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07/07/2020

Consumer Financial Protection Week announced

The Bureau has announced the launch of Consumer Financial Protection Week, which will take place from July 14–17, 2020. During the week, activities will focus on how the CFPB is protecting consumers in the financial marketplace, the issues consumers are confronting, and how consumers can communicate to the Bureau any issues they may have with a financial services provider.

07/07/2020

Credit union CLF borrowing capacity exceeds $25M

The NCUA announced yesterday that the Central Liquidity Facility (CLF) has experienced a significant increase in its membership and borrowing capacity. In total, 3,797 credit unions, or 73 percent all federally insured credit unions, have access to the CLF, either as a regular member or through their corporate credit union. Under the temporary authority granted by the CARES Act, the CLF can borrow sixteen times its total capital. As of May 31, the facility’s borrowing authority stood at $25.8 billion, an increase of $15.3 billion since April.

07/07/2020

PPP loan data released

The SBA, in consultation with Treasury, yesterday announced it was releasing detailed loan-level data regarding the loans made under the Paycheck Protection Program (PPP). This disclosure covers each of the 4.9 million PPP loans that have been made. The release includes loan-level data, including business names, addresses, NAICS codes, zip codes, business type, demographic data, non-profit information, name of lender, jobs supported, and loan amount ranges.

The data release also includes overall statistics regarding dollars lent per state, loan amounts, top lenders, and distribution by industry. The loans have reached diverse communities proportionally, across all income levels and demographics.

07/06/2020

PPP extended to August 8

The president has signed S.4116 into law, extending the deadline for applications for Paycheck Protection Program loans to August 8, 2020, and separating the program from the SBA 7(a) program to ensure that 7(a) loans will continue to be available after the PPP deadline.

07/03/2020

Don't forget to file blocked property report

OFAC has posted a reminder to file the 2020 Annual Report of Blocked Property (ARBP).

The Reporting, Procedures and Penalties Regulations (RPPR) require holders of blocked property to provide OFAC with a comprehensive list of all blocked property held as of June 30 of the current year by September 30 (no report is required if no blocked property is held on June 30).

The term "blocked property" only applies to property that is blocked under OFAC regulations. Property that was unblocked by an OFAC general or specific license or was previously blocked pursuant to a sanctions program that was terminated on or before June 30, 2020, is not considered blocked property, and should not be reported in the ARBP. Similarly, a restricted account of a person ordinarily resident in Iran is not blocked, and should not be reported to OFAC in the ARBP, unless there is an interest in the account of a person whose property and interests in property are blocked pursuant to an applicable sanctions authority.

Failure to submit a required ARBP by September 30 constitutes a violation of the RPPR. For more information see OFAC's Guidance on Filing the Annual Report of Blocked Property.

07/03/2020

Tribes get $15M to address COVID-19

HUD yesterday awarded $15 million to tribes in Alaska, Arizona, California, New Mexico, Oklahoma, and Utah as part of HUD's Indian Community Development Block Grant (ICDBG) Imminent Threat program, which provides funding to help address problems that pose an imminent threat to public health or safety of tribal residents. This funding will specifically be used to help tribes prevent, prepare for, and respond to COVID-19. This initial distribution is the first $15 million of $100 million that will be going to tribes.

07/03/2020

Airlines agree to Treasury loan terms

Treasury has announced that five airlines— American, Frontier, Hawaiian, Sky West, and Spirit—have signed letters of intent under which Treasury would extend loan loans under the CARES Act, which authorizes Treasury to make loans to eligible businesses related to losses incurred as a result of the coronavirus pandemic.

07/03/2020

West Virginia bank pays flood insurance penalty

The Federal Reserve Board has announced a civil money penalty of $24,500 has been assessed against Putnam County Bank, Hurricane, Virginia, in connection with the Bank's pattern or practice of unspecified violations of Regulation H, 12 CFR § 208.25, which implements the requirements of the National Flood Insurance Act.

