comment on the information collection titled Guidance on Sound Incentive Compensation Policies. OCC also gave notice that it sent the collection to OMB for review. Comments are due 02/10/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26807.pdf. Federal Register, Vol. 84, No. 239, 12/12/2019, 68012-68013.
  • 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 01/15/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-16/pdf/2019-27051.pdf. Federal Register, Vol. 84, No. 241, 12/16/2019, 68544-68545.
  • OCC announced it seeks comment on the information collection titled Retail Foreign Exchange Transactions. OCC also gave notice that it sent the collection to OMB for review. Comments are due 03/10/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-10/pdf/2020-00232.pdf. Federal Register, Vol. 85, No. 7, 01/10/2020, 1373-1374.

OCC Issues Correction to Regulatory Capital Rule.

OCC is making technical corrections to the Capital Simplification for Qualifying Community Banking Organizations final rule that appeared in the Federal Register on 11/13/2019. The technical corrections align the rule text in the final rule with changes made by other final rules. The technical corrections also include a conforming edit. The correction is effective 01/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-18/pdf/2019-27168.pdf. Federal Register, Vol. 84, No. 243, 12/18/2019, 69296-69298.

OCC Issues Inflation Adjustments for Civil Money Penalties.

OCC is providing notice of its maximum civil money penalties as adjusted for inflation. The inflation adjustments are required to implement the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The adjusted maximum amount of civil money penalties in this notice are applicable to penalties assessed on or after 01/01/2020, for conduct occurring on or after 11/02/2015. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-28053.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 71735-71737.

OCC Issues Correction to Other Real Estate Owned Rule.

OCC is correcting a final rule originally published in the Federal Register on 10/22/2019 revising the other real estate owned rule and making related technical amendments. The final rule had an effective date of 12/01/2019. On 11/21/2019, the OCC published a correction to that final rule in the Federal Register amending the final rule’s effective date to 01/01/2020. This document corrects and supplements the 11/21/2019, final rule. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-28054.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 71735.

HUD Requests Comment on Information Collections.

  • The Department of Housing and Urban Development (HUD) announced it seeks comment on the information collection titled FHA-Insured Mortgage Loan Servicing Involving the Loss Mitigation Program. HUD also gave notice that it sent the collection to OMB for review. Comments are due 01/13/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26697.pdf. Federal Register, Vol. 84, No. 239, 12/12/2019, 67951-67952.
  • HUD announced it seeks comment on the information collection titled National Standards for the Physical Inspection of Real Estate (NSPIRE) Demonstration. HUD also gave notice that it sent the collection to OMB for review. Comments are due 01/13/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26695.pdf. Federal Register, Vol. 84, No. 239, 12/12/2019, 67952-67953.
  • HUD announced it seeks comment on the information collection titled Nonprofit Application and Recertification for FHA Mortgage Insurance Programs. HUD also gave notice that it sent the collection to OMB for review. Comments are due 01/13/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26696.pdf. Federal Register, Vol. 84, No. 239, 12/12/2019, 67951.
  • HUD announced it seeks comment on the information collection titled Housing Counseling Federal Advisory Committee (HCFAC). HUD also gave notice that it sent the collection to OMB for review. Comments are due 03/06/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-06/pdf/2019-28522.pdf. Federal Register, Vol. 85, No. 249, 01/06/2020, 522-523.

FEMA Issues Final Rule on Suspensions of NFIP Community Eligibility.

The Federal Emergency Management Agency (FEMA) issued a final rule which identifies communities in the states of Iowa, and Minnesota, 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-2019-12-16/pdf/2019-26956.pdf. Federal Register, Vol. 84, No. 241, 12/16/2019, 68346-68348.

FEMA Issues Final Flood Hazard Determinations.

FEMA has issued a final notice which identifies communities in the states of Missouri, and Nebraska, 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 05/01/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-13/pdf/2019-26888.pdf. Federal Register, Vol. 84, No. 240, 12/13/2019, 68182-68184.

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, and Indiana. 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-2019-12-27/pdf/2019-27962.pdf. Federal Register, Vol 84, No. 248, 12/27/2019, 71446-71448.
  • 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, Michigan, 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-2020-01-09/pdf/2020-00183.pdf. Federal Register, Vol. 85, No. 6, 01/09/2020, 1173-1176.

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 03/26/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-27/pdf/2019-27960.pdf. Federal Register, Vol. 84, No. 248, 12/27/2019, 71444-71446.
  • 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 Michigan. 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 04/08/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-09/pdf/2020-00184.pdf. Federal Register, Vol. 85, No. 6, 01/09/2020, 1172-1173.

