April Regulatory Compliance Briefing

  • April 19, 2023
  • Quantivate

The April Regulatory Compliance Briefing includes recent alerts, advisories, and pending actions and alerts to be aware of this month.

Recap of March & April Compliance Alerts

National Credit Union Administration (NCUA)

CA-197 NCUA Final Amendments to Subordinated Debt Rule

  • Rule/Action Final: March 16, 2023
  • Effective Date: N/A
  • Alert Date: March 20, 2023

Consumer Financial Protection Bureau (CFPB)

CA-198 CFPB Final Rule on Small Business Lending Data Collection

  • Rule/Action Final: March 30, 2023
  • Effective Date: October 1, 2024
  • Alert Date: April 11, 2023

U.S. Department of Housing and Urban Development (HUD)

CA-199 HUD Final Rule Reinstating Discriminatory Effects Standard

  • Rule/Action Final: March 31, 2023
  • Effective Date: May 1, 2023
  • Alert Date: April 17, 2023

Additional Advisories and Announcements

The selected advisories and/or announcements below provide information that may be helpful to your organization but were not included as compliance alerts because they do not contain any regulatory changes.

Consumer Financial Protection Bureau (CFPB)

CFPB Supervisory Highlights: Junk Fees

On March 8, 2023, the CFPB issued a Supervisory Highlights special edition focusing on what the CFPB refers to as “junk fees.” The report discusses recent supervisory work and violations of the law in connection with certain fees, including Authorized Positive, Settled Negative Overdraft fees, and NSF fees assessed on the same item presented multiple times, among other fees the CFPB has determined to be an unfair act or practice. The report focuses on fees in the areas of deposits, auto servicing, mortgage servicing, payday and small-dollar lending, and student loan servicing.

Federal Deposit Insurance Corporation (FDIC)

FDIC Fair Hiring in Banking Act Amendments to Section 19 of the Federal Deposit Insurance Act

On March 9, 2023, the FDIC issued FIL-09-2023, discussing the amendments to Section 19 of the Federal Deposit Insurance Act made by the Fair Hiring in Banking Act signed into law on December 23, 2022. Section 19 prohibits a person from participating in the affairs of an FDIC-insured institution if he or she has been convicted of an offense involving dishonesty, breach of trust, or money laundering, or has entered into a pretrial diversion or similar program in connection with a prosecution for such an offense, without the prior written consent of the FDIC.

FDIC Guidance to Help Financial Institutions and Facilitate Recovery in Areas of Mississippi Affected by Severe Storms, Straight-Line Winds, and Tornadoes

On March 30, 2023, the FDIC issued FIL-12-2023, announcing a series of steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Mississippi affected by severe storms, straight-line winds, and tornadoes.

National Credit Union Administration (NCUA)

NCUA Letter to Credit Unions: Permissible Loan Interest Rate Ceiling Extended

On March 1, 2023, the NCUA issued a Letter to Credit Unions (23-FCU-02) extending the temporary 18-percent interest rate ceiling for loans made by federal credit unions.

NCUA Update to Simplified CECL Tool

On March 23, 2023, the NCUA issued an update of its simplified CECL Tool. The update includes: a) the incorporation of each credit union’s December 2022 net charge-offs values in its average three-year net charge-off rates, b) the adjustment of Weighted Average Remaining Maturity (life-of-loan) factors for recent trends, and c) minor technical enhancements.

NCUA Regulatory Alert 23-RA-02: Home Mortgage Disclosure Act Data Collection Requirements for Calendar Year 2023

On March 30, 2023, the NCUA issued a Regulatory Alert outlining the four criteria which, if met, would require a credit union to comply with Regulation C and collect HMDA data associated with mortgage loan applications processed during 2023. Credit Unions that do not meet such criteria are exempt from filing HMDA data for applications processed in calendar year 2023. The Regulatory Alert also outlines the partial exemptions from HMDA’s requirements for certain transactions. 

Federal Trade Commission (FTC)

FTC Proposed Negative Option Rule

On March 23, 2023, the FTC issued a Proposed Rule to amend its Negative Option Rule. Negative option offers are those that contain a term or condition that allows a seller to interpret a customer’s silence, or failure to take an affirmative action, as acceptance of an offer; such as, automatic renewal plans. The proposed amendments would expand the scope of coverage to all forms of negative option marketing (e.g. telephone, internet, print media, and in-person) and would establish new requirements to provide specified information to consumers, obtain consumers’ express informed consent, and ensure consumers can easily cancel these programs when they choose.

Future & Pending Regulatory Actions and Compliance Alerts

Financial Crimes Enforcement Network (FinCEN)

  • FinCEN Advance Notice of Proposed Rulemaking to address the vulnerability of the U.S. real estate market to money laundering and other illicit activity — public comment period ended February 14, 2022.
  • FinCEN Pilot Program for SARs Sharing proposed rule — public comment period ended March 28, 2022.
  • FinCEN Proposed Phase II Beneficial Ownership Rule — public comment period ended February 14, 2023.

Consumer Financial Protection Bureau (CFPB)

  • CFPB Notice and Request for Comment Regarding the CFPB’s Inquiry Into Buy-Now-Pay-Later (BNPL) Providers — public comment period ended on March 25, 2022.
  • CFPB Proposed Rule on Credit Card Late Fees – public comment period ends on April 3, 2023.

Federal Deposit Insurance Corporation (FDIC)

  • FDIC Climate Risk Principles — public comment period ended on June 1, 2022.

National Credit Union Administration (NCUA)

  • NCUA rulemaking to modernize and improve the NCUA’s investment rule and to provide regulatory relief was expected in September 2022.
  • NCUA Proposed Amendments to FCU Bylaws related to member expulsion — public comment period ended on December 2, 2022.
  • NCUA Proposed Financial Innovation Rule — public comment period ended on February 28, 2023.
  • NCUA Proposed Field of Membership Rule – public comment period ends on May 30, 2023.

Joint Federal Banking Agency Proposed Rules

  • OCC, NCUA, FDIC, FRB — Joint, proposed rulemaking regarding their uniform rules and procedures for administrative hearings. The public comment period ended on June 13, 2022.
  • OCC, FRB, FDIC, NCUA, FHFA, and CFPB — Rulemaking to implement quality control standards for the use of automated valuation models by mortgage originators and secondary market issuers. Notice of Proposed Rulemaking was expected in October 2022.

Stay on Top of Compliance Changes

For access to the complete analysis, executive summaries, and actions needed to ensure compliance, contact us.