Banker's Compliance Consulting

OFAC recently announced some things that may be helpful in your compliance efforts. There is a new OFAC Compliance Hotline page for users to get guidance and submit queries. OFAC’s Compliance Hotline email is no longer in use and the phone number will only be operational until the end of the year. OFAC is also in the process of updating many of its FAQs. More information, including which FAQs have already been updated and how to receive notice about future updates, is available here. Changes are also being made to make OFAC’s website more user-friendly, including a new search function for the FAQs. When you need an answer to an OFAC question, it’s very often time-sensitive; so, we encourage you to take note of these changes and update your procedures, as necessary. https://lnkd.in/gGUs2w43 https://hubs.li/Q02NSVLm0

Consent Order on Mortgage Servicing   Mortgage servicing requirements have changed quite a bit over the years and there are likely more changes on the horizon. Not only have we seen an increase in regulatory requirements, the focus on fair lending and UDAAP has also greatly increased.    For some of these requirements, institutions rely largely on their systems. While that’s fine and often necessary, it’s imperative that those systems are periodically tested for accuracy. There’s also the fact that, at least when it comes to actions such as potential foreclosure, that other key players like your institution’s legal counsel are aware of the prohibitions as well.    A recent Consent Order demonstrates how complicated mortgage servicing requirements can be and how much trouble they can cause. Some of the issues that resulted in this Consent Order included:   ·     Late fees were improperly calculated and charged. This is an issue that lately we’ve heard of more and more. It doesn’t matter if the actual charge is what you intend it to be if your Note (i.e., your contract with your borrower) describes the charge inaccurately. You also need to make sure the timing of any late fee lines up with the language of your Note. Additionally, if you provide periodic statements, coupon books, etc., any late fee(s) need to be described accurately there too.   ·     PMI was not terminated in a timely manner for numerous reasons, including the failure to accurately recalculate the termination date after loans were modified.   ·     Unearned PMI premiums were not accurately calculated and refunded within 45 days of termination.   ·     Escrow account statements did not accurately reflect the scheduled PMI termination date and continued to require PMI premiums.   ·     Several shortcomings concerning loss mitigation practices and foreclosure actions were also noted. Many were a result of not following the appropriate wait times for initiating or proceeding with foreclosure.   There is a lot to consider with the various mortgage servicing requirements.

Do you need expert help with Section 1071 implementation? Would it make your compliance life a little easier? In case you didn’t know, we have a “1071 Thought Leadership, Implementation & Planning Group”, which meets monthly. This is an instructor-led study group that helps institutions prepare for all aspects of 1071 implementation. Why try and digest it all on your own when you can learn it in small 90 -minute chunks each month in plain English? Want to get started now? No problem! You can join at any time as all prior meetings have been recorded to help you catch up. There is still plenty to be learned between now and your 1071 mandatory compliance date. In the most recent meeting, Jerod Moyer discussed what Regulation B’s 1071 rules require and how that intersects with Regulation C (HMDA). It’s important to point out that, even if your institution is not a HMDA reporter, you will still need to know some HMDA basics as you prepare for 1071. There are several data points that can be especially confusing between these two somewhat similar reporting requirements. For example, 1071 requires you to report the Gross Annual Revenue, which is not the same as HMDA, which requires you to report the Gross Annual Income relied on in making the credit decision. Again, this is just one example where having data points that are similar, but not the same, can open a can of procedural errors you’d rather avoid. Jerod Moyer gives an overview of what this meeting covered in the video. Join the next session - https://lnkd.in/g4iaipXg https://bit.ly/47hlShE

What are people reading? The Banking on BCC Magazine of course. Take a sneak peek at the Sept. Edition. Sign your team up today - https://lnkd.in/ea-57T9

The Stars Align: Navigating Compliance Together Zig Ziglar once said, "If you're not willing to learn, no one can help you. If you are determined to learn, no one can stop you." Hi, it's David Dickinson with Banker's Compliance Consulting. I’d love to share my passion for learning, whether it's playing the piano or guitar, woodworking, or my newest hobby—astronomy. You see, learning opens up new worlds and perspectives. When I look through my telescope, I'm reminded of how vast our universe is and how much more there is to discover. Here are a few of my favorite astronomy pictures to inspire you. The Joy of Lifelong Learning As a lifelong learner, I thrive around others who share this same passion. One of my mottos is, "We think better than me." When I’m surrounded by people who are willing to share their thoughts and challenge each other’s thinking, I get excited. There’s immense value in these connections and the insights gained from them. Why Compliance Matters In the world of banking, compliance isn’t just a buzzword; it’s a critical component that ensures the smooth operation of financial institutions. Compliance helps maintain integrity, protect customer data, and uphold laws and regulations. It's a field that requires constant learning and adaptation to stay ahead of regulatory changes and industry standards. Join Us at the Banker’s Compliance Consulting 2024 Virtual Conference That’s why I’m thrilled to attend and help lead the Banker’s Compliance Consulting 2024 virtual compliance conference. We have numerous sessions lined up to cover the latest developments and topics in compliance. Our goal is to provide you with the knowledge and tools needed to ensure your institution is not only compliant but also efficient and secure. What to Expect: • Expert-Led Sessions: Learn from the best in the industry about the latest in compliance. • Interactive Q&A: Get your specific questions answered in real-time. • Networking Opportunities: Connect with like-minded professionals and share insights. • Practical Takeaways: Implementable strategies and best practices to take back to your team. One of my favorite parts of the conference is the chat room, where we can interact with you, answer your questions, and learn from each other. This kind of collaborative training is as if the stars align. Yes, pun intended! See You There! Register you and your team here - https://lnkd.in/gmue2ih https://bit.ly/3AYu7mu