FEMA Withdraws Proposed Flood Hazard Determinations.

FEMA is withdrawing its proposed notice concerning proposed flood hazard determinations, which may include the addition or modification of any Base Flood Elevation, base flood depth, Special Flood Hazard Area boundary or zone designation, or regulatory floodway (herein after referred to as proposed flood hazard determinations) on the Flood Insurance Rate Maps and, where applicable, in the supporting Flood Insurance Study reports for Winneshiek County, Iowa and Incorporated Areas. The withdrawal is effective 12/13/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-13/pdf/2019-26889.pdf. Federal Register, Vol. 84, No. 240, 12/13/2019, 68186.

FinCEN Requests Comment on Information Collections.

  • 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 Commercial Bank of Syria, including its subsidiary Syrian Lebanese Commercial Bank, as a financial institution of primary money laundering concern. FinCEN also gave notice that it sent the collection to OMB for review. Comments are due 02/18/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-19/pdf/2019-27359.pdf. Federal Register, Vol. 84, No. 244, 12/19/2019, 69822-69824.
  • FinCEN announced it seeks comment on the information collection titled Beneficial Ownership Requirements for Legal Entity Customers. FinCEN also gave notice that it sent the collection to OMB for review. Comments are due 02/28/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-28037.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 72137-72138.

FinCEN Solicits Applications for Bank Secrecy Act Advisory Group.

FinCEN is inviting the public to nominate financial institutions, trade groups, and non-federal regulators or law enforcement agencies for membership on the Bank Secrecy Act Advisory Group. New members will be selected for three-year membership terms. Nominations are due 01/21/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-19/pdf/2019-27358.pdf. Federal Register, Vol. 84, No. 244, 12/19/2019, 69822.

Treasury Finalizes Regulations Relating to Withholding and Reporting Tax on Certain U.S. Source Income Paid to Foreign Persons. 

The Department of the Treasury (Treasury) issued final regulations that provide guidance on certain due diligence and reporting rules applicable to persons making certain U.S. source payments to foreign persons, and guidance on certain aspects of reporting by foreign financial institutions on U.S. accounts. The final regulations affect persons making certain U.S.-related payments to certain foreign persons and foreign financial institutions reporting certain U.S. accounts. The final regulations are effective 01/02/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-02/pdf/2019-27979.pdf. Federal Register, Vol. 85, No. 1, 01/02/2020, 192-206.

Treasury Proposes Regulations on Misdirected Direct Deposit Refunds.

Treasury issued proposed regulations to provide guidance on section 6402(n) of the Internal Revenue Code (Code), concerning the procedures for identification and recovery of a misdirected direct deposit refund. The regulations reflect changes to the law made by the Taxpayer First Act. The proposed regulations affect taxpayers who have made a claim for refund, requested the refund be issued as a direct deposit, but did not receive a refund in the account designated on the claim for refund. Comments are due 02/21/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-23/pdf/2019-27653.pdf. Federal Register, Vol. 84, No. 246, 12/23/2019, 70462-70466.

Treasury Proposes Amendments to Source of Income from Certain Sales of Personal Property.

Treasury issued proposed regulations modifying the rules for determining the source of income from sales of inventory produced within the United States and sold without the United States or vice versa. These proposed regulations also contain new rules for determining the source of income from sales of personal property (including inventory) by nonresidents that are attributable to an office or other fixed place of business that the nonresident maintains in the United States. Finally, these proposed regulations modify certain rules for determining whether foreign source income is effectively connected with the conduct of a trade or business within the United States. Comments are due 02/28/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-27813.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 71836-71851.

Treasury Proposes Amendments to Federal Government Participation in the Automated Clearing House. 

Treasury is proposing to amend its regulation governing the use of the Automated Clearing House (ACH) Network by Federal agencies. Our regulation adopts, with some exceptions, the Nacha Operating Rules developed by Nacha, formerly known as NACHA—The Electronic Payments Association (Nacha), as the rules governing the use of the ACH Network by Federal agencies. Treasury is issuing this proposed rule to address changes that Nacha has made to the Nacha Operating Rules since the publication of the 2016 Nacha Operating Rules & Guidelines book. These changes include amendments set forth in the 2017, 2018, and 2019 Nacha Operating Rules & Guidelines books, including supplements thereto, with an effective date on or before 06/30/2021. Comments are due 02/03/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-03/pdf/2019-27261.pdf. Federal Register, Vol. 85, No. 2, 01/03/2020, 265-271.

Treasury Issues QFC Recordkeeping Requirement Exemption.

