On June 7, the National Credit Union Administration published in the Federal Register a notice and request for information on ways it can improve and modernize data collection for regulatory oversight of credit unions. In particular, the NCUA is looking for ways to improve the Call Report and Credit Union Profile.
The NCUA is seeking stakeholder input in several specific areas, including:
• Specific areas of the Call Report and Credit Union Profile that users find challenging;
• Sections or items that could be made optional for small or non-complex credit unions without compromising the agency’s ability to assess risk in these institutions;
• Items that could be added to the reports to enhance the agency’s analysis of the system’s performance trends;
• Whether Call Report database fields align with a credit union’s internal accounting;
• How the Call Report and Credit Union Profile could be reorganized to reduce credit unions’ reporting burden; and
• Additional suggestions or ideas from credit unions for collecting financial and non-financial information.
Comments due by Aug. 1.
CFPB publishes civil money penalty inflation adjustments
On June 14, the Consumer Financial Protection Bureau published an interim final rule in the Federal Register to adjust the civil monetary penalties within the bureau’s jurisdiction for inflation, as required by federal law. The rule adds a new Part 1083 (“Civil Penalty Adjustments”) to the Code of Federal Regulations.
Specifically, it adjusts the following civil money penalties:
• Consumer Financial Protection Act: 12 U.S.C. 5565(c)(2)(A) – Tier 1 penalty for any violation of any provision of federal consumer financial law, or rule, or final order imposed in writing by the CFPB – $5,000 per day, adjusted to $5,437.
• Consumer Financial Protection Act: 12 U.S.C. 5565(c)(2)(B) – Tier 2 penalty for any reckless violation of any provision of federal consumer financial law, or rule, or final order imposed in writing by the CFPB – $25,000 per day, adjusted to $27,186.
• Consumer Financial Protection Act: 12 U.S.C. 5565(c)(2)(C) – Tier 3 penalty for any knowing violation of any provision of federal consumer financial law, or rule, or final order imposed in writing by the CFPB – $1 million per day, adjusted to $1,087,450.
• Interstate Land Sales Full Disclosure Act: 15 U.S.C. 1717a(a)(2) – Per violation, $1,000, adjusted to $1,894; annual cap from $1 million to $1,893,610.
• Real Estate Settlement Procedures Act (RESPA): 12 U.S.C. 2609(d)(1) – Provision of annual escrow statement, $50 per failure, with annual cap of $100,000, increased to $89 per failure, with annual cap of $178,156; per intentional failure, $100 raised to $178 (with no caps).
• S.A.F.E. Act: 12 U.S.C. 5113(d)(2): Only in states where there is a licensing system imposed by the CFPB – $25,000 per violation increased to $27,455.
• Truth in Lending Act: 15 U.S.C. 1639c(k) (Appraisal independence requirements in real estate transactions) – $10,000 per day for first violation, increased to $10,875; $20,000 per day for subsequent violations, increased to $21,749.
The interim final rule will be effective on July 14, and comments must be received by that date.
HUD adjusts civil monetary penalty amounts
On June 15, the U.S. Department of Housing and Urban Development published in the Federal Register an interim final rule, “Inflation Catch-up Adjustment of Civil Monetary Penalty Amounts.” The rule amends the agency’s civil monetary penalty regulations by making inflation adjustments as mandated by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. It also removes three obsolete civil monetary penalty regulations previously authorized under statutes for which either HUD no longer has enforcement authority or the program is no longer active. Among other increases, the amendment increases the penalty per violation for Federal Housing Administration mortgagees and lenders from the current levels of $8,500 per violation (capped at $1,525,000 per year) to $9,468 per violation (capped at $1,893,610 annually). The rule will be effective on Aug. 16. Comments are due by Aug. 15.
CFPB announces annual Regulation Z adjustments
The Consumer Financial Protection Bureau announced June 17 a final rule on its annual adjustments to the dollar amounts of various thresholds under the Truth in Lending Act regulations that will apply to certain consumer credit transactions in 2017. The notice addresses the thresholds related to the minimum interest charge and safe harbor penalty fees under the Credit Card Accountability Responsibility and Disclosure Act, the total loan amount and points and fees dollar trigger for high-cost mortgages under the Home Ownership and Equity Protection Act, and the maximum points and fees for qualified mortgages under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The notice also revises one of the 2016 safe harbor penalty fee amounts due to a decline in the 2015 Consumer Price Index that was not fully accounted for. That revision is effective upon publication in the Federal Register.
NCUA adjusts civil monetary penalty levels
The National Credit Union Administration on June 21 published an interim final rule in the Federal Register amending its regulations to adjust the maximum amount of each civil monetary penalty within its jurisdiction to account for inflation. This action, including the amount of the adjustments, is required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The rule is effective July 21 and comments must be received on or before that date.
Other Industry Issues of Interest
OFAC updates Iran-related FAQs
The Office of Foreign Assets Control on June 8 updated its frequently asked questions relating to the lifting of certain sanctions under the Joint Comprehensive Plan of Action relating to Iran. Two FAQs related to Financial and Banking Measures and nine FAQs related to Foreign Entities Owned or Controlled by U.S. Persons were added. OFAC added these FAQs to provide further clarity on the scope of the sanctions lifting that occurred on Implementation Day (Oct. 1, 2015) of the JCPOA.
FDIC issues revised Regulation P Exam procedures
The Federal Reserve Board on June 8 issued revised interagency examination procedures for Regulation P (Privacy of Consumer Financial Information).
Consumer Compliance Outlook available
The Federal Reserve System published on June 8 the first 2016 issue of Consumer Compliance Outlook. The publication features these and other articles:
• Interagency flood insurance regulation update webinar: Questions and answers.
• Credit and debit card issuers’ obligations when consumers dispute transactions with merchants.
• Proposed changes to the Uniform Interagency Consumer Compliance Rating System.
OCC issues reminder of servicemember protections
The Office of the Comptroller of the Currency issued a bulletin informing national banks, federal savings associations, and federal branches and agencies of foreign banks of the temporary extension of certain protections under the Servicemembers Civil Relief Act. The act amendments continue a temporary provision that extends for one year following a servicemember’s period of military service protections related to the sale, foreclosure, or seizure of the servicemember’s mortgaged property, or the filing of a legal action to enforce a mortgage obligation or other similarly secured obligation. The temporary extension expires on Dec. 31, 2017. The Department of Housing and Urban Development has updated its “Servicemembers Civil Relief Act Notice Disclosure” (Form 92070) to reflect the extensions.
NCUA releases June 2016 issue
The June 2016 issue of The NCUA Report features an article by the regulator’s Office of Minority and Women Inclusion outlining how diversity leads to better service, greater innovation and increased membership.
Other articles in this issue include:
• NCUA extends Call Report deadlines for July, October reporting.
• Chairman’s Corner: Instant replay timeout: Official review of the regulatory process.
• Board Perspective by Mark McWatters: Accounting standards may drive ALLL changes.
• Board Actions: Stabilization fund to pay treasury $700 million.
• How will your commercial loan underwriting and deal structure change with the new member business lending rule?
• Grants give low-income credit unions the means to grow.
• Reaching the credit-invisible.
Agencies announce 2016 Distressed or Underserved Geographies list
The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation announced June 17 the availability of the 2016 list of distressed or underserved nonmetropolitan middle-income geographies, where revitalization or stabilization activities are eligible to receive Community Reinvestment Act consideration as community development.