January Regulatory Compliance Briefing

The January Regulatory Compliance Briefing includes a recap of December’s five finalized changes by the CFPB and FRB and dozens of other compliance alerts and advisories to be aware of this month. Learn more about January’s regulatory compliance changes below.

Recap of December Compliance Alerts

Compliance Alerts Expected in January

To Be Decided 

Regulatory Effective Dates – Next 90 Days

CFPB Civil Penalty Adjustments

Effective – January 15, 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 Updated “What you should know about home equity lines of credit” Brochure

The CFPB issued an updated version of the HELOC Brochure. The Truth in Lending Act and Regulation Z require lenders to provide the Brochure to consumers in connection with home equity lines of credit.

Federal Deposit Insurance Corporation (FDIC)

FDIC Proposed Rulemaking on FDIC Official Sign and Advertising Rule

On December 13, 2022, the FDIC issued a Notice of Proposed Rulemaking to amend part 328 of its regulations governing the use of the official FDIC sign and insured depository institutions’ advertising statements. The proposed amendments are intended to modernize the rules governing the display of the FDIC official sign-in branches and address the application of sign requirements to non-traditional branches, including digital and mobile channels. The proposed amendments would also clarify the FDIC’s regulations regarding misrepresentations of deposit insurance coverage. The proposed amendments are further discussed in FDIC Financial Institution Letter FIL-52-2022.

FDIC Amendments to the Guidelines for Appeals of Material Supervisory Determinations

On December 13, 2022, the FDIC adopted revisions to the Guidelines for Appeals of Material Supervisory Determinations. The revised Guidelines expand and clarify the role of the FDIC’s Ombudsman in the appeals process and add the Ombudsman to the SARC as a non-voting member. The revised Guidelines are effective December 13, 2022. The revisions are further discussed in FDIC Financial Institution Letter FIL-53-2022.

Interagency Statement Extending the 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 22, 2022, the FDIC, FRB, and the OCC, issued an Interagency Statement to extend the expiration of a no-action position previously provided in an interagency statement that was set to expire on January 1, 2023. The Interagency Statement provides 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, 2024, 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.

Financial Crimes Enforcement Network (FinCEN)

FinCEN Proposed Rule – Beneficial Ownership Information Access and Safeguards

On December 16, 2022, FinCEN issued a Proposed Rule regarding access by authorized recipients to beneficial ownership information (BOI) reported to FinCEN pursuant to the Corporate Transparency Act (CTA). The Proposed Rule is the second of three rulemakings planned by FinCEN to implement the CTA. The first rulemaking was the BOI Reporting Rule finalized on September 30, 2022. The third rulemaking will revise FinCEN’s CDD rule.

Under this Proposed Rule, financial institutions would be able to request beneficial ownership information from FinCEN as part of their Customer Due Diligence process, and FinCEN would then allow the information to be released if the reporting company has granted consent to the financial institution.

National Credit Union Administration (NCUA)

NCUA Expiration of Emergency Exemption From Certain In-Person Meeting Requirements

On December 7, 2022, the NCUA issued NCUA Letter to Federal Credit Unions, 22-FCU-03, indicating that the pandemic-related exemption for federal credit unions to conduct virtual meetings will expire on December 31, 2022. The Letter reminds FCUs that they may still choose to hold hybrid meetings (virtual, with an in-person component) if that suits their needs and is permitted by their bylaws. In addition, the NCUA’s Federal Credit Union Bylaws permit federal credit union boards to conduct “virtual-only” meetings for all but one of their board meetings per calendar year.

NCUA Proposed Financial Innovation Rule

On December 15, 2022, the NCUA issued a Proposed Rule to amend the NCUA’s regulations on the purchase of loan participations and the purchase, sale, and pledge of eligible obligations and other loans, including notes of liquidating credit unions. The Proposed Rule would: 1) Remove current limits for federal credit unions (FCUs) on purchases of eligible obligations; 2) Remove qualifying criteria for FCUs to purchase non-member loans from federally insured credit unions; 3) Impose due diligence and risk management requirements on FCUs that purchase and sell eligible obligations; and 4) Codify a 2015 legal opinion letter on the definition of originating lenders in the loan participation regulation, among other changes.

Federal Reserve Board (FRB)

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

FRB Modifications to the Federal Reserve Policy on Payment System Risk to Accommodate Enhancement to the Automated Claim Adjustment Process

On December 21, 2022, the FRB issued technical updates to its policy governing the provision of intraday credit in accounts at the Federal Reserve Banks. The updates are effective January 30, 2023, and include a new rule establishing settlement times for debits and credits to institutions’ Federal Reserve accounts for certain transactions, as well as streamline the settlement process and shorten the time needed for debits and credits to settle.

Office of the Comptroller of the Currency (OCC)

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

Federal Financial Institutions Examination Council (FFIEC)

Revisions to Interagency Examination Procedures for the FDCPA

Federal banking regulators jointly released revisions to interagency examination procedures for the Fair Debt Collection Practices Act (FDCPA) and its implementing regulation (Regulation F). Updates include the determination of whether a bank is a debt collector under the FDCPA and Regulation F, prohibitions on certain communications with consumers in connection with debt collection, requirements for a reasonable and simple method that consumers can use to opt out of additional communications and attempts to communicate, prohibited practices of a debt collector to not harass, oppress, or abuse any person in connection with the collection of a debt.

Future & Pending Regulatory Actions and Compliance Alerts

Financial Crimes Enforcement Network (FinCEN)

• FinCEN’s Advance Notice of Proposed Rulemaking seeks comments on a potential rule to address the vulnerability of the U.S. real estate market to money laundering and other illicit activity. Public Comments ended on February 14, 2022.
• FinCEN’s Pilot Program for SARs Sharing proposed rule ended on 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. CFPB public comments ended on March 25, 2022.

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’s Proposed Rule on Reportable Cyber Incidents – public comment period ended on September 26, 2022.
• NCUA Proposed Amendments to Subordinated Debt Rule – public comment period ended on December 5, 2022
• NCUA Proposed Amendments to FCU Bylaws related to member expulsion – comment period ended on December 2, 2022
• NCUA Proposed Financial Innovation Rule – comment period ends on February 28, 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.