Treasury is issuing a determination regarding a request for an exemption from certain requirements of the rule implementing the qualified financial contracts (QFC) recordkeeping requirements of Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The exemption is granted 01/02/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-02/pdf/2019-27801.pdf. Federal Register, Vol. 85, No. 1, 01/02/2020, 1-3.

Treasury Requests Comment on Information Collections.

  • Treasury announced it seeks comment on the information collection titled U.S. Business Income Tax Return. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 01/21/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-19/pdf/2019-27297.pdf. Federal Register, Vol. 84, No. 244, 12/19/2019, 69825-69830.
  • Treasury announced it seeks comment on the information collection titled Allocation and Qualified Equity Investment Tracking System. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 02/24/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-26/pdf/2019-27786.pdf. Federal Register, Vol. 84, No. 247, 12/26/2019, 71078.
  • Treasury announced it seeks comment on the information collection titled New Markets Tax Credit Program Community Development Entity (CDE) Certification Application. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 02/24/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-26/pdf/2019-27788.pdf. Federal Register, Vol. 84, No. 247, 12/26/2019, 71077.
  • Treasury announced it seeks comment on the information collection titled Relief for Certain Spouses of Military Personnel. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 02/24/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-26/pdf/2019-27751.pdf. Federal Register, Vol. 84, No. 247, 12/26/2019, 71081-71082.
  • Treasury announced it seeks comment on the information collection titled Form 8233—Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 01/27/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-27/pdf/2019-27888.pdf. Federal Register, Vol. 84, No. 248, 12/27/2019, 71531-71534.
  • 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 01/29/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-28143.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 72140.
  • Treasury announced it seeks comment on the information collection titled Tax Exempt Forms and Schedules. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 01/30/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-31/pdf/2019-28274.pdf. Federal Register, Vol. 84, No. 250, 12/31/2019, 72435.
  • Treasury announced it seeks comment on the information collection titled Application By Survivors for Payment of Bond or Check Issued Under the Armed Forces Leave Act of 1946, as amended. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 03/03/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-03/pdf/2019-28422.pdf. Federal Register, Vol. 85, No. 2, 01/03/2020, 416-417.
  • Treasury announced it seeks comment on the information collection titled Request to Reissue U.S. Savings Bonds to a Personal Trust. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 03/03/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-03/pdf/2019-28423.pdf. Federal Register, Vol. 85, No. 2, 01/03/2020, 417.
  • Treasury announced it seeks comment on the information collection titled Minority Bank Deposit Program (MBDP) Certification Form for Admission. Treasury also gave notice that it sent the collection to OMB for review. Comments are due 03/03/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-03/pdf/2019-28423.pdf. Federal Register, Vol. 85, No. 2, 01/03/2020, 417.

Treasury Establish Prices for 2019 and 2020 United States Mint Numismatic Products.

Treasury is announcing pricing for United States Mint numismatic products. The pricing for the products may be viewed in the table in the notice. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-03/pdf/2019-28401.pdf. Federal Register, Vol. 85, No. 2, 01/03/2020, 418.

FHFA Proposes Amendments to Stress Test Rule.

The Federal Housing Finance Agency (FHFA) issued a proposed rule that would amend its stress testing rule, consistent with section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). Specifically, the proposed rule would revise the minimum threshold for the regulated entities to conduct stress tests from $10 billion to $250 billion, remove the requirements for Federal Home Loan Banks (Banks) subject to stress testing, and remove the adverse scenario from the list of required scenarios. These amendments align FHFA’s rule with rules adopted by other financial institution regulators that implement the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) stress testing requirements, as amended by EGRRCPA. The proposed rule also makes certain conforming and technical changes. Comments are due 01/15/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-16/pdf/2019-26950.pdf. Federal Register, Vol. 84, No. 241, 12/16/2019, 68350-68353.

SBA Issues Peg Rate.

The Small Business Administration (SBA) publishes an interest rate called the optional “peg” rate (13 CFR 120.214) on a quarterly basis. This rate is a weighted average cost of money to the government for maturities similar to the average SBA direct loan. This rate may be used as a base rate for guaranteed fluctuating interest rate SBA loans. This rate will be 1.88 percent for the January–March quarter of FY 2020. Pursuant to 13 CFR 120.921(b), the maximum legal interest rate for any third party lender’s commercial loan which funds any portion of the cost of a 504 project (see 13 CFR 120.801) shall be 6% over the New York Prime rate or, if that exceeds the maximum interest rate permitted by the constitution or laws of a given State, the maximum interest rate will be the rate permitted by the constitution or laws of the given State. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-28188.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 72101.

