Compliance Monthly
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Compliance Monthly Compliance Monthly is intended to keep you informed of regulatory changes in advance of their effective date so your institution can have the necessary policies, procedures and processes in place to be compliant at the time of enactment. Information contained in Compliance Monthly is not intended to provide specific advice and guidance. You should consult your own professional services provider in connection with matters affecting your own interests. March 2021
Transcript of Compliance Monthly
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Compliance MonthlyCompliance Monthly is intended to keep you informed of regulatory changes in
advance of their effective date so your institution can have the necessary policies,
procedures and processes in place to be compliant at the time of enactment.
Information contained in Compliance Monthly is not intended to provide specific
advice and guidance. You should consult your own professional services provider in
connection with matters affecting your own interests.
March 2021
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Table of ContentsACCUMULATE KNOWLEDGE, VALUE, RESOURCES
Focus of the Month 03
Regulator Roundup 04
Finalized Rules 06
Proposed Rules 09
Other Compliance News 11
AML News 15
Recommended Actions to Take 18
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Focus Of the MonthRegulation D Limitations Finally Final!
On February 10, 2021, the Board of Governors of the Federal Reserve System announced adoption of
the Regulation D interim final rule without change to be effective as of March 12, 2021.
The interim rule was published in March 2020, reducing reserve requirement ratios to zero percent. As
a result of the elimination of reserve requirements on all transaction accounts, the differentiation in
Regulation D between reservable “transaction accounts” and non-reservable “savings deposits” is no
longer necessary.
As a result of the final rule, transaction limitations are no longer due to federal regulatory limitations. A
financial institution can continue to use such limitations as a product feature. So, now is the time to
review your practices regarding transaction limitations and make the appropriate updates to
disclosures, policies, procedures, systems and training.
We have put together the following chart to help guide you through the process of updating your
product information regarding the final Rule.
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Regulator Roundup
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Regulator Roundup
CFPB Know Your Data: Updated list of reporting companies
The CFPB has published an updated list of consumer reporting companies. You can filter and search the list online.
Source: https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/consumer-reporting-companies/
FDIC Technical Assistance Videos on Fair Lending
On February 23, 2021, the FDIC released nine technical assistance videos on fair lending. The information in the videos is intendedas a high-level overview to help FDIC-supervised institutions assess and mitigate fair lending risk, and to understand how FDICexaminers evaluate fair lending compliance.
Source: https://www.fdic.gov/news/financial-institution-letters/2021/fil21010.html
Statement on Mandatory Compliance Date of General QM Final Rule and Possible Reconsideration of General QM Final Rule andSeasoned QM Final Rule
On February 23, 2021, the CFPB issued a Statement on Mandatory Compliance Date of General QM Final Rule and PossibleReconsideration of General QM Final Rule and Seasoned QM Final Rule. The Bureau is considering whether to initiate arulemaking to revisit the Seasoned QM Final Rule. If the Bureau decides to do so, it expects that it will consider in that rulemakingwhether any potential final rule revoking or amending the Seasoned QM Final Rule should affect covered transactions for which anapplication was received during the period from March 1, 2021, until the effective date of such a final rule.
Source: https://files.consumerfinance.gov/f/documents/cfpb_qm-statement_2021-02.pdf
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Finalized Rules
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Finalized Rules
Board Approves Joint-Ownership Share Accounts Final Rule
On February 18, 2021, the NCUA Board unanimously approved a final rule amending the NCUA’s regulation governing the requirements for a share account to be separately insured as a joint account. The final rule provides federally insured credit unions with an alternative method to satisfy the membership card or account signature card requirement. For example, under the final rule, the signature card requirement can be satisfied by the credit union having issued a mechanism for accessing the account, such as a debit card, to each co-owner or evidence of usage of the joint share account by each co-owner.
Source: https://www.ncua.gov/newsroom/press-release/2021/board-approves-joint-ownership-share-accounts-final-rule
Higher-Priced Mortgage Loan Escrow Exemption (Regulation Z)
The Bureau of Consumer Financial Protection (Bureau) is issuing this final rule to amend Regulation Z, which implements the Truth inLending Act, as mandated by section 108 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The amendmentsexempt certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts forcertain higher-priced mortgage loans. This rule is effective on February 17, 2021.
