January Regulatory Compliance Briefing

Stay up to date with recent regulatory activity and advisories for banks, credit unions, and other financial institutions.

The January Regulatory Compliance Briefing includes recent and upcoming alerts, announcements, and pending actions to be aware of this month.

Recap of December & January Compliance Alerts

Consumer Financial Protection Bureau (CFPB)

CA-210 CFPB Final Rules updating Exemption Thresholds (Reg. C and Reg. Z)

• Rule/Action Final: December 18, 2023
• Effective Date: January 1, 2024
• Alert Date: December 19, 2023

Interagency Alert

CA-211 FRB, FDIC, and OCC Final Rules Updating Asset-Size Thresholds Under Community Reinvestment Act Regulations

• Rule/Action Final: December 26, 2023
• Effective Date: January 1, 2024
• Alert Date: December 29, 2023

Financial Crimes Enforcement Network (FinCEN)

CA-212 FinCEN Final Rule – Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities

• Rule/Action Final: December 22, 2023
• Effective Date: February 20, 2024
• Alert Date: December 29, 2023

Federal Deposit Insurance Corporation (FDIC)

CA-213 FDIC Final Rule on FDIC Official Signs and Advertising Requirements, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC’s Name or Logo

• Rule/Action Final: December 20, 2023
• Effective Date: April 1, 2024
• Alert Date: January 3, 2023

Regulatory Effective Dates – Next 90 Days

Financial Crimes Enforcement Network (FinCEN)

FinCEN Final Beneficial Ownership Access Rule

• Effective Date: February 20, 2024

Federal Deposit Insurance Corporation (FDIC)

FDIC Final Rule on FDIC Official Signs and Advertising Requirements, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC’s Name or Logo

• Effective Date: April 1, 2024

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 Annual Adjustments to Civil Penalty Amounts

On January 8, 2024, the CFPB announced the annual adjustments for inflation to the CFPB’s civil penalty amounts. The CFPB adjusts the civil penalties under the laws within the CFPB’s jurisdiction based on the cost-of living adjustments. For the 2024 annual adjustment, the multiplier reflecting the “cost-of-living adjustment” is 1.03241. Therefore, the CFPB’s civil penalties are increased by a multiplier of 1.03241 and rounded to the nearest dollar for 2024. The Final Rule provides a table reflecting the increased penalties for specified laws.

CFPB Proposed Overdraft Rule

On January 17, 2024, the CFPB issued a Proposed Rule to amend Reg. E and Reg. Z related to overdraft programs by very large financial institutions (assets of $10 billion or more). Under the Proposed Rule, such financial institutions could offer courtesy overdraft services, but only charge either: a) the direct costs to provide the service, or b) a “benchmark fee” of $3, $6, $7, or $14 (such amount to be determined in a Final Rule). If a very large financial institution wishes to charge a greater fee, the overdraft service would be deemed credit subject to TILA, and therefore require a credit agreement and TILA disclosures.

CFPB Proposed NSF Fee Rule

On January 24, 2024, the CFPB issued a Proposed Rule to prohibit financial institutions from charging fees, such as NSF fees, when a consumer initiates certain payment transactions that are instantaneously declined. The prohibition would cover transactions involving the use of debit cards, ATMs, or certain person-to-person apps. Charging such fees would constitute an abusive practice under the Consumer Financial Protection Act’s prohibition on unfair, deceptive, or abusive acts or practices.

Federal Deposit Insurance Corporation (FDIC)

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

On December 1, 2023, the FDIC issued FIL-62-2023, announcing a series of steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Illinois affected by severe storms and flooding.

FDIC Advisory: Managing Commercial Real Estate Concentrations in a Challenging Economic Environment

On December 18, 2023, the FDIC issued FIL-64-2023 and Advisory: Managing Commercial Real Estate Concentrations in a Challenging Economic Environment. The Advisory is intended to reemphasize the importance of strong capital, appropriate credit loss allowance levels, and robust credit risk-management practices for institutions with commercial real estate (CRE) concentrations. The Advisory identifies key risk-management actions for financial institutions with significant CRE concentrations to manage through changes in market conditions. The advisory replaces the 2008 advisory: Managing Commercial Real Estate Concentrations in a Challenging Environment (issued March 17, 2008).

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

On December 21, 2023, the FDIC issued FIL-66-2023, announcing a series of steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Tennessee affected by severe storms and tornadoes.

FDIC Guidance to Help Financial Institutions and Facilitate Recovery in Areas of Rhode Island Affected by Severe Storms, Flooding, and Tornadoes

On January 18, 2024, the FDIC issued FIL-2-2024, announcing a series of steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Rhode Island affected by severe storms, flooding, and tornadoes.

