September 2019 - Compliance Alert

The Consumer Financial Protection Bureau (CFPB)

CFPB Plans to Enhance Consumer Complaint Database

The Consumer Financial Protection Bureau announced it would continue to publish consumer complaints and that it would enhance the information that’s available to those who use the database. The CFPB will also improve the database itself, including dynamic visualization tools on more recent complaints.

Office of the Comptroller of Currency (OCC)

OCC to Hold Compliance and Operational Risk Workshops in LA

The Office of the Comptroller of the Currency will hold two workshops in Los Angeles on October 22 and 23. The workshops, held at the Federal Reserve Bank of Los Angeles, will be for national community bank and federal saving association directors. The workshops will focus on compliance, risks, and major regulations.

Securities and Exchange Commission (SEC)

SEC to Update Statistical Disclosures

The Securities and Exchange Commission announced that it had proposed rule changes to update the statistical disclosures that some institutions must provide to investors. The changes would get rid of some disclosures, eliminating overlap with some SEC rules.

Once published in the Federal Register, there will be a sixty-day public comment period.

The Federal Deposit Insurance Company (FDIC)

FDIC Releases Annual Survey Results

The Federal Deposit Insurance Committee announced the results of its annual branch office deposits survey. The survey included all FDIC-insured institutions as of June 30, 2019. The Summary of Deposits survey includes data that goes as far back as 1994. The survey collects deposit totals for thousands of institutions in the US.

National Credit Union Administration (NCUA)

NCUA Approves Three Final Rules

The National Credit Union Administration approved three final rules during its eighth 2019 open meeting. The NCUA approved the following:

• Federal credit unions can offer additional alternative payday loans
• Clarification of regulations regarding credit union supervisory committee audits and audit process flexibility
• Finalization and simplification of federal credit union bylaws

Changes to the Volcker Rule

Changes to the Volcker Rule

On August 20^th, the Office of the Comptroller of the Currency (OCC) announced that they, along with the Federal Deposit Insurance Corporation (FDIC), had approved amendments to the Volcker Rule, an important regulation that prevents certain financial institutions from participating in proprietary, or “prop”, trading and limits their involvement with covered funds. The new amendment, which is expected to be approved by other federal regulators soon, would ease some of these exclusions and eliminate a “rebuttal presumption” that labels financial instruments being held for less than sixty days “prop” trading.

History

The Volcker Rule came about as a response to the financial crises that the US has endured. Following the Great Depression and the Great Recession, regulators tried to find ways to prevent federally insured banks from making certain types of potentially risky investments. The Volcker Rule came on the heels of the Great Recession as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, creating rules for implementing section 13 of Bank Holding Company Act of 1956, which is an act of congress that restricts bank holding companies from certain actions.

The Volcker Rule came into effect in April of 2014 with full compliance required before July 21, 2015. However, things quickly became complicated as discerning the difference between regular trading and “prop” trading became difficult. The Volcker Rule has subsequently proven to be one of the harder regulations to implement and in 2018, the Federal Reserve Board unanimously decided to push forward the proposal loosening some of the Volcker Rule’s restrictions. The goal was to streamline the requirements of the rule, making compliance much easier, specifically for banks that do very little trading.

Changes

These changes to the Volcker Rule would not remove the restrictions placed but relax them to allow certain institutions to more easily comply with The Rule. With another potential recession looming on the horizon, it will be interesting to see how the Volcker Rule may or may not change over the coming months and years.

The ever-changing landscape of financial regulation makes it difficult for banks to keep to relevant compliance training. As rules change, your compliance training should be changing too. Our team at Banker’s Academy are experts in compliance training and do our best to stay ahead of the curve as banking regulations change. That’s why you need to be sure you’re trusting your compliance training to us. If you’re interested in effective, relevant compliance training for your financial institution, contact our team today!

