Top Story Compliance Related

The U.S. Department of Housing and Urban Development (HUD) has charged housing providers in Georgia, Louisiana, and New Hampshire with violating the Fair Housing Act by discriminating against families with children. HUD has also announced charges against landlords in South Florida alleging discrimination against tenants with disabilities and separate agreements with landlords in Nevada and Massachusetts resolving similar charges.

The NCUA Board has published at 81 FR 78748 a proposal to amend its chartering and field of membership rules at 12 CFR Part 701 to give applicants for community charter approval, expansion or conversion the option, in lieu of a presumptive community, to submit a narrative to establish common interests or interaction among residents of the area it proposes to serve, thus qualifying the area as a well-defined local community. The Board also proposes to increase up to 10 million the population limit on a community consisting of a statistical area or a portion thereof. Comments on the proposal are due by December 9, 2016.

The Federal Trade Commission will host a workshop in Washington, D.C. on December 6, 2016, to examine changing consumer demographics and how they will affect the Commission’s work in the years ahead. During the workshop, researchers, marketers, consumer groups, and law enforcement will discuss issues such as:

• Who are the consumers of the future?
• How are advertising and marketing changing to reach these consumers?
• How will fraud likely change and what can the FTC and others do to combat fraud perpetuated against these consumers?

The Federal Reserve has announced an update of the Reserve Maintenance Manual, which provides information regarding reserve calculations and account maintenance for depository institutions that file an FR 2900 (Report of Transaction Accounts, Other Deposits and Vault Cash) with the Federal Reserve, either weekly or quarterly. The Federal Reserve updates this manual when necessary, but in particular toward the end of each calendar year to reflect the annual indexing of values used in the calculation of reserve requirements on the FR 2900.

The Federal Financial Institutions Examination Council (FFIEC) has announced the issuance of an updated Uniform Interagency Consumer Compliance Rating System. The revisions reflect the regulatory, examination, technological, and market changes that have occurred since the release of the original rating system. The FFIEC member agencies plan to implement the updated rating system on consumer compliance examinations to begin on or after March 31, 2017. The Consumer Compliance Rating System is a supervisory policy for evaluating financial institutions’ adherence to consumer compliance requirements. Member agencies include the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB).

Update: The FDIC issued FIL-75-2016 and the OCC issued Bulletin 2016-39 to announce the new rating system.

The Federal Emergency Management Agency (FEMA) has published a final rule at 81 FR 78054 in this morning's Federal Register identifying communities in Ulster County, New York, and Franklin and Lincoln Counties, Tennessee, that are scheduled for suspension from the National Flood Insurance Program on November 18, 2016, because of noncompliance with the floodplain management requirements of the program.

FDIC FIL-74-2-16 was issued on Friday, to announce steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Virginia affected by Hurricane Matthew.

The FDIC has issued a list of 73 state nonmember banks recently evaluated for compliance with the Community Reinvestment Act. Five were rated outstanding, 65 satisfactory, and three needs to improve. The list covers evaluation ratings that the FDIC assigned to institutions in August 2016.

Treasury has announced that FinCEN has issued a final rule under Section 311 of the USA PATRIOT Act to further restrict North Korea’s access to the U.S. financial system. The final rule prohibits U.S. financial institutions from opening or maintaining correspondent accounts for North Korean banks and also requires U.S. financial institutions to apply additional due diligence measures in order to prevent North Korean financial institutions from gaining improper indirect access to U.S. correspondent accounts. The rule was proposed in June 2016 along with publication of the notice of finding that North Korea is a jurisdiction of “primary money laundering concern” engaged in illicit conduct, including using state-controlled financial institutions and front companies to engage in proliferation of weapons of mass destruction and ballistic missiles and to evade international sanctions.

Update: The rule was published at 81 FR 78715 on November 8, 2016. It becomes effective December 9, 2016.

The Federal Reserve Board has added a new question and answer to its Regulation II (Debit Card Interchange Fees and Routing) FAQs. Question 4 under the heading of "§ 235.7 Network Exclusivity and Routing Provisions" indicates that card networks cannot require merchants to allow debit cardholders to choose EMV chip application when one application routes to a single network. The Board's interpretation of the Durbin Amendment could cause more debit card transactions to be processed as PIN transactions rather than by signatures, and could therefore affect card issuer interchange income.