What's New?: ATR/QM Rule & High Cost Mortgage Rule Updates

The CFPB has updated the loan amounts for points and fees calculations under the Ability-to-Repay/Qualified Mortage rule and High-Cost Mortgage Rule. These amounts have been updated for inflation and are effective beginning January 1, 2016. 

See Qualified Mortgages: Limitations and High-Cost Mortgages in The Gold Book.

What's New? Flood Insurance Escrow Requirements

On June 22, the federal banking agencies issued a joint final rule that modifies the mandatory purchase of flood insurance regulations to implement some provisions of the Biggert-Waters and Homeowner Flood Insurance Affordability Acts.

Notable highlights include that the final rule, among other things: (i) expands escrow requirements for lenders who do not qualify for a small lender exception, (ii) clarifies the detached structure exemption, (iii) introduces new and revised sample notice forms and clauses relating to the escrow requirement and the availability of private flood insurance, and (iv) clarifies the circumstances under which lenders and servicers may charge borrowers for lender-placed flood insurance coverage.

The escrow provisions and sample notice forms will become effective on January 1, 2016, and all other provisions will become effective October 1, 2015. The agencies reminded that the escrow provisions in effect on July 5, 2012, the day before Biggert-Waters was enacted, will remain in effect and be enforced through December 31, 2015.

Read more in The Gold Book, chapter Flood Insurance Escrow Requirements.

What's New? Host Loan-to-Deposit Ratios

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency recently issued the host state loan-to-deposit ratios that they will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios update data released on July 2, 2014.

In general, section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 109 also prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production.

Section 109 provides a process to test compliance with the statutory requirements.

The host state loan-to-deposit ratio information may be found in The Gold Book. 

What's New? Updated Flood Insurance Rules

On June 22, 2015, five federal regulatory agencies announced the approval of a joint final rule that modifies regulations that apply to loans secured by properties located in special flood hazard areas.  The final rule implements provisions of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) relating to the escrowing of flood insurance payments and the exemption of certain detached structures from the mandatory flood insurance purchase requirement.  The final rule also implements provisions in the Biggert-Waters Flood Insurance Reform Act of 2012 (the Biggert-Waters Act) relating to the force placement of flood insurance.

The Gold Book has been updated accordingly here.

Final Rule Integrating National Bank and Federal Savings Association Licensing Activities

The Office of the Comptroller of the Currency (OCC) released a final rule integrating policies and procedures for corporate activities and transactions of national banks and federal savings associations.

The Dodd-Frank Wall Street Reform and Consumer Protection Act transferred the former Office of Thrift Supervision’s functions relating to Federal savings associations to the OCC. Therefore, the OCC has been responsible for ongoing examination, supervision and regulation of Federal savings associations. Prior to issuing this final rule, the OCC had been maintaining one set of rules applicable to national banks and another set of rules for Federal savings associations.  The rule eliminates unnecessary requirements, promotes fairness in supervision, and furthers the safe and sound operation of the institutions the OCC supervises.

Read more in the Federal Register.

What's New? Privacy Notices

The alternative delivery method for annual privacy notices may be found at: Annual Privacy Notice.

What's New? Suspicious Activity Reports Completion Instructions

In accordance with recent changes made to the filing of Suspicious Reports and the release of the March 2015 FinCEN SAR Electronic Filing Requirements guide, several area of The Gold Book have been updated.

See: 

Suspicious Activity Reports Requirements Summary

Suspicious Activity Reports Completion Instructions

What's New? Checks for Forward Collection

Forward collection is the process by which a bank sends a check to a collecting bank for settlement or to a paying bank for payment. While domestic items are subject to Regulation CC, foreign items are subject to rules established by the International Chamber of Commerce. Read more in the new Gold Book section titled, Checks for Forward Collection.

