What's New? Re-Presentment Fees

FDIC released guidance on charging multiple NSF (Non-Sufficient Fund) fees on re-presented items — a topic that has generated questions from a number of financial institutions. Read more in The Gold Book here.

What's New? Digital Banking

Digital banking poses many opportunities as well as threats to the financial industry. As the digital economy continues to evolve, cybersecurity is increasingly a serious concern. Utilizing methods and procedures created to safeguard data is essential for a successful digital revolution. The effectiveness of cybersecurity in banks influences the safety of personal information, whether it be an unintentional breach or a well-planned cyberattack. 

Accordingly, Electronic Banking section of The Gold Book has been renamed Digital Banking and includes sections addressing cybersecurity, virtual currency. Click here to go to the Digital Banking chapter.

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.

What's New? 2023 Dollar Thresholds for Reg Z

The Consumer Financial Protection Bureau, the Federal Reserve Board, and the Office of the Comptroller of the Currency today announced that the 2023 threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans will increase from $28,500 to $31,000.

The threshold amount will be effective January 1, 2023, and is based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, as of June 1, 2022.

The Dodd–Frank Wall Street Reform and Consumer Protection Act added special appraisal requirements for higher-priced mortgage loans, including that creditors obtain a written appraisal based on a physical visit to the interior of the home before making a higher-priced mortgage loan. The rules implementing these requirements contain an exemption for loans of $25,000 or less, adjusted annually to reflect CPI-W increases.

Read more about the Appraisal Rule in The Gold Book under Higher Priced Mortgages in the Truth-in-Lending (Reg. Z) chapter.

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.

Beneficial Ownership Reporting

The  Financial  Crimes  Enforcement  Network  issued a final rule  establishing  a  beneficial ownership  information  reporting  requirement.  The  rule will require most U.S. corporations, limited  liability  companies,  and  other  entities  to  report  to  FinCEN information about their  beneficial  owners—those  who  ultimately  own  or  control  the company. The rule enacts provisions  of  the  Corporate  Transparency  Act—passed  as  part  of  the  Anti-Money  Laundering  Act—to  strengthen  national  security  and  the integrity  and  transparency  of  the  U.S.  financial  system. 

Read this and more about the Beneficial Ownership rules here.

CFPB Warns that Digital Marketing Providers Must Comply with Federal Consumer Finance Protections

Tech firms that use behavioral targeting of individual consumers regarding financial products are liable for Digital Marketing violations as per new interpretive ruling fy the CFPB. 

Read more in Digital Marketing in The Gold Book. 

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

What's New? Crypto Currency and the FDIC

To address certain misrepresentations about FDIC deposit insurance by some crypto companies, the FDIC is issuing an Advisory to FDIC-insured institutions Regarding Deposit Insurance and Dealings with Crypto Companies (FDIC Crypto Advisory).  Additionally, a Fact Sheet on What the Public Needs to Know About FDIC Deposit Insurance and Crypto Companies (Deposit Insurance Fact Sheet) is available. Read more in The Gold Book under Crypto Currency.

Computer Security Final Rule and Information Webinar

On November 23, 2021, the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency (the Agencies) announced the approval of a final rule on computer-security incident notification to improve the sharing of information about cyber incidents that may affect the U.S. banking system. Compliance with the final rule is required by May 1, 2022. 

Read more about this rule in the Cybersecurity section of The Gold Book.

On Thursday, April 28, 2022, at 2:00 ET, the Agencies will jointly host an Ask the Regulators webinar regarding this rule. The program is intended for banking organizations and their bank service providers, as defined in the computer-security incident notification final rule. During the webinar, the Agencies will respond to questions submitted in advance from banking organizations and bank service providers. Please email questions in advance of the webinar to asktheregulators@stls.frb.org by April 20. 

Registration for the webinar is available at: https://www.webcaster4.com/Webcast/Page/584/44888 

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.

OSHA ETS Withdrawn

The Emergency Temporary Standard was withdrawn effective January 26, 2022. Although OSHA is withdrawing the vaccination and testing ETS as an enforceable emergency temporary standard, the agency is not withdrawing the ETS as a proposed rule. The agency is prioritizing its resources to focus on finalizing a permanent COVID-19 Healthcare Standard.

Proposed regulations update RMDs for SECURE Act changes

The IRS and Treasury released proposed regulations (REG-105954-20) that would update existing rules for required minimum distributions (RMDs) from qualified retirement plans.

