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The FDIC has updated the following sections of its Consumer Compliance Examination Manual (CEM):

• Communicating Findings (II-6.1): Updated to clarify when the self-identification of violations is considered a strength of a bank’s Compliance Management System
• Expedited Funds Availability Act (VI-1.1): Updated with technical changes related to regulatory dollar-amount thresholds and large deposit hold times
• FTC Rule - Preservation of Claims and Defenses (VII-2.1): Removed an invalid exception in a chart

The CFPB has released its 2023 Consumer Response Annual Report. The report indicates that during 2023, the Bureau sent more than 1.3 million complaints to over 3,400 companies for review and response.

The report shows a continued increase in credit or consumer reporting complaints, with more than one million of them sent to the three nationwide consumer reporting companies — Equifax, Experian, and TransUnion.

Consumers also raised issues about fraudulent activity in nearly every product category, including credit or consumer reporting, debt collection, checking or savings accounts, and credit cards.

The FDIC has released a list of enforcement actions it took in February 2024.

• Guaranty Bank and Trust Company, Belzoni, Mississippi, was assessed an $80,500 civil money penalty for a pattern or practice of flood insurance-related violations
• Robert Christopher Rodgers, former president of The Citizens Bank, Hickman, Kentucky, received a Removal/Prohibition Order with assessment of a $7,000 civil money penalty after a finding that he exceeded his lending authority by originating unsecured loans and approving overdrafts for a customer of the bank; continuing to approve overdrafts despite the customer's failure to pay loans and existing overdrafts, and failing to inform the bank's board of the extent of the overdrafts, resulting in a loss to the bank of over $800,000.
• Rhenae K. Risher, a former employee of Bank of Morton, Morton, Mississippi, was issued a Removal/Prohibition order after a finding that she manipulated the bank's general ledger accounts to cash and pay checks of her son's trucking company to avoid overdrawing his business checking account, causing a loss to the bank of over $255,000.

The FDIC yesterday issued FIL-16-2024 to publish its Spring 2024 issue of Consumer Compliance Supervisory Highlights to provide an overview of consumer compliance issues identified through the FDIC’s supervision of state non-member banks and thrifts in 2023. It includes:

• A description of the most frequently cited violations and other consumer compliance examination observations;
• Information on regulatory developments;
• A summary of consumer compliance resources and information available to financial institutions; and
• An overview of consumer complaint trends.

The most frequently cited violations (representing approximately 74 percent of the total violations cited in 2023) involved:

• the Truth in Lending Act (TILA) and Regulation Z;
• the Flood Disaster Protection Act (FDPA) and Part 339;
• the Electronic Fund Transfers Act (EFTA) and Regulation E;
• the Truth in Savings Act (TISA) and Regulation DD; and
• Section 5 of the Federal Trade Commission Act.

While this list contains the same laws and regulations from the 2022 Highlights, Section 5 of the FTC Act violations dropped from the second most frequently cited violation to the fifth most frequently cited violation.

FDIC Financial Institution Letter FIL-15-2024, issued yesterday in coordination with today's FinCEN Federal Register request for information and comment, is an advisory to reemphasize the requirements under the Customer Identification Program (CIP) Rule as it relates to collecting identifying information from customers. The advisory reminds institutions of the information required to be collected from the customer prior to account opening. The CIP rule has been in effect for more than 20 years (since October 1, 2003).

• The CIP Rule requires a bank to implement a program that includes risk-based verification procedures that enable the bank to form a reasonable belief that it knows the true identity of its customers. These requirements exist regardless of whether the bank establishes this relationship directly with the customer or through an intermediary.
• These procedures must include collecting, at a minimum, the customer’s name, date of birth (for an individual), address, and identification number.
• A bank is required to collect the taxpayer identification number (TIN) from a customer that is a U.S. person prior to account opening or another approved identification from a non-U.S. person. This applies to all accounts with the exception of credit card accounts.

FinCEN has published [89 FR 22231] in this morning's Federal Register a notice and request for information and comment regarding the Customer Identification Program (CIP) Rule requirement for banks to collect a taxpayer identification number (TIN), among other information, from a customer who is a U.S. person, prior to opening an account (the “TIN collection requirement”).

Generally, for a customer who is an individual and a U.S. person (“U.S. individual”), the TIN is a Social Security number (SSN). FinCEN specifically seeks information to understand the potential risks and benefits, as well as safeguards that could be established, if banks were permitted to collect partial SSN information directly from the customer for U.S. individuals and subsequently use reputable third-party sources to obtain the full SSN prior to account opening. FinCEN seeks this information to evaluate and enhance its understanding of current industry practices and perspectives related to the CIP Rule's TIN collection requirement, and to assess the potential risks and benefits associated with a change to that requirement.

The notice also serves as a reminder from FinCEN, and staff at the Agencies, that banks must continue to comply with the current CIP Rule requirement to collect a full SSN for U.S. individuals from the customer prior to opening an account (“SSN collection requirement”).

Comments will be accepted for 60 days, through May 28, 2024.

A Ballard Spahr Consumer Finance Monitor article published Tuesday reports that the U.S. District Court for the Northern District of Texas has set April 2, 2024, as the date for a hearing on the plaintiffs' motion for a preliminary injunction against the CFPB's enforcement of its recent credit card late fee rule. According to the article, the CFPB last week filed a motion with the district court to transfer the case (Chamber of Commerce et al v. CFPB) to the U.S. District Court of the District of Columbia.

On March 20, the Texas district court denied the plaintiffs' motion for expedited consideration of their preliminary injunction motion [the CFPB's final rule has a May 14, 2024, effective date].

The Federal Housing Finance Agency yesterday reported U.S> house prices fell in January, down 0.1 percent from December, according to the FHFA seasonally adjusted monthly House Price Index.

House prices rose 6.3 percent from January 2023 to January 2024. The previously reported 0.1 percent price increase in December remained unchanged.

For the nine census divisions, seasonally adjusted monthly price changes from December 2023 to January 2024 ranged from -0.6 percent in the South Atlantic division to +1.5 percent in the West North Central division. The 12-month changes were all positive, ranging from +3.8 percent in the West South Central division to +8.7 percent in the East North Central division.

Yesterday, the FDIC issued Financial Institution Letters FIL-13-2024 and FIL-14-2024 to provide guidance the help financial institutions and facilitate recovering in areas of Maine and Rhode Island, respectively, affected by severe storms and flooding December 17–19, 2023 (Rhode Island) and January 9–13, 2024 (Maine and Rhode Island).

The CFPB has announced that the modified HMDA LARs with 2023 data are now available for each institution that filed HMDA data collected in 2023. The modified LARs provide each financial institution's loan-level HMDA data, as modified to protect applicant and borrower privacy in accordance with the Consumer Financial Protection Bureau’s final policy guidance on the disclosure of HMDA data. Users also have the ability to download one combined file that contains all institutions’ modified LAR data.

The modified LARs can be accessed HERE.