Top Story Compliance Related

The Federal Reserve Board has published a report on debit card transactions in 2015, including summary information on the volume and value, interchange fee revenue, certain issuer costs, and fraud losses. The report is the fourth in a series to be published every two years required by the Electronic Fund Transfer Act (EFTA).

• 2015 Interchange Fee Revenue, Covered Issuer Costs, and Covered Issuer and Merchant Fraud Losses Related to Debit Card Transactions

HUD has announced a new rule that public housing developments in the U.S. will be required to provide a smoke-free environment for their residents. The rule will be effective 60 days after publication in the Federal Register, with implementation required 540 days (roughly 18 months) thereafter. In an address to local public housing officials, residents and public health professionals in Boston, HUD Secretary Castro said HUD's new rule will provide resources and support to more than 3,100 public housing agencies to implement required smoke-free policies over the next 18 months.

UPDATE: Published 12/5/2016 at 81 FR 87430, with an effective date of February 3, 2017, and compliance date of August 3, 2018.

The U.S. Treasury Bureau of the Fiscal Service has published a Notice of Proposed Rulemaking in the November 30, 2016, Federal Register. The proposed rule would address changes that NACHA has made to the NACHA Operating Rules since the publication of the 2013 NACHA Operating Rules & Guidelines book. These changes include amendments set forth in the 2014, 2015, and 2016 NACHA Operating Rules & Guidelines books. The agency proposes to incorporate in its rule on "Federal government participation in the automated clearing house" at 31 CFR Part 210 most, but not all, of these changes. It is also proposing two changes to Part 210, related to reversals and prepaid cards, that do not stem from a change to the NACHA Operating Rules. Comments on the proposal are due by January 30, 2017.

The Consumer Financial Protection Bureau's Compliance Bulletin 2016-03, released on November 28, provides insight into the Bureau's expectations with regard to incentive compensation programs. The Bulletin restates guidance previously issued and focuses on examples from the CFPB's supervisory and enforcement experience in which incentives have proven detrimental to consumers. The guidance emphasizes the need for a compliance management system that is adjusted to the risk, nature and significance of an institution's incentive programs.

• Bureau Press Release
• UPDATE: The Bureau published this Compliance Bulletin in the Federal Register at 82 FR 5541 on 1/18/2017

The FDIC has released a list of 24 administrative enforcement actions taken against banks and individuals in October 2016. The actions included two consent orders, seven removal and prohibition orders, six Section 19 orders, four civil money penalties, and five terminations of consent orders and cease and desist orders. There was an order of prohibition from further participation and an order to pay a civil money penalty of $125,000 to a former institution-affiliated party of Pacific Valley Bank, Salinas, California. There were also orders to pay civil money penalties for violations of the Flood Act issued to Bank of Kampsville, Kampsville, Illinois ($21,819), and to TSB Bank, Lomira, Wisconsin ($7,100).

FinCEN has announced that the U.S. District Court for the District of Columbia has remanded to FinCEN a Final Rule issued under Section 311 that would have severed FBME Bank Ltd. from the U.S. financial system. In its memorandum opinion, the court stated that FinCEN had not meaningfully responded to FBME’s comments regarding FinCEN’s treatment of aggregate Suspicious Activity Report (SAR) data. FinCEN today submitted for publication in the Federal Register a Supplement to the Final Rule that responds to FBME’s comments.

UPDATE: FinCEN Supplement, published in December 1, 2016, Federal Register

The Federal Reserve Board and the Consumer Financial Protection Bureau have announced they have issued final rules detailing the method that will be used to adjust the thresholds for exempting certain consumer credit and lease transactions from the Truth in Lending Act and Consumer Leasing Act. The final rules also apply the calculation method to the thresholds for exempt credit and lease transactions for 2017. The thresholds will remain at $54,600 based on the CPI-W in effect on June 1, 2016. The thresholds last changed on January 1, 2015. The amendments made by the final rules, which will be effective January 1, 2017, have been posted to the BankersOnline Regulations pages for Regulations M and Z.

• Regulation M final rule, published 11/30/16 at 81 FR 86256
• Regulation Z final rule, published 11/30/16 at 81 FR 86260

The Consumer Financial Protection Bureau (CFPB), Federal Reserve Board, and Office of the Comptroller of the Currency (OCC) have announced they have issued a final rule detailing the method that will be used to make annual inflation adjustments to the threshold for exempting small loans from special appraisal requirements. The final rule also applies the calculation method to the exemption threshold for 2017. The threshold will remain at $25,500, based on the CPI-W in effect on June 1, 2016. The final rule will be effective January 1, 2017.

UPDATE: Published at 81 FR 86250, 11/30/16

U.S. District Judge Amos Mazzant, of the U.S. District Court for the Eastern District of Texas, has approved a motion for a preliminary injunction filed by Nevada and 23 other states, in the case of State of Nevada, et al v. United States Department of Labor, et al. The injunction blocks implementation of the Department of Labor's revised Overtime Rule, which was scheduled to become effective on December 1, 2016. The plaintiffs' suit alleges that the Labor Department exceeded its authority in setting the payroll thresholds (and the automatic updating mechanism affecting them) triggering overtime pay.

The injunction is effective nationwide, and will remain in effect pending further order of the court, which typically means until the decision is made on the underlying case.

The Department of the Treasury's Office of Foreign Assets Control has added Specially Designated Global Terrorist (SDGT) designations to its Specially Designation Nationals Lists. Four individuals were added, and two designated narcotics traffickers with the Kingpin Act designation were updated to add the SDGT designation. See our OFAC Update for details.