Regulatory Compliance Update October 2016

Regulatory Compliance Update

By: Hickman Beckner, Vice President

With Congress on their summer recess the regulatory activity has slowed dramatically.

The CFPB has updated the limits for Regulation Z as required by law:

Regulation Z – Adjusted the “safe harbor” limits for late payment, returned payments, over limit, declined drafts, declined transactions, inactivity and closing fees.  The new limits are $27 for the first violation and $38 for subsequent violation of the same type within 6 billing cycles.

Regulation Z – Adjusted the limits for points and fees and loan amounts that trigger the Home Ownership and Equity Protection Act (HOEPA).  The new total fees and points trigger is $1,029.  The new loan amount trigger is $20,579.  If either one of the triggers is reached, the institution must take the additional HOEPA steps.

Regulation Z – Adjusted the fees and points and the dollar limits to determine if a mortgage loan is a “qualified mortgage”.   The fees and points are a scale depending on the loan amount.  These limits do not affect our system.  The rules require a higher standard of compliance in qualification and disclosures.

FinCEN (Financial Crimes Enforcement Network) update

FinCEN has proposed new rules for financial institutions that lack a federal regulator to implement formal anti-money laundering policies as required by Patriot Act of 2001.

SBA

The Small Business Administration has included the following fees for 7(a) loans in the fiscal Year 2017 budget.

For Loans greater than $150,000 –

The annual service fee will be increased to 0.546% or 54.6 basis points for the guaranteed portion of the outstanding balance of the loan.

The upfront guarantee fees for loan with maturity that exceeds 12 months will remain unchanged at 3% for loans of $150,000 to $700,000 and 3.5% for loan up to $1,000,000 and 3.75% for the guaranteed portion over $1,000,000.

For loans with a maturity under 12 months the guarantee fee remains .25% or 254 basis points.

For Loans of $150,000 or less–

The annual service fee will be increased to 0.546% or 54.6 basis points for the guaranteed portion of the outstanding balance of the loan.

The upfront guarantee fees will remain at zero for all loans in the amount of $150,000 or less.

Shaw will be issuing the changes to Commercial for compliance with the October 2017 reporting period.

Significant Dates:

September 23, 2016 – Effective date for Phase 1 of NACHA’s same-day ACH processing.  Phase 1 covers deposits only.

October 3, 2016 – Mandatory compliance date for the Department of Defense final rule implementing the Military Lending Act for active duty service members and their dependents.

October 24, 2016 – Comments due on FinCEN’s proposal to implement anti-money laundering policies for non-federally regulated institutions.

Emerging Legislation:

We have not had any significant legislation that would impact our systems.