07/03/2020

CFPB proposes EGRRCPA-required HPML escrow exemption

The CFPB has issued a notice of proposed rulemaking that would amend Regulation Z to provide a new exemption available to certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs), to implement an amendment to Regulation Z made by section 108 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

The proposed amendment generally would exempt from the Regulation Z HPML escrow requirement any loan made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if

  • the institution has assets of $10 billion or less;
  • the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year;
  • the institution meets the requirement in § 1026.35(b)(2)(iii)(A) relating to making a covered transaction secured by a first lien on a property located in a "rural" or "underserved" area; and
  • the institution and its affiliates do not maintain an escrow account other than those established for HPMLs at a time when the creditor may have been required by the regulation to do so or those established after consummation as an accommodation to distresses consumers.

Comments on the proposal will be accepted for 60 days following Federal Register publication.

07/03/2020

OCC CRA evaluations released

The OCC has released CRA evaluations for 21 national banks and federal savings associations that became public in June. Of the 21 evaluations, 11 are rated satisfactory, nine are rated outstanding, and one is rated needs to improve.

The nine institutions with outstanding ratings are (with links to their evaluation reports):

07/03/2020

FDIC releases CRA evaluations

The FDIC has issued its list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in April 2020. Of the 86 institutions listed, 75 were rated satisfactory, eight received an outstanding rating, and three were rated needs to improve.

The eight institutions garnering outstanding ratings are (links are to their evaluation reports):

07/02/2020

NCUA Board reschedules July meetings

The NCUA Board has rescheduled its July open and closed meetings, originally set for Thursday, July 16. Both meetings are now scheduled for Thursday, July 30. The open meeting will begin at 10 a.m. Eastern, and the closed meeting will follow immediately after the open meeting has concluded. The July open meeting will be available through a live audio webcast only.

07/02/2020

Regulators joint statement on managing LIBOR transition

The members of the Federal Financial Institutions Examination Council (FFIEC) issued a statement yesterday highlighting the risks that will result from the transition away from LIBOR, and encouraged supervised institutions to continue their efforts to transition to alternative reference rates in order to mitigate financial, legal, operational, and consumer protection risks. The financial services industry uses LIBOR as a reference rate for many financial products and instruments that include loans, investments, and deposits to a range of customers, as well as borrowings and derivatives. While some smaller and less complex institutions may have limited exposure to LIBOR- denominated instruments, the transition to alternative reference rates will affect almost every institution.

The statement also highlights:

  • the legal and consumer compliance risks associated with inadequate fallback language, when the contractual language does not contemplate LIBOR’s permanent discontinuance;
  • the need for each financial institution to have risk management processes to identify and mitigate LIBOR transition risks that reflect the size and complexity of their exposure and third-party servicer arrangements; and
  • areas where supervisory staff will focus their reviews of LIBOR transition planning and risk mitigation efforts.

07/02/2020

Info for next large firm resolution plans released

A joint press release posted yesterday by the Fed and the FDIC released a June 29, 2020, letter to the eight largest and most complex domestic banking organizations with information that will guide their next resolution plans, which are due by July 1, 2021. The 2021 plans will be required to include core elements of a firm's resolution plan—such as capital, liquidity, and recapitalization strategies—as well as how each firm has integrated changes to and lessons learned from its response to the coronavirus into its resolution planning process.

07/02/2020

June 9-10 FOMC minutes posted

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the minutes of the Committee meeting held on June 9–10, 2020. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the meeting was also released.

07/02/2020

New NMLS Ombudsman appointed

The Conference of State Bank Supervisors announced yesterday that ​Jim Payne, director of examinations and assistant deputy commissioner for the Consumer and Mortgage Lending Division of the Kansas Office of the State Bank Commissioner, will serve as the new NMLS ombudsman starting July 1.

