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Top Story Compliance Related

04/06/2020

FinCEN updates COVID-19 info

FinCEN has posted a notice updating its March 16, 2020 COVID-19 Notice to provide additional information to assist financial institutions in complying with their Bank Secrecy Act (BSA) obligations during the COVID-19 pandemic, and announces a direct contact mechanism for urgent COVID-19-related issues.

FinCEN recognizes financial institutions face challenges related to the COVID-19 pandemic. In addition, FinCEN is committed to promoting the success of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including the need to facilitate expeditious disbursal of CARES Act funds. Accordingly, FinCEN will issue further information, as appropriate, as the CARES Act is implemented and questions arise.

FIN-2020-R001 implementation suspended
FinCEN has suspended implementation of its February 10, 2020, Ruling (FIN-2020-R001) on CTR filing obligations related to transactions of sole proprietorships and entities operating under a DBA name until further notice. Institutions that have already made the necessary changes to implement the Ruling need not revert to prior practice, and may report CTRs in accordance with the suspended ruling. Other institutions should continue to file CTRs involving sole proprietorships and DBAs under the prior practice.

04/06/2020

Temporary rule under FFCRA published

The Wage and Hour Division of the Department of Labor has published [85 FR 19326; correcting amendments at 85 FR 20156] temporary regulations to implement public health emergency leave under Title I of the Family and Medical Leave Act (FMLA), and emergency paid sick leave to assist working families facing public health emergencies arising out of Coronavirus Disease 2019 (COVID-19) global pandemic. The leave is created by a time-limited statutory authority established under the Families First Coronavirus Response Act, Public Law 116-127 (FFCRA), and is set to expire on December 31, 2020. The FFCRA and this temporary rule do not affect the FMLA after December 31, 2020. The rule is effective from April 2 through December 31, 2020, and became operational on April 1, 2020.

Gerard Panero will present a BOL Learning Connect webinar, Alternatives to Layoffs During COVID-19, on April 23, 2020.

04/06/2020

Fed posts FAQ on elimination of reserve requirements

Federal Reserve Bank Services has posted an FAQ explaining the March 15 elimination of reserve requirements by the Federal Reserve Board as part of its response to the COVID-19 pandemic. Banks can refer to questions 7 through 16 in particular to get information on how the elimination of reserve requirements may impact a bank's compliance program for limiting depositors' transfers and payments from savings and money market deposit accounts.

04/03/2020

Agencies extend comment period on Volcker Rule modifications

The OCC has announced that the Fed, CFTC, FDIC, OCC, and SEC have extended the comment period on their proposal to modify the Volcker Rule's general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds ("covered funds") from April 1 to May 1, 2020.

04/02/2020

CFPB COVID-19 credit reporting guidance

The Consumer Financial Protection Bureau yesterday released a policy statement outlining the responsibility of credit reporting companies and furnishers during the COVID-19 pandemic. In response to the pandemic, many lenders are being flexible when it comes to consumers’ making payments. The Bureau’s statement underscores that consumers benefit if lenders report accurate information about these arrangements to credit bureaus so that the credit reports of consumers are accurate.

In addition, in response to staffing and resources constraints on lenders and credit bureaus due to the pandemic, the Bureau’s statement also provides flexibility for lenders and credit bureaus in the time they take to investigate disputes. The Bureau specifically states that it does not intend to cite in an examination or bring an enforcement action against firms who exceed the deadlines to investigate such disputes as long as they make good faith efforts during the pandemic to do so as quickly as possible.

04/02/2020

CFPB settles with short-term lender

The CFPB has announced a settlement with Cottonwood Financial, Ltd., which does business under the name Cash Store. Cash Store is based in Irving, Texas, and owns and operates roughly 340 retail lending outlets in Idaho, Illinois, Michigan, New Mexico, Texas, Utah, and Wisconsin. The Bureau found that in the course of marketing, servicing, and collecting on high-interest payday, auto-title, and unsecured consumer-installment loans Cash Store violated the Consumer Financial Protection, Fair Credit Reporting, and Truth in Lending Acts. The consent order requires Cash Store to pay over $1.3 million in redress and penalties.

04/02/2020

OCC CRA evaluations released

The OCC has released a list of Community Reinvestment Act performance evaluations that were made public in March.. Of the 28 evaluations made public this month, 22 were rated satisfactory and the following six were rated outstanding (links are to the evaluation reports):

04/02/2020

OCC publishes March proposal to amend licensing rules

The OCC has published at 85 FR 18728 its March 2020 proposal (see our Top Story) to amend its rules relating to policies and procedures for corporate activities and transactions involving national banks and Federal savings associations to update and clarify the policies and procedures, eliminate unnecessary requirements consistent with safety and soundness, and make other technical and conforming changes. Comments will be accepted through May 4, 2020.

04/01/2020

FATF reports on U.S. progress in tackling ML

The Financial Action Task Force has issued a report on the United States' progress in strengthening measures to tackle money laundering and terrorist financing.

The United States has been in an enhanced follow-up process following the adoption of its mutual evaluation in 2016. In line with the FATF Procedures for mutual evaluations, the country has reported back to the FATF on the actions it has taken since then. To reflect the United States' progress, the FATF has changed its rating of the country on Recommendation 10 (Customer Due Diligence) from Partially Compliant to Largely Compliant

The report also looks at whether the United States' measures meet the requirements of FATF Recommendations that have changed since the 2016 mutual evaluation. The FATF agreed to maintain the rating of Compliant for Recommendation 2 (National cooperation and coordination), Recommendation 5 (Terrorist financing offense) and Recommendation 21 (Tipping-off and confidentiality). The FATF also maintained the rating of Largely Compliant for Recommendation 7 (Targeted financial sanctions related to proliferation), Recommendation 8 (Non-profit organizations) Recommendation 15 (New technologies) and Recommendation 18 (Internal controls and foreign branches and subsidiaries).

The United States is now compliant on 9 of the 40 Recommendations and largely compliant on 22 of them. It remains partially compliant on 5 of the 40 Recommendations and not compliant on 4 of them. The United States remains in enhanced follow-up and will report back to the FATF on progress to strengthen its implementation of Anti-Money Laundering / Countering the Financing of Terrorism measures.

04/01/2020

Regulators clarify five year-transition rule and CECL Rule

FDIC FIL-32-2020, issued yesterday, delivered a joint statement by the Fed, FDIC, and OCC to clarify the interaction between the interim final rule that provides a five-year transition period for the impact of the current expected credit loss methodology (CECL) on regulatory capital and the temporary CECL relief provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

On March 27, 2020, the agencies issued an interim final rule that provides banking organizations that were required (as of January 1, 2020) to adopt CECL during the 2020 calendar year an option to delay an estimate of CECL's impact on regulatory capital. Also, on March 27, 2020, the CARES Act was signed into law. The CARES Act provides banking organizations optional temporary relief from complying with CECL. The joint statement clarifies the interaction between the CECL IFR and the CARES Act for purposes of regulatory capital requirements.

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