Top Story Compliance Related

The Consumer Financial Protection Bureau (CFPB) has outlined consumer protection principles to guide mortgage servicers, investors, government housing agencies, and policymakers as they develop new foreclosure relief solutions. The Bureau’s action comes as the Department of Treasury’s Home Affordable Modification Program, a foreclosure relief program put in place in response to the financial crisis, is nearing its expiration date. The CFPB’s proposed principles are meant to inform the discussion of potential options to help prevent avoidable foreclosures. The principles promote:

• Accessibility: Consumers should easily be able to obtain and use information about loss mitigation options, and how to apply for those options.
• Affordability: Repayment plans and mortgage loan modifications should generally be designed to produce a payment and loan structure that is affordable for consumers.
• Sustainability: Loss mitigation options used for home retention should be designed to provide affordability throughout the remaining or extended loan term.
• Transparency: Consumers should get clear, concise information about the decisions servicers make.

The Bureau's principles don't establish legal requirements, but are instead intended to complement ongoing discussions amount industry, consumer groups and policymakers.

The OCC has released the ratings received by 25 national banks and federal savings associations recently evaluated for compliance with the Community Reinvestment Act (CRA). Five institutions received a rating of outstanding, 19 were rated satisfactory, and one was given a "substantial noncompliance" rating.

The Board of Governors, FDIC and OCC have announced how the financial institutions they regulate may begin to voluntarily submit self-assessments of their diversity policies and practices as of year-end 2015. The Dodd-Frank Act required the federal financial regulatory agencies to establish an Office of Minority and Women Inclusion (OMWI) and instructed the OMWI Director at each agency to develop standards for assessing the diversity policies and practices of its regulated institutions. The standards, which became effective on June 10, 2015, (see our Top Story) reflect input received during a public comment period, as well as information gathered during outreach sessions. The standards provide a framework for regulated institutions to assess and establish or strengthen their diversity policies and practices. Frequently Asked Questions (FAQs) about the process were also released.

The Federal Reserve Board and the FDIC have jointly announced that the December 31, 2016 deadline for 38 firms to submit their next resolution plans has been extended one year to December 31, 2017. These firms include 36 domestic bank holding companies and foreign banking organizations, as well as two nonbank financial companies designated by the Financial Stability Oversight Council (FSOC).

OFAC has announced the issuance of findings of violation of the Foreign Narcotics Sanctions Regulations by a life insurance company and a heath insurance company. The life insurance company was found to have facilitated and/or processed payments and maintained two health insurance policies in which one or more Specially Designated Nationals (SDNs) had an interest. The health insurance company was found to have facilitated and/or processed payments and serviced two health insurance policies in which one or more SDNs had an interest.

The Bureau has posted an article in Spanish and English on the ways language barriers create financial challenges. The articles include links to information in both languages to help all consumers, including non- and limited English-speaking consumers navigate the financial marketplace.

The OCC will host two workshops in Duluth, Minnesota, at the Holiday Inn Hotel & Suites, September 13–14, for directors of national community banks and federal savings associations supervised by the OCC. The Credit Risk workshop on September 13 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. The Compliance Risk workshop on September 14 combines lectures, discussion, and exercises on the critical elements of an effective compliance risk management program. The workshop also focuses on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Community Reinvestment Act, and the Truth-in-Lending (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA) Integrated Disclosures Rule, also known as TRID.

A joint news release has been issued by five federal agencies (FRB, OCC, FDIC, FHFA, and FCA) announcing a final rule exempting certain commercial and financial end users from margin requirements for certain swaps not cleared through a clearinghouse. The final rule exempts from the agencies’ margin requirements the non-cleared swaps of commercial end users, small banks, savings associations, Farm Credit System institutions, and credit unions with $10 billion or less in total assets. Additionally, the non-cleared swaps of certain treasury affiliates, certain financial cooperatives, and captive finance companies also are exempted from the agencies’ margin requirements. In all cases, the non-cleared swaps must hedge or mitigate commercial risk of these counterparties and satisfy the rule’s requirements for an exemption from mandatory clearing. The rule, which adopts without change the interim final rule that became effective April 1, 2016, will become effective on October 1, 2016.

The CFPB has announced the publication [81 FR 50484] in the Federal Register of a request for OMB approval for a new information collection aimed at further improving the complaint process for consumers and companies. The notice indicates the Bureau intends to give consumers the option to provide feedback on the company’s response to and handling of their complaints. The consumer would have the ability to rate the company’s handling of a complaint on a one-to-five scale and provide a narrative description in support of the rating. Consumer feedback will be shared with the company that responded to the complaint to inform its complaint handling and used to inform the CFPB's work to supervise companies and monitor the market for consumer financial products and services.

Comments on the proposed information gathering are due by September 30, 2016.

The NCUA has announced it has issued eight notices of prohibition to former employees of credit unions, each of whom had been convicted of crimes of dishonesty and, as a result, are now prohibited from participating in the affairs of any federally insured financial institution.