SBA Requests Comment on Information Collections.

  • SBA announced it seeks comment on the information collection titled Statement of Personal History. SBA also gave notice that it sent the collection to OMB for review. Comments are due 03/03/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-09/pdf/2020-00175.pdf. Federal Register, Vol. 85, No. 6, 01/09/2020, 1189.
  • SBA announced it seeks comment on the information collection titled Generic Clearance for SBA Customer Experience Data Collections. SBA also gave notice that it sent the collection to OMB for review. Comments are due 02/10/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-10/pdf/2020-00209.pdf. Federal Register, Vol. 85, No. 7, 01/10/2020, 1368-1369.

FCA Proposes District Financial Reporting.

The Farm Credit Agency (FCA) proposes amending the regulation governing how a Farm Credit bank presents information on its related associations when preparing annual bank financial statements on a standalone basis. FCA proposes to provide an additional presentation option that would allow the related association financial information to be in a supplement. Comments are due 03/09/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-07/pdf/2019-27573.pdf. Federal Register, Vol. 85, No. 4, 01/07/2020, 647-649.

RHS Finalizes Amendments to Single Family Housing Guaranteed Loan Program.

The Rural Housing Service (RHS) has finalized changes to the single family housing guaranteed loan program (SFHGLP) regulation to streamline the loss claim process for lenders who have acquired title to property through voluntary liquidation or foreclosure; clarify that lenders must comply with applicable laws, including those within the purview of the Bureau of Consumer Financial Protection (CFPB); and better align loss mitigation policies with the mortgage industry. The final rule is effective 04/24/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-26/pdf/2019-27504.pdf. Federal Register, Vol. 84, No. 247, 12/26/2019, 70881-70887.

RBC Finalizes Advanced Biofuel Payment Program.

The Rural Business-Cooperative Service (RBC) published an interim rule in the Federal Register on 02/11/2011. Through this action, RBS finalizes the rule based on public comments and new program requirements established in the Agricultural Improvement Act of 2018 (2018 Farm Bill). The final rule is effective 12/27/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-27/pdf/2019-27396.pdf. Federal Register, Vol. 84, No. 248, 12/27/2019, 71297-71303.

CCC Finalizes Amendments to Technical Assistance for Specialty Crops Program.

The Commodity Credit Corporation (CCC) issued a rule revising the Technical Assistance for Specialty Crops (TASC) program regulations to incorporate legislative changes introduced in the Agriculture Improvement Act of 2018 and to incorporate changes that conform the operation of the program to the requirements in the “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” (Uniform Guidance) and Federal grant-making best practices. The rule is effective 12/23/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-23/pdf/2019-27248.pdf. Federal Register, Vol. 84, No. 246, 12/23/2019, 70393-70399.

CCC Finalizes Amendments to Foreign Market Development Program. 

CCC issued a rule revising the Foreign Market Development (FMD) program regulations to incorporate changes that conform the operation of the program to the requirements in the “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” (Uniform Guidance) and Federal grant-making best practices. The rule is effective 01/09/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-09/pdf/2019-27964.pdf. Federal Register, Vol. 85, No. 6, 01/09/2020, 1083-1096.

CCC Issues Interim Final Rule on Environmental Quality Incentives Program.

CCC issued an interim final rule making changes to the Environmental Quality Incentives Program (EQIP) to conform to the Agriculture Improvement Act of 2018 (the 2018 Farm Bill). EQIP helps agricultural producers conserve and enhance soil, water, air, plants, animals (including wildlife), energy, and related natural resources on their land. Eligible lands include cropland, grassland, rangeland, pasture, wetlands, nonindustrial private forest land, and other agricultural land on which agricultural or forest-related products or livestock are produced and natural resource concerns may be addressed. Participation in the program is voluntary. The interim rule is effective 12/17/2019, comments are due 01/17/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-17/pdf/2019-26872.pdf. Federal Register, Vol. 84, No. 242, 12/17/2019, 69272-69293.

CCC Issues Interim Rule on Agricultural Conservation Easement Program.

CCC issued an interim rule that makes changes to the Agricultural Conservation Easement Program policies and procedures in the regulations to conform with the Agriculture Improvement Act of 2018 (the 2018 Farm Bill). The interim rule is effective 12/30/2019. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2020-01-06/pdf/2019-27883.pdf. Federal Register, Vol. 85, No. 3, 01/06/2020, 558-590.

CFTC Finalizes Amendments to Public Rulemaking Procedures.

