Tennessee Bankers

This Week Newsletter

September 17, 2018 - Issue No. 1837

Agencies Announce No Enforcement Actions Based on Guidance

In a joint statement issued last week, the financial regulatory agencies clarified the role of supervisory guidance in bank supervision, noting that it “does not have the force and effect of law.” Regulators from the Federal Reserve, FDIC, OCC, CFPB and the NCUA affirmed that supervisory guidance is intended to outline expectations and general views regarding appropriate practices for a given subject area, and that they would not pursue enforcement actions based on it.

The agencies highlighted additional ongoing efforts to clarify policies and practices related to supervisory guidance. Specifically, they said they would: limit the use of numerical thresholds or bright-lines when outlining expectations in supervisory guidance; not criticize institutions for “violations” of supervisory guidance; strive to reduce the issuance of multiple guidance documents; and continue working to clarify the role of supervisory guidance in communications with exam teams and supervised institutions. Read the statement.

FDIC Seeks Comment on the Treatment of Reciprocal Deposits

The FDIC issued a proposed rule to implement Section 202 of S. 2155, the new regulatory reform law. Under the proposed rule, well-capitalized and well-rated institutions would not be required to treat reciprocal deposits as brokered deposits as long as they were less than 20 percent of a bank’s total liabilities or $5 billion. Institutions that are not both well capitalized and well rated may also exclude reciprocal deposits from their brokered deposits under certain circumstances.

This rulemaking is the first of a two-part effort the FDIC plans to undertake to revisit the brokered deposit rules. For the second part, the FDIC plans to seek comments later this year on the agency’s overall brokered deposit and rate cap regulations.

Comments on the proposed rule will be accepted for 30 days after publication in the Federal Register. Read the proposed rule.

Senate Hearing on S. 2155 Postponed

The Senate Banking Committee postponed its hearing on the implementation of S. 2155, which was originally scheduled for last Tuesday, Sept. 11. The hearing is now scheduled for Oct. 2. 

FDIC Chairman Jelena McWilliams, Comptroller of the Currency Joseph Otting, Fed Vice Chairman for Supervision Randal Quarles and National Credit Union Administration Chairman J. Mark McWatters are scheduled to testify.

CFPB Issues Final Rule on Records Disclosure

The CFPB last Wednesday, Sept. 12, published its final rule on the disclosure of records and information. The final rule makes clarifying changes to the CFPB’s practices related to Freedom of Information Act requests, requests for information in connection with legal proceedings and the Privacy Act of 1974. It takes effect Oct. 12, 2018.

The bureau omitted from the final rule previously proposed changes that would have threatened the confidentiality of supervisory information banks provide to CFPB examiners by allowing the bureau to disclose confidential supervisory information to any agency it deems “relevant to the exercise of the Agency’s statutory or regulatory authority”—including state attorneys general, foreign regulators, and state bar associations. Read the final rule.

CFPB Updates Model Disclosure Forms to Reflect Changes to FCRA

The CFPB issued an interim final rule making changes to two model disclosure forms—summary of consumer rights and summary of identity theft rights—to reflect changes made to the Fair Credit Reporting Act by S. 2155. The changes become effective Sept. 21.

The law requires consumer reporting agencies to provide consumers with the ability to freeze their credit free of charge, and for consumers to be notified of the security freeze right when receiving either of the two disclosures. It also extends to one year the minimum time that reporting agencies must include an initial fraud alert in a consumer’s file, which alerts prospective lenders that the consumer may have been a victim of identity theft. Read the interim final rule.

Fed Approves Changes to Reg CC

As part of its ongoing effort to update Regulation CC to reflect a payments system that is largely electronic, the Federal Reserve approved changes to Reg CC’s liability provisions to address situations involving a dispute about whether portions of an electronic check have been altered or whether the item is a forgery. The changes take effect Jan. 1, 2019.

The Fed acknowledged that in today’s check collection environment, original checks may not be available for inspection when disputes between banks arise. In cases where the original paper check is not available, the amendments stipulate that for purposes of determining the burden of proof, it will be assumed that the item has been altered rather than forged. The presumption applies only in disputes between banks when one bank has transferred an electronic or substitute check to the other bank. Read the final rule.

Pathway Lending's Gwin Named to CFPB's Consumer Advisory Board

The CFPB announced the appointment of new experts from outside the federal government to the Consumer Advisory Board, Community Bank Advisory Council, and Credit Union Advisory Council. The three advisory committees provide advice to Bureau leadership on a broad range of consumer financial issues and emerging market trends.

Clint Gwin, president and CEO, Pathway Lending—a TBA endorsed partner—was named to the Consumer Advisory Board, which advises and consults with the Bureau’s director on a variety of consumer financial issues.

Opening New Accounts in Tennessee Program Taking Place Soon Around State

There is a lot to know on the new accounts desk—federal regulations, Tennessee law, bank policy and procedures. This evening seminar makes sense of all these requirements and provides a strong foundation for adherence to the bank’s Anti-Money Laundering program (CIP and CDD—beneficial ownership and customer risk profile).

“Know your program” is the primary emphasis of the presentation and materials. The importance of knowing what is required by the bank’s board approved CIP and CDD programs is stressed from beginning to end. Participants learn that the answers to many of their day-to-day questions are available in writing in the bank’s written policies and procedures.

  • September 24, Kingsport—Bank of Tennessee, Operations Center
  • September 25, Knoxville—U.T. Conference Center
  • September 26, Jackson—Union University, The Barefoot Student Building
  • September 27, Nashville—TBA Barrett Training Center

Click here to register.

Call for Speakers and Presentation Topics

TBA is in the active planning stage of many of our 2019 events and conferences, and we value the expertise that our Associate Member companies can provide and contribute to making the agenda strong and value adding. To submit a presentation topic, please complete our TBA Call for Presentations form at this link.

CRA Partners Hosts Complimentary Webinar Oct. 16

Memphis-based CRA Partners, previously Senior Housing Crime Prevention Foundation, offers TBA member banks the ability to receive CRA credit on both the lending and investment test, along with service credit consideration—all through a unique, turnkey program that works in your community. It has become difficult to find meaningful CRA credit opportunities and that’s why CRA Partners developed a low-risk, profitable solution for banks that’s worth a lot more than just checking a box.

Join us October 16, 10:00–10:30 a.m. CT for a complimentary webinar to learn more. Register here. Webinar Questions? Call 901-529-4765. To learn more about CRA Partners, visit SHCPFoundation.org.

TBA On the Road

  • Stacey Langford joins the Young Bankers Division as hosts of the Leadership Luncheons in Cookeville, Chattanooga, Knoxville, and Kingsport.
  • TBA hosts Compliance with Federal Lending Seminars in Nashville and Knoxville.
  • Senior Lenders meet in Nashville for their peer forum.

See where TBA goes while "on the road" by following @TNBankers.

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