2023 Community Reinvestment Act Final Rule Rescinded

The federal bank regulatory agencies announced, in light of pending litigation, their intent to issue a proposal to both rescind the Community Reinvestment Act (CRA) final rule issued in October 2023 and reinstate the CRA framework that existed prior to the October 2023 final rule. The agencies will continue to work together to promote a consistent regulatory approach on their implementation of the CRA.

The October 2023 final rule was the first major revision to CRA regulations, which were established in 1977, in nearly three decades. The final rule was scheduled to take effect in April while requiring bank compliance by Jan. 1, 2026.

Community Reinvestment Act (CRA) regulations remain largely under the 1995/2021 framework. See the Community Reinvestment Act chapter of The Gold Book for details and upcoming rules as they are announced.

Agencies Announce Intent to Rescind 2023 CRA Final Rule

On March 28, 2025, the federal bank regulatory agencies announced, in light of pending litigation, their intent to issue a proposal to both rescind the Community Reinvestment Act (CRA) final rule issued in October 2023 and reinstate the CRA framework that existed prior to the October 2023 final rule. The agencies will continue to work together to promote a consistent regulatory approach on their implementation of the CRA.

Remittance Transfers Under the Electronic Fund Transfer Act (Regulation E)

The CFPB has issued guidance to prevent banks from charging overdraft fees to a consumer where the banks have no evidence that they obtained the consumer’s consent for the overdraft. The CFPB’s guidance released on September 17 clarifies that a bank can be found in violation of the Electronic Fund Transfer Act (EFTA) and its federal implementing rule, Regulation E, if the bank cannot produce evidence that it obtained affirmative consent from a consumer to enroll in covered overdraft services that resulted in charging overdraft fees to the consumer. The requirement to obtain the affirmative consent of a consumer for covered overdraft services applies to fees for overdraft loans to cover ATM and one-time debit transactions. The requirement does not apply to overdraft fees charged on paper checks, recurring debit transactions, or ACH transactions. Banks found to have violated the EFTA’s opt-in requirement can be liable for refunding affected consumers and paying monetary penalties. Click here for a copy of the CFPB’s guidance.

CFPB Proposes Rules to Help Homeowners Avoid Foreclosure

The Consumer Financial Protection Bureau (CFPB) recently proposed new rules to make it easier for homeowners to get help when they are struggling to pay their mortgage. The proposal, if finalized, would require mortgage servicers to focus on helping borrowers, not foreclosing, when a homeowner asks for help. The proposed changes would also make it simpler for servicers to offer assistance by reducing paperwork requirements, improve communication with borrowers, and ensure critical information is provided in languages borrowers understand. 

The new provisions would not apply to small servicers. All existing requirements remain in effect until the effective date of a final rule.

NACHA Rule Update

On March 18, Nacha, the organization that governs the ACH network, announced that its members approved a new set of rules aimed at reducing the incidence of frauds, such as business email compromise (BEC), that exploit credit-push payments. These rules establish a base level of ACH payment monitoring for all parties in the ACH Network, excluding consumers. While these rules do not alter the liability for ACH payments, they do, for the first time, assign a defined role to receiving depository financial institutions (RDFIs) in monitoring the ACH payments they receive.

The first amendment becomes effective October 1, 2024 and does the following:

• Allows an RDFI to use return reason code R17 to return an entry that it thinks is fraudulent.
• Expands the use of request for return (R06) for the originating depository financial institution (ODFI) to request a return from the RDFI for any reason.
• Provides RDFIs with an additional exemption from the funds availability requirements to include credit entries that the RDFI suspects are originated under false pretenses.
• Provides that a written statement of unauthorized debit (WSUD) may be signed and dated by the receiver on or after the date on which the entry is presented to the receiver (either by posting to the account or by notice of a pending transaction), even if the debit has not yet been posted to the account.
• Requires the RDFI to return a consumer debit that has been claimed to be unauthorized by the opening of the sixth banking day following the completion of its review of the consumer’s signed WSUD.

The second phase of amendments becomes effective on March 20, 2026.

The Gold Book will be updated accordingly as the compliance date(s) approaches.

CFPB Proposes Rule to Stop New Junk Fees on Bank Accounts

The Consumer Financial Protection Bureau (CFPB) has proposed to block banks and other financial institutions from one potential source of new junk fee revenue – fees on transactions declined right at the swipe, tap, or click. The proposed rule would prohibit non-sufficient funds (NSF) fees on transactions that financial institutions decline in real time. These types of transactions include declined debit card purchases and ATM withdrawals, as well as some declined peer-to-peer payments. The CFPB’s proposal is part of the agency’s proactive approach to protect consumers, and it would cover banks, credit unions, and certain peer-to-peer payment companies.

FinCEN Issues Final Beneficial Ownership Rules

House Financial Services Committee Chairman Patrick McHenry (R-NC) is calling on the Administration to delay the first phase of new beneficial ownership reporting that begins on January 1 under the Corporate Transparency Act, in part because “millions of small business owners remain unaware of their beneficial ownership reporting obligations.” Dozens of other House and Senate Republicans have also called for a delay. Yesterday, FinCEN issued the second phase of the final rules for accessing the data (in effect later in 2024) and eased some rules so that banks could use the ownership information for a broader range of purposes to combat money laundering and comply with sanctions. A third phase of final rules is still forthcoming.

Read more about Beneficial Ownership in The Gold Book.

New Banker Engagement Site through FDICconnect

The FDIC recently launched a new Banker Engagement Site through FDICconnect for examination-related activities.

The site will:

• Serve as the primary tool for exchanging documents, information, and communications for consumer compliance and Community Reinvestment Act examinations.
• Allow financial institutions’ authorized staff to communicate with FDIC exam staff and to respond to information and document requests made throughout the supervisory process.