The Commodity Futures Trading Commission (CFTC) is issuing a final rule that amends CFTC’s regulations to eliminate the provisions that set forth the procedures for the formulation, amendment, or repeal of rules or regulations. Because the Administrative Procedure Act (APA) governs CFTC’s rulemaking process, CFTC believes that it is unnecessary to codify the rulemaking process in a Commission regulation. The amended regulation is comprised solely of the procedure for filing petitions for rulemakings, as the APA does not address this process. The rule is effective 01/16/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-17/pdf/2019-27103.pdf. Federal Register, Vol. 84, No. 242, 12/17/2019, 68787-68790.

FASB Proposes Statement of Federal Financial Accounting Standards.

The Federal Accounting Standards Advisory Board (FASB) has issued an exposure draft of a proposed Statement of Federal Financial Accounting Standards titled Deferral of the Effective Date of SFFAS 54, Leases. 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. Respondents are encouraged to comment on any part of the exposure draft. Comments are due 01/31/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-26/pdf/2019-27679.pdf. Federal Register, Vol. 84, No. 247, 12/26/2019, 70968-70969.

FTC Requests Comment on Information Collection.

The Federal Trade Commission (FTC) announced it seeks comment on the information collection titled Rule Governing Pre-sale Availability of Written Warranty Terms. FTC also gave notice that it sent the collection to OMB for review. Comments are due 03/02/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-31/pdf/2019-28194.pdf. Federal Register, Vol. 84, No. 250, 12/31/2019, 72362-72364.

FCC Requests Comment on Advanced Methods to Target and Eliminate Unlawful Robocalls.

The Federal Communications Commission (FCC) solicits input for the first staff report on call blocking. FCC seeks data and other information on the availability and effectiveness of call-blocking tools offered to consumers, the impact of FCC actions on illegal calls, the impact of call blocking on 911 services and public safety, and any other information that may inform FCC’s analysis of the state of deployment of advanced methods and tools to eliminate illegal and unwanted calls. Comments are due 01/29/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-30/pdf/2019-28136.pdf. Federal Register, Vol. 84, No. 249, 12/30/2019, 71888-71889.

NCUA Requests Comment on Information Collections.

  • The National Credit Union Administration (NCUA) announced it seeks comment on the information collection titled Monitoring Bank Secrecy, 12 CFR part 748.2. NCUA also gave notice that it sent the collection to OMB for review. Comments are due 01/13/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26767.pdf. Federal Register, Vol. 84, No. 239, 12/12/2019, 67963.
  • NCUA announced it seeks comment on the information collection titled Written Reimbursement Policy, 12 CFR 701.33. NCUA also gave notice that it sent the collection to OMB for review. Comments are due 01/21/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-20/pdf/2019-27530.pdf. Federal Register, Vol. 84, No. 245, 12/20/2019, 70213-70214.
  • 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 01/30/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-31/pdf/2019-28240.pdf. Federal Register, Vol. 84, No. 250, 12/31/2019, 72383.

NCUA Delays Effective Date of Prompt Corrective Action Regulations.

NCUA issued a final rule to delay the effective date of both NCUA’s 10/29/2015 final rule regarding risk-based capital (2015 Final Rule) and NCUA’s 11/06/2018 supplemental final rule regarding risk-based capital (2018 Supplemental Rule), moving the effective date from 01/01/2020 to 01/01/2022. During the extended delay period, NCUA’s current PCA requirements will remain in effect. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-17/pdf/2019-27141.pdf. Federal Register, Vol. 84, No. 242, 12/17/2019, 68781-68787.

NCUA Issues CFR Correction.

NCUA issued a correction to the Code of Federal Regulations (CFR). In Title 12 of CFR, Parts 600 to 899, revised as of 01/01/2019, on page 700, in § 703.114, remove paragraph (3) that appears below paragraph (d). The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-18/pdf/2019-27403.pdf. Federal Register, Vol. 84, No. 243, 12/18/2019, 69298.

SSA Issues Rate for Assessment on Direct Payment of Fees to Representatives.

The Social Security Administration (SSA) announced that the assessment percentage rate under the Social Security Act (Act) is 6.3 percent for 2020. A claimant may appoint a qualified individual as a representative to act on his or her behalf in matters before SSA. If the claimant is entitled to past-due benefits and was represented either by an attorney or by a non-attorney representative who has met certain prerequisites, SSA withholds up to 25 percent of the past-due benefits and use that money to pay the representative’s approved fee directly to the representative. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26752.pdf. Federal Register, Vol. 84, No. 239, 12/12/2019, 67987-67988.

