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  • FDIC releases fair lending videos

    Agency Rule-Making & Guidance

    On February 23, the FDIC released nine technical assistance videos on fair lending compliance. The videos provide FDIC-supervised institutions with a high-level overview on ways to assess and mitigate fair lending risk and understand how examiners evaluate fair lending compliance. Information provided in the videos includes: (i) an overview of federal fair lending laws and regulations for bank directors and senior managers; (ii) ways a bank’s compliance management system can mitigate fair lending risk; (iii) a discussion on how FDIC examiners evaluate fair lending risk during consumer compliance examinations; and (iv) commentary on the following specific fair lending risk factors, one each for overt discrimination, underwriting, pricing, steering, redlining, and marketing.

    Agency Rule-Making & Guidance FDIC Examination Fair Lending Bank Regulatory

  • Agencies provide Texas winter storm guidance

    Federal Issues

    On February 22, the Federal Reserve Board, OCC, FDIC, NCUA, and the Conference of State Bank Supervisors issued a joint statement covering supervisory practices for financial institutions affected by winter storms in Texas. Among other things, the agencies called on financial institutions to “work constructively” with affected borrowers, noting that “prudent efforts” to adjust or alter loan terms in affected areas “should not be subject to examiner criticism.” Institutions facing difficulties in complying with any publishing and reporting requirements should contact their primary federal and/or state regulator. Additionally, the agencies noted that institutions may receive Community Reinvestment Act consideration for community development loans, investments, and services that revitalize or stabilize federally designated disaster areas. Institutions are also encouraged to monitor municipal securities and loans impacted by the winter storms.

    Additionally, HUD announced it will make disaster assistance available to Texas by providing foreclosure relief and other assistance to homeowners living in counties affected by the severe winter storms. Specifically, HUD is providing an automatic 90-day moratorium on foreclosures of FHA-insured home mortgages for covered properties in the affected counties and is making mortgage insurance available to those victims whose homes were destroyed or severely damaged. Additionally, HUD’s Section 203(k) loan program will allow individuals who have lost homes to finance the purchase of a house, or refinance an existing house along with the costs of repair, through a single mortgage. The program will also allow homeowners with damaged property to finance the rehabilitation of existing single-family homes.

    Federal Issues FDIC Federal Reserve CSBS NCUA OCC Disaster Relief HUD Mortgages FHA Bank Regulatory

  • Agencies propose Call Report asset threshold relief

    Agency Rule-Making & Guidance

    On February 18, the FDIC, Federal Reserve Board, and the OCC published a joint notice and request for comments on changes to three versions of the Call Report—FFIEC 031, FFIEC 041, and FFIEC 051. The reporting changes, first proposed by the agencies last year, will provide relief to financial institutions with under $10 billion in total assets as of December 31, 2019, by allowing them “to use the lesser of the total consolidated assets reported in its Call Report as of December 31, 2019, or June 30, 2020, when determining whether the institution has crossed certain total asset thresholds to report additional data items in its Call Reports for report dates in calendar year 2021.” The agencies also outline specific thresholds that limit certain eligibility for streamlined Call Reports or that require the reporting of certain additional data items. This relief will only be allowed for calendar year 2021. The agencies will also allow financial institutions that temporarily exceed the $10 billion total asset threshold to use the community bank leverage ratio framework in Call Report Schedule RC R from December 31, 2020, through December 31, 2021, provided the institution meets the other qualifying criteria for this framework. Comments on the proposed changes are due March 22.

    Agency Rule-Making & Guidance FDIC Federal Reserve OCC Call Report FFIEC Bank Regulatory

  • FDIC announces first-ever chief innovation officer

    Fintech

    On February 16, the FDIC announced the appointment of Sultan Meghji as the agency’s first Chief Innovation Officer. Prior to the FDIC, Meghji was the co-founder of a financial technology firm that provides, “secure, cloud-native, artificial intelligence-based software for community banks and credit unions.” Additionally, Mr. Meghji served as an advisor to the U.S. Treasury, the Group of Seven (G7), the OCC, and the FBI in the areas of cybersecurity, quantum computing, and artificial intelligence. In accepting the position, Meghji stated that his mission “is to engage both public and private sector partners to ensure the financial system of the future is innovative, resilient, and equitable.”

    Fintech FDIC Bank Regulatory

  • FDIC assesses bank $12.5 million BSA penalty

    Federal Issues

    On January 29, the FDIC released a list of administrative enforcement actions taken against banks and individuals in December. During the month, the FDIC issued 10 orders consisting of “three consent orders, one termination of consent order, three section 19 orders, two removal and prohibition orders and two orders to pay civil money penalties.” Among the orders, the FDIC issued a $12.5 million civil money penalty order against a New York-based bank resolving allegations that the bank violated the Bank Secrecy Act (BSA) and its implementing regulations from April 2014 through September 2018, including failing to comply with the FDIC’s December 2015 consent order, which required the bank to strengthen its BSA/anti-money laundering oversight. The $12.5 million civil money penalty is reflective of the “the financial resources and good faith of the [bank], the gravity of the violations by the [bank], the history of previous violations by the [bank], and such other matters[.]”

    Federal Issues FDIC Enforcement Financial Crimes Bank Secrecy Act Anti-Money Laundering Bank Regulatory

  • Fed proposes SAR filing exemptions

    Agency Rule-Making & Guidance

    On January 22, the Federal Reserve Board published a notice of proposed rulemaking, which would modify the requirements to file Suspicious Activity Reports (SARs) for state member banks, Edge and agreement corporations, U.S. offices of foreign banking organizations supervised by the Federal Reserve, and bank holding companies and their nonbank subsidiaries. The proposal would amend the Board’s SAR regulations to allow for the issuance of exemptions from the requirements of those regulations. As previously covered by InfoBytes, in December, the FDIC and the OCC issued similar proposals. As with the OCC and the FDIC proposals, the Board’s proposal is intended “to facilitate supervised institutions in meeting Bank Secrecy Act requirements more efficiently and effectively, including through development of innovative solutions.” Comments on the proposed rule are due February 22.