Source: https://www.federalregister.gov/documents/2021/02/17/2021-01572/higher-priced-mortgage-loan-escrow-exemption-regulation-z
Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks
On April 17 and July 15, 2020, the Board issued two interim final rules to except certain loans made through June 30 and August 8,2020, respectively, that are guaranteed under the Small Business Administration's Paycheck Protection Program from therequirements of section 22(h) of the Federal Reserve Act and the Board's Regulation O. The Board is issuing this interim final rule tofurther extend this relief to PPP loans, including PPP second draw loans, made through March 31, 2021.
Source: https://www.federalregister.gov/documents/2021/02/17/2021-02966/loans-to-executive-officers-directors-and-principal-shareholders-of-member-banks
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Finalized Rules
Regulation D: Reserve Requirements of Depository Institutions
The Board of Governors of the Federal Reserve System (“Board”) is adopting as a final rule, without change, its March 24, 2020 interim
final rule amending its Regulation D (Reserve Requirements of Depository Institutions) to lower reserve requirement ratios on
transaction accounts maintained at depository institutions to zero percent.
Source: https://www.federalregister.gov/documents/2021/02/10/2020-28756/regulation-d-reserve-requirements-of-depository-
institutions
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Proposed Rules
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Proposed Rules
Proposed RuleComment
Period Close
Summary
Renewal Without Change of Transactions of Exempt Persons Regulations, and FinCEN Report 110, Designation of Exempt Person Report
March 2, 2021
FinCEN invites comments on the proposed renewal, without change, of a currently approved informationcollection found in existing Bank Secrecy Act regulations. Specifically, the regulations permit banks to file aFinCEN Report 110, Designation of Exempt Person (“DOEP Report”), to designate eligible customers as exemptpersons, such that a bank is not required to file a report with respect to any transaction in currency over $10,000with such customers. Under the regulations, a bank, to exempt a person, must also take steps to ensure that aperson meets the requirements for an exemption, document the basis for the bank's initial conclusion that aperson is exempt, annually review the eligibility of certain exempt persons, document compliance with the DOEPReport requirements, and maintain a monitoring system that is reasonably designed to detect, for each accountof a non-listed business or payroll customer, transactions in currency requiring a bank to file a suspicioustransaction report. Although no changes are proposed to the information collection itself, this request forcomments covers a future expansion of the scope of the annual hourly burden and cost estimate associated withthese regulations. https://www.federalregister.gov/documents/2021/01/25/2021-01451/agency-information-collection-activities-proposed-renewal-comment-request-renewal-without-change-of
FinCEN Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital
Update:Extended to March 29,
2021
On December 23, 2020, FinCEN published a notice of proposed rulemaking to seek public comments on a
proposal to require banks and money service businesses (“MSBs”) to submit reports, keep records, and verify the
identity of customers in relation to transactions involving convertible virtual currency (“CVC”) or digital assets
with legal tender status (“legal tender digital assets” or “LTDA”) held in unhosted wallets (as defined below), or
held in wallets hosted in a jurisdiction identified by FinCEN. FinCEN is proposing to adopt these requirements
pursuant to the Bank Secrecy Act (“BSA”). To effectuate certain of these proposed requirements, FinCEN proposes
to prescribe by regulation that CVC and LTDA are “monetary instruments” for purposes of the BSA. However,
FinCEN is not proposing to modify the regulatory definition of “monetary instruments” or otherwise alter existing
BSA regulatory requirements applicable to “monetary instruments” in FinCEN’s regulations, including the existing
currency transaction reporting (“CTR”) requirement and the existing transportation of currency or monetary
instruments reporting requirement.
https://public-inspection.federalregister.gov/2020-28437.pdf
https://www.federalregister.gov/documents/2021/01/28/2021-01918/requirements-for-certain-transactions-
involving-convertible-virtual-currency-or-digital-assets
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Other Compliance News
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Other Compliance News
HUD to Enforce Fair Housing Act to Prohibit Discrimination on the Basis of Sexual Orientation and Gender Identity
On February 11, 2021, the U.S. Department of Housing and Urban Development (HUD) announced that it will administer andenforce the Fair Housing Act to prohibit discrimination on the basis of sexual orientation and gender identity.
