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Banker's Toolbox, Inc., leaders in compliance solutions for financial institutions, announced the acquisition of Georgia-based MainStreet Technologies (MST). MST is an industry leader in the loan risk management space. This acquisition adds to a strong and growing portfolio of compliance-related solutions and will continue to enhance the value Banker's Toolbox brings to both their customers and the industry. (Read full press release here.)

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Storm and flood relief FILs issued

The FDIC has issued Financial Institution Letters announcing steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Arkansas (FIL-32-2019) and South Dakota (FIL-33-2019) affected by severe weather.


Distressed or underserved geographies under CRA

The Federal Reserve, FDIC, and OCC have issued a joint press release announcing the availability of the 2019 list of distressed or underserved nonmetropolitan middle-income geographies where revitalization or stabilization activities are eligible to receive Community Reinvestment Act (CRA) consideration under the community development definition. The historical list of these geographies is available on the FFIEC's Distressed and Underserved Tracts page.


Agencies streamline Call Report requirements

The FDIC, Fed, and OCC have issued a joint press release to announce their adoption of a final rule to streamline regulatory reporting requirements for small institutions. The changes will permit insured depository institutions with total assets of less than $5 billion that do not engage in certain complex or international activities to file the most streamlined version of the Call Report, using FFIEC 051, for their first and third calendar quarters of each year. The rule, which will be effective 30 days after publication in the Federal Register, will reduce by approximately one-third the number of existing data items reportable for those quarters.

The final rule implements Section 205 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) and is one step in the agencies' efforts to meaningfully streamline reporting requirements. The press release said the agencies are committed to actively exploring additional revisions to Call Reports that would further reduce reporting requirement burdens.

UPDATE: Published at 84 FR 29039 on 6/21/19, with an effective date of 7/22/19.


FEMA suspending communities in 5 states Thursday

FEMA has published [84 FR 27970] a rule identifying communities in five states hat are scheduled for suspension from the National Flood Insurance Program on Thursday, June 20, for noncompliance with the floodplain management requirements of the program.

  • Pennsylvania: In Perry County, the Boroughs of Blain, Duncannon, and Liverpool; and Townships of Greenwood, Juniata, Miller, Northeast Madison, Penn, Rye, Southwest Madison, Spring, Toboyne, Watts, and Wheatfield
  • South Carolina: Unincorporated areas of Greenwood, Laurens, and Newberry Counties
  • Kansas: In Montogomery County, the Cities of Caney, Cherryvale, Coffeyville, Elk City, and Independence; and unincorporated areas
  • Missouri: Unincorporated areas of Jefferson County
  • Washington: in Mason County, the City of Shelton and unincorporated areas.

If FEMA receives documentation that a listed community has adopted the required floodplain management measures before June 20, its suspension will not occur. Information identifying the current participation status of a community can be obtained from FEMA's Community Status Book.


CFPB settles with student loan firm

The Bureau has announced a settlement with Student CU Connect CUSO, LLC (CUSO), a company set up to hold and manage private loans for students at ITT Technical Institute. The complaint filed by the CFPB alleged that CUSO was actively involved in the creation and the implementation of the CUSO loan program. The complaint alleges that ITT induced its students to take out the loans by a variety of means, and that CUSO knew or was reckless in not knowing that many student borrowers did not understand the terms and conditions of the CUSO loans and could not afford them.

Under the terms of a proposed stipulated judgment, CUSO must stop collecting on all outstanding CUSO loans, discharge all outstanding CUSO loans, and ask all consumer reporting agencies to which CUSO furnished information to delete tradelines relating to CUSO loans. The order also requires CUSO to provide notice to all consumers with outstanding CUSO loans that their debt has been discharged and is no longer owed and that CUSO is seeking to have the relevant tradelines deleted. The total amount of loan forgiveness is currently estimated to be $168 million. Forty-four states plus the District of Columbia have also settled with CUSO on the same terms.


Chinese bank pays $42M for mishandling ADRs

The Security and Exchange Commission has announced it has issued a cease and desist order requiring the Industrial and Commercial Bank of China Financial Services LLC (ICBCFS), a wholly-owned subsidiary of Industrial and Commercial Bank of China Limited, to pay more than $42 million to settle charges for improper handling of “pre-released” American Depositary Receipts (ADRs) - U.S. securities that represent foreign shares of a foreign company – require a corresponding number of foreign shares to be held in custody at a depositary bank. The settlement marks the largest recovery against a broker in the SEC’s ongoing investigation of ADR practices, which thus far has resulted in settlements with 10 financial institutions exceeding $414 million.


Fed Board requests comment on FOIA and CSI updates

The Federal Reserve Board has requested public comment on technical, clarifying updates regarding its Freedom of Information Act (FOIA) procedures and changes to improve the efficiency of its rules governing the disclosure of confidential supervisory information (CSI). The proposal would update the Board's FOIA regulation to be consistent with the Board's current practices and to incorporate recent changes in law and guidance. The proposed changes to the CSI rules would ease certain outdated and inefficient restrictions. The proposal would, among other things, expand the ability of a supervised financial institution to share CSI with its affiliates, auditors, and outside legal counsel as well as other federal and state banking agencies.


IRS reminder on tax withholding

The IRS has posted a reminder to taxpayers that they have options to control the amount of their take-home pay and the size of their tax refund by adjusting their tax withholding. Paycheck Checkup using the IRS Withholding Calculator can help taxpayers determine the right amount of tax to have their employer withhold from their paychecks


OCC schedules two workshops in Boston

Two compliance and operational risk workshops will be hosted by the OCC at its Boston Field Office, on July 30 and 31, for directors of national community banks and federal savings associations it supervises.

  • The Compliance Risk workshop on July 30 focuses on the critical elements of an effective compliance risk management program and on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Flood Disaster Protection Act, Fair Lending, Home Mortgage Disclosure Act, Community Reinvestment Act, and other compliance hot topics.
  • The Operational Risk workshop on July 31 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, internal fraud, and cybersecurity.


FDIC Supervisory Highlights

The June 2019 issue of the FDIC's Consumer Compliance Supervisory Highlights includes a section with "Resources & Information for Financial Institutions" and an appendix of "Most Frequently Cited Violations and Enforcement Actions" to support supervised institutions' efforts to manage consumer compliance responsibilities effectively. In a section devoted to issues identified in examinations during 2018, the report lists:

  • Overdraft Programs: Debit Card Holds and Transaction Processing
  • Real Estate Settlement Procedures Act (RESPA) Section 8 Violations
  • Regulation E – Mistakes Made in the Consumer Liability/Error Resolution Process
  • Skip-A-Payment Loan Programs
  • Lines of Credit – Finance Charge Calculation and Disclosure


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