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  • FTC seeks comments on possible adjustments to privacy and data security rulemaking authority

    Privacy, Cyber Risk & Data Security

    On August 6, the FTC published a request for comments in the Federal Register—in advance of a series of 15 to 20 public hearings scheduled to start this September—on whether the agency should make adjustments to competition and consumer protection law, enforcement priorities, and policy in light of evolving technologies and market developments. The hearings will cover a range of consumer-related issues, including the agency’s “remedial authority to deter unfair and deceptive conduct in privacy and data security matters” and the “interpretation and harmonization of state and federal statutes and regulations that prohibit [such conduct].” According to testimony presented by FTC Chairman Joseph Simons at a July 18 House Subcommittee on Digital Commerce and Consumer Protection hearing, there exists a need for expanded rulemaking and civil penalty authority. Specifically, Simons discussed Section 5 of the FTC Act, which he stated is too limited to address all of the privacy and security concerns in the marketplace and does not provide for civil penalties. Comments on the hearing topics must be received by August 20.

    Privacy/Cyber Risk & Data Security FTC Federal Register FTC Act

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  • FDIC issues updated Section 19 policy statement

    Federal Issues

    On August 3, the FDIC published in the Federal Register an updated statement of policy pursuant to Section 19 of the Federal Deposit Insurance Act (FDI Act) concerning participation in banking of a person convicted of a crime of dishonesty, breach of trust, money laundering or who has entered a pretrial diversion program in connection with the prosecution of such offenses. In addition to technical and clarifying changes, the final policy statement expands the criteria of de minimis offenses for which the FDIC will not require the filing of an application, and in response to comments received on the January proposal, (i) clarifies when an expungement is considered complete for Section 19 purposes; (ii) clearly recognizes that convictions set aside based on procedural or substantive error should not be considered convictions under Section 19; and (iii) adjusts the definition of “jail time” to not include “those on probation or parole who may be restricted to a particular jurisdiction.”

    Federal Issues FDIC FDI Act Section 19 Federal Register

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  • Federal Reserve issues final rules reflecting credit and interest rate increases

    Agency Rule-Making & Guidance

    On June 20, the Federal Reserve issued a final rule amending Regulation A (Extensions of Credit by Federal Reserve Banks) to reflect its June 14 approval of a one-quarter percent increase in the primary credit rate at each Federal Reserve Bank. Because the formula for the secondary credit rate references the primary rate, the secondary credit rate also increased by one-quarter percentage point.

    The same day, the Federal Reserve also issued a final rule amending Regulation D (Reserve Requirements of Depository Institutions) to reflect its June 14 approval of a one-quarter percent increase to the “rate of interest paid on balances maintained to satisfy reserve balance requirements (IORR) and the rate of interest paid on excess balances (IOER) maintained at Federal Reserve Banks by or on behalf of eligible institutions.”

    Agency Rule-Making & Guidance Federal Reserve Federal Register Regulation A Regulation D

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  • NCUA proposes additional payday loan alternative option

    Agency Rule-Making & Guidance

    On June 4, the National Credit Union Administration (NCUA) published in the Federal Register a proposal to create a new payday alternative loan product (PAL II) in addition to the current payday alternative loan product (PAL I), which has been available since 2010. According to the NCUA announcement, the goal of PAL II is to expand access to safe and affordable short-term, small-dollar loans for consumers of modest means. PAL II would include most features of PAL I, with four changes: (i) eliminating a loan minimum while setting the maximum at $2,000; (ii) setting a term maximum of 12 months; (iii) eliminating the requirement for membership minimum length; and (iv) as long as the consumer only has one outstanding loan at the time, eliminating the time restriction on the number of loans a credit union can make to the borrower in a six month period.

    The proposal also requests input on the potential features of a possible third option, PAL III, including lending restrictions, associated fees, and underwriting guidelines.

    As previously covered by InfoBytes, the OCC recently issued a bulletin encouraging banks to offer short-term, small dollar installment lending.

    Agency Rule-Making & Guidance NCUA Payday Lending Federal Register Credit Union

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  • FDIC proposes information collection renewal for appraisal management companies

    Agency Rule-Making & Guidance

    On May 2, the FDIC published a notice and request for comment in the Federal Register regarding the renewal of an existing information collection on the minimum requirements for appraisal management companies (AMCs). According to the notice, there is no significant change in the methodology or substance of the information collection; however, burden estimates for states and AMCs have been revised to include (i) “AMC Written Notice of Appraiser Removal from Network or Panel;” (ii) “Develop and Maintain a State Licensing Program;” (iii) “AMC Reporting Requirements (State and Federal AMCs);” and (iv) “State Reporting Requirements to the Appraisal Subcommittee.” The notice requests comment on, among other things, whether the information collection is necessary and ways to minimize the burden of the information collection on the respondents. Comments are due by July 2.

