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Top Story Compliance Related

11/06/2020

OCC Director’s Toolkit updated

The OCC has announced the update of its Director’s Toolkit to help bank directors for national banks and federal savings associations fulfill their corporate governance responsibilities. The Toolkit is a helpful guide for bank directors on strategic issues, risk management, and compliance responsibilities. The updated toolkit includes a revised Director's Book: Role of Directors for National Banks and Federal Savings Associations and adds a new publication, the Director’s Reference Guide to Board Reports and Information.

11/05/2020

FDIC CRA ratings released

The FDIC has posted a list of 72 banks recently evaluated for compliance with the Community Reinvestment Act. The list covers evaluation ratings that the FDIC assigned to institutions in August 2020. Sixty-six banks received a Satisfactory rating, and we congratulate the following six banks, which were rated Outstanding:

11/05/2020

Servicemembers consumer protection webinar

The NCUA and the CFPB will co-host a webinar on financial literacy and consumer financial protections for servicemembers. The November 18 “Financial Readiness Resources and Information for Servicemembers, Veterans, and their Families" webinar is scheduled to begin at 2 p.m. ET and run approximately 45 minutes. Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. Registration is now open.

The NCUA’s Office of Consumer Financial Protection will share financial literacy resources for servicemembers and their families on MyCreditUnion.gov, and provide a brief overview of servicemember consumer financial protection laws and regulations. The CFPB’s Office of Servicemember Affairs will highlight their interactive learning tools and resources for servicemembers and their families.

11/03/2020

SMART payment plan deception ends in CFPB settlement

The CFPB has issued a consent order against SMART Payment Plan, LLC (Austin, Texas), after finding that the company's disclosures of its loan accelerator program were misleading and in violation of the Consumer Financial Protection Act's prohibition against deceptive acts or practices. SMART operates a loan payment accelerator program for auto loans called the SMART Plan that deducts payments from consumers’ bank accounts every two weeks and then forwards these payments every month to the consumers’ lenders. The consent order imposes a judgment against SMART requiring it to pay $7,500,000 in consumer redress and requirements to prevent future violations.

SMART provided consumers individualized “benefits summaries” that purported to state a specific amount of interest savings or other money savings consumers would get by enrolling in the SMART Plan, but SMART’s fees would ordinarily exceed the savings. SMART’s disclosures thus created the misleading impression that consumers would save money using its product.

The ordered consumer redress has been suspended upon SMART's payment of $1,500,000 by December 31, and a $1 civil money penalty to the Bureau (based on SMART'S inability to pay more based on sworn financial statements.

For additional information and a link to the Bureau's consent order, see "SMART Payment Plan LLC settles with Bureau over misleading statements" in the BankersOnline Penalty pages.

11/03/2020

NCUA fair lending and consumer compliance webinar announced

The NCUA has announced it will host a webinar on November 17, 2020, on a range of fair lending and consumer compliance topics. Registration for the “Fair Lending and Consumer Compliance Regulatory Update” webinar is open. The session is scheduled to begin at 3 p.m. Eastern Time and last approximately 60 minutes. The webinar will be closed-captioned and archived online approximately three weeks following the live event.

11/03/2020

OCC CRA evaluations released

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public in October (links are to the evaluation reports):

Of the 22 evaluations listed, 16 were rated satisfactory. We congratulate the six banks whose evaluations were rated outstanding:

11/03/2020

OFAC advisory on risks in dealing in costly artwork

OFAC has issued an "Advisory and Guidance on Potential Sanctions Risks Arising from Dealings in High-Value Artwork," to highlight sanctions risks arising from dealings in high-value artwork associated with persons blocked pursuant to OFAC’s authorities, including persons on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List). Such transactions may play a role in blocked persons accessing the U.S. market and financial system in violation of OFAC regulations.

The advisory describes characteristics of the market for high-value artwork that pose sanctions risks; emphasizes to art galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market the importance of maintaining a risk-based compliance program to mitigate such risks; and highlights that what is commonly described as the "Berman Amendment" to the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) does not categorically exempt all dealings in artwork from OFAC regulation and enforcement.

11/02/2020

FDIC September enforcement orders

The FDIC has issued a list of enforcement orders issued in September, 2020.

  • Banks in Sauk City ($18,500) and Berlin ($15,375), Wisconsin, paid civil money penalties for flood insurance violations
  • The former president of Enloe State Bank, Cooper, Texas (now in receivership) was issued a prohibition order, after an FDIC finding that she originated a significant number of fictitious loans from which she benefited and that led to the bank's financial losses.
  • A former branch manager for First Community Bank, Batesville, Arkansas, was issued a prohibition order after an FDIC finding that she had made unauthorized and fraudulent withdrawals from bank customers' certificate of deposit accounts, from which she received financial gain or other benefit.
  • A former commercial lender for Synovus Bank, Columbus, Georgia, was issued a prohibition order for misappropriation of funds through the creation of a fictitious line of credit, and unauthorized draws from a customer's line of credit and from another customer's account.

11/02/2020

Bureau issues FDCPA rule

The CFPB has issued a final rule [653-page PDF] to restate and clarify prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt. The rule focuses on debt collection communications and gives consumers more control over how often and through what means debt collectors can communicate with them regarding their debts. The rule also clarifies how the protections of the Fair Debt Collection Practices Act apply to newer communication technologies, such as email and text messages.

The rule—

  • establishes a presumption on the number of calls debt collectors may place to reach consumers on a weekly basis. A debt collector is presumed to violate federal law if the debt collector places telephone calls to a particular person in connection with the collection of a particular debt more than seven times within seven consecutive days or within seven consecutive days of having had a telephone conversation about the debt.
  • clarifies how consumers may set limits on debt collection communications to reflect their preferences and the limits on communicating with third parties about a consumer’s debt
  • requires debt collectors who communicate electronically to offer the consumer a reasonable and simple method to opt out of such communications at a specific email address or telephone number
  • provides that consumers may, if the debt collector communicates through a medium of electronic communications, use that medium of electronic communications to place a cease communication request or notify the debt collector that they refuse to pay the debt
  • clarifies that the FDCPA’s general prohibition on harassing, oppressive, or abusive conduct applies to telephone calls as well as other communication media, such as email and text messages
  • provides examples demonstrating how the prohibition restricts emails and text messages
  • generally restates the FDCPA’s prohibitions regarding false, deceptive, or misleading representations or means and unfair or unconscionable means

The final rule does contain provisions on disputes, and record retention, among other topics. It does not include a proposed safe harbor for debt collectors against claims that an attorney falsely represented the attorney’s involvement in the preparation of a litigation submission. The Bureau intends to issue a second debt collection final rule focused on consumer disclosures and collection of time-barred debts in December 2020.

The rule, which is a complete revision and restatement of Bureau Regulation F (12 CFR Part 1006), will become effective one year after it is published in the Federal Register.

10/30/2020

Proposal to codify regulatory guidance statement

In a joint press release, the OCC, Federal Reserve Board, FDIC, NCUA, and CFPB have invited public comment on a proposed rule outlining and confirming the agencies' use of supervisory guidance for regulated institutions. The proposal would codify the statement, as amended, that was issued in September 2018 by the agencies to clarify the differences between regulations and guidance.

Comments on the proposal will be accepted for 60 days following its publication in the Federal Register.

PUBLICATION AND COMMENT PERIOD UPDATE: Published at 85 FR 70512 on November 5, 2020, with comments due by January 4, 2021.

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