InfoBytes Blog
Filter
Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.
FinCEN releases statement on NPRM for beneficial ownership
On February 8, FinCEN disclosed that the comment period from a December 2021 notice of proposed rulemaking (NPRM) related to the reporting of beneficial ownership information (the “Reporting NPRM”) received more than 230 public comments and is now closed. As previously covered by InfoBytes, in December, FinCEN issued a NPRM implementing the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA), which addressed who must report beneficial ownership information, when to report it, and what information they must provide. FinCEN noted that “the next step in the CTA rulemaking series will be FinCEN’s publication of proposed rules on BOI access and disclosure requirements (the 'Access NPRM'), which FinCEN anticipates publishing later this year.” According to FinCEN, some public comments included requests for the opportunity to submit, supplement, or amend their comments on the Reporting NPRM after having the opportunity to review the Access NPRM.
VA establishes threshold for reporting VA debts to CRAs
On February 2, the Department of Veterans Affairs published a final rule in the Federal Register amending its regulations around the conditions by which VA benefits debts or medical debts are reported to consumer reporting agencies (CRAs), and creating a methodology for determining a minimum threshold for debts reported to the CRAs. According to the VA, approximately 5,000 delinquent accounts are reported monthly to credit bureaus, and, in many cases, veterans complained about the loss of security clearance or an inability to obtain credit or rental housing. In amending the rule, the VA acknowledged that certain debts, such as medical debts, “are fundamentally different than consumer debt.” Under the new rule, debts are to be reported to a credit bureau if (i) they are considered to be “currently not collectible,” meaning the VA has exhausted available debt collection efforts; (ii) the debt is not owed by someone who has been determined to be catastrophically disabled or has a gross household income below a certain amount; and (iii) the debt owed is over $25. The rule is effective March 4.
On February 7, the CFPB published a blog highlighting the changes that the VA made in its final rule. Among other things, the blog discussed changes to VA’s debt collection practices, protections against surprise medical bills, and getting help with medical bills.
OCC looks at compliance with state laws in CRA evaluations
On February 2, the OCC issued Bulletin 2022-2 addressing the agency’s processes for considering state banking commissioner input related to the performance of national banks under state community reinvestment laws, as well as state consumer complaint referrals. Among other things, the Bulletin outlines OCC policy and procedures for considering state input on the community reinvestment performance of OCC-supervised banks, including the implementation of Riegle–Neal Interstate Banking and Branching Efficiency Act community reinvestment-related provisions. Noting that several states and the District of Columbia have adopted community reinvestment laws that are similar to the federal Community Reinvestment Act (CRA), the OCC states that it will consider input from state banking commissioners regarding a national bank’s performance under applicable state community reinvestment laws when evaluating the bank’s CRA performance. The Bulletin also provides general guidance related to the OCC’s expectations concerning the handling of consumer complaints that state officials refer to national banks and federal savings associations, as well as state referrals of complaints to the OCC. The Bulletin “reminds banks that the OCC’s exclusive visitorial authority is not a basis for declining to address consumer complaints referred by state or local officials,” and “encourages banks to explain to state officials how complaints were resolved but without compromising consumers’ privacy interests or other confidential information.” Additionally, state officials are encouraged to refer to the OCC complaints alleging violations of federal fair lending laws or illegal, predatory, unfair, or deceptive acts or practices.
Bulletin 2022-2 rescinds OCC Advisory Letters 99-1 and 2004-2.
FCC proposes to classify ringless voicemails as “calls” under the TCPA
On February 2, FCC Chairwoman Jessica Rosenworcel announced a proposal that would classify technology that leaves ringless voicemails on consumers’ cell phones as “calls” under the TCPA and therefore subject to the FCC’s robocalling restrictions. If adopted by the full Commission, callers using this form of technology would be required to obtain a consumer’s consent before delivering a ringless voicemail. The announcement explained that the TCPA “prohibits making any non-emergency call using an automatic telephone dialing system or an artificial or prerecorded voice to a wireless telephone number without the prior express consent of the called party.” According to Chairwoman Rosenworcel, ringless voicemails should face the same consumer protection rules as other robocalls. The proposal is in response to a petition that asked the FCC to find that ringless voicemails are not calls protected by the TCPA.
CFTC issues no-action letter on compliance date for swap data
On January 31, the CFTC issued a no-action letter on the compliance dates for the November 25, 2020 amendments to the swap data reporting rules. According to the letter, the CFTC’s Division of Data does not recommend that the Commission take enforcement action against market participants “for failure to comply with the Amendments before December 5, 2022, and for failure to comply with the Block and Cap Amendments before December 4, 2023, provided that the entity comply with the Parts 43, 45, 46, and 49 regulations that were in effect on January 1, 2021.” A statement released by CFTC Commissioner Dawn D. Stump noted that she “expect[s] market participants to work diligently toward resolving the operational and technological issues they have encountered in complying with the Amendments,” and that she hoped the efforts will “better align swap data reporting rules internationally [and] will at last permit much needed international deference among the various regulatory bodies who long ago committed to improving swap data for the benefit of these global markets.”
