Regulatory Compliance Update May 2018

Regulatory Compliance Update

By: Hickman Beckner, Senior Vice President

I have reviewed the Compliance News for April 2018.  The Congressional push to change the structure and funding of the CFPB continues.  The acting director of the CFPB, Mick Mulvaney, continues to reshape the agency.  The regulatory flow from the CFPB has been greatly reduced.

FINCen – The Financial Crimes Enforcement Network has issued guidance for implementation for Customer Due Diligence (CDD) when automatically renewing a CD.   The institution must obtain certified beneficial ownership information (CBOI) when opening a CD or on the next renewal.  For subsequent renewals a new CBOI is not required if the customer agrees to inform the institution of any change in the information.

HUD – The Department of Housing and Urban Development has revised its Service Members Civil Relief Act (SCRA) Notice Disclosure Form.

Significant Dates:

May 11, 2018 – Effective date for FinCEN’s Customer Due Diligence Requirements.

May 14, 2018 – Comments due on the Federal Reserve’s changes to Regulation J (Collection of Checks and Other Items) that would simplify and modernize check collection procedures.

July 1, 2018 – Effective date for Federal Reserve’s final changes to check collection and return procedures in Regulation CC.  The new regulations encourage banks to clear and return checks electronically.  This will make returned items (NSF checks) be returned sooner.

Emerging Legislation:

There have been many bills introduced in Congress.

Ensuring Quality Unbiased Access to Loans Act would nullify some guidance on deposit advance products, require Federal banking regulators to establish standards for short term, small dollar loans and would exempt insured banks from the CFPB’s payday lending rule.  However, banks would still be subject to the Military Lending Act.

Empowering Student Borrowers Act would require annual notification to students detailing the student’s total loan debt, projected monthly repayment amounts and the estimated interest rate for each loan.  The act would also require colleges and universities to teach financial literacy and provide information to assist students when borrowing.

Protecting Veterans from Predatory Lending would require lenders to demonstrate material benefit to veterans when refinancing their mortgage and combat refinancing of a mortgage multiple times to generate fees.

Christopher Bryski Student Loan Protection Act would prohibit a lender from automatically declaring a default of accelerating the payments on an otherwise performing student loan upon the death, disability or bankruptcy of a co-signer. The act would also prohibit declaring a default or accelerating the payments upon the death, disability or bankruptcy of the student if the co-signer continues to meet all payment obligations. The act would also require lenders to clearly and conspicuously describe in writing the co-signers obligations upon the death, disability or bankruptcy of a student borrower.

Protecting Children From Identity Theft would require the Social Security Administration to develop a database to facilitate the verification of consumer information from a certified financial institution.  The verification would only be provided with the consumer’s consent and in connection with a credit transaction.

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