HUD’s Office of Fair Housing and Equal Opportunity (FHEO) issued a memorandum stating that HUD interprets the Fair Housing Actto bar discrimination on the basis of sexual orientation and gender identity and directing HUD offices and recipients of HUD fundsto enforce the Act accordingly. The memorandum begins implementation of the policy set forth in President Biden’s ExecutiveOrder 13988 on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation (Executive Order),which directed executive branch agencies to examine further steps that could be taken to combat such discrimination.
Source: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_21_021
FFIEC CRA/HMDA Software Downloads
Version 2020 for the CY 2020 CRA data due March 1, 2021 is now available. Each software version is year-specific (i.e. 2019 reporting requires 2019 CRA DES and not 2020 CRA DES). The software must be installed locally on a hard disk; it is NOT networkcompatible.
Source: https://www.ffiec.gov/software/software.htm
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Other Compliance News
HUD Announces Extensions and Expansions of COVID-19 Homeowner Relief and Home Retention Measures
To provide urgent economic relief to homeowners impacted by COVID-19, ON February 16, 2021, the U.S. Department of Housingand Urban Development (HUD) announced extensions of the Federal Housing Administration’s (FHA) foreclosure and evictionmoratoriums, as well as an extension of the initial start date of a COVID-19 Forbearance. Forbearance is an option mortgageservicers use to provide homeowners with a pause to their monthly payments for a limited period of time during a COVID-19induced hardship.
The FHA has extended the length of forbearance for some borrowers and will allow more borrowers access to COVID-19 lossmitigation options. These measures will provide relief to the nation’s homeowners with FHA-insured single-family mortgages whocontinue to suffer financially because of the COVID-19 pandemic.
Additionally, the Office of Public and Indian Housing is planning to announce similar relief for Native American and Native Hawaiianhomeowners assisted under the Section 184 Indian Home Loan Guarantee Program and the Section 184A Native Hawaiian HousingLoan Guarantee Program.
Source: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_21_023
Nacha Unauthorized Entry Fee Applied to R11 Starting April 1
Sometimes, changes to the Nacha Operating Rules come in two parts. Such is the case with the Rule on DifferentiatingUnauthorized Return Reasons, where the second part will be implemented soon. First, let’s back up to when part one of the Ruletook effect. Since April 1, 2020, RDFIs have been able to use return reason code R11 for a debit that had an authorization butcontained an error, such as the wrong day or incorrect amount. That set them apart from R10 coded returns, which continue to beused when a consumer says a debit was unauthorized. The goal was to have RDFIs use the repurposed R11 code when theOriginator and Receiver could both benefit from correcting an error, rather than ending the origination authorization. On April 1,2021, the second half of this Rule takes effect, as R11 returns become covered by the existing Unauthorized Entry Fee.
Source: https://www.nacha.org/news/unauthorized-entry-fee-applied-r11-starting-april-1
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Other Compliance News
Limits on Exempted Calls Under the Telephone Consumer Protection Act of 1991
On February 25, 2021, the FCC took steps to implement the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement andDeterrence Act (TRACED Act). First, the Commission codified the Telephone Consumer Protection Act (TCPA) exemptions for calls towireless numbers into the rules to make those exemptions clearer and more understandable for both callers and consumers.Second, the Commission amended the TCPA exemptions for artificial or prerecorded voice calls made to residential telephone linesso each satisfies the TRACED Act's requirements to identify who can call, who can be called, and any call limits. The Commissionadopted limits on the number of calls that can be made under the exemptions for non-commercial calls to a residence; commercialcalls to a residence that do not include an advertisement or constitute telemarketing; tax-exempt nonprofit organization calls to aresidence; and Health Insurance Portability and Accountability Act (HIPPA)-related calls to a residence. In addition, callers musthave mechanisms in place to allow consumers to opt out of any future calls. This action will empower consumers to further limitthe number of unwanted robocalls made under any TCPA exemption.
