Regulatory Compliance Update December 2017

Regulatory Compliance Update

By: Hickman Beckner, Senior Vice President

The November regulatory activity is focused on technical adjustments that are required by law and changes in regulatory reporting.

Federal Reserve – Has amended Regulation D (Reserve Requirements for Depository Institutions). The annual adjustments index the reserve requirements thresholds. There is no effect on lending systems.

FFIEC – There were many proposed amendments to the Bank Call Reports. The table below summarizes the changes that impact loan and leasing systems. These changes do not require any System modifications.

FFIEC 051

Certain “Small” Institutions

FFIEC 041

Institutions with Only Domestic Offices

FFIEC 031

Institutions with Domestic and Foreign Offices

Schedule RC-N No Changes Loans and Leases Held for Sale  Renumbered as Item 5

Fair Value (item 5b) is deleted

Unpaid Principal Balance (item 5.b.2) is deleted

Loans and Leases Held for Sale  Renumbered as Item 5

Fair Value (item 5b) is deleted

Unpaid Principal Balance (item 5.b.2) is deleted

Other FFIEC reporting changes that do not impact lending, lease or collections systems

FFIEC 051

Certain “Small” Institutions

FFIEC 041

Institutions with Only Domestic Offices

FFIEC 031

Institutions with Domestic and Foreign Offices

 

Schedule RC-F

 

 

 

Combined mortgage and other items into a new line item for Interest-Only Strips.

 

 

 

 

Combined mortgage and other items into a new line item for Interest-Only Strips.

 

 

 

Schedule RC-T

 

Increased asset threshold for reporting.

 

 

 

Schedule SU

 

Deleted the reporting item for credit card fees in receivable sold and securitized with servicing retained

 

Schedule RC-A

 

Combined line items for foreign branches and other banks in foreign countries

 

 

Combined line items for foreign branches and other banks in foreign countries

 

 

Schedule RC-P

 

Changed the asset size threshold for reporting

 

Combined Origination data for First Linens, Junior Liens and Commitments into a single item.

 

Combined Wholesale Origination data for First Linens, Junior Liens and Commitments into a single item.

 

Combined Residential Mortgages Sold data for First Linens, Junior Liens and Commitments into a single item.

 

Combined Residential Mortgages Held of Sale data for First Linens, Junior Liens and Commitments into a single item.

 

Combined Non-Interest Income From Sale Securitization and Servicing of Residential Mortgages data for Closed-End and Open-End into a single item.

 

Combined Repurchase and Indemnification for First Linens, Junior Liens and Commitments into a single item.

 

 

 

 

Past Due and Non-Accrual Assets Held for Investment at Fair Market Value items are renumbered and deleted.

 

Changed the asset size threshold for reporting

 

Combined Origination data for First Linens, Junior Liens and Commitments into a single item.

 

Combined Wholesale Origination data for First Linens, Junior Liens and Commitments into a single item.

 

Combined Residential Mortgages Sold data for First Linens, Junior Liens and Commitments into a single item.

 

Combined Residential Mortgages Held of Sale data for First Linens, Junior Liens and Commitments into a single item.

 

Combined Non-Interest Income From Sale Securitization and Servicing of Residential Mortgages data for Closed-End and Open-End into a single item.

 

Combined Repurchase and Indemnification for First Linens, Junior Liens and Commitments into a single item.

 

 

Schedule RC-Q

 

Increased asset threshold for reporting.

 

Deleted the line item for Federal Funds Sold, Purchased and Repurchase agreements.

 

Combined Loans Measured at Fair Value into a single line items

 

Combined the Unpaid Principal Balance of Loans Measured at Fair Value into a single line items

 

 

Schedule RC-S

 

Eliminated detail columns for Home Equity Loans, Credit Card Receivables, Auto Loans. Other Consumer Loans and C&I Loans and combined into a single column

 

Combined credit exposure from recourse into a single line item

 

Deleted reporting of unused commitments to provide bank’s liquidity

 

Combined Total amount of Ownership in carried securities into a si8ngle line item

 

Deleted Past due amounts, charge offs and recoveries reporting for item 6(a)

 

Increased asset threshold for reporting of Unused commitments to provide bank’s liquidity

 

Changed reporting for Small Business Obligations Transferred with Recourse to other line items

 

Increased asset threshold for reporting of Asset-Backed Commercial Paper and Outstanding Credit Card Fees.

