Top Story Compliance Related

The National Credit Union Administration has published at 81 FR 40152 of today's Federal Register an interim final rule amending its regulations at 12 CFR 747 to adjust the maximum amount of each civil monetary penalty (CMP) within its jurisdiction to account for inflation. This action, including the amount of the adjustments, is required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The rule is effective on, and comments are due by, July 21, 2016.

Update: This story has been corrected to reflect the correct effective date.

The CFPB has announced its annual adjustments to the dollar amounts of various thresholds under the Truth in Lending Act regulations that will apply to certain consumer credit transactions in 2017. The notice addresses the thresholds related to the minimum interest charge and safe harbor penalty fees under the Credit Card Accountability Responsibility and Disclosure Act (CARD Act), the total loan amount and points and fees dollar trigger for high-cost mortgages under the Home Ownership and Equity Protection Act (HOEPA), and the maximum points and fees for qualified mortgages under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The notice also revises one of the 2016 safe harbor penalty fee amounts due to a decline in the 2015 Consumer Price Index that was not fully accounted for, and that revision is effective upon publication in the Federal Register.

• Final Rule

UPDATE: The amendments were published in the Federal Register on June 27, 2016.

The Federal Reserve, FDIC, and OCC have issued the host state loan-to-deposit ratios that they will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios replace the prior year’s ratios, which were released on June 29, 2015. In general, section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 109 also prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production.

A joint press release from the Federal Reserve, FDIC, OCC and NCUA has announced the issuance of a joint statement regarding the new accounting standard, Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the Financial Accounting Standards Board. The joint statement also provides initial supervisory views regarding the standard's implementation. The new accounting standard applies to all banks, savings associations, credit unions, and financial institution holding companies, regardless of asset size. The standard allows for various expected credit loss estimation methods and is scalable. The standard will become effective in 2020 for financial institutions required to file financial statements with the U.S. Securities and Exchange Commission or the appropriate federal banking agency under the federal securities laws. The new accounting standard will take effect in 2021 for all other financial institutions. Early adoption is permitted, but no earlier than in 2019.

• Federal Reserve Board SR letter 16-12
• OCC Bulletin 2016-21
• FDIC FIL-39-2016

The Federal Reserve, OCC, and FDIC have announced the availability of the 2016 list of distressed or underserved nonmetropolitan middle-income geographies, where revitalization or stabilization activities are eligible to receive Community Reinvestment Act (CRA) consideration as community development. Distressed nonmetropolitan middle-income geographies and underserved nonmetropolitan middle-income geographies are designated by the agencies in accordance with their CRA regulations. The current and previous years' lists can be found on the FFIEC website, along with information about the data sources used to generate those lists.

OFAC has released the 4th quarter 2014 and the 1st quarter 2015 reports for licensing activities undertaken pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA). Under the procedures established in its TSRA-related regulations, OFAC processes license applications requesting authorization to export agricultural commodities, medicine, and medical devices to Iran and Sudan under specific licensing.

The Financial Action Task Force (FATF) has posted a public statement by the Caribbean Financial Action Task Force (CFATF) on Haiti's lack of progress in addressing the significant strategic deficiencies in its anti-money laundering and counter-terrorist financing (AML/CFT) regime. The CFATF also acknowledged the significant progress made by Suriname in improving its AML/CFT enforcement programs.

The OCC will host two workshops in Tampa, Florida, on July 26–27, for directors of national community banks and federal savings associations. The Credit Risk workshop on July 26 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 Operational Risk workshop on July 27 focuses on the key components of operational risk—people, processes and systems. The workshop also covers governance, third-party risk, vendor management, and cybersecurity.

The NCUA has posted five questions for stakeholders' consideration regarding the regulator’s efforts to modify supervision and examination procedures with its Exam Flexibility Initiative:

• How can NCUA conduct future examinations in ways that minimize their impact on credit unions’ operations?
• What concerns do credit unions have about the current examination and supervision program?
• What steps should NCUA take to improve the efficiency of its examination program while ensuring it remains effective?
• How can NCUA better use technology in examinations?
• What metrics should NCUA consider to determine a credit union’s eligibility for an extended examination cycle?

Comments can be submitted online. The NCUA will accept suggestions received after August 1, but comments received before that date will receive full consideration.

The notice of the June 21, 2017, meeting of the FDIC Board has been posted. The agenda includes Memoranda and resolutions regarding:

• Interim Final Rule Adjusting Civil Money Penalties for Inflation.
• Final Rule Addressing Public Comments Received on Interim Final Rule That Exempts Commercial End Users and Small Financial Institutions From Swap Margin Requirements.
• Final Rule Regarding the Retention of Records of a Covered Financial Company and of the FDIC as Receiver Pursuant to Section 210(a)(16)(D) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010-12 CFR Part 380.
• Final Rule to Revise 12 C.F.R. § 360.6 [Securitization Safe Harbor].
• Notice of Proposed Rulemaking: Alternatives to References to Credit Ratings With Respect to Permissible Activities for Foreign Branches of Insured State Nonmember Banks and Pledge of Assets by Insured Domestic Branches of Foreign Banks [Part 347].