National Credit Union Administration (NCUA)

NCUA Reinstates Civil Money Penalties for Late Call Report Filing

On November 28, 2023, the NCUA announced that it will reinstate assessing civil money penalties for credit unions failing to submit NCUA Form 5300 Call Report on time, effective January 1, 2024.

NCUA Letter to Credit Unions (24-CU-1) 2024 Supervisory Priorities

On January 1, 2024, the NCUA issued a Letter to Credit Unions outlining the NCUA’s 2024 supervisory priorities and other updates to the agency’s 2024 examination program. Supervisory Priorities for 2024 include: Credit Risk, Liquidity Risk, Consumer Financial Protection (including overdraft programs, fair lending, and auto lending), Information Security (Cybersecurity), and Interest Rate Risk.

Office of the Comptroller of the Currency (OCC)

OCC Guidance on ‘Buy Now, Pay Later’ Lending

On December 6, 2023, the OCC issued guidance to national banks and federal savings associations to address the risks associated with “buy now, pay later” lending. The guidance focuses on the risk management of buy now, pay later loans, which are payable in four or fewer installments and carry no finance charges.

Federal Trade Commission (FTC)

FTC Proposed COPPA Rule

On December 20, 2023, the FTC issued a Proposed Rule to amend the Children’s Online Privacy Protection Rule (COPPA Rule). The proposed changes would place new restrictions on the use and disclosure of children’s personal information and further limit the ability of companies to condition access to services on monetizing children’s data. Specifically, the proposed changes include: Requiring separate opt-in for targeted advertising; a prohibition against conditioning a child’s participation on collection of personal information; limits on the support for the internal operations exception; limits on nudging kids to stay online; changes related to Ed Tech; increasing accountability for Safe Harbor programs; strengthening data security requirements; and limits on data retention.

Interagency Announcements

Interagency Extension of the Revised Statement Regarding Status of Certain Investment Funds and Their Portfolio Investments for Purposes of Regulation O and Reporting Requirements under Part 363 of FDIC Regulations

On December 15, 2023, the FDIC, FRB, and OCC issued an Interagency Statement to extend the expiration of the certain no-action position previously provided in an Interagency Statement. The Interagency Statement provided that the federal banking agencies would not take action against banks or principal shareholder fund complexes with respect to extensions of credit by the banks to fund complex-controlled portfolio companies that otherwise would violate Regulation O, provided the fund complexes and banks satisfy the criteria set forth in the Interagency Statement. The new Interagency Statement extends the no-action position until the sooner of January 1, 2025, or the effective date of a final FRB rule having a revision to Regulation O that addresses the treatment of extensions of credit by a bank to fund complex-controlled portfolio companies that are insiders of the bank.

Interagency Statement for Banks on the Issuance of the Beneficial Ownership Information Access Rule

On December 21, 2023, the FDIC, FRB, NCUA, OCC, FinCEN, and state bank and credit union regulators issued an interagency statement regarding the beneficial ownership information Access Rule. The Interagency Statement explains that the Access Rule does not create a new regulatory requirement for banks to access BOI from the BO IT System or a supervisory expectation that they do so, and that the Access Rule does not necessitate changes to BSA/AML compliance programs.

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.

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.
• CFPB Proposed Rule to Supervise Nonbank Digital Payment App Providers — public comment period ended on January 8, 2024.
• CFPB Proposed Personal Financial Data Rights Rule — public comment period ended on December 29, 2023.
• CFPB Proposed NSF Fee Rule — public comment period ends March 25, 2024.
• CFPB Proposed Overdraft Rule — public comment period ends April 1, 2024.

Federal Deposit Insurance Corporation (FDIC)

• FDIC Climate Risk Principles — public comment period ended on June 1, 2022.
• FDIC Proposed Large Bank Capital Rules — public comment period ended on January 16, 2024.

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 Field of Membership Rule — public comment period ended on May 30, 2023.
• NCUA Proposed Share Insurance Rule — public comment period ended on December 26, 2023.
• NCUA Proposed Fair Hiring in Banking Rule – public comment period ended on January 8, 2024.

Federal Reserve Board (FRB)

• FRB Proposed Rule on Debit Card Interchange Fees and Routing — public comment period ends February 12, 2024..

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. The public comment period ended on January 16, 2024.
• FDIC, FRB, OCC — Joint, proposed rulemaking to impose a long-term debt requirement for certain insured depository institutions. The public comment period ended on January 16, 2024.

Stay on Top of Compliance Changes

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