Enacted in December 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act 

revised the starting date for required minimum distributions (RMDs) from a qualified plan, generally to April 1 of the calendar year following the later of the calendar year in which the employee either turns age 72 or retires (Sec. 401(a)(9)(C)). Before the SECURE Act's amendment, that age was 70½. The higher age was effective for distributions required to be made after Dec. 31, 2019 (with respect to individuals who turned age 70½ after that date) (SECURE Act Section 114(a)).

Also, the SECURE Act eliminated "stretch" individual retirement accounts (IRAs) or plan distributions by requiring distributions to nonspouse beneficiaries (other than eligible designated beneficiaries) to be completed within 10 years following a plan participant or IRA owner's death (the 10-year rule) rather than, as before, over the beneficiary's life or life expectancy. The SECURE Act defined eligible designated beneficiaries for purposes of the exception to the 10-year rule as the employee's surviving spouse, the employee's child under the age of majority, a disabled designated beneficiary, a chronically ill individual, or other individual no more than 10 years younger than the employee (Sec. 401(a)(9)(E)(i)).

The proposed regulations provide general rules for RMDs, including application of the 10-year rule where the retirement plan owner dies, then the designated beneficiary also dies. If the owner died before Sec. 401(a)(9)(H)'s effective date for the plan and the owner had only one designated beneficiary who also died before that effective date, the beneficiary of the designated beneficiary is subject to the 10-year rule. If the owner's designated beneficiary died on or after that effective date, the 10-year rule does not apply to the beneficiary of the designated beneficiary. If the owner dying before the Sec. 401(a)(9)(H) effective date for the plan had more than one designated beneficiary, whether the SECURE Act amendments apply depends on when the oldest beneficiary dies.

The proposed regulations also address the SECURE Act RMD starting age of beneficiaries of an owner who died before reaching age 70½ but would have reached that age on or after Jan. 1, 2020. In that case, the beneficiary may wait until the calendar year in which the employee would have reached age 72 to begin RMDs.

The proposed regulations clarify the eligible designation beneficiary definition, age of majority, applicability of disability to young beneficiaries, and more. The proposed regulations would generally apply for purposes of determining RMDs for calendar years beginning on or after Jan. 1, 2022, or to distributions on or after that date. For the 2021 distribution calendar year, taxpayers must apply the existing regulations but take into account a reasonable, good-faith interpretation of the SECURE Act amendments, which compliance with the proposed regulations will satisfy.

NJ Mortgage Assistance

This week, the New Jersey Housing and Mortgage Finance Agency (NJHMFA) opened the application portal for the Emergency Rescue Mortgage Assistance program (ERMA).

To help protect homeowners from foreclosure, this program will provide assistance to cover mortgage arrearages, delinquent property taxes, and other housing costs for eligible homeowners negatively impacted by the COVID-19 pandemic. If eligible, you could receive up to $35,000 in the form of a three-year forgivable loan, with no interest or payments due.

NJHMFA will also provide free housing counseling services to help New Jersey homeowners apply for this program, guide them through all available options, and even work with their loan servicers to achieve the best outcome available for their families. These counselors will also ensure that the process is accessible to those without access to internet or anyone needing assistance with the application.

Visit NJHMFA to learn more and access the application.

FedNow Pricing Approach

The Federal Reserve released its anticipated pricing approach for its FedNow instant payments service ahead of next year’s launch.

Pricing: The Fed said it expects the FedNow Service fee schedule to be published later this year with the following pricing information:

• A $25 monthly FedNow Service participation fee for each routing transit number that enrolls in the service to receive credit transfers.
• A fee of $0.045 per transaction to be paid by its sender, including returns.
• A fee of $0.01 for a request for payment message to be paid by the requestor, including both requests for a new payment or funds to be returned.
• Participating financial institutions can send RFPs through FedNow to other participating FIs to request payment of a bill, invoice, or other amount owed by the receiving FI’s customer.
• Standard fees will apply for FIs accessing the FedNow Service via FedLine Solutions.
• FedNow’s initial credit transfer transaction value limit will be a maximum of $500,000, though the default limit is set at $100,000 and FIs will be able to adjust it based on their needs.

What's New? NYC Wage Posting Requirements

Beginning May 15, employers in New York City will have to include in job postings the minimum and maximum salaries that the firm believes, in good faith, that it will pay. Read more under Posting Requirements for Labor Laws in the Human Resources chapter of The Gold Book.

What's New? FDIC Simplification Rules

The FDIC approved a final rule to amend the deposit insurance regulations for trust accounts and mortgage servicing accounts. The final rule will take effect on April 1, 2024, providing depositors and insured depository institutions two years to prepare for the changes in coverage. Read more about Trust Accounts in the Federal Deposit Insurance chapter of The Gold Book.