Regulatory Compliance Update November 2016 (Second Installment)

Regulatory Compliance Update

By: Hickman Beckner, Vice President

Congress was in recess for the elections. Regulatory activity also slowed in advance of the election.

Federal Reserve Board adjusted key dollar amount thresholds for deposit account reserves.  This change only affects deposit accounts.

Federal Financial Institutions Examination Council (FFIEC) has proposed modifications to the Bank Call Report for small institutions.

  • Covered institutions are those with under $1 billion in assets and having no foreign offices.
  • The proposed format will streamline the reporting and eliminate certain scheduled and supplemental data.

Consumer Data Industry Association has revised the credit bureau reporting guidelines.  The new rules are meant to increase accuracy and prevent credit data being reported for the wrong consumer.

  • The credit reporter must furnish either a Social Security Number or the Date of Birth.
  • Abbreviations of the first name are not allowed.
  • The rules for reporting the first line of the address have been clarified for foreign addresses and bill payment services.

Significant Dates:

November 7, 2016 – Comments due for CFPB’s request for information on Payday, Vehicle Title, Installment Loans and Lines of Credit.  The request for information is a prelude to issuance of new rules.

November 10, 2017 – Effective Date for IRS’ final rule that removes the “36-month Non-Payment Test” as an identifiable event for the issuance of a 1099-C.

January 6, 2017 – Comments due on the proposed rule that would implement private flood insurance provisions of Biggert-Waters Flood Insurance Reform Act.  This Act allows private insurance in place of Federally-sponsored insurance.

January 17, 2017 – Comments due on proposed rulemaking for cyber risk management standards for large and interconnected financial institutions.

Emerging Legislation:

The Senior Safe Act which creates a safe harbor for covered institutions and individuals who report the suspected exploitation of a senior citizen has passed the House and now moves to the Senate.

We are expecting a large number of bills to be submitted to lessen regulation or deregulate completely many areas of financial services.  President-elect Trump and members of Congress have made public proposals to repeal or significantly modify Dodd-Frank.  Dodd-Frank was a large and wide-ranging law that created many regulatory mandates.  The one that impacts lending the most is the creation of the Consumer Financial Protection Bureau.  We do not expect that the CFPB will be abolished, but we do expect that its funding will be changed to bring it under the budgeting control of Congress.  This will impact many of the rules enacted and proposed by the CFPB.  The Dodd-Frank legislation required over 750 new rules to be issued by the regulatory agencies.  The agencies did not issue all the rules required by the legislation and many of the rules that were issued may be rolled back or amended.  The other major impact could be a reintroduction of Glass-Steagall which was partially repealed in 1999 and attempt to again separate commercial banking activities from investment banking activities.  This will mostly affect securitization and syndication of loans.

Shaw Systems will continue to monitor legislative activities and report to you on the impacts.