Regulatory Compliance Update December 2019

Regulatory Compliance Update

By: Hickman Beckner, Senior Vice President

We have reviewed the Compliance News for November 2019. Congress is back in session.

Federal Reserve Board – Amended Regulation D for the annual adjustments to deposit reserve requirements. The adjustments do not affect loans.

National Credit Union Administration (NCUA) – Published the final rules for Federal Credit Unions to offer payday alternative loans. This is an extension of the earlier rules for payday alternative loans. The new rules will affect the rates, loan term and other characteristics of the loan.

IRS – Published a proposed rule to update life expectancy tables. The tables are used to determine the minimum required distributions from IRA’s and other retirement accounts. The new rules do not affect loans.

CFPB – Announced that the maximum allowable charge for consumer credit reports will be unchanged at $12.50.

Bank Regulators – (FDIC, FRB, OCC) – Are requesting public comments on how to improve reporting on data for reporting of loans to small business and small farms. The current threshold excludes loans over $1 million. The ceiling has remained unchanged since 1992. The regulators are seeking to change the current reporting rules to better capture data on small business and small farm loans. This is comments only. No new rules have been adopted.

Significant Dates:

December 9, 2019 – A federal court in Austin, Texas has delayed the regulations for payday loans until December 9 while the court reviews the rules. August 19, 2019 was the published effective date.

December 2, 2019 – Effective date for NCUA’s final rule that provides federal credit unions with additional options to offer payday alternative loans. See above.

December 3, 2019 – Comments due on the FFIEC proposed changes to the Bank Call Report.

December 16, 2019 – Comments due on interagency request to improve reporting of small business and small farm loans in the Bank Call Report. See above.

December 16, 2019 – Comments due on Interagency Guidance on Credit Risk Review Systems.

December 16, 2019 – Comments due on proposed Interagency Policy Statement on Allowances for Credit Losses.

Emerging Issues:

Bank Service Company Examination Coordination Act – Would require coordination of federal and state banking regulatory agencies in the regulation and examination of the activities of bank service companies. The Act also provides for sharing of information among federal and state regulators. This Act has passed the House.

Financial Inclusion Act – Directs the CFPB to lead coordination with other federal agencies to improve participation in the traditional banking system. This Act has passed the House.

Veterans and Consumer Fair Credit Act – Would extend the protections of the Military Lending Act, which caps the interest rate on consumer loans at 36%, to cover veterans and other consumers. The Act would also empower the CFPB to conduct supervisory examinations to monitor compliance with the Military Lending Act’s 36% APR cap. This bill was introduced in the Senate. No action has been taken.

Corporate Transparency Act – Would require shell companies to disclose their owners, would establish federal reporting requirements mandating that all ownership information be maintained in a comprehensive database. This Act has passed the House.

Fair Debt Collection Improvement Act – Would amend the Fair Debt Collection Practices Act to prohibit debt collectors from collecting or attempting to collect a debt to which the statute of limitations has expired. No action has been taken on this bill.

COUNTER Act – Would direct the Treasury Department to establish a program for banks to share information with their foreign affiliates to combat money laundering. The Act would also require financial regulators to appoint a Civil Liberties and Privacy Officer to review regulations to ensure the regulations were not infringing on consumers rights. The Act would also establish an Innovation Lab to encourage firms to develop technology for Anti Money Laundering (AML) monitoring. The Act would also index the Currency Transaction report threshold to the inflation rate. The current threshold is $10,000 and was established in 1970. The Act has passed the House.

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