DOL Finalizes Regular Rate Under the Fair Labor Standards Act.

The Department of Labor (DOL) issued the regular rate under the Fair Labor Standards Act (FLSA). FLSA generally requires that covered, nonexempt employees receive overtime pay of at least one and one-half times their regular rate of pay for time worked in excess of 40 hours per workweek. The regular rate includes all remuneration for employment, subject to the exclusions outlined in section 7(e) of the FLSA. In this final rule, DOL updates a number of regulations on the calculation of overtime compensation both to provide clarity and to better reflect the 21st-century workplace. These changes will promote compliance with the FLSA, provide appropriate and updated guidance in an area of evolving law and practice, and encourage employers to provide additional and innovative benefits to workers without fear of costly litigation. The final rule is effective 01/15/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-16/pdf/2019-26447.pdf. Federal Register, Vol. 84, No. 241, 12/16/2019, 68736-68776.

VA Proposes Specialty Education Loan Repayment Program. 

The Department of Veterans Affairs (VA) proposes to amend its regulations that govern scholarship programs to certain health care professionals. This rulemaking would implement the mandates of the VA MISSION Act of 2018 by establishing a Specialty Education Loan Repayment Program, which would assist VA in meeting the staffing needs of VA physicians in medical specialties for which VA has determined that recruitment or retention of qualified personnel is difficult. Comments are due 02/24/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-26/pdf/2019-27511.pdf. Federal Register, Vol. 84, No. 247, 12/26/2019, 70908-70913.

HHS Finalizes Amendments to Exchange Program Integrity.

The Department of Health and Human Services (HHS) issued a final rule revising standards relating to oversight of Exchanges established by states and periodic data matching frequency. This final rule also includes new requirements for certain issuers related to the collection of a separate payment for the portion of a plan’s premium attributable to coverage for certain abortion services. The final rule is effective 02/25/2020. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2019-12-27/pdf/2019-27713.pdf. Federal Register, Vol. 84, No. 248, 12/27/2019, 71674–71711.

By, Ally Bates

The below article is the Special Focus section of the January 2020 Compliance Journal. The full issue may be viewed by clicking here.

There are several recently enacted state legislative items which impact financial institutions. The following article discusses select aspects of three laws that have been passed this session. For more comprehensive information on each law, please review the applicable Act, each of which is included at the end of this article. This article is focused on law that has been passed. At time of this article’s publication, the legislature is still in session. Bills that are later signed into law will be discussed in future publications.  

Financial Institutions Modernization Act 

The Financial Institutions Modernization Act, or Omnibus Bill, implemented by 2019 Wisconsin Act 65, is a piece of legislation that makes several changes to statutes relating to banking practices. Each change is presented with both a summary and detailed explanation below. 

Banking Review Board 

Summary: Combines the Banking Review Board with the Savings Institutions Review Board into a single Banking Institutions Review Board. 

Detailed Explanation: The Wisconsin Department of Financial Institutions has two five-member boards which advise DFI’s division of banking. The Banking Review Board advises and reviews administrative actions on matters related to banks and banking. The Savings Institution Review Board advises and reviews administrative actions on matters related to savings banks and savings and loan associations. This provision combines both authorities and purposes into a single review board. 

Lost, Destroyed, or Stolen Cashier’s Check  

Summary: Reduces the period, from 90 days to 30 days, after certain checks or issued, during which the issuing bank must pay the item after it has been claimed as lost, stolen, or destroyed.  

Detailed Explanation: The Wisconsin Uniform Commercial Code Section 403.312 describes the procedure by which a financial institution may place a stop payment on a lost, destroyed, or stolen cashier’s check, teller’s check, or certified check. Under that procedure, a claim to such an item becomes enforceable, generally, on the 90th day following the date of the check. Meaning, that a financial institution must, generally, pay an item claimed as lost, destroyed, or stolen if it is presented during the 90 day period following the date of the check or risk liability for an improper stop payment. This provision reduces that period from 90 days to 30 days.  

Mortgage Loan Originators  

Summary: Provides temporary authority to act as a mortgage loan originator (MLO) while a license application is pending.  

Detailed Explanation: This provision gives temporary authority to act as an MLO to an individual who applies to DFI for a license so long as that individual is employed by a licensed mortgage banker or mortgage broker and was a registered MLO in another state under certain conditions and time requirements. In addition, the individual must not have been previously denied a license, subject to a cease and desist by the Bureau of Consumer Financial Protection (CFPB), and not been convicted of a disqualifying crime. If eligible, the temporary authority beings when the individual furnishes application information to the NMLSR and ends upon the earlier of DFI granting or denying the license, withdrawal of the application for an MLO license, the application is determined to be incomplete, or the license is granted. During the temporary period, the individual is considered to be associated with the mortgage banker or mortgage broker employing them and is considered to have MLO authority subject to all applicable requirements and duties.  

