August Regulatory Compliance Briefing

  • August 22, 2023
  • Quantivate

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

Recap of July Compliance Alerts

Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC)

CA-202 Interagency Guidance on Risk Management of Third-Party Relationships

  • Rule/Action Final: July 20, 2023
  • Effective Date: August 25, 2023
  • Alert Date: July 24, 2023

Compliance Alerts Expected in September

Consumer Financial Protection Bureau (CFPB)

CA-203 Delayed Effective Date of CFPB Small Business Lending Rule for Certain Banks

Regulatory Effective Dates – Next 90 Days

Consumer Financial Protection Bureau (CFPB)

CFPB Final Rule on Small Business Lending Data Collection

  • Effective Date: August 29, 2023

National Credit Union Administration (NCUA)

NCUA Final Rule on Cyber Incident Reporting

  • Effective Date: September 1, 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

On July 26, 2023, the CFPB released a new Supervisory Highlights report discussing the CFPB’s examinations in the areas of auto origination and servicing, consumer reporting, debt collection, deposits, mortgage origination and servicing, and payday and small dollar lending, that were completed from July 1, 2022 to March 31, 2023.

Federal Deposit Insurance Corporation (FDIC)

FDIC Guidance to Help Financial Institutions and Facilitate Recovery in Areas of Vermont Affected by Severe Storms and Flooding

On July 19, 2023, the FDIC issued FIL-36-2023, announcing a series of steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Vermont affected by severe storms and flooding.

FDIC Financial Institution Letter: Estimated Uninsured Deposits Reporting Expectations

On July 24, 2023, the FDIC issued FIL-37-2023, indicating that the FDIC has observed that some insured depository institutions are not reporting estimated uninsured deposits in accordance with the Call Report instructions. The FIL explains that, for example, some institutions incorrectly reduced the amount reported to the extent that the uninsured deposits are collateralized by pledged assets. Additionally, some institutions incorrectly reduced the amount reported on Schedule RC-O by excluding intercompany deposit balances of subsidiaries.

Federal Financial Institutions Examination Council (FFIEC)

Updates to BSA/AML Examination Manual

The FFIEC has updated sections and related examination procedures in the FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual. The updates are located within the Assessing Compliance with BSA Regulatory Requirements section. The updates do not establish any new requirements for financial institutions and are not intended to signal an increased focus in certain areas. The FFIEC indicated that the updates are intended to offer further transparency into the examination process and support risk-focused examination work.

Interagency Announcements

Proposed Interagency Rulemaking on Amendments to the Regulatory Capital Rule

On July 27, 2023, the FDIC, FRB, and OCC jointly issued a Proposed Rule that would substantially revise the measurement of risk-weighted assets and the definition of regulatory capital applicable to large banking organizations. The Proposed Rule would apply to banking organizations with total assets of $100 billion or more, their subsidiary depository institutions, and other banking organizations with significant trading activity. In addition to other changes, the proposal would replace the advanced approaches for calculating risk-weighted assets with the expanded risk-based approach. The expanded risk-based approach would include: (1) a new standardized approach for credit risk and operational risk, (2) a revised internal models-based approach and a new standardized measure for market risk, and (3) a new revised approach for CVA.

Addendum to the Interagency Policy Statement on Funding and Liquidity Risk Management: Importance of Contingency Funding Plans

On July 28, 2023, the OCC, FRB, FDIC, OTS, and NCUA issued an Addendum to the 2010 Interagency Policy Statement on Funding and Liquidity Risk Management. The Addendum reminds depository institutions about the importance of a strong and viable contingency funding plan and discusses specific actions depository institutions should take with regard to contingency funding plans. The Addendum also encourages depository institutions to incorporate the discount window as part of their contingency funding plans and discusses the option for credit unions to access the Central Liquidity Facility as a contingent federal liquidity source.

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 ended on April 3, 2023.
  • CFPB Statement of Policy Regarding Prohibition of Abusive Acts and Practices – public comment period ended on July 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 Financial Innovation Rule — public comment period ended on February 28, 2023.
  • NCUA Proposed Field of Membership Rule – public comment period ended on May 30, 2023.

Interagency Proposed Rules

  • OCC, NCUA, FDIC, FRB — Joint, proposed rulemaking regarding uniform rules and procedures for administrative hearings. The public comment period ended on June 13, 2022.
  • CFPB, OCC, FRB, NCUA, FDIC, and FHFA — Joint, proposed rule to implement automated valuation model (AVM) quality control standards. The public comment period ended on August 21, 2023.
  • FDIC, FRB, OCC — Joint, proposed interagency rulemaking on amendments to the regulatory capital rule; comment period ends November 30, 2023.

Stay on Top of Compliance Changes

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