 

 

 

 

Eliminated detail columns for Home Equity Loans, Credit Card Receivables, Auto Loans. Other Consumer Loans and C&I Loans and combined into a single column

 

Combined credit exposure from recourse into a single line item

 

Deleted reporting of unused commitments to provide bank’s liquidity

 

Combined Total amount of Ownership in carried securities into a si8ngle line item

 

Deleted Past due amounts, charge offs and recoveries reporting for item 6(a)

 

Increased asset threshold for reporting of Unused commitments to provide bank’s liquidity

 

Changed reporting for Small Business Obligations Transferred with Recourse to other line items

 

Increased asset threshold for reporting of Asset-Backed Commercial Paper and Outstanding Credit Card Fees.

 

 

Schedule RC-T

 

Increased asset threshold for reporting of Services Income and Collective Investment and Trust Funds.

 

 

Increased asset threshold for reporting of Services Income and Collective Investment and Trust Funds.

 

 

Schedule RC-V

 

 

Combined detail columns for asset backed commercial paper and other Variable rate entities into a single column

 

Combined securities not held for trading into a single line item.

 

Combined loans and leases held for investment into a single line item.

 

Deleted trading assets, derivative trading assets as separate reporting items.

 

Other items ware renumbered.

 

Liabilities of consolidated Non-Recourse Variable Investment Entities are consolidate into a single line item.

 

New line items are added for total assets and total liabilities for Asset-Backed Commercial Paper Conduits.

 

 

Combined detail columns for asset backed commercial paper and other Variable rate entities into a single column

 

Combined securities not held for trading into a single line item.

 

Combined loans and leases held for investment into a single line item.

 

Deleted trading assets, derivative trading assets as separate reporting items.

 

Other items ware renumbered.

 

Liabilities of consolidated Non-Recourse Variable Investment Entities are consolidate into a single line item.

 

New line items are added for total assets and total liabilities for Asset-Backed Commercial Paper Conduits.

 

 

 

Schedule RC-H

 

A new line item has been added for Total Amount of Fair Value Option Loans Held for Investment and Sale.

 

CFPB – Has amended the exemption thresholds for Regulation M (Leasing) and Regulation Z (Loans).  Leases and loans above the threshold may not be subject to the regulations.  The Bureau also left unchanged the maximum allowable fee for a consumer credit report.

Regulation M – the adjusted threshold is $55,800.

Regulation Z – the adjusted threshold is $55,800.

Consumer Credit Report – $12

In other significant CFPB news, the appointment of an interim director is in the hands of the courts. President Trump has appointed Mick Mulvaney, while the outgoing director Richard Cordray appointed Leandra English.  This is a result of the Dodd-Frank legislation.

Significant Dates

December 18, 2017 – Comments due on IRS proposal to permit employers to mask the social security number on employee’s W2 forms.

January 1, 2018 – Effective date for changes to Regulation C that implement the Home Mortgage Disclosure Act.  We removed the HMDA data gather from both Commercial and Retail in response to the new requirements.

January 1, 2018 – Effective date for changes to the Regulation B – data gathering and retention of ethnicity, sex and race of certain mortgage loan applicants.  We removed the data gathering components from the Systems due to lack of use by our clients.  They gather the data in their loan origination systems.

January 8, 2018 – Comments due on the FFIEC changes to the Bank Call Report discussed above.

March 16, 2018 – Effective date for Phase 3 of NACHA Same Day ACH Processing.

Emerging Legislation:

There have been a few bills introduced in Congress:

Preserving Access to Manufactured Housing – Would amend the Truth In Lending Act to specify that mobile home dealers are not considered a mortgage originator and subject to the Truth In Lending Requirements.  The Act would also extend to the Secure and Fair Enforcement for Mortgage Licensing Act.  The Act would also increase the APR values for mobile home loans that would be considered “High Cost Mortgages”.

Privacy Notification Technical Clarification Act – Would permit auto lenders to mail privacy notices only if their privacy policies have changes in the prior year.  The Act would require auto lenders to make their privacy policies available on-line and hardcopy upon request.

This will be the last regulatory update for the year.  Happy Holidays from all of us at Shaw Systems Associates, Inc.