    Agency Rule-Making & Guidance FDIC OCC Federal Reserve SARs Financial Crimes Bank Secrecy Act Of Interest to Non-US Persons Anti-Money Laundering Bank Regulatory

  • FDIC revises supervisory appeals guidelines

    Agency Rule-Making & Guidance

    On January 19, the FDIC issued FIL-04-2021 announcing the adoption of revised Guidelines for Appeals of Material Supervisory Determinations (Guidelines). The Guidelines, originally proposed last August (covered by InfoBytes here), will establish a new, independent Office of Supervisory Appeals (Office) replacing the current Supervision Appeals Review Committee. The new Office will have final authority to resolve appeals by a panel of reviewing officials and will be independent from other divisions within the FDIC that have authority to issue material supervisory determinations. The Guidelines provide that appeals submitted to the Office will be decided by a panel of term-appointed reviewing officials with bank supervisory or examination experience. Additionally, the division director will make an independent supervisory determination without deferring to the judgments of either party, with communications between the Office and members of either the supervisory staff or the appealing institution to be shared with the other party to the appeal. The Guidelines will also permit an institution to request expedited review of its appeal, and will amend the procedures and timeframes for considering formal enforcement-related decisions through the supervisory appeals process. The Guidelines will take effect once the new Office is fully operational. In the meantime, the current guidelines will remain in effect.

    Agency Rule-Making & Guidance FDIC Supervision Enforcement Bank Regulatory

  • Agencies release SARs/AML consideration FAQs

    Agency Rule-Making & Guidance

    On January 19, the Financial Crimes Enforcement Network (FinCEN), Federal Reserve Board, FDIC, NCUA, and the OCC, in consultation with staff at certain other federal functional regulators, published answers to frequently asked questions concerning suspicious activity reporting (SAR) and other anti-money laundering (AML) considerations. The answers clarify financial institutions’ commonly asked questions about SARs/AML regulatory requirements and are provided to assist financial institutions with their Bank Secrecy Act (BSA)/AML compliance obligations in order to enable them “to focus resources on activities that produce the greatest value to law enforcement agencies and other government users of [BSA] reporting.” Topics discussed include (i) law enforcement requests for financial institutions to maintain accounts; (ii) receipt of grand jury subpoenas and law enforcement inquiries and SAR filings; (iii) maintaining customer relationships following the filing of SARs; (iv) filing SARs based on negative news identified in media searches; (v) information provided in SAR data and narrative fields; and (vi) SAR character limits. The agencies note that the FAQs do not alter existing BSA/AML requirements or establish new supervisory expectations, but have been developed in response to recent recommendations as described more thoroughly in FinCEN’s Advance Notice or Proposed Rulemaking issued last September on AML program effectiveness (covered by InfoBytes here).

    Agency Rule-Making & Guidance FinCEN FDIC Federal Reserve NCUA OCC Of Interest to Non-US Persons SARs Anti-Money Laundering Bank Compliance Bank Regulatory

  • CFPB finalizes rule stating supervisory guidance lacks force of law

    Agency Rule-Making & Guidance

    On January 19, the CFPB issued a final rule codifying the Interagency Statement Clarifying the Role of Supervisory Guidance issued by the CFPB, OCC, Federal Reserve Board, FDIC, and the NCUA on September 11, 2018 (2018 Statement). As previously covered by InfoBytes, the October 2018 joint proposal amended the 2018 Statement by (i) clarifying that references in the Statement limiting agency “criticisms” includes criticizing institutions “through the issuance of [matters requiring attention] MRAs and other supervisory criticisms, including those communicated through matters requiring board attention, documents of resolution, and supervisory recommendations”; and (ii) adding that supervisory criticisms should be “specific as to practices, operations, financial conditions, or other matters that could have a negative effect on the safety and soundness of the financial institution, could cause consumer harm, or could cause violations of laws, regulations, final agency orders, or other legally enforceable conditions.”

    The Bureau notes that it chose to issue a final rule that is specific to the Bureau and Bureau-supervised institutions, rather than a joint version including the five agencies as it did with the proposal. However, the final rule adopts the proposed rule without substantive change. The final rule is effective 30 days after publication in the Federal Register.

    Similar announcements were issued by the OCC, FDIC, and NCUA.

    Agency Rule-Making & Guidance CFPB Supervision Examination Enforcement OCC Federal Reserve NCUA FDIC Bank Regulatory

  • FDIC codifies appointment of ALJs

    Agency Rule-Making & Guidance

    On January 12, the FDIC published a final rule amending 12 CFR Part 308 to codify the agency’s “practice of having certain adjudicative functions performed by an inferior officer of the United States appointed by the FDIC’s Board of Directors.” The clarification follows a 2018 U.S. Supreme Court decision in Lucia v. SEC, which held that SEC administrative law judges (ALJs) are “inferior officers” subject to the Appointments Clause (Clause) of the Constitution (covered by InfoBytes here). The FDIC notes that while the Lucia decision did not directly affect the agency or FDIC ALJs, the Board has chosen to “formally appoint the ALJs that preside over FDIC enforcement proceedings.” The final rule, which also makes other technical edits to the agency’s rules of practice and procedure to update outdated references to certain position titles, becomes effective immediately.

    Agency Rule-Making & Guidance FDIC ALJ U.S. Supreme Court Bank Regulatory

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