Regulatory Compliance Update
By: Hickman Beckner, Senior Vice President
We have reviewed the Compliance News for January 2019. The banking regulators (Federal Deposit Insurance Corporation, the Federal Reserve and the Office of the comptroller of the Currency) have proposed changes. The IRS has proposed changes in reporting and the CFPB has announced multiple changes affecting consumers.
Banking Regulators – Have proposed changes to the streamlined version of the Bank Call Report. The changes are directed to banks with assets of less than $5 billion with domestic offices only. The new rules will reduce the frequency of reporting from quarterly to semi-annually and would reduce the amount of information reported.
IRS – Has proposed a rule that would permit the institution reporting information to not file corrected information for small dollar amount errors. The rules would provide a safe harbor for reporters who file the information on time and do not intentionally disregard the reporting rules.
CFPB – Has announced that the maximum charge for a credit bureau report will increase to $12.50. The Bureau also announced that the threshold for escrow account exemption for institutions issuing higher priced mortgage loans would increase to $2.167 billion. Institutions with less than the threshold amount in assets are not required to provide escrow accounts. The Bureau also increased the exemption threshold for Home Mortgage Disclose Act to $46 million in assets. The CFPB has also agreed with the banking regulators that institutions with less than $3 billion in assets are eligible for on-site examination once every 18 months. The old standard was every 12 months.
February 5, 2019 – Comments due on proposal to raise the threshold for residential real estate transaction requiring an appraisal from $250,000 to $400,000.
February 8, 2019 – Comments due on the CFPB and FRB’s proposed rule to provide a calculation for making the required annual CPI adjustments for funds availability rules.
February 11, 2019 – Comments due on FDIC’s request for information regarding the deposit insurance application process.
February 19, 2019 – Comments due on the proposed IRS rules that would reduce the burden for FATCA reporting.
April 1, 2019 – Effective date for CFPB rules for Prepaid Accounts which implement changes to Regulation Z and Regulation E.
August 19, 2019 – Published Compliance date for CFPB’s final rule for payday loans.
Congress is back in session and the government shutdown has ended. New bills have been introduced that we are watching. With the changes in the makeup of Congress we would expect fewer bills limiting the CFPB to be passed by the House.
Fair Lending for All Act – would add additional classes that are protected from credit discrimination. The new classes would include sexual orientation, gender identity, and the applicant’s location based on the zip code or census tract.
Let Lenders Lend Act – would nullify changes to Home Mortgage Disclosure Act reporting enacted by the CFPB. (We removed this reporting from our systems with the last update).
Financial Institution Customer Protection Act – Would prevent a recurrence of “Operation Chokepoint” that targeted banks servicing payday lenders and other companies that have “reputational” concerns. The act would also specify that federal banking agencies not request or order an institution to terminate a customer’s account based solely on reputational risk and would require notification and justification for the termination.
Financial Protection for Our Military – Would extend supervisory authority for enforcing the Military Lending Act to the CFPB.