Funds Availability Reminder
On February 27th the Federal Reserve Board completed its consolidation of check processing regions from 45 (twenty years ago) to one. This action eliminates all non-local checks. This consolidation may impact your account opening disclosures, lobby signs and updates for existing account holders. In addition, this has impacted your processes since the availability of the five day hold has been limited. If you have questions on the impact of these changes, please contact me at your convenience:
Email: garyshess@gmail.com; Phone: 1-320-260-0135
FinCEN Issues Bank Secrecy Act Guidance This guidance relates to beneficial ownership of accounts at financial institutions. It clarifies and consolidates expectations regarding customer due diligence (CDD) and enhanced due diligence (EDD) processes related to certain accounts and relationships.
Knowing your customer is the first line of defense in preventing money laundering, and reviewing your policies and procedures in light of this guidance is a recommended activity. A full copy of the guidance may be found at:
http://www.fdic.gov/news/news/financial/2010/fil10008a.html
Federal Reserve Board Launches Credit Card Website The FRB has recently launched an interactive web site for consumers called the Consumer's Guide to Credit Cards. It may be found at: http://www.federalreserve.gov/creditcard/
The site is designed to educate consumers on the new credit card changes, and includes calculators, a sample statement tips on wise use of credit cards and more. As an educational benefit to your consumers, you may want to make them aware of this resource through your newsletters, lobby signs, statements, etc.
FFIEC Posts Frequently Asked Questions for S.A.F.E.
The Federal Financial Institution Examination Council has posted frequently asked questions (FAQs) online concerning the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act). The FAQ’s are located at: http://www.ffiec.gov/safeact.htm
FinCEN Assesses Civil Money Penalty for BSA Violations
Regulators remain focused on Bank Secrecy Act compliance and Anti Money Laundering processes at financial institutions. FinCEN has recently assessed a civil money penalty for violations of these provisions against Wachovia Bank in the amount of $110,000,000. Information regarding this assessment may be found at: http://fincen.gov/bsaviolations.html
FRB Gift Card Rules Effective August 22, 2010
This is a forward looking reminder that the Federal Reserve Board Gift Card rules take effect on August 22nd. The rules, issued under Regulation E, emanate from the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. The final gift-card rules prohibit dormancy, inactivity, and service fees on gift cards unless:
- The consumer has not used the certificate or card for at least one year;
- No more than one such fee is charged per month;
- The consumer is given clear and conspicuous disclosures about the fees.
Additional rules apply as well as you should consult your state law for stricter rules relating to gift cards. A copy of the announcement and link the rule may be found at: http://www.federalreserve.gov/newsevents/press/bcreg/20100323a.htm
FDIC Announces 64 Civil Money Penalty Actions
The sixty-four actions announced included ones against banks and individuals. They included four civil money penalties (CMPs) totaling $40,450 for flood violations and six totaling $24,000 for HMDA violations. As witnessed by these activities, it is not only BSA violations that will draw the attention of regulators. All areas of compliance are important and compliance is important to all areas!
“Tis the Season” – OTS Issues $5 million Civil Money Penalty
The Office of Thrift Supervision has assessed a civil money penalty of 5 million dollars against Pamrapo Savings Bank, SLA, of Bayonne, NJ for violations of the Bank Secrecy Act. Information on this order may be found at: http://www.ots.treas.gov/?p=EnforcementSearch&eid=3269
FRB Issues Letter on Submission of Credit Card Agreements
The Federal Reserve Board has issued a Consumer Affairs Letter to reiterate and highlight Regulation Z (Truth in Lending) requirements related to the submission of consumer credit card agreements. Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, credit card issuers must submit their consumer credit card agreements to the Federal Reserve Board (Board) for posting on the Board's Web site. The final rule amending Regulation Z, adopted by the Board on January 12, 2010, required issuers to send their initial submissions to the Board by February 22, 2010. Subsequent submissions are due on August 2, 2010, and on a quarterly basis thereafter. More information on this requirement may be found at: http://www.federalreserve.gov/boarddocs/caletters/2010/1004/caltr1004.htm
FRB Issues Letter on Interagency Examination Procedures Regarding the Duties of Furnishers of Information
This examination module recently released by the FFIEC relates to the duties of furnishers of consumer information to a consumer reporting agency. Reviewing the examination module may provide insight into compliance with these rules. The letter may be found at: http://www.federalreserve.gov/boarddocs/caletters/2010/1005/caltr1005.htm
FRB Regulation Z Escrow Rules Effective April 1, 2010
This is a reminder that the Federal Reserve Board escrow rules for all "higher-priced" first-lien mortgages that are secured by a consumer's principal dwelling go into effect on April 1, 2010. This is no April Fool’s Day trick!
Loans are classified as "higher-priced" if the annual percentage rate exceeds the average prime offer rate for a comparable transaction as of the date the interest rate is set by 1.5%. The rules impose limits on prepayment penalties and require escrow accounts for taxes and insurance, prohibit certain servicing practices, and prevent certain misleading and deceptive advertisements. For more information see: http://www.federalreserve.gov/newsevents/press/bcreg/20080714a.htm
NCUA Issues Legal Opinion Letter on Home Equity Loan Rate Changes
NCUA Legal Opinion Letter 10-0214 issued March 3, 2010, clarifies that a federal credit union may change the interest rate on an existing home equity loan if the original agreement disclosed the possibility of adding the rate and any associated triggering event or the borrower agrees to the addition in writing. This letter takes into account the provisions of Regulation Z that impact such a change in interest rates. The letter may be found at: http://www.ncua.gov/Resources/RegulationsOpinionsLaws/OpinionLetters/2010.aspx
Then click on Letter number 10-0124.