Top Story Compliance Related

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.

FDIC seeks comments on appeals guidelines and lending guidance
The FDIC has announced it is seeking comments on updates to its guidelines for institutions to appeal certain material supervisory determinations and on draft examination guidance on third-party lending. The two items are part of a package issued by the FDIC Board to improve the transparency and clarity of the FDIC's supervisory policies and practices, and to ensure that institutions have clear and fair avenues to pursue when there are differences of opinion regarding supervisory matters. The proposed supervision appeals guidelines expand the circumstances under which banks may appeal a material supervisory determination. Comments on the supervision appeals guidelines will be accepted until 60 days after it is published in the Federal Register. The proposed third-party lending guidance outlines the risks that may be associated with third-party lending as well as the expectations for a risk-management program, supervisory considerations, and examination procedures related to third-party lending. Comments on the third-party lending guidance will be accepted until September 12, 2016.

Update: On August 4, 2016, the FDIC announced it had extended the comment deadline for its draft exam guidance on third-party lending to October 27, 2016.

The FDIC has released a list of 20 orders of administrative enforcement actions taken against banks and individuals in June. Included were one consent order, seven removal and prohibition orders, seven Section 19 orders, two terminations of insurance, three terminations of consent orders and cease and desist orders, and one adjudicated decision. One of the removal and prohibition orders included a $195,000 civil money penalty assessed on a former institution-affiliated party of a New York bank for engaging in unauthorized cash and ATM withdrawals from four bank customer accounts and forging customers’ signatures on checks to pay his own debts.

The Office of the Comptroller of the Currency's Bulletin 2016-25 has announced the issuance of a “Corporate and Risk Governance” booklet of the Comptroller’s Handbook. The new booklet updates, consolidates and rescinds a number of older booklets in the Handbook.