Regulatory Compliance Update January 2015
By: Hickman Beckner, Vice President
The new congress has been seated and the Speaker has been reelected. Congress is ready to address the people’s business.
Comments were due by December 29 on the proposed rules to implement the Homeowner Flood Insurance Affordability Act. The law delayed implementation of Biggert-Waters until after the midterm elections. The new rules will reinstate the requirement to escrow for flood insurance for properties in Special Flood Hazard Areas for loans made, extended or increased after January 1, 2016. The rules also require institutions to provide escrow services for loans that are not covered by the Act. COMMERCIAL™ and RETAIL™ will provide full escrow processing for compliance.
Comments were due by January 13 on the new IRS rules to eliminate the 36-month rule for triggering a 1098-C. The proposed rule would eliminate the 36-Month rule from the list of identifiable events that trigger the 1099-C. The effect of this rule would be to remove the deadline for receiving payments. The rules remain in effect for cancellation of debt through other legal actions.
As of January 21, 2015 financial institutions will no longer be able to charge interest on a FHA loan after the loan is paid off. Institutions were allowed to charge interest for the full month of the payoff but this practice has been eliminated.
The Federal Reserve has issued final rules for Regulation J that address the time limits for settlement by the paying bank for items received from the Federal Reserve. This could impact drafts on revolving lines.
The new integrated mortgage disclosures approved by the CFPB will become effective on August 1, 2015.
The IRS has updated the list of countries that have information exchange agreements with the United States. This affects Form 1042-S reporting.
With the new Congress seated we expect many new bills to be introduced. We will be monitoring the bills as they make their way through the legislative process. While the Republicans hold a majority in both houses the legislative rules do present many hurdles for new legislation. We will also monitor the rules that implement the new laws.
Shaw will be hosting a talk by James Carley, Southeast Regional Director of the CFPB during the Shaw Systems Conference in Charleston February 22-25. We will also have other sessions for regulatory compliance during the Conference.
In addition to the regulatory news we share here in the pages of Connected magazine, during User Advisory Board conference calls, and in the Client Solution Center, we send Shaw clients comprehensive monthly regulatory compliance updates via email. If you have concerns about any regulatory issues that may affect your Shaw software, please contact me at email@example.com.