Regulatory Compliance Update February 2016

Regulatory Compliance Update

By: Hickman Beckner, Vice President

The first month of 2016 has seen little regulatory activity.

The IRS has issued supplemental instructions for reporting mortgage insurance premiums on the 2015 version of form 1098. The premiums paid are to be reported in Box 4. Box 5 is for optional information such as property taxes paid or interest paid on escrow. Shaw Systems has addressed this clarification.

CFPB News:

The CFPB announced that the threshold for exemption of “small institutions” from HMDA reporting will remain at $44 million. Institutions smaller than this threshold are not required to file HMDA Reports.

The threshold for exemption from the High Priced Mortgage Act for institutions that lend primarily in rural areas and its requirement to offer escrow accounts has been lowered to $2.06 billion.

Privacy Notices – An exception to the annual Privacy Notice requirement was created by a new law. Institutions will no longer have to issue the annual privacy notice if they do not share information with unaffiliated third parties and have not changed their policies in the previous year.

Same Day ACH – The National Automated Clearinghouse Association (NACHA) has issued amended rules for same day ACH clearing. There will be a morning cut off and an afternoon cutoff for same day ACH transactions. The rules will go into effect in three phases. For loan payments the rules for same day payment will take effect in September 2017. Shaw Systems will address the new rules in updates over the coming year.

Significant Dates:

March 22, 2016 – Comments due on interagency regulatory review regarding rules of procedure, safety and soundness and securities.

July 1, 2016 – Effective date of the IRS’ temporary regulations that remove the automatic extension for filing W-2 forms.

September 23, 2016 – Effective date for Phase 1 of NACHA’s same day ACH processing. This only impacts ACH deposits to accounts. Loan payments will come in 2017.

October 3, 2016 – Mandatory compliance with Military Lending Act final rules. This does not require any processing changes in your loan system. It establishes (for the first time) a national usury ceiling for loans made to active duty military members and their immediate families. This also requires that if the borrower defaults all legal action must be brought in the state where the loan was made.

Emerging Issues

With the Year-end Congressional recess, there was no new significant legislation introduced that would impact financial services.