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Compliance News

April 2012 | May 2012

See Countdown to Comment Deadlines and Regulatory Proposals

Dodd-Frank Act developments are tagged .

May News

FinCEN Releases SAR Activity Review – By the Numbers (5/15/12)
The Financial Crimes Enforcement Network (FinCEN) released its annual SAR Activity Review – By the Numbers, a compilation of numerical data gathered from 2011 Suspicious Activity Reports (SARs) that financial institutions filed. The latest edition contains new interactive tables with county-level geographic summaries that enhance state graphical displays. By the Numbers serves as a companion publication to the SAR Activity Review – Trends, Tips & Issues that was released last week and provides information about SARs' preparation and use. Visit ABA's SAR Activity Review page for previous issues of the SAR Activity Review.
Regulators Issue Stress-Test Guidance (5/14/12)
The federal banking regulators issued final supervisory guidance regarding stress-testing practices for banks with more than $10 billion in assets. "The guidance outlines general principles for a satisfactory stress testing framework and describes various stress testing approaches and how stress testing should be used at various levels within an organization," the regulators said. "The guidance also discusses the importance of stress testing in capital and liquidity planning and the importance of strong internal governance and controls as part of an effective stress-testing framework." This guidance will become effective on July 23, 2012. In a separate news release, the federal banking regulators issued a joint statement to clarify expectations for stress testing by community banks – banks, savings associations, and bank and savings and loan holding companies with $10 billion or less in total assets. Community banks are not required or expected to conduct the types of stress testing required of larger organizations, the news release said.
Rep. Maloney Introduces Bill to Limit Overdraft Fees (5/14/12)
House Financial Services Committee member Carolyn Maloney (D-N.Y.) on May 9 introduced a bill that would require banks to obtain consent before activating overdraft fees for paper checks, automated clearing house charges and debit card transactions. The legislation also would require that fees be "reasonable and proportional" to the amount of the overdraft; prohibit banks from changing the sequence in which they process transactions if it creates more overdrafts and maximizes the fees paid; limit the number of fees that can be charged to one per month and six per year; require the Consumer Financial Protection Bureau to conduct a study on prepaid debit card overdraft fees; and grant the CFPB rulemaking authority over such fees.
CFPB Considering Rules to Simplify Mortgage Points, Fees (5/11/12)
The Consumer Financial Protection Bureau (CFPB) outlined rules it expects to propose this summer and finalize next January that are intended to simplify mortgage points and fees. The proposals the bureau is considering would require an interest-rate reduction when consumers elect to pay discount points; ban origination charges that vary with the loan's size; and mandate that lenders offer consumers a no-discount-point loan option. Other proposals the bureau is looking at would establish qualification and screening standards for mortgage loan originators. The CFPB also plans to reaffirm the Federal Reserve's rule prohibiting steering incentives while clarifying some issues in it that have created confusion. In connection with this effort, CFPB assembled a small entity review panel (a SBREFA Panel) to help CFPB consider the impact of this rulemaking. For more information about the issues under consideration contact ABA's Rod Alba. If you are a bank under $200 million in assets and want to provide input to the panel, please contact ABA's Alex Maroulis-Cronmiller.
FinCEN Releases Materials from New SAR, CTR and DOEP Webinar (5/10/12)
The Financial Crimes Enforcement Network (FinCEN) released the recording and presentation materials from its informational Webinar on May 8. Updated technical specifications for FinCEN's new Currency Transaction Report (CTR) and Suspicious Activity Report (SAR) as well as the recently released specifications for FinCEN's new Designation of Exempt Person (DOEP) report were discussed. This Webinar was intended specifically for the information technology (IT) professionals who will be responsible for integrating the technical specifications for these new FinCEN reports into their processes.
SAR Activity Review Features Money Services Businesses (5/10/12)
The May issue of the Financial Crimes Enforcement Network's SAR Activity Review, which was released on May 9, focuses on trends and issues related to money services businesses (MSBs). FinCEN last year started collecting information on the MSB agent population, and the publication features articles that analyze the resulting data, and related calls to the agency's regulatory helpline.
ABA Testifies on Impact of Regulatory Compliance Costs on Community Banks (5/9/12)
