OCC Final Regs on Direct Deposit Advances

The Office of the Comptroller of the Currency (OCC) on November 26, 2013, issued final “Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products”. This guidance addresses safe and sound banking practices and consumer protection in connection with deposit advance products.

The guidance outlines appropriate underwriting policies and practices, including establishing customers’ eligibility and assessing their ability to repay while allowing borrowers to continue to meet typical recurring and other necessary expenses.

This final supervisory guidance is applicable to all OCC-supervised institutions.

Complete guidance may be found in the Federal Register.

What's New? NYS MLO Requirements

The Department of Financial Services published a notice of Emergency Rulemaking to implement license, financial responsibility, education and test requirements for mortgage loan originators (MLOs) to comply with Article 12-E of the Banking Law, amended in order to conform the regulation of MLOs in New York to federal legislation.

The rule requires that individuals engaging in mortgage loan origination must be licensed by the Superintendent of Financial Services and that MLOs, including those already engaged in the business of originating mortgage loans, must complete new education, testing and bonding requirements for licensure.

The new regulation is substantially similar to the prior rule on the same matter. This rule will expire on February 12, 2014.

See also the SAFE Act information in The Gold Book. 

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 tothe 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.

The adjustments to the thresholds reflect the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers as of June 1, 2013 and will take effect on January 1, 2014. These increases are consistent with amendments to the Truth in Lending and Consumer Leasing laws made by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

See The Gold Book for more information.

What's New? New ATR/QM Rules for Mortgage Lenders

The CFPB recently issued new Ability-to-Repay (ATR) and Qualified Mortgage (QM) rules for financial institutions that originate closed-end residential mortgage loans.

See the new section in The Gold Book, Ability-to-Repay and Qualified Mortgage Rule in the Truth in Lending (Regulation Z) section for details. 

For a guide to help financial institutions determine compliance oblications for mortgage loans, click here.

What's New? 2014 Reserve Requirements

The Federal Reserve Board announced the annual indexing of the amounts used in determining reserve requirements of depository institutions effective 2014. See Reserve Requirements for details.

What's New? Foreign Remittance Rules

The CFPB recently issued version 2.0 of its compliance guide to revise several requirements relating to the disclosure of institution fees and error resolution. All remittance transfer providers must comply with the new rules by October 28, 2013. The guide may be found here: http://files.consumerfinance.gov/f/201308_cfpb_intl-money-transfer-entity-compliance-guide.pdf. Also see The Gold Book section, Foreign Remittances for details.

What's New? Payroll Card Accounts

The Consumer Financial Protection Bureau (CFPB) recently issued information regarding payroll card accounts. See Payroll Cards for details. 

Fewer NY ATM Disclosure Requirements

New York Gov. Andrew Cuomo last week signed legislation eliminating the requirement of physical fee disclosures on ATMs. While ATM operators are required to disclose fees on their computer screens or on a paper notice once the transaction has been initiated, elimination of this disclosure requirement brings state law into conformity with the federal law signed last December by President Barack Obama. This measure is effective immediately.  See NY disclosure requirements and federal disclosure requirements in The Gold Book. 

What's New: Force Place Flood Insurance Provisions

The Flood Disaster Protection Act of 1973 was recently amended by the Biggert-Waters Flood Insurance Act of 2012. Some provisions became effective upon enactment on July 6, 2012, while other provisions are not effective until regulations are issued. The Gold Book Flood Insurance chapter has been updated with the provisions that are presently in effect.

FFIEC Proposes Guidance on Social Media

The Federal Financial Institutions Examination Council (FFIEC) released proposed guidance on the of the consumer protection, compliance and privacy laws to social media usage by banks, credit unions, and other covered financial institutions.

The FFIEC is responding to requests for guidance in this area from various industry and consumer interests. The guidance is intended to help financial institutions understand potential consumer compliance, legal, reputation, and operational risks associated with the use of social media, along with expectations for managing those risks. Although the guidance does not impose additional obligations on financial institutions, the FFIEC expects financial institutions to take steps to manage potential risks associated with social media, as they would with any new process or product channel.

The FFIEC invites comments on any aspect of the proposed guidance. It is specifically seeking comments on the following questions:

1. Are there other types of social media, or ways in which financial institutions are using social media, that are not included in the proposed guidance but that should be included?
2. Are there other consumer protection laws, regulations, policies or concerns that may be implicated by financial institutions’ use of social media that are not discussed in the proposed guidance but that should be discussed?
3. Are there any technological or other impediments to financial institutions’ compliance with applicable laws, regulations, and policies when using social media of which the Agencies should be aware?

The proposed guidance may be found here. Comments must be received 60 days from publication in the Federal Register. All comments received will be posted generally without change to http://www.regulations.gov, including any personal information provided.

What's New? New Gold Book Section on Lending Discrimination

The Gold Book Compliance Chapter now contains a section on Lending Discrimination Laws and Regulations.  A federal Interagency Policy Statement on Fair Lending serves as guidance for the Consumer Financial Protection Bureau, and is a benchmark for use in fair lending examination procedures. Read federal rules here and NYS rules here.