August 2019 - Compliance Alert

The Consumer Financial Protection Bureau (CFPB)

CFPB Extends Comment Period for Proposal on Debt Collection

The Consumer Financial Protection Bureau announced that it will extend the comment period for its proposal implementing the Fair Debt Collection Practices Act. This choice was made to make sure that commenters can take into consideration issues raised during its Notice of Proposed Rulemaking.

The proposal would provide consumers with protections from harassment by debt collectors and simple options to address and dispute debts.

Office of the Comptroller of Currency (OCC)

Comptroller Approves Volcker Rule Changes

The Comptroller of the Currency signed a final rule amending the Volcker Rule, simplifying the rule, while maintaining the protections it provides.

This rule implements Section 13 of the Bank Holding Company Act of 1956 (BHC Act), which gives the authority to the OCC to implement the prohibitions and restrictions of Section 13.

Securities and Exchange Commission (SEC)

The SEC Votes to Adopt Amendments Codifying Exemption to Credit Rating Agency Rule

The Securities and Exchange Commission voted to adopt amendment that codifies an existing exemption to Rule 17g-5(a)(3), clarifying the conditions of the exemption.

SEC Chairman said that “These appropriately tailored amendments provide needed clarity to NRSROs and other market participants”.

The Federal Deposit Insurance Company (FDIC)

FDIC Issues NPR on Interest Rate Restrictions Applicable to Less Than Well Capitalized Institutions

The FDIC issued a notice of proposed rulemaking (NPR) that would change the way national rate and national rate cap for specific deposit products are calculated. The goal of this proposed change is to create a balanced and dynamic national rate cap.

Federal Reserve Board (FRB)

FRB Announces Seven-Day Term Deposit Results

The Federal Reserve Board announced the results of their operation offering seven-day term deposits with the rate set equal to the sum of the interest rate paid on excess reserves plus a fixed spread of 1 basis point.

Results are as follows:

TDF Operation ID:                   F74

Total Amount Awarded:         $1,668,000,000

Number of Participants:         18

July 2019 - Compliance Alert

The Consumer Financial Protection Bureau (CFPB)

CFPB and Others Announce Equifax Data Breach Settlement

The Consumer Financial Protection Bureau, Federal Trade Commission, 48 states, Puerto Rico, and the District of Columbia announced a settlement with Equifax. The settlement would provide up to $700 Million in relief and penalties. This comes after a complaint that Equifax participated in unfair and deceptive practices involved with an Equifax data breach in 2017 that impacted 147 million consumers.

Office of the Comptroller of Currency (OCC)

OCC and Other Agencies Propose Rule Regarding Land Development Loans

The Office of the Comptroller of the Currency and other regulatory agencies asked for public comment on a proposed change to the treatment of land development loans under the agencies’ capital rules. This proposal aims to clarify the treatment of this type of loan and expand on a September 2018 proposal to revise what high volatility commercial real estate (HVCRE) means.

Securities and Exchange Commission (SEC)

SEC and Other Agencies Accept Rule to Exclude Community Banks from Volcker Rule

The Securities and Exchange Commission and the other federal financial regulatory agencies adopted a final rule, excluding community banks from the Volcker Rule. This decision is in line with the stipulations of the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The Federal Deposit Insurance Company (FDIC)

FDIC, Other Regulatory Agencies, and FinCEN Improve BSA/AML Supervision Transparency

The Federal Deposit Insurance Corporation, the other federal financial regulatory authorities, and FinCEN released a statement as part of an ongoing effort to increase transparency regarding risk-based BSA and AML supervision. The statement outlines assessment practices for a bank’s money laundering and terrorist financing risk.

Federal Reserve Board (FRB)

FRB and Other Regulatory Agencies Will Not Take Action on Volcker Rule Restrictions for Certain Foreign Funds

The Federal Reserve Board and other regulatory bodies announced that they would not take action on Volcker Rule Restrictions involving certain foreign funds for an additional two years. These foreign funds are excluded from the definition of covered funds as established by the agencies’ regulations.