Regulatory Compliance Update September 2016

Regulatory Compliance Update

By: Hickman Beckner, Vice President

The big regulatory news back in June was the final changes in the Bank Call Reports.  There were no changes that require any changes to the Shaw solutions.  Below is a recap of the changes that impact reporting for loan and lease accounting.

FFIEC Changes to Call Reports

These changes become effective with the September 2016 reports:

The Call Reports must now contain contact information for the chief executive of the institution.  The required information includes, name, email address, phone, and fax number.

RI – Income Statement

Extraordinary income items will now be reported in separate totals for Noninterest Income and Noninterest Expense.  This will give greater clarity to the items.  The figures will no longer be netted into a single sum.

RC-C – Loan and Lease Financing Receivables

Troubled Debt Restructured (TDR) Loans that are in compliance with their modified plans will be reported separately.  Loans to depository institutions, loans to foreign governments, loans secured by real estate in foreign offices, and “other” loans will no longer be broken out.

RC-N – Past Due and Nonaccrual Loans, Leases, and Other Assets

Troubled Debt Restructured (TDR) Loans that are past due or in nonaccrual will be reported separately.  Past due loans to depository institutions, loans to foreign governments, loans secured by real estate in foreign offices, and “other” loans will no longer be broken out.

These changes become effective with the March 31, 2017 reports:

RC-C

Loans measured at fair market value will be move to report RC-Q.  Unpaid principal balance of loans measured at fair market value will be moved to report RC-Q.  Report RC-Q is all assets and liabilities of the institution measured at fair market value.  Our systems report loans and leases at their historical accounting value.  The figures are not adjusted for fair market value.

There were clarifications issued that do not change the reporting.

RC-C – Loan and Lease Financing Receivables

The reporting instructions were clarified for reporting of home equity lines of credit and closed end loans secured by 1-4 family residential property.   This is to clarify the reporting of HELOC’s when the loan is converted to a to a non-revolving, closed end payout loan. The closed end loans will be reported in separate lines for first liens and junior liens.

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.

Emerging Legislation:

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