What's New? CRA Asset-Size Threshold Adjustments for 2013

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. The annual adjustments are required by the CRA rules and are effective January 1, 2013.

More details in The Gold Book.

What's New? Temporary Unlimited Coverage on Noninterest Bearing Transaction Accounts to Expire

The temporary unlimited deposit insurance coverage for noninterest-bearing transaction account (under the Dodd-Frank Wall Street Reform and Consumer Protection Act) is scheduled to expire on December 31, 2012. Absent a change in law, beginning January 1, 2013, the FDIC will no longer provide separate, unlimited deposit insurance coverage for noninterest bearing transaction accounts. 

Gold Book sections Transaction Account Guarantee Program, Notice Requirements, and IOLTA have been updated accordingly.

What's New? Reg Z Dollar Thresholds Increased for 2013

The Federal Reserve Board and the Consumer Financial Protection Bureau announced 2013 increases in the dollar thresholds for Regulation Z (Truth-in-Lending) and Regulation M (Consumer Leasing) for exempt consumer credit and lease transactions. 

The following sections of The Gold Book are updated:

High-Cost Mortgages

Truth-in-Lending (Regulation Z) Coverage

Truth-in-Lending (Regulation Z) Exemptions

What's New? New Classification System for Citing Violations in Reports of Examination

A new classification system for citing violations in reports of examination was effective October 1, 2012. Read more.

Deposit Insurance on Non-Interest Bearing Accounts

Pursuant to Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), temporary unlimited deposit insurance coverage for noninterest-bearing transaction accounts (NIBTAs), including Interest on Lawyer Trust Accounts, is scheduled to expire on December 31, 2012. Absent a change in law, beginning January 1, 2013, the FDIC no longer will provide separate, unlimited deposit insurance coverage for NIBTAs at insured depository institutions (IDIs). IDIs are encouraged to take reasonable steps to provide adequate advance notice to NIBTA depositors of the changes in FDIC insurance coverage so that they may consider the impact of any change in coverage in their management of these transaction accounts.

The FDIC has provided FAQs on the changes and notifications required by the end of next month.

Click here: FDIC: FIL-45-2012: Notice of Expiration: Temporary Unlimited Coverage for Noninterest-Bearing Transaction Accounts

Web Site Accessibility Standards

There are no uniformly-accepted standards that determine the accessibility to web site-based services for persons with disabilities.  The Americans with Disabilities Act of 1990 (“ADA”) provides safe-harbors for providing accessibility to physical banking locations. Proposed ADA rulemaking addresses the requirements for making goods, services, facilities, privileges and accommodations via the internet. For more details, see Websitesunder the Americans with Disabilities Actin the Compliance chapterof The Gold Book. 

What's New? NYS Preauthorized EFT Law

On August 17, 2012, Governor Cuomo signed S.219-A / A978, which became Chapter 403 of the laws of 2012.  The new law amends Banking Law section 9-s regarding stop payments of electronic funds transfers (the New York version of the Electronic Funds Transfer Act.)

Text in The Gold Book addressing New York rules for stopping payment on preauthorized electronic transfers have been updated in the Compliance and Electronic Banking chapters.

What's New? NYS Social Security Law Amended

A person may not be required to disclose or furnish his or her Social Security Number (SSN) for any purpose under a new law signed by New York Governor Andrew Cuomo.  The new law safeguarding SSNs (A.8992-A/S.6608-A) applies to employers and certain other entities in the state.   It adds new section 399-ddd to the General Business Law and becomes effective December 12, 2012. Businesses must review their practices with employees, customers and other individuals in situations where all or a part of the Social Security Number is involved.

Read more in The Gold Book. Click Here.

Caution Passing FDIC Fees to Customers

The FDIC has become aware that certain insured depository institutions are charging customers an "FDIC fee" or similarly described fee, apparently to compensate for some or all of its FDIC deposit insurance assessment costs. This Financial Institution Letter 33-2012 communicates the FDIC’s concerns and expectations when institutions assess these types of fees.

For further information visit www.fdic.gov or the FDIC chapter of The Gold Book.

The FDIC has become aware that certain insured depository institutions (IDIs) are charging customers an "FDIC fee" or similarly described fee, apparently to compensate the IDI for some or all of its FDIC deposit insurance assessment costs. This Financial Institution Letter (FIL) communicates the FDIC’s concerns and expectations when IDIs assess these types of fees.The FDIC has become aware that certain insured depository institutions (IDIs) are charging customers an "FDIC fee" or similarly described fee, apparently to compensate the IDI for some or all of its FDIC deposit insurance assessment costs. This Financial Institution Letter (FIL) communicates the FDIC’s concerns and expectations when IDIs assess these types of fees.The FDIC has become aware that certain insured depository institutions (IDIs) are charging customers an "FDIC fee" or similarly described fee, apparently to compensate the IDI for some or all of its FDIC deposit insurance assessment costs. This Financial Institution Letter (FIL) communicates the FDIC’s concerns and expectations when IDIs assess these types of fees.