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Banker's Toolbox, Inc., leaders in compliance solutions for financial institutions, announced the acquisition of Georgia-based MainStreet Technologies (MST). MST is an industry leader in the loan risk management space. This acquisition adds to a strong and growing portfolio of compliance-related solutions and will continue to enhance the value Banker's Toolbox brings to both their customers and the industry. (Read full press release here.)

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Bureau adjusts CMPs for inflation

The Consumer Financial Protection Bureau has posted an announcement of a Final Rule adjusting for inflation the maximum amount of each civil penalty within the Bureau’s jurisdiction. The inflation adjustments mandated by the Inflation Adjustment Act serve to maintain the deterrent effect of civil penalties and to promote compliance with the law. The Final Rule will be effective on publication in the Federal Register. They represent a 2.522 percent increase over the limits published for 2018. The Bureau's CMP limits are found in its "Civil Penalty Adjustments" regulation at 12 CFR Part 1083.


Jeweler settles unauthorized credit card claims

The Bureau and the State of New York have announced that, under the terms of a Consent Order, Sterling Jewelers Inc. will pay civil money penalties of $10 million to the Bureau and $1 million to the State of New York to settle claims it opened store credit card accounts without customer consent. A Complaint filed by the CFPB and the New York Attorney General alleges Sterling enrolled customers in payment-protection insurance without their consent; and misrepresented to consumers the financing terms associated with the credit card accounts. Sterling is headquartered in Akron, Ohio, and does business throughout the United States. Sterling operates over 1,500 jewelry stores under several names, including Kay Jewelers, Jared The Galleria of Jewelry, JB Robinson Jewelers, Marks & Morgan Jewelers, Belden Jewelers, Goodman Jewelers, LeRoy’s Jewelers, Osterman Jewelers, Rogers Jewelers, Shaw’s Jewelers, and Weisfield Jewelers.


January Beige Book

The Federal Reserve Board has published the January 16, 2019, edition of the Beige Book, with information on current economic conditions in the 12 Federal Reserve Districts.


Consumer & Community Context - new Fed series

The Federal Reserve Board announced yesterday the launch of a new article series, "Consumer & Community Context," that features original analysis about the financial conditions and experiences of consumers and communities, including traditionally underserved and economically vulnerable households and neighborhoods. The inaugural issue focuses on student loans, and includes articles on the effect that rising student loan debt levels may have on homeownership rates among young adults; and the relationship between the amount of student loan debt and individuals' decisions to live in rural or urban areas.


CFPB blogs on credit score myths

The Bureau has posted an article regarding misleading information concerning ways to improve one's credit score. The myths the Bureau debunked include:

  • Checking one's credit report will hurt one's credit score
  • Individuals have only one credit score
  • Getting loan estimates from multiple lenders will hurt one's score.
  • Carrying a balance on credit cards will improve one's credit score
  • There are companies that can be paid to quickly fix one's score
  • There are only three companies that create the reports lenders use to make loan decisions


NCUA supervisory priorities for 2019

The National Credit Union Administration has outlined its primary areas of supervisory focus for 2019 in its Letter 19-CU-01 to credit unions. The NCUA's extended exam cycle will be fully implemented, and agency examiners will continue using the streamlined small credit union exam program procedures for most credit unions that have assets under $50 million. For all other credit unions, examiners will conduct risk-focused examinations, concentrating on the areas of highest risk, new products and services, and compliance with federal regulations.

NCUA examiners will have increased flexibility to conduct suitable examination work offsite. In the agency’s Flexible Examination Program (FLEX) pilot, examiners were able to conduct as much as 35 percent of examination time offsite. The NCUA expects this increased flexibility will reduce the time impact on credit unions, save on travel costs and increase staff productivity.

The Letter briefly described examiners' focus in several areas.

  • BSA Compliance: Examiners will perform more in-depth reviews of credit unions’ Bank Secrecy Act and anti-money laundering policies, procedures, and processes to assess compliance with regulatory requirements for customer due diligence and for identifying and verifying beneficial owner(s) of legal entity members.
  • Concentrations of Credit: Examiners will have a continued focus on large concentrations of loan products and concentrations of specific risk characteristics.
  • Consumer Compliance: As in 2018, examiners will continue to perform limited reviews of Home Mortgage Disclosure Act (HMDA) quarterly Loan/Application Registers, or full-year Loan/Application Registers when applicable. The reviews will evaluate federal credit unions’ good faith efforts to comply with 2018 HMDA data collection and reporting requirements. These reviews will account for the statutory partial exemptions that took effect on May 24, 2018. The NCUA will continue to focus on Military Lending Act (MLA) compliance, and examiners will evaluate credit unions’ efforts to comply with the MLA. Examiners will review credit unions’ compliance with Regulation B’s notification requirements following adverse action taken on consumer credit applications. They will also review overdraft policies and procedures for compliance with Regulation E.
  • Current Expected Credit Losses (CECL): examiners will inquire about efforts a credit union has taken to prepare for the new accounting standard, and whether a credit union has performed analysis for how CECL would alter the Allowance for Loan and Lease Losses funding needs.
  • Information Systems and Assurance: Examiners will continue conducting information security maturity assessments with the Automated Cybersecurity Examination Toolbox (ACET). Examiners will use the ACET to assess credit unions with over $250 million in assets that have not previously received an assessment. The security, confidentiality, and integrity of credit union member information remains a key supervisory priority for the NCUA. Two additional areas of supervisory focus for 2019 are the assessment of credit union IT risk management to ensure it effectively identifies, remediates, and controls inherent risks to appropriate residual risk levels, and oversight of service provider arrangements to ensure credit unions implement effective risk-based supply chain management.
  • Liquidity and Interest Rate Risks: Examiners will assess liquidity and interest rate risk management in light of upward rate trends.


Banks encouraged to work with customers during shutdown

The Federal Reserve, FDIC, OCC, NCUA, CFPB and Conference of State Bank Supervisors have issued a joint press release encouraging financial institutions to work with consumers affected by the federal government shutdown.


HUD shutdown information

HUD has posted pay and benefits information for furloughed federal employees and a specific program shutdown Q&A.


CFPB assessment of ATR/QM and mortgage servicing rules

The Bureau has released reports assessing the effectiveness of its Ability to Repay and Qualified Mortgage Rule and of its Mortgage Servicing Rule.

The Dodd-Frank Act requires the Bureau to conduct an assessment of each significant rule or order adopted by the Bureau and to publish a report of its assessment no later than five years after the effective date of the significant rule or order. The assessment must address, among other relevant factors, the effectiveness of the rule in meeting the purposes and objectives of the Dodd-Frank Act and the specific goals stated by the Bureau in issuing the rule in question. The Bureau expects that the findings in these reports will inform stakeholders, policy makers, and the general public about developments in the mortgage market and the effects of the rules on consumers.


NMLS in reinstatement period

The NMLS has posted a notice that the Reinstatement Period began on January 2, 2019, for mortgage loan originators whose registrations lapsed on December 31 because they had not completed the annual renewal process, and will run through midnight ET on February 28. MLOs with lapsed registrations should check the NMLS's Federal Registry annual renewal page for guidance on reactivation.


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