The American Bankers Association testified on May 9 that the cumulative impact of years of added regulations has reached the tipping point, dramatically increasing compliance costs and threatening the future of community banks. William B. Grant, chairman and chief executive officer of First United Bank of Trust in Oakland, Md., testified on behalf of ABA before the House Subcommittee on Financial Institutions and Consumer Credit. Grant testified that regulatory burden for community banks has multiplied tenfold in the last decade, with about 1,500 small banks disappearing from their communities during that time. Grant testified that the costs to implement new regulations are substantial and weigh most heavily on community banks. Grant noted that direct out-of-pocket expenses for compliance costs are just part of the story – the opportunity costs and unintended consequences of the Dodd-Frank Act also have far-reaching effects. Grant closed his testimony by expressing concern that some rules under Dodd-Frank, if written improperly, could literally drive community banks out of certain lines of business. He cited mortgage lending as a key example, with proposed rules that would make it much more costly for banks to make loans and would deny quality loans to creditworthy borrowers.
FinCEN Reminder: E-Filing Starts July 1 (5/8/12)
The Financial Crimes Enforcement Network reminds all financial institutions subject to the Bank Secrecy Act that they are required to use electronic filing (E-Filing) for certain agency reports no later than July 1. FinCEN issued a notice on February 24 re-affirming that such institutions must submit agency reports electronically unless they are eligible to ask for a temporary exemption as described in the final rule.
FinCEN Extends Comment Period on Customer Due Diligence ANPRM (5/4/12)
FinCEN on May 4 issued an extension to its March 5 advance notice of proposed rulemaking (ANPRM) which solicited comments on a wide range of questions pertaining to the possible application of an explicit customer due diligence (CDD) obligation on financial institutions, including a requirement for financial institutions to identify beneficial ownership of their accountholders. The comment period has been extended until June 11. ABA will file comments. Contact ABA's Rob Rowe for questions or comments.
Amicus Filed in TILA Case (5/4/12)
ABA and two other trade groups on May 3 filed a friend-of-the-court brief asserting that a U.S. appeals court should affirm a district court's decision that borrowers must file a lawsuit within three years of a mortgage loan's signing to exercise their right of rescission under the Truth in Lending Act (TILA). The CFPB also filed a brief in the case – Rosenfield v. HSBC Bank – arguing that consumers could simply notify their lenders of their intent to rescind without going to court to unwind the loans. Our brief refuted that argument, explaining that such an approach would upset TILA's careful balance of remedies. For more information, contact ABA's Thomas Pinder.
FinCEN Webinar on the New SAR, CTR and DOEP, May 8 (5/2/12)
The Financial Crimes Enforcement Network (FinCEN) will hold a Webinar on May 8 at 2:00 p.m. ET to discuss the E-Filing specifications for FinCEN's new Currency Transaction Report (CTR), Suspicious Activity Report (SAR), and Designation of Exempt Person (DOEP) report; the BSA E-Filing Test site and Testing Process, and; FAQs about the E-Filing specifications. This Webinar is intended specifically for the information technology (IT) professionals who will be responsible for integrating the technical specifications for the new FinCEN reports into batch filing processes. FinCEN will be offering a separate Webinar at a later date for financial institution employees and compliance professionals with BSA-related responsibilities. Register here. For questions, please call the FinCEN Help Desk at 1-866-346-9478.
FinCEN MOU with Louisiana Insurance Commissioner (5/1/12)
FinCEN on May 1 signed a Memorandum of Understanding (MOU) that will allow the Federal Anti-Money Laundering (AML) regulator and the State Insurance regulator to share important information enabling both parties to better protect the industry and consumers from criminal activity and fraud. With the signing of this MOU, Louisiana becomes the first state insurance commission to partner with FinCEN. "FinCEN looks forward to forming new partnerships with state insurance regulators to share information to detect and deter illicit financial activity including insurance fraud," said FinCEN Director James H. Freis, Jr.
Trade Groups: Parts of Key DFA Proposal Do More Harm Than Good (5/1/12)
Parts of the Federal Reserve's proposed rule that would implement enhanced prudential standards and early remediation requirements for bank holding companies under the Dodd-Frank Act's Sections 165 and 166 would do more harm than good, ABA and four other trade groups said in a comment letter. They said, among other things, that the proposed single counterparty credit concentration rules would needlessly reduce liquidity in the financial system, and the early remediation rules threaten to impose significant and nondiscretionary regulatory constraints on firms that are not warranted by an institution's condition. The trade groups also made numerous recommendations to reduce the proposed rule's adverse effects. For more information, contact ABA's Denyette DePierro.
ABA Concerned About Proposal's Effect on Mid-Sized, Regional Banks (5/1/12)
ABA in a comment letter expressed concern about how the Federal Reserve's proposed rule that would implement enhanced prudential standards and early remediation requirements under the Dodd-Frank Act's Sections 165 and 166 would affect mid-sized and regional banks. ABA emphasized that while it strongly supports risk management tools to identify and mitigate systemic risk, to be used effectively those tools should be tailored to an institution's complexity, business model, geographic footprint and size. The association expressed concern that instead the proposal, as drafted, would be implemented in a one-size-fits-all manner that treats all banks in broad asset-size categories the same way, or trickles down requirements to smaller institutions through the examination's staff's best-practices recommendations. For more information, contact ABA's Beth Knickerbocker.