Click here to learn more.

Personal Financial Data Rights

The Consumer Financial Protection Bureau (CFPB) is proposing to establish 12 CFR part 1033, to implement section 1033 of the Consumer Financial Protection Act of 2010 (CFPA). The proposed rule would require depository and nondepository entities to make available to consumers and authorized third parties certain data relating to consumers’ transactions and accounts; establish obligations for third parties accessing a consumer’s data, including important privacy protections for that data; provide basic standards for data access; and promote fair, open, and inclusive industry standards. Read more here.

Guidance on Overdraft Protection Practices

The FDIC, OCC and Federal Reserve have recently issued guidance on overdraft protection program practices, risk management, and representment. 

FDIC: Supervisory Guidance on Multiple Re-Presentment NSF Fees

OCC: Overdraft Protection Programs: Risk Management Practices

Federal Reserve: Supervisory Observations on Representment Fees

Also see The Gold Book for continuing updates:

Checking Accounts: Overdraft Protection Programs

Electronic Collection of Fees

FDIC launching new site for consumer compliance, CRA exam activities

New this month: The will launch a new Banker Engagement Site (BES) through FDICconnect for examination-related activities. The site will: Serve as the primary tool for exchanging documents, information, and communications for consumer compliance and Community Reinvestment Act examinations. Allow financial institutions’ authorized staff to communicate with FDIC exam staff and to respond to information and document requests made throughout the supervisory process. More: The FDIC’s existing tool to exchange exam information, the Enterprise File Exchange, will continue to be used for activity initiated prior to the availability of BES. FDIC exam management will inform financial institutions of the application that will be used for their exam during the transition to BES.

Diversity Policies and Practices

The FDIC issued a letter this week encouraging FDIC-supervised financial institutions to voluntarily conduct and submit self-assessments of their diversity policies and practices. The assessment is not part of the CRA examination requirement. Assessment responses are due back to the agency by September 30, 2023.

Small Business Review Panel for Personal Financial Data Rights Rulemaking

In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress directed the Consumer Financial Protection Bureau (CFPB) to adopt regulations governing consumers’ rights to access certain financial information. Section 1033 generally requires a covered person to make available to a consumer, upon request, information in the control or possession of the covered person concerning the consumer financial product or service that the consumer obtained from such covered person. The information must be made available in an electronic form usable by consumers.

The CFPB is now in the process of writing regulations to implement section 1033. Under the process established by Congress in the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), the CFPB is required to obtain feedback on the potential impacts of the proposals the CFPB is considering from representatives of small entities likely to be directly affected. For additional materials, see:

https://www.consumerfinance.gov/personal-financial-data-rights/

https://www.consumerfinance.gov/rules-policy/small-business-review-panels/

https://www.consumerfinance.gov/rules-policy/small-business-review-panels/small-business-review-panel-for-personal-financial-data-rights-rulemaking/

https://files.consumerfinance.gov/f/documents/cfpb_1033-data-rights-rule-sbrefa-panel-report_2023-03.pdf

What's New? DFS Removes Mandatory Two-Week Absence Requirement

New York State Department of Financial Services (DFS) has provided new guidance effective immediately to update and replace guidance issued by the New York State Banking Department in 1996 addressing Vacation Policy as an Internal Control Safeguard. Read more under NYS Vacation Policy in the Human Resources chapter of The Gold Book

Fee Practices: UDAAP Violations

The CFPB has issued new guidance for “junk fee” practices by banks that are likely to violate the prohibition against unfair, deceptive, and abusive acts or practices (“UDAAP”) in Section 1036 of the Consumer Financial Protection Act (“CFPA”). The CFPB’s Consumer Financial Protection Circular 2022-06, published on October 26, discusses how unanticipated overdraft fee assessment practices may violate the CFPA. According to the circular, overdraft fees assessed by banks on transactions that a consumer would not reasonably anticipate likely constitute UDAAP violations of the CFPA. The circular includes examples of situations that may cause unexpected overdraft fees that violate the CFPA, such as “authorize positive, settle negative” transactions.

Office of Financial Technology

The OCC announced it will establish an Office of Financial Technology early next year to enhance the agency’s expertise and ability to adapt to a rapidly changing banking landscape. The Office of Financial Technology will build on and incorporate the Office of Innovation, which the OCC established in 2016 to coordinate agency efforts to support responsible financial innovation.

FedNow Service Releases Guidance

In anticipation of the launch of FedNow, recently released is: Operating Circular 8 Funds Transfers through the FedNow Service, effective September 21, 2022. The circular also references another document, version 1.0 of the FedNow Service Operating Procedures.

National Banks Not Required to Comply with a New York State Law

A federal appeals court has ruled that national banks are not required to comply with a New York State law requiring mortgage lenders to pay a two per cent minimum annual interest rate on mortgage escrow accounts established for owner-occupied, one-to-six family residences.  The decision by the United States Court of Appeals for the Second Circuit in Cantero v. Bank of America, N.A., held that the New York law is preempted by the National Bank Act of 1864, which among other things grants national banks the power to establish and fund escrow accounts.  While the decision expressly applies only to national banks, it provides a strong basis for arguing that preemption would also apply to other federally-chartered financial institutions.  However, the Court’s ruling directly conflicts with a 2019 decision by a federal appeals court in California which reached the opposite conclusion, making the issue ripe for potential review and resolution by the Supreme Court should a further appeal be made

NY Hero Act

On March 17, 2022, the designation of COVID-19 as an airborne infectious disease that presents a serious risk of harm to the public health under the HERO Act ended. Private sector employers are no longer required to implement their workforce safety plans.

NYS Remote Notary Guidance

Effective 2/25/22, remote notarization is now authorized in New York State, per section 135-c of the executive law. Visit Department of State website for details.