Bank Law Monitor

Bank Law Monitor

A Legal Blog for the Financial Services Industry

Category Archives: Regulatory Developments

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FinCEN Reverses Course on Beneficial Ownership Requirements in Connection with Loan Renewals and Modifications

By Steve Miller on Posted in Banking, Regulatory Developments
It can be hard for regulatory agencies to admit when they’ve made a mistake. But that’s exactly what FinCEN did last week when it announced that certain loan renewals and modifications[1] would not trigger its beneficial ownership due diligence rule (the “Rule”), reversing its earlier guidance on the subject. FinCEN’s change of heart is welcome… Continue Reading

The STATES Act—A Solution to the Cannabis Banking Problem on the Horizon?

By Miller Nash Graham & Dunn LLP on Posted in Banking, Cannabis, Regulatory Developments
By Danielle Hunt, Kalin Bornemann, Olivia Grabacki, and Jessica Roberts As we previously discussed, financial institutions that offer financial services to the cannabis industry have been operating in a state of uncertainty in the wake of the rescission of the so-called “Cole Memo” earlier this year. Without the comfort of the Cole Memo, those financial… Continue Reading

Update: DOJ Rescinds the Cole Memo—FinCen Guidance Still in Effect, For Now…

By Olivia Grabacki and Danielle Hunt on Posted in Cannabis, Regulatory Developments
In the wake of the shift in federal marijuana enforcement policy, financial institutions have been left to speculate the risk in offering financial services to marijuana-related businesses. While the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued guidance in 2014 that laid out a process for financial institutions to open accounts for marijuana-related businesses,… Continue Reading

DOJ Rescinds the Cole Memo—What It Means for Your Financial Institution

By Kalin Bornemann and Danielle Hunt on Posted in Cannabis, Regulatory Developments
Reiterating that Congress considers marijuana to be a “dangerous drug” and marijuana activity to be a “serious crime,” Attorney General Jeff Sessions today issued a memo to all U.S. attorneys rescinding various memoranda related to enforcement of federal marijuana laws issued during the Obama administration. Included in the rescinded memos was the prominent “Cole Memo,” which discouraged… Continue Reading

Reg CC Goes “Paperless”: New Amendments Address Electronic Checks, Remote Deposit Capture, and Other Modern Banking Trends

By Kalin Bornemann and Kellen Hade on Posted in Banking, Mobile Banking, Regulatory Developments
Regulation CC first became law back in 1992. Yes, that was when Sir Mix-a-Lot was “back” on the top of the charts, audiences were eating up Silence of the Lambs, and bowl cuts were a thing. Times have changed, but oddly Reg CC hasn’t. Since 1992, Reg CC—which governs funds availability and how financial institutions… Continue Reading

Citing Operational Challenges, CFPB May Rewrite TRID

By Faye Ricci on Posted in CFPB, Compliance Resources, Mortgage Servicing, Regulatory Developments, TILA/RESPA, Trending News
Today, the CFPB issued a letter to various industry trade groups, including the Mortgage Bankers Association, the American Bankers Association, and the Independent Community Bankers of America,  acknowledging that the implementation of the “Know Before You Owe” rule  (otherwise known as “TRID”) poses many “operational challenges.”   Many financial institutions and industry participants do not have… Continue Reading

Regulators Refocus on Commercial Real Estate Lending

By Faye Ricci on Posted in Commercial Real Estate, Compliance Resources, Regulatory Developments
On December 18, 2015, the Office of the Comptroller of the Currency (OCC), along with the Board of Governors of the Federal Reserve System (FRB) and the Federal Deposit Insurance Corporation (FDIC, together with the FRB and the OCC, the “Banking Agencies”) issued the Interagency Statement on Prudent Risk Management for Commercial Real Estate Lending… Continue Reading

Monday Morning Quarterbacking

By Steve Klein on Posted in Regulatory Developments
Back to the Future As I prepare for a presentation at the WIB Annual Directors Conference, it strikes me that it has been seven years since the financial meltdown. While our economy has improved, it still has not completely recovered and the Fed and other banking agencies are fearful of an instant replay. The Fed,… Continue Reading

CFPB Issues Final Home Mortgage Disclosure Act Rule

By Faye Ricci on Posted in CFPB, HMDA, Mortgage Servicing, Regulatory Developments, Trending News
The CFPB issued a final rule changing Regulation C, which implements the Home Mortgage Disclosure Act (HMDA) today. This is significant because HMDA requires certain institutions to collect, report, and disclose information about their mortgage lending activity. The CFPB and other banking regulators will use the reported data to determine whether financial institutions are serving… Continue Reading

Beware: Data Breaches May Expose You to UDAP Liability

By Brian Sniffen and Faye Ricci on Posted in CFPB, Cybersecurity, Regulatory Developments, Trending News, UDAAP
Recently, the U.S. Court of Appeals for the Third Circuit ruled that the Federal Trade Commission (FTC) may pursue a lawsuit against Wyndham Worldwide Corporation, a hotel and time share operator for “unfair and deceptive” cybersecurity practices. In its complaint, the FTC alleged that