The NMLS ombudsman provides state regulators and industry a neutral environment for discussing NMLS issues and policies governing the system. More than 226,000 state-licensed entities across the mortgage, debt, consumer finance and money services businesses industries rely on NMLS to manage their licensing requirements. Over 424,000 federally registered institutions and mortgage loan originators also depend on the system.

07/02/2020

More from CFPB's rulemaking agenda

The CFPB's Spring 2020 Rulemaking Agenda (see yesterday's Top Story) also indicates that the Bureau is participating in an interagency rulemaking to develop regulations to implement Dodd-Frank Act amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) concerning quality control standards for automated valuations models (AVMs).

The Bureau is also conducting an assessment of its TRID Rule (required not later than 5 years after the rule's effective date), with an assessment report due by October 2020. The CFPB also expects to conduct a review under the Regulatory Flexibility Act of Regulation Z rules implementing the Credit CARD Act of 2009 to consider the effect of the rules on small entities.

07/01/2020

Labor Department proposes exemption from fiduciary rule

The Department of Labor has issued a Notice of Proposed Class Exemption that would allow investment advice fiduciaries under both ERISA and the Internal Revenue Code to receive compensation, including as a result of advice to roll over assets from a Plan to an IRA, and to engage in principal transactions, that would otherwise violate the prohibited transaction provisions of ERISA and the Code. The exemption would apply to registered investment advisers, broker-dealers, banks, insurance companies, and their employees, agents, and representatives that are fiduciaries, but would include protective conditions designed to safeguard the interests of Plans, participants and beneficiaries, and IRA owners.

Comments on the proposed class exemption will be accepted for 30 days following Federal Register publication. The Department proposes to make a final rule effective 60 days after it is issued and published.

The Department has also issued technical amendments to its regulations at 29 CFR parts 2509 and 2510 to implement the Fifth Circuit Court of Appeals 2018 vacatur [vacating, nullification, or setting aside] of Labor's 2016 final rule ("Conflict of Interest Rule — Retirement Investment Advice" or the "Fiduciary Rule") defining who is a "fiduciary" under ERISA and the Internal Revenue Code. In essence, Labor's new technical amendments remove language from the Code of Federal Regulations that the Fiduciary Rule added, and reinstates the Department's 1975 regulation and an interpretive bulletin. It also removes the two class exemptions Labor granted in connection with the Fiduciary Rule. These technical amendments will be effective on publication in the Federal Register.

PUBLICATION UPDATE: The proposed rule was published 7/7/2020 at 85 FR 40834 with a 30-day comment period ending 8/6/2020. The technical amendments were published as a final rule on 7/7/2020 at 85 FR 40589 effective upon publication.

07/01/2020

FDIC releases list of May enforcement orders

The FDIC has released a list of enforcement decisions and orders issued in May 2020.

  • The former president, CEO and chairman of a Virginia bank was assessed a $15,000 civil money penalty for reckless unsafe and unsound practices and breaches of fiduciary duty.
  • A former teller at a Washington bank was issued an order of prohibition after a finding that she had embezzled over $49,000 and falsified bank records.
  • A former teller at a South Carolina bank received an order of prohibition after a finding that she had caused unauthorized ATM access cards to be issued on bank customer accounts without those customers' knowledge, and, alone or with others, used the cards to complete unauthorized withdrawals of more than $60,000 from those accounts.

07/01/2020

Competition to develop innovative financial reporting

The FDIC announced on Tuesday a rapid prototyping competition to help develop a new and innovative approach to financial reporting, particularly for community banks.

The agency has invited 20 technology firms to participate. They will develop proposed solutions over several months for consideration by the FDIC. The agency intends that the modern tools developed in this and future competitions "will help make financial reporting seamless and less burdensome for banks, provide more timely and granular data to the FDIC on industry health, and promote more efficient supervision of individual banks."

07/01/2020

HUD awards $40M to fight housing discrimination

The U.S. Department of Housing and Urban Development (HUD) has awarded $40.8 million to support dozens of fair housing organizations working to help end housing discrimination. These funds are provided through the Department’s Fair Housing Initiatives Program (FHIP) both to help people who believe they have been victims of housing discrimination and to educate housing providers about fair housing laws.