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April News

ABA: Qualified Mortgage Should Have Safe Harbor (4/30/12)

ABA White Paper on Bank Supervision and Examination (4/27/12)

ABA Banker Describes Draft Mortgage Proposals' Effects (4/27/12)

ABA Suggests Improvements to SBREFA Review Process (4/27/12)

Read ABA's SBREFA summary. For more information, contact ABA's Virginia O'Neill.

FDIC Model Safe Accounts Pilot: Final Report (4/26/12)

CFPB Launches Arbitration Clause Inquiry (4/26/12)

CFPB Extends Comment Deadline on Overdraft-Practices Inquiry (4/25/12)

The Consumer Financial Protection Bureau extended the comment deadline from April 30 to June 29 on its notice and request for information on how overdraft programs affect consumers.

FinCEN: Mortgage-Fraud SARs Increase 31 Percent in 2011 (4/24/12)

President Obama Signs E.O. Targeting Human Rights Abuses via Information Technology (4/23/12)

Fed Forms Council to Provide Stress-Test Model Advice (4/23/12)

Regulators Clarify Volcker Rule Compliance Deadline (4/20/12)

Banks are expected to comply fully with the rule by July 21, 2014.

CFPB to Pursue Discriminatory Lenders (4/18/12)

FDIC Guidance on CFPB's MLO Compensation Clarification (4/18/12)

ABA Comments on CFPB Payday Lending Hearing (4/17/12)

ABA Comments on KBYO Mortgage Loan Initiative (4/17/12)

ABA Supports CFPB's Proposal on Privileged Bank Information (4/17/12)

CHARM Handbook Updated (4/16/12)
The Federal Reserve recently updated the Consumer Handbook on Adjustable-Rate Mortgages.

CFPB Announces Expectations for Managing Service Providers (4/16/12)

CFPB's first Consumer Response Annual Report to Congress (4/16/12)

CFPB Proposes Revisions to Rule on Credit Card Upfront Fees (4/13/12)

Comments are due June 11. Contact ABA's Nessa Feddis for more information.

CFPB to Propose Mortgage-Servicing Rules This Summer (4/11/12)

Consumer Alert: Fraudulent Emails Claiming to be from the FDIC (4/11/12)

ABA Requests for Comment Extension on CFPB Inquiry on Overdraft Practices (4/10/12)

ABA Comment on Remittances (4/9/12)

CFPB's Date to Address ABA Regulatory Compliance Conference (4/9/12)

Fed Issues Final Rules on Reserve Requirements (4/6/12)

Both rules are effective on July 12.

Fed Releases Statement on Renting Residential OREO Properties (4/6/12)

DOJ Files Legal Action against Mortgage Company for Lending Discrimination (4/4/12)

See also http://www.americanbanker.com for the full story entitled 'Mortgage Lender to Fight Back Against DOJ Fair Lending Suit' by 'Kate Davidson' published on April 3, 2012.