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Top Story Compliance Related

02/07/2020

Kraninger signals CFPB plans

In oral and written testimony given yesterday before the House Financial Services Committee, CFPB Director Kathleen Kraninger reported that the Bureau plans to move away from the 43 percent debt-to-income ratio requirement in the qualified mortgage rule, and will propose an alternative such as pricing thresholds to better ensure that responsible, affordable mortgage credit remains available for consumers. The Bureau expects to issue a proposal on changes to the QM rule in May 2020.

Kraninger reported that the Bureau is evaluating comments received on its proposal to rescind the underwriting portions of its Payday Lending rule. She also reported progress on the Bureau's evaluation of comments relating to the EGRRCPA requirement that the Bureau prescribe regulations under the Truth in Lending Act for residential property assessed clean energy (PACE) loans. Also under review are approximately 100 comments received on the Bureau's proposed amendments to the Remittance Rule (subpart B of Regulation E), and comments on the Bureau's proposed rule to implement the requirements applicable to debit collectors under the Fair Debt Collection Practices Act.

02/07/2020

2020 hypothetical stress test scenarios released

The Federal Reserve and the OCC have released the hypothetical scenarios for the 2020 stress test exercises, which ensure that large banks have adequate capital and processes so that they can continue lending to households and businesses, even during a severe recession. The harshest scenario includes a severe global recession with heightened stresses in corporate debt markets and commercial real estate, and for banks with large trading operations, additional pressure on leveraged loans.

02/07/2020

2020 national illicit finance strategy announced

Treasury has issued the 2020 National Strategy for Combating Terrorist and Other Illicit Financing, which provides a roadmap to modernize the U.S. anti-money laundering/countering the financing of terrorism (AML/CFT) regime to make it more effective and efficient. The strategy identifies key threats, vulnerabilities, and priorities for disrupting and preventing illicit finance activities within and transiting the U.S. financial system, and builds upon and updates the 2018 National Strategy for Combating Terrorist and Other Illicit Financing, pursuant to the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA).

02/07/2020

Mali Sanctions regulations published

OFAC has published regulations [85 FR 7223, 2/7/2020] to implement Executive Order 13882 of July 26, 2019, "Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Mali."

02/06/2020

OCC CRA evaluations released

The OCC has announced its release of a list of Community Reinvestment Act performance evaluations that were made public in January. Of the 28 evaluations listed, 21 are rated Satisfactory and seven are rated Outstanding. Our congratulations to those receiving Outstanding ratings (links are to their performance evaluations):

02/06/2020

CFPB proposing settlement with Think Finance

The CFPB has announced a proposed settlement with Think Finance, LLC, formerly known as Think Finance, Inc., and six subsidiaries, to resolve the lawsuit the Bureau filed on November 15, 2017 (see our 11/16/2017 Top Story). The Bureau alleged that the Think Finance Entities engaged in unfair, deceptive, and abusive acts and practices in violation of the Consumer Financial Protection Act in connection with the illegal collection of loans that were void in whole or in part under state laws governing interest rate caps, the licensing of lenders, or both.

In 2018, the Bureau filed its first amended complaint, alleging that the Think Finance Entities operated as a common enterprise that affiliated with tribal lenders in the offering and collection of online installment loans and online lines of credit to consumers nationwide. The Think Finance Entities, the Bureau alleged, made deceptive demands and illegally took money from consumers’ bank accounts for debts that consumers did not actually owe because the loans were either partially or completely void under the law of 17 states. The Bureau also alleged that the Think Finance Entities provided substantial assistance to two debt collection companies that were also engaged in the illegal collection of loans.

If the proposed stipulated final consent order is entered by the court, it would, among other things, prohibit the Think Finance Entities from offering or collecting on loans to consumers in any of the 17 states if the loan violates state lending laws and from assisting others in engaging in that conduct. The proposed order would also impose a $1 civil money penalty for each of the seven Think Finance Entities.

The proposed settlement is part of a global resolution of the Think Finance Entities' bankruptcy proceeding, which includes settlements with the Pennsylvania Attorney General's Office and private parties in a class action suit. Consumer redress will come from a fund created as part of the global resolution, which is anticipated to have over $39 million available for distribution and may increase.

02/05/2020

Fed CRA evaluation ratings

Our monthly check of the Federal Reserve Board's CRA evaluation ratings reveals that the Board made public 20 ratings in January, including one "Substantial Non-Compliance" rating for a bank in West Memphis, Arkansas, and 17 ratings of "Satisfactory." Our congratulations to the following two banks, which received "Outstanding" ratings (links are to their evaluations):

02/05/2020

FDIC lists banks examined for CRA compliance

The FDIC has released a list of 74 banks examined for compliance with the Community Reinvestment Act whose evaluation ratings were assigned in November 2019. Sixty-nine of the banks received ratings of "Satisfactory." Two were rated "Needs to Improve." Our congratulations to the following three banks, which received a rating of "Outstanding" (links are to their evaluation reports):

02/04/2020

Six credit unions to pay late-filing penalties

The NCUA has posted its Second Quarter Late Call Report Filers List, which indicates six federally insured credit unions were subject to civil money penalties for filing late Call Reports in the second quarter of 2019 and have agreed to penalties totaling $2,259. Each of the six credit unions had filed a late Call Report previously. All six had total assets below $50 million, four with assets of $10 million or less.

02/03/2020

SEC proposals to amend financial disclosure requirements and guidance

The Securities and Exchange Commission has announced that it has voted to propose amendments to modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K. The proposed amendments would eliminate duplicative disclosures and modernize and enhance Management's Discussion and Analysis disclosures for the benefit of investors, while simplifying compliance efforts for companies. The Commission also announced that it is providing guidance on key performance indicators and metrics in Management's Discussion and Analysis.

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