Regulatory Compliance Update October 2017

Regulatory Compliance Update

By: Hickman Beckner, Senior Vice President

The September regulatory activity was confined to technical changes. The IRS has issued revisions for 2017 for 1042-S forms.  The National Credit Union Administration (NCUA) has revised the Credit Union Call Report.The September regulatory activity was confined to technical changes.  The IRS has issued revisions for 2017 for 1042-S forms.  The National Credit Union Administration (NCUA) has revised the Credit Union Call Report.

IRS – The IRS has issued the 2017 revisions to the 1042-S reporting file.

Recipient Record (“Q”)

  • Recipient TIN Indicator (position 358) the field has been deleted
  • Withholding Indicator (position 761) the field has been deleted
  • Unique Identifier (position 988-997) Filers must assign a unique identifying number to each form that is filed.  This unique ID is used by the IRS for processing amended forms – that way they can match them up.
    • Must be numeric
    • Exactly 10 digits
    • Must be unique to each form 1042-S
    • Must not be the US or foreign Tax ID
  • Amendment Number – used for amended forms.  This is a new field.  I do not know of any customer doing amended forms through our systems. Reserved (positions 988-1010).

The IRS also added the Faroe Islands and Greenland to the list of countries that have information exchange agreements with the US.

The IRS has also made some technical changes in 1098 reporting. The instructions for Box 10 – Number of Mortgaged Properties have been modified to allow for reporting “1”.  The old instructions restricted this to 2 through 9999.

Shaw Systems will be releasing the annual IRS update in early November.

NCUA – The National Credit Union Administration has published changes to the Credit Union Call Report.  The revisions reflect credit union’s authority to issue commercial loans. The new line items include:

  • All Other Secured Non-Real Estate Loans/ Lines Of Credit
  • Total Loans/Lines Of Credit Secured By 1st Lien 1-4 Family Residential Properties and Loans and Lines secured by Junior Liens
  • All Other Real Estate Loans/Lines Of Credit Commercial Loans/Lines Of Credit Real Estate Secured and non-Real Estate Secured
  • Total Loans & Leases
  • Government Guaranteed Non-Commercial Loans
  • Small Business Administration Loans
  • Other Government Guaranteed Loans

New delinquency and charge off information was added for commercial loans.

Other sections and line items have been renamed to reflect commercial loans.

Significant Dates:

October 19, 2017 – Effective date for CFPB final mortgage servicing rules covering:October 19, 2017 – Effective date for CFPB final mortgage servicing rules covering: Definition of delinquency Forced placed insurance notices Early intervention for defaults Loss mitigation  Prompt payment crediting Wording changes on statements to reflect successors in interest  Small servicers

October 19, 2017 – Effective date for CFPB’s interpretive ruling dealing with borrowers in bankruptcy.  The CFPB has created a “safe harbor” for sending statement to borrowers that have declared bankruptcy. Since the effective date falls in the middle of the week, the CFPB has announced that lenders and servicers may implement the rules up to three days earlier on Monday, October 16, 2017.  The CFPB has also published the final rules for Reg. Z compliance for statements sent to confirmed successors in interest.

October 20, 2017 – Comments due on the proposal to modify the Community Reinvestment Act to bring it into conformity with the revised Home Mortgage Disclosure Act which will become effective on January 1, 2018.

Emerging Legislation:

There have been a few bills introduced in Congress:There have been a few bills introduced in Congress:

Expedited Funds Availability Act for American Samoa and Northern Mariana Islands – would apply the Expedited Funds availability provisions to non-contiguous states and territories.

Fix Credit Reporting Errors Act – Would require credit bureaus to forward documentation from a consumer to dispute errors and would permit the consumer to include documentation in their credit report to dispute erroneous information.

Protecting Consumer’s Access to Credit – Would require the rate of interest on certain sold loans (charge-offs) remain unchanged after transfer.  This would prevent loan buyers from increasing the interest rate on the charged off loan they purchase.