Fair Lending: The Board’s Task As most lenders know, the Equal Credit Opportunity Act prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, or age…. We find that most lenders understand the big picture and know it’s illegal to discriminate based on these factors but sometimes when they get in the routine of the day to day, they can unknowingly overlook some of the finer details and potentially discriminate in ways that may not be as obvious. But fair lending isn’t just your lender’s job. It’s everyone’s job and that starts with the Board of Directors. The Board is tasked with setting the tone and ensuring that what can be done to lower the potential risk of fair lending issues is being done. Jerod Moyer explains more in the video. https://bit.ly/3TeUVFI

FDIC Sample Policy & Procedures As you’ve likely heard by now, the FDIC issued a Final Rule in December 2023 to update its signage and advertising requirements. - https://lnkd.in/eKCTX9qf Certain signage requirements for non-deposit products are also included. These changes also require institutions to implement written policies and procedures to help ensure compliance with the requirements. To help, we’ve created a sample policy and procedures that are available now in the Free Deposit Downloads on our website. Please note, you will want to pay attention to the comments included within the document so that you can customize these for your institution. You will also find a Checklist to help ensure compliance in the Free Deposit Downloads. https://lnkd.in/gEXccuq9 If you’re looking for more resources to get up-to-speed with these changes, be sure to check out our FDIC Signs & Advertisement of Membership webinar. https://lnkd.in/gPz2QjzN https://bit.ly/4erXUTp

The Monthly Connection is an interactive meeting with, and for, bankers. During the August event, Jerod Moyer updated members on the new FDIC signage rules. Specifically, that the FDIC recently updated its Frequently Asked Questions (FAQs) and made slide decks available, which include graphic examples of the “official digital sign” that must be used beginning January 1, 2025. - https://lnkd.in/gXDfjyQs Take a listen: Keep in mind, there are many additional changes to the signage requirements and this includes the need for policies and procedures. Be sure to check out our webinar, “FDIC Signs & Advertisement of Membership”, which is available now OnDemand for more information. Kevin Edwards updated members on the “Interagency Statement on the Issuance of the AML/CFT Program Notices of Proposed Rulemaking.” While that and the term “anti-money laundering/countering the financing of terrorism” is a mouth full, there is a lot coming that will require changes to your AML/CFT program. By learning some of the basics now, you can prepare for the upcoming change management you’ll be doing. Jerod Moyer also spoke on the agencies’ reconsideration of value guidance and contrasted it with the rules previously published for those institutions selling to Freddie, Fannie and HUD. These hot topics were followed by a Q&A session with members and our panel of experts. The topics included ROVs, TRID, flood and more. Members also commented on some hot button issues from recent exams, which is always useful information. The hour concluded with a talk on complaints, especially from military customers, and the importance of handling these correctly and doing so before they have to go to a regulatory agency. Join the next Monthly Connection - https://lnkd.in/eYwjvCX https://hubs.li/Q02MC5xm0

If a financial institution furnishes information about consumers to a credit reporting agency, the Fair Credit Reporting requirements found in 12 CFR 1022.40 apply. In a nutshell, you must ensure that the information you provide is accurate and investigate any direct disputes of this information. Specifically, furnishers must establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information related to consumer that it furnishes to a consumer reporting agency. While these rules have been in effect for quite some time, we still run into institutions that are essentially complying with the requirement, but they do not have written policies and procedures. We also see institutions that fail to provide staff training. Kevin Edwards explains more in the video. Be sure to JOIN US on September 5, 2024, for our webinar, “FCRA/FACT Act”. Register here - https://lnkd.in/g-5SVD5U https://hubs.li/Q02MBl6P0

Closed-End Refinances We’re often asked whether making a change to an existing closed-end loan agreement triggers new disclosures. For instance, can you change the rate, extend the term or even change a payment? Regulation Z generally only requires new disclosures in the case of a refinancing (aka a new note). A refinancing is defined in §1026.20(a) as …an existing obligation... satisfied and replaced by a new obligation undertaken by the same consumer.... In other words, you’re replacing an existing note with an entirely new note. There are, of course, some exceptions outlined in the Regulation as well. It's important to remember that even if you don’t have to provide new disclosures under Regulation Z, other regulatory requirements can still come into play. For instance, adding a security interest in a consumer’s principal dwelling to an existing loan triggers the right of rescission. Flood insurance is triggered any time you Make, Increase, Renew, Refinance, or Extend (MIRE) a loan. Joint intent is another requirement that is often overlooked. Ready to learn more? JOIN US on September 26, 2024, for our webinar, “Refinances, Renewals & Modifications”. Register here - https://lnkd.in/g98bYUM8 Featured topics include: • When are new disclosures required? • What is a Refinance? • What is a Modification? • What is a Renewal? • What regulatory requirements do each of these terms trigger? • What are the If ’s, And’s and But’s? • Commercial, Consumer, Closed and Open-End Credit • Regulatory Guidance & Best Practices https://hubs.li/Q02MxPCR0