What's New? Reg. Z Notice of Rescission

The United States Supreme Court recently handed down a very important decision for lenders and borrowers regarding the timeliness of a borrower’s right to rescission under Regulation Z, Truth in Lending Act. The decision provides clarification of a provision regarding the timeliness of a borrower’s right to rescind a mortgage. For further information see Rescission and Notices in the Truth in Lending (Regulation Z) section of The Gold Book. 

Proposed Amendments to RESPA and TIL

The Consumer Financial Protection Bureau (CFPB) is proposing amendments to certain mortgage servicing rules regarding force-placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X's servicing provisions; and periodic statement requirements under Regulation Z's servicing provisions. 

The proposed amendments may be found in the Federal Register, here.

What's New? Bank size criteria for CRA

The federal bank regulatory agencies announced the annual adjustment to the asset-size thresholds used to define small bank, small savings association, intermediate small bank, and intermediate small savings association under the Community Reinvestment Act (CRA) regulations. See The Gold Book for details.

What's New? FATCA amendment to FCRA.

Enacted in 2010, the Foreign Account Tax Compliance Act (FATCA) is effective July 1, 2014.  It requires foreign financial institutions to report on the U.S. owned accounts held with them to the Internal Revenue Service.  If they do not, the foreign institutions face a 30% withholding on their US based source income.  Read more about FATCA here. 

Revised BSA/AML Exam Manual Available

The Federal Financial Institutions Examination Council (FFIEC) recently released the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual.

The revised manual reflects the FFIEC's ongoing commitment to incorporate guidance issued since 2010 into one manual for the FFIEC agencies' examination staff. The manual benefits depository institutions by providing information to help ensure compliance with the BSA and safeguard operations from money laundering and terrorist financing.

The revised manual may be found on the FFIEC BSA/AML Infobase at http://www.ffiec.gov/bsa_aml_infobase/default.htm.

What's New? Residential Mortgage Foreclosure Actions

New rules clarifying the settlement conferences in residential mortgage foreclosure actions in New York State have been approved. See new material under Practices During Foreclosure.

What's New? Mortgage Loan Servicers Conduct

New rules have been implemented regarding the conduct of mortgage loan services in New York State. Please see the new section under the Lending Compliance chapter. 

What's New? Reg Z & M Threshold Exemptions for Consumer Credit and Lease Transactions

The Federal Reserve Board and the Consumer Financial Protection Bureau (CFPB) announced increases to the dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) for exempt consumer credit and lease transactions. Transactions at or below the thresholds are subject to the protections of the regulations.

See The Gold Book for more information.

What's New? Remittance Rules - Exception Extended

The Consumer Financial Protection Bureau extended a temporary exception in its remittance rule that allows sending institutions to estimate fees charged by the receiving institution. The original provision would have expired in July 2015, but the exception will now last until June 21, 2020, to facilitate industry compliance. Read more in The Gold Book.

What's New? Know Before You Owe

Consumer Financial Protection Bureau (CFPB) has issued rules and forms that combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the Truth in Lending Act and the Real Estate Settlement Procedures Act. 

The new forms use clear language and design to make it easier for consumers to locate key information, such as interest rate, monthly payments, and costs to close the loan. The forms also provide more information to help consumers decide whether they can afford the loan and to compare the cost of different loan offers, including the cost of the loans over time.

The rule is effective August 1, 2015. See Know Before You Owe in The Gold Book for more information. 

What's New? Paying Agent Notification Requirements

On January 23, 2013, the Securities and Exchange Commission (SEC) amended Exchange Act Rule 17Ad-17 to implement the requirements of Section 929W of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The amendments add a requirement that "paying agents" send a one-time notification to "unresponsive payees" stating that the agent has sent a securityholder a check that has not yet been negotiated.

The effective date for the amendments is January 23, 2014. Therefore, the first potential notice to unresponsive payees would be due no later than August 23, 2014. 

See the The Gold Book for more information. 

What's New? IRS Reporting Requirements Updated

Information and instructions on the following IRS reporting forms have been updated in The Gold Book:

Form 1098

Form 1099-K

Form 1099-R

Form 5498