HUD’s FHIP grants support a wide range of fair housing enforcement, education, and outreach activities. The grants allow organizations to provide fair housing enforcement through testing in the rental and sales markets, to file fair housing complaints with HUD, and to conduct investigations. Additionally, the education and outreach activities the organizations conduct also help to educate the public, housing providers, and local governments about their rights and responsibilities under the Fair Housing Act.

07/01/2020

FATF 31st Plenary Meeting

The Treasury Department has reported that the Financial Action Task Force (FATF) concluded its 31st plenary meeting by calling on its members to tackle new threats and vulnerabilities posed by criminals during the COVID-19 crisis. The FATF also completed a 12-month review of progress made by jurisdictions on implementing the new FATF standards on virtual assets adopted during the U.S. presidency of the FATF. The international task force further agreed upon draft text, on which it will seek public consultation, revising its standards to incorporate measures to counter proliferation financing, and adopted a groundbreaking report on money laundering and illegal wildlife trafficking.

07/01/2020

NMLS makes Temporary Authority resource available

In response to a request made of the NMLS Ombudsman at the organization's 2020 NMLS Annual Conference and Training, the NMLS has created a Temporary Authority state regulatory and implementation resource, available on the NMLS Temporary Authority to Operate webpage.

07/01/2020

NCUA issues prohibition order

The NCUA reports that it issued one prohibition order in June.

A former employee of Midwest Carpenters & Millwrights Federal Credit Union, Hobart, Indiana, found to have misapplied funds totaling approximately $1.5 M, consented to the issuance of a prohibition order and agreed to comply with all its terms to settle and resolve the NCUA Board’s claim against him.

07/01/2020

Victims of work-from-home scheme to receive full refunds

The FTC announced yesterday that it is sending full refunds totaling more than $284,000 to people who lost money to a scheme that used misleading spam emails to lure consumers into buying work-from-home services. A complaint filed by the Commission in November 2019 alleged that Effen Ads, LLC and its owners worked with an affiliate marketing network called W4 LLC to promote a work-from-home scheme by sending bulk unsolicited email, or spam, to consumers.

07/01/2020

CFPB publishes Spring 2020 rulemaking agenda

The Bureau has published its Spring 2020 Rulemaking Agenda, which lists the regulatory matters that it expects to focus on between May 1, 2020 and April 30, 2021. In addition to actions already taken, the Agenda lists several other regulatory activities planned for the remainder of 2020 through the spring of 2021, including—

  • A proposed rule to implement section 108 of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA), which requires the Bureau to conduct a rulemaking to exempt certain loans from the escrow requirements applicable to higher-priced mortgage loans if they are made by certain creditors with assets of $10 billion or less and that meet other criteria.
  • In the fall of 2020, significant steps toward implementing section 1071 of the Dodd-Frank Act, requiring the collection and reporting of certain information on credit applications made by women-owned, minority-owned, and small businesses.
  • Also in the fall of 2020, two new proposed rules under HMDA relating to data points reported and public disclosure of HMDA data in light of consumer privacy considerations.
  • October 2020 final action on the May 2019 proposed rules under Regulation F to govern the activities of debt collectors under the FDCPA, followed at a later date with final action on the supplemental proposal addressing time-barred debt disclosures.
  • Consideration later in 2020 of a proposed rule with a "seasoning" definition of "qualified mortgage," to provide an alternate pathway to QM safe-harbor status for certain mortgage loans when the borrower has consistently made timely mortgage payments for a period.

07/01/2020

Fed assesses flood penalty on Virginia bank

The Federal Reserve Board has issued an order assessing an $8,500 civil money penalty on Benchmark Community Bank, Kenbridge, Virginia, for unspecified violations of section 208.25 of Regulation H, which implements the National Flood Insurance Act.

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