    Agency Rule-Making & Guidance FDIC Appraisal Federal Register

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  • Federal Reserve requests comments on proposal addressing capital plan and stress test rules

    Agency Rule-Making & Guidance

    On April 25, the Federal Reserve Board (Fed) published a request for comments in the Federal Register on a proposal to amend the Fed’s capital plan rule, capital rule, and stress testing rules by integrating the rules to simplify the capital regime. Under the proposed rule, a financial institution’s required stress capital buffer and stress leverage buffer would be established by the Fed’s supervisory stress test. The stress capital buffer requirement would replace the existing, static 2.5 percent of risk-weighted assets portion of the capital conservation buffer requirement under the standardized approach of the capital rule. The proposal—which would take effect December 31 with financial institutions’ first set of buffer requirements generally going into effect on October 1, 2019—would apply to bank holding companies with total consolidated assets of $50 billion or more, as well as U.S. intermediate holding companies of foreign banking organizations established pursuant to the Fed’s Regulation YY. Community banks, state member banks or saving and loan companies, and bank holding companies that do not meet the required asset threshold would be exempt. All comments must be received by June 25.

    Agency Rule-Making & Guidance Federal Reserve Federal Register Stress Test

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  • Federal Reserve proposes changes to simplify capital rules for large banks

    Agency Rule-Making & Guidance

    On April 10, the Federal Reserve Board (Board) announced proposed changes intended to simplify the capital regime applicable to bank holding companies with $50 billion or more in total consolidated assets by integrating the Board’s regulatory capital rule (capital rule) and Comprehensive Capital Analysis and Review (CCAR) and stress test rules. The proposal introduces a “stress capital buffer” (SCB) requirement which will replace the existing fixed capital conservation buffer requirement. Under the proposal, the size of the SCB will be based on the annual stress test and will be added to the bank’s capital requirements for the coming year. For globally systemically important banks (GSIB), a GSIB surcharge will be added to the determined SCB amount. According to the Board’s announcement, the amount of capital required for GSIBs will generally stay the same or somewhat increase, while non-GSIBs will generally see a modest decrease. Overall, the Board states that the changes would reduce the number of capital-related requirements from 24 to 14. Comments on the proposal are due 60 days after publication in the Federal Register.

    Agency Rule-Making & Guidance Stress Test CCAR Capital Requirements Federal Reserve Federal Register

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  • CFPB releases RFI on financial education programs

    Federal Issues

    On April 4, the CFPB released its eleventh Request for Information (RFI) in a series seeking feedback on the Bureau’s operations. This RFI solicits public comment to assist the Bureau in “assessing the overall efficiency and effectiveness of its consumer financial education programs.” Pursuant to the Dodd-Frank Act, the CFPB develops education programs to educate and empower consumers to make better informed financial decisions, and to improve consumers’ financial literacy. The Bureau develops programs for the general public as well as programs designed for special populations. While the Bureau is seeking feedback on all aspects of its financial education initiatives, the RFI specifically seeks comments related to (i) the topics and delivery functions of the programs; (ii) the effectiveness of the programs, including how the Bureau should measure program success; and (iii) how to avoid duplication and improve coordination with other federal agencies. The RFI is expected to be published in the Federal Register on April 9. Comments will be due 90 days from publication.

    Federal Issues RFI CFPB Succession Consumer Finance Consumer Education Dodd-Frank Federal Register

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  • Federal banking agencies raise commercial real estate appraisal threshold to $500,000

    Agency Rule-Making & Guidance

    On April 2, the Federal Reserve Board, the OCC, and the FDIC (agencies) issued a joint press release announcing the adoption of a final rule, which would increase the threshold for commercial real estate transactions requiring an appraisal from $250,000 to $500,000. After receiving more than 200 comments to their July 2017 joint notice of proposed rulemaking (see previous InfoBytes coverage here), the agencies increased the threshold to $500,000, rather than $400,000 as originally proposed. The rulemaking initiative responded to financial industry concerns that adjustments had not been made to the current threshold amounts, which were set 24 years ago. In accordance with the final rule, commercial real estate transactions exempted by the $500,000 threshold will no long require appraisals, but will instead be subject to an evaluation, which is not required to comply with the Uniform Standards of Professional Appraiser Practices in order to provide a market value estimate of the real estate pledged as collateral and is not required to be completed by a state licensed or certified appraiser. However, the final rule stipulates that real-estate related transactions secured by a single one-to-four family residential property are excluded. The final rule will take effect immediately upon publication in the Federal Register.

    Agency Rule-Making & Guidance Commercial Lending Federal Reserve OCC FDIC Federal Register

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  • Treasury adjusts for inflation maximum civil monetary penalties assessed under OFAC sanction regulations

    Agency Rule-Making & Guidance

    On March 19, the U.S. Treasury Department published a final rule in the Federal Register that adjusts for inflation the maximum amount of civil monetary penalties that may be assessed by the Treasury’s Terrorism Risk Insurance Program, Office of Foreign Assets Control, and Financial Crimes Enforcement Network for violations of laws administered by those agencies. The rule became effective immediately.

    Agency Rule-Making & Guidance Financial Crimes OFAC Civil Money Penalties Department of Treasury Federal Register Sanctions

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