Effective March 29, 2021 except for the amendments to Sec. 64.1200(a)(3)(ii) through (v), (b)(2) and (b)(3), and (d), which aredelayed indefinitely. The Commission will publish a document in the Federal Register announcing the effective date of theseamendments.
Source: https://www.federalregister.gov/documents/2021/02/25/2021-01190/limits-on-exempted-calls-under-the-telephone-consumer-protection-act-of-1991
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AML News
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Other AML News
Revocation of the Terrorist Designations of Ansarallah
Effective February 16, the Secretary of State revoked the designations of Ansarallah, sometimes referred to as the Houthis, as a
Foreign Terrorist Organization (FTO) under the Immigration and Nationality Act and as a Specially Designated Global Terrorist
(SDGT) pursuant to Executive Order (E.O.) 13224, as amended.
Source: https://www.state.gov/revocation-of-the-terrorist-designations-of-ansarallah/
Advisory on COVID-19 Health Insurance and Health Care-Related Fraud
The Financial Crimes Enforcement Network (FinCEN) is issuing this advisory to alert financial institutions to health insurance and
health care frauds related to the COVID-19 pandemic. These frauds target Medicare, Medicaid/Children’s Health Insurance
Program (CHIP), and TRICARE as well as health care programs provided through the Departments of Labor and Veterans Affairs
(collectively, “health care benefit programs”) and private health insurance companies. In addition, the United States government
has observed frauds in connection with COVID-19 relief funds for health care providers, such as those provided under the
Paycheck Protection Program and Health Care Enhancement Act (PPP-HCEA). This advisory contains descriptions of COVID-19-
related fraud involving health care benefit programs and health insurance, associated financial red flag indicators, select case
studies, and information on reporting suspicious activity. This advisory is based on FinCEN’s analysis of COVID-19-related
information obtained from Bank Secrecy Act (BSA) data, public reporting, and law enforcement partners. Additional COVID-19-
related information is located on FinCEN’s website at https://www.fincen.gov/coronavirus, which also contains information on
how to register for FinCEN Updates.
Source: https://www.fincen.gov/sites/default/files/advisory/2021-02-02/COVID-19%20Health%20Care%20508%20Final.pdf
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Other AML News
Paycheck Protection Program Frequently Asked Questions (FAQs)
The Small Business Administration (SBA), in consultation with the U.S. Department of the Treasury, has been issuing FAQs
regarding implementation of the Paycheck Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act or the Act). Specifically, some of those FAQs involve explaining the requirements under
the Bank Secrecy Act (BSA), and how lenders can meet those requirements when issuing a PPP loan. As the administrator of the
BSA, the Financial Crimes Enforcement Network (FinCEN) is re-publishing those FAQs in this document. FinCEN will update this
document with any additional BSA-related FAQs involving the PPP.
Source: https://www.fincen.gov/sites/default/files/2021-02/Paycheck_Protection_program_%20FAQs_Jan2021.pdf
FinCEN Advisory on Financial Crimes Targeting COVID-19 Economic Impact Payments
On February 24, 2021, FinCEN published an advisory to alert financial institutions to fraud and other financial crimes related to
the Economic Impact Payments (EIPs), authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the
Coronavirus Response and Relief Supplemental Appropriations Act of 2021.
This advisory contains descriptions of EIP fraud, associated red flag indicators, and information on reporting suspicious activity.
This Advisory is part of a series published by FinCEN on COVID-19-related frauds and criminal activity.
Source: https://www.fincen.gov/sites/default/files/advisory/2021-02-24/Advisory%20EIP%20FINAL%20508.pdf
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Recommended Actions to Take
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Recommended Actions to Take
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➢ Review the final changes to Regulation D and implement an action plan to ensure compliance.
➢ Review Final Rules and Amendments and determine the impact for your institution.
➢ Review Proposed Regulations and consider opportunities to comment.
➢ Review the FinCEN Advisories on Covid -19 related scams and Economic Impact payment frauds.
If you have questions about any of the above recommendations, or about their implementation, feel free to
reach out to Accume for additional information.
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