The August Regulatory Compliance Briefing includes recent alerts, advisories, and pending actions to be aware of this month.
CA-202 Interagency Guidance on Risk Management of Third-Party Relationships
CA-203 Delayed Effective Date of CFPB Small Business Lending Rule for Certain Banks
CFPB Final Rule on Small Business Lending Data Collection
NCUA Final Rule on Cyber Incident Reporting
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.
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.
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.
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.
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.
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.
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.
For access to the complete analysis, executive summaries, and actions needed to ensure compliance, contact us.