Top Story Compliance Related

The OCC will hold a workshop for directors of national community banks and federal savings associations in Santa Ana, California., at the DoubleTree Santa Ana-Orange County Airport Hotel, July 11–13. The "Building Blocks for Directors" workshop combines lectures, discussion, and exercises to provide practical information on the roles and responsibilities of board participation for both new and experienced directors.

The May issue of the CFPB's Monthly Complaint Report focuses on credit reporting complaints. The Bureau reports that consumers continue to complain about incorrect information on their credit reports as well as difficulty having errors resolved. This month’s report also highlights trends seen in complaints coming from New Mexico.

The Federal Reserve Board has released the semiannual update of its Commercial Bank Examination Manual. Changes are described in Supplement 45, dated April 2016,

ICE has announced the arrest of a retired New York Police Department Officer for conspiring to launder the proceeds of a multi-million dollar prostitution ring. The complaint alleges that between June 2012 and May 2016, Michael Rizzi, 44, of Brooklyn, New York, owned and operated BJM/Manhattan Stakes and Entertainment, a company that provided high-end prostitution services to customers in the New York metropolitan area. There has not yet been a trial of the case If convicted of money laundering conspiracy, Rizzi faces a maximum sentence of 20 years’ imprisonment.

The Consumer Financial Protection Bureau has posted an article on its Spring 2016 rulemaking agenda, a semi-annual status report on the agency's plans for adding or amending consumer protection rules assigned to the agency for implementation.

• Arbitration. The Bureau today published a proposed rule that would restrict the use of mandatory arbitration agreements in contracts for consumer financial products or services. Comments are due August 22, 2016.
• Payday, auto title, and similar lending products. The CFPB plans to release a Notice of Proposed Rulemaking addressing consumer protections for these small consumer loans "in the next several weeks." Industry observers have suggested that the proposed rule is likely to be announced June 2, at a small dollar lending field hearing in Kansas City, Missouri.
• Prepaid accounts. The Bureau expects to issue a final rule this summer to create a comprehensive set of consumer protections for prepaid financial products. A proposed rule was issued in November 2014.
• Mortgage servicing. The Bureau reports that a final rule can be expected this summer to amend a proposal published in December 2014. The proposal addressed enhanced loss mitigation requirements and compliance with certain servicing rules when a successor in interest or bankruptcy may be involved.
• TRID Rule. Also expected this summer is a proposed rule to "make small clarifications and provide further regulatory guidance" on the TRID Rule.
• Pre-rule stage. The Bureau reports it is still in the "pre-rule stage" in any potential rulemaking related to overdraft services on consumer checking accounts; debt collection practices; and data gathering and reporting for women-owned, minority-owned and small business lending.

Aside from the status of the proposed Arbitration Rule, none of the dates in the Bureau's regulatory agenda are commitments. This update reflects later target dates for most of the agenda items than seen on the Bureau's Fall 2015 agenda. Nonetheless, this summer promises to be one of active regulatory change.

The CFPB has published in today's Federal Register its previously-announced proposal (see our May 5 Top Story) to establish a new part 1040 in Chapter X in title 12 of the Code of Federal Regulations, which would contain regulations governing two aspects of consumer finance dispute resolution. First, the proposed rule would prohibit covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action with respect to the covered consumer financial product or service. Second, the proposal would require a covered provider that is involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau. The Bureau proposes that the rulemaking would apply to certain consumer financial products and services. The Bureau is also proposing to adopt official interpretations to the proposed regulation. Comments on the proposal are due by August 22, 2016.

The Department of Labor's Wage and Hour Division has published the previously announced (see our May 18 Top Story) final rule revising its regulations under the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees. These exemptions are frequently referred to as the “EAP” or “white collar” exemptions. The rule also adds provisions for automatic updates every three years for its standard salary level for EAP employees, and for Highly Compensated Employee (HCE) compensation requirements. The revisions made by the rule published today will become effective December 1, 2016.

• 81 FR 32391

The Federal Deposit Insurance Corporation (FDIC) has announced it is extending the comment period for proposed recordkeeping requirements for FDIC-insured institutions with a large number of deposit accounts. The proposed recordkeeping requirements, which are designed to facilitate rapid payment of insured deposits to customers if large institutions were to fail, was published in the Federal Register on February 26 with a 90-day comment period. All comments must now be received on or before June 27. The 30-day extension will allow interested parties additional time to consider the proposal and the issues and questions posed for comment, particularly those related to the estimated cost of compliance. To assist commenters, the FDIC has published a report prepared for the agency on the estimated cost of compliance.

The proposed rule would apply to insured depository institutions with at least 2 million deposit accounts. The FDIC is not proposing or considering making these requirements applicable to smaller institutions, including community banks.

UPDATE: The comment deadline was corrected to June 27 in the Federal Register notice of the extension.

OCC Bulletin 2016-17, issued on May 19, 2016, highlights actions that national banks and federal savings associations (collectively, banks) should take and factors they should consider based on the SEC revised money market fund (MMF) rules in effect now and going into effect. Although these rules directly apply only to MMFs, the rules indirectly affect

• banks that make MMFs available to their customers through their fiduciary and custody activities;
• bank programs that automatically sweep funds between deposit accounts and MMFs; and
• banks that invest in MMFs.

The OCC will host risk governance and credit workshops in Milwaukee on June 28-29, for directors of national community banks and federal savings associations. The Risk Governance workshop on June 28 will provide practical information for directors to effectively measure and manage risks. The workshop also focuses on the OCC's approach to risk-based supervision and major risks in the financial industry. The Credit Risk workshop on June 29 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change.