CFPB releases regulatory agenda
On January 31, the CFPB released its semiannual regulatory agenda in the Federal Register, as part of the Fall 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions. According to the CFPB, it “reasonably anticipates having the regulatory matters identified below under consideration during the period from November 1, 2021 to October 31, 2022.” The next agenda will be published in Spring 2022, which will update the recently released agenda through Spring 2023. Among other things, the agenda noted that the Bureau made “significant progress” on the implementation of Section 1071 of the Dodd-Frank Act, which covers banks’ collection, reporting, and disclosure of information on credit applications made by women-owned, minority-owned, and small businesses. Other highlights of the agenda include the Bureau’s: (i) continued collaboration with other federal agencies on regulations for automated valuation models under the FIRREA amendments to Dodd-Frank; (ii) expectation to issue a final rule on the transition away from the LIBOR index, which aims to ensure that loans tied to LIBOR are transitioned “in an orderly, transparent, and fair manner”; (iii) assessment of a rule implementing HMDA; (iv) work on regulations for PACE financing and its “continu[ed] engagement with stakeholders and collect information” from a Advance Notice of Proposed Rulemaking, issued in March 2019 (covered by InfoBytes here); and (v) continued monitoring of consumer financial product markets and creation of working groups to focus on specific markets for potential future rulemakings.
OCC seeks comments on compliance risk for reverse mortgages
On January 28, the OCC published a notice and request for comment in the Federal Register seeking feedback on the renewal of its guidance for managing compliance and reputation risks for reverse mortgage products. The OCC, along with the FDIC, Federal Reserve Board, and the NCUA issued final guidance in 2010 focusing on the need for institutions “to provide adequate information to consumers about reverse mortgage products, to provide qualified independent counseling to consumers considering these products, and to avoid potential conflicts of interest.” The 2010 guidance also addressed related policies, procedures, internal controls, third party risk management, training, and program maintenance. The current notice seeks feedback on (i) whether the collection of the information is necessary and carries a practical utility; (ii) the accuracy of the estimates of the information collection burden; (iii) methods for enhancing the quality, utility and clarity of the information to be collected; (iv) ways to minimize the information collection burden for respondents; and (v) “[e]stimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.” Comments are due March 29.
Fed solicits comments on insurance supervision guidance
On January 28, the Federal Reserve Board announced it is soliciting comments on proposed guidance, which would implement a framework for the supervision of certain insurance organizations overseen by the Board. According to the Fed, the proposed framework for depository institution holding companies significantly engaged in insurance activities would apply guidance and allocate supervisory resources based on the risk of a firm and would “formalize a supervisory rating system for these companies and describe how examiners work with state insurance regulators.” Comments are due 60 days after publication in the Federal Register.
Treasury requests comments on certain nonbanks
On January 28, the U.S. Treasury Department published a notice and request for comment in the Federal Register on the proposed information collection “Determinations Regarding Certain Nonbank Financial Companies.” According to the notice, “information collected in § 1310.20 from state and federal regulatory agencies and from nonbank financial companies will be used generally by the [Financial Stability Oversight Council] to carry out its duties under Title I of the Dodd-Frank Act.” Additionally, “[t]he collections of information in §§ 1310.21, 1310.22 and 1310.23 provide an opportunity for a nonbank financial company to request a hearing or submit written materials to the Council concerning whether, in the company’s view, material financial distress at the company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the company, could pose a threat to the financial stability of the United States.” Comments are due March 29.
SEC reopens comments on “pay versus performance” proposal
On January 27, the SEC reopened the comment period on a proposed rule to amend the current executive compensation disclosure rule and implement Dodd-Frank’s “pay versus performance” requirement. Item 402 of Regulation S-K requires companies to disclose the relationship between their financial performance and executive compensation. The proposal (originally published in 2015, and covered by InfoBytes here), was intended to give shareholders new metrics by requiring registrants to clearly disclose “the relationship between executive compensation actually paid and the financial performance of the registrant.” All reporting companies, except smaller companies, would be required to disclose the relevant compensation information for the last five fiscal years. Smaller reporting companies would only be required to disclose the information for the past three fiscal years, and foreign private issuers, registered investment companies, and emerging growth companies would be exempt from the relevant Dodd-Frank statutory requirement.
According to the SEC, the reopening of the comment period will allow interested persons to comment on the proposed rules in light of developments since the 2015 proposal was released. The SEC noted in its press release that, in reopening the comment period, the Commission is “considering whether additional performance metrics would better reflect Congress’s intention in the Dodd-Frank Act and would provide shareholders with information they need to evaluate a company’s executive compensation policies.” SEC Chair Gary Gensler signaled support for the proposed rule, noting that it would “strengthen the transparency and quality of executive compensation disclosure,” and would fulfill a Congressional mandate under Dodd-Frank. However, Commission Hester M. Peirce dissented, stating that while she agreed it is time to move forward on the “nearly twelve-year-old Dodd-Frank rulemaking mandate,” she disagreed with the approach and would have favored a re-opening release that asked the public “whether [the SEC] should permit companies greater flexibility to determine which financial performance measure is appropriate in this context and to determine how to calculate executive compensation actually paid.”