November Regulatory Compliance Briefing

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

Recap of November Compliance Alerts

Interagency Alerts

CA-207 OCC, FRB, and FDIC Final Community Reinvestment Act Rule

• Rule/Action Final: October 24, 2023
• Effective Date: April 1, 2024
• Alert Date: November 14, 2023

CA-208 CFPB, FRB, OCC Annual Updates to Exemption Thresholds (Reg. Z and Reg. M)

• Rule/Action Final: November 13, 2023
• Effective Date: January 1, 2024
• Alert Date: November 21, 2023

National Credit Union Administration (NCUA)

CA-209 NCUA Charitable Donation Accounts Final Rule

• Rule/Action Final: November 16, 2023
• Effective Date: December 21, 2023
• Alert Date: November 21, 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 Proposed Personal Financial Data Rights Rule

On October 31, 2023, the CFPB issued a Proposed Rule to establish 12 CFR Part 1033, implement section 1033 of the Consumer Financial Protection Act of 2010, and provide consumers greater access rights to their data held by financial institutions. The Proposed Rule would: 1) require financial institutions to make available to consumers and authorized third parties certain data relating to consumers’ transactions and accounts; 2) establish obligations for third parties accessing a consumer’s data, including privacy protections for that data; and 3) provide basic standards for data access.

CFPB Proposed Rule to Supervise Nonbank Digital Payment App Providers

On November 7, 2023, the CFPB issued a Proposed Rule to supervise nonbank providers that offer services like digital wallets, payment apps, and funds transfer apps. The Proposed Rule would define a market for general-use digital consumer payment applications, which would cover nonbank providers of funds transfer and wallet functionalities through digital applications for consumers’ general use in making payments to other persons for personal, family, or household purposes. Larger participants of this market would be subject to the CFPB’s supervisory and examination authority under the Consumer Financial Protection Act (CFPA). The Proposed Rule does not apply to banks and credit unions.

Federal Deposit Insurance Corporation (FDIC)

FDIC Proposed Fair Hiring in Banking Rule

On October 24, 2023, the FDIC issued a Proposed Rule to update its regulations concerning section 19 of the Federal Deposit Insurance Act to conform to the Fair Hiring in Banking Act. The Act excluded or exempted categories of otherwise-covered offenses from the scope of section 19, including certain older offenses, offenses committed by individuals 21 or younger, and “certain lesser offenses.” The proposed amendments address, among other topics, the types of offenses covered by section 19, the effect of the completion of sentencing or pretrial-diversion program requirements in the context of section 19, and the FDIC’s procedures for reviewing applications filed under section 19.

FDIC Final Rule on Special Assessment Pursuant to Systemic Risk Determination

On November 16, 2023, the FDIC issued a final rule to implement a special assessment to recover the loss to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. The Final Rule applies to FDIC-insured banks with $5 billion or more in total consolidated assets.

National Credit Union Administration (NCUA)

NCUA Proposed Share Insurance Rule

On October 25, 2023, the NCUA issued a Proposed Rule to simplify the share insurance rules related to trust and mortgage servicing accounts. The Proposed Rule would: 1) establish a “trust accounts” category that would provide for coverage of funds of both revocable trusts and irrevocable trusts, 2) provide consistent share insurance treatment for all mortgage servicing account balances held to satisfy principal and interest obligations to a lender, and 3) provide more flexibility for the NCUA to consider various records in determining share insurance coverage in liquidations.

NCUA Proposed Fair Hiring in Banking Rule

On November 7, 2023, the NCUA issued a Proposed Rule to incorporate its “Second Chance” Interpretive Ruling and Policy Statement 19-1 (IRPS 19-1) and the Fair Hiring in Banking Act (FHBA) into its regulations. The Proposed Rule would allow people convicted of certain minor offenses to work in the credit union industry without applying for the NCUA’s approval.

Interagency Announcements

Interagency Guidance on Principles for Climate-Related Financial Risk Management for Large Financial Institutions

On October 24, 2023, the FDIC, FRB, and OCC jointly issued guidance to provide a high-level framework for the safe and sound management of exposures to climate-related financial risks for financial institutions with over $100 billion in total consolidated assets. The agencies indicated that the principles in the guidance are intended to support efforts by financial institutions to focus on key aspects of climate-related financial risk management and are designed to help financial institutions’ boards and management make progress toward incorporating climate-related financial risks into risk management frameworks in a manner consistent with safe and sound practices.

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.
• CFPB Proposed Rule to Supervise Nonbank Digital Payment App Providers — public comment period ends on January 8, 2024.
• CFPB Proposed Personal Financial Data Rights Rule — public comment period ends on December 29, 2023.

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 extended to 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 ends on December 26, 2023.
• NCUA Proposed Fair Hiring in Banking Rule – public comment period ends on January 8, 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; comment period ends November 30, 2023.
• FDIC, FRB, OCC — Joint, proposed rulemaking to impose a long-term debt requirement for certain insured depository institutions; comment period ends November 30, 2023.

Stay on Top of Compliance Changes

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