Possession of Property Subject to Garnishment  

Summary: Grants financial institutions two business days to respond to certain legal process.

Detailed Explanation: A garnishee financial institution in possession of property subject to garnishment is liable for the surrender of that property only upon expiration of two business days to comply with or respond to the garnishee summons and complaints.  

Data Processing Services Provided to Financial Institutions  

Summary: A financial institution retains property rights of any data transferred to an independent data processing servicer.  

Detailed Explanation: Under this provision an independent data processing servicer is an entity that provides to a financial institution electronic data processing services. It excludes the exchange of data and settlement of funds between unaffiliated financial institutions through terminals, remote service units, and customer bank communications terminals. If a financial institution transfers data to an independent data processing servicer, the financial institution retains all right, title, interest, and legal claim to the data. The transfer only permits temporary control of the data for purposes of the contracted services. This provision also places required contract disclosures upon data processing servicers.  

Federal Home Loan Bank Loans  

Summary: Eliminates certain limitations on loans to state banks made by a Federal Home Loan Bank.  

Detailed Explanation: This provision eliminates the current 20-year term limitation and the limitation on the value of bank assets that may be pledged as collateral by a Federal Home Loan Bank. 

Effective Date 

The Omnibus Bill became effective November 27, 2019, except for three provisions. The provisions creating the banking institutions review board takes effect on May 2, 2021. The provisions affecting licensing and employment transition for MLOs took effect on November 28, 2019. The provisions for independent data processing servicers takes effect on March 1, 2020. 

Industrial Hemp 

2019 Wisconsin Act 68 was enacted to make several changes to the law governing industrial hemp. Act 68 aligns Wisconsin law to be consistent with the 2018 Federal Farm Bill. An important consideration for banks to keep in mind is that Act 68 directs the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) to write new rules. It is WBA’s understanding that DATCP will continue under the 2014 Farm Bill provisions, and existing Wisconsin regulation at the time of this article’s publication, in 2020. DATCP is preparing to write rules pursuant to Act 68 and expects to begin the new program in 2021. Select provisions from Act 68 are included below. 

  • The term “hemp” instead of “industrial hemp” is used, which is defined as “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 delta-9-tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis or the maximum concentration allowed under federal law up to 1 percent, whichever is greater.”  
  • No person may produce hemp in Wisconsin without a license from DATCP if required under federal law.  
  • DATCP is provided authority to establish procedures for the following:  
    • Maintaining information relating to hemp production, 
    • Testing for THC concentrations in hemp, 
    • Disposing of hemp plants grown illegally, 
    • Complying with enforcement provisions, and 
    • Conducting annual inspections of hemp producers.  
  • Redefines “marijuana,” for the purposes of the controlled substances act, to exclude hemp.  
  • Excludes THC contained in hemp from the list of Schedule I controlled substances.  
  • Changes the current hemp pilot program under DATCP to a permanent program and sunsets the pilot program.  
  • Allows DATCP to set criteria for approving persons to undertake any sampling and testing of hemp that DATCP requires by rule and to approve persons that meet the criteria.  
  • Requires DATCP to issue a fit for commerce certificate after hemp is tested, or if DATCP determines that hemp is not required to be tested.  
  • Allows a person, whose personally identifying information relating to the hemp program is in DATCP’s possession, to authorize the disclosure of that information. 

Agricultural Development Loan Guarantee Program 

2019 Wisconsin Act 62 (Act 62) creates a pilot loan guarantee program under the Agricultural Development Loan Guarantee Program administered by the Wisconsin Housing and Economic Development Authority (WHEDA) along with other changes. 

Specifically, Act 62 makes the following changes to WHEDA’s existing Agricultural Development Loan Guarantee Program:  

  • The term of a loan guarantee may not exceed ten years for land and buildings, five years for inventory, equipment, and machinery, and two years for permanent working capital and marketing expenses.  
  • The closing fee for a loan guarantee under the program may not exceed 1.5 percent. 

Act 62 requires WHEDA to allocate $3,000,000 to the pilot program. WHEDA may guarantee collection of 25 percent of the principal of an eligible loan or $750,000, whichever is less. The fixed amount guaranteed is payable to the lender for the entire term of the guarantee. Otherwise, a loan guarantee under the pilot program is subject to all prior requirements. The pilot program sunsets as of July 1, 2024.

Conclusion 

In general, recent legislative activity has been favorable for the banking industry. WBA will continue to monitor existing bills and update the membership on any significant changes. If you have any additional questions on any of the above laws, do not hesitate to contact us at wbalegal@wisbank.com

Click here for Act 65.

Click here for Act 68.

Click here for Act 62.

By, Ally Bates

Events

A summary of the bank funding types, liquidity issues and management of capital. Learn what funding is used by banks; how liquidity needs may be addressed by storing liquidity on the balance sheet or by securing additional funding; and bank capital’s purpose, regulatory requirements and the effect on profitability.

Audience: This course is designed for individuals involved in managing the bank’s investment portfolio.

The required textbook for this course is Bank Management, 8th Edition.

IMPORTANT:  Be sure to order the required book for this course if you do not have it.  We recommend that you FIRST select and add your course session to the shopping cart, then select your preferred format of book from the “Recommended Training” options that appear alongside the shopping cart.

*Please note this book is used for all four Bank Management courses: Managing Funding, Liquidity, and Capital, Managing Interest Rate Risk, Analyzing Bank Performance, and Managing the Bank’s Investment Portfolio.*

Price: $660

February 22 – Compliance Forum: Session 3 – Wausau

9:00am – 3:00pm
Hilton Garden Inn
151401 County Rd Nn, Wausau

February 23 – Compliance Forum: Session 3 – Madison

9:00am – 3:00pm
DoubleTree by Hilton Madison East
4402 E Washington Ave, Madison

About the Forum:

Your membership includes:

  • Up-to-the Minute Updates on changing federal and state law and regulations.
  • In-depth information on key compliance issues.
  • Networking opportunity with other compliance officers.
  • Access to the WBA Compliance Forum email group for connecting with other Forum members throughout the year.
  • Credits available – CLE and other compliance certifications*.

*Submission of education program material to the Board of Bar Examiners does not guarantee CLE credit will be granted. WBA will apply for CRCM credits for this program and provide the appropriate number of credits for those with the designation. Bankers with the CCBCO designation can self-submit this program for credit using the agenda provided at the forum.

February 2022 Agenda:

  • Registration & Continental Breakfast
    8:30 – 9:00 a.m.
  • Hot Topics Update on Legislative and Regulatory Topics
    9:00 – 9:45 a.m.
    WBA Legal
  • Topic TBD
    9:45 – 10:45 a.m.
  • Topic TBD
    11:00 a.m. – Noon
  • Networking Lunch
    Noon – 12:45 p.m.
  • Peer Group Discussions
    12:45 – 1:45 p.m.
    Deposit or Loan Compliance
  • Topic TBD
    2:00 – 3:00 p.m.

Registration Information:

Bank Member Registration: If your bank is a Compliance Forum member for the 2021–22 year, registration is complimentary for up to 2 attendees from your bank. Additional attendees may register at the registration fee of $150/attendee for attending just session 3 in February.

If your bank is not currently a member of the 2021-22 Compliance Forum, please contact WBA’s Lori Kalscheuer via email for more information on how to join the forum!

When you arrive at work today, your computer screen shows a message asking for $52,000 to access your files, and you have 48 hours to pay or you lose your data. Does this scenario keep you up at night? It sure has kept the employees of the City of Atlanta up most nights in the second quarter of 2018 as they recovered from a SamSam ransomware infection that shut down a significant portion of their network for months. In the case of shipping company Mearsk, they lost over $200 million from the NotPetya ransomware attack. They were required to conduct a complete infrastructure overhaul, which included the reinstallation of 4,000 servers and 45,000 PCs according to a ZDNet article. If you recall, the 2017 NotPetya ransomware attack never had a successful payment mechanism to get your data back. It resulted in the complete destruction of systems for thousands of businesses in eastern Europe.

Ransomware is evolving from a wallet stealing threat to a weapon of mass destruction that has the power to cripple businesses or even countries. There are many different directions that ransomware has taken over the past few years; as it finds its place as a major threat to our businesses. Join us in this discussion to learn about trending issues with ransomware and best practices to prepare for an attack.

Topics for Discussion:

  • Regulatory guidance and expectations
  • Trend attack types
  • Infection process
  • Lessons learned
  • Best practices
  • Ransom payment methods
  • Free Ransomware Toolkit

Target Audience:  Information security officer, IT manager, risk officer, internal auditor, board members, or other management team members looking to understand risks from Ransomware.

Presenter
SBS CyberSecurity, LLC

Registration Option
Live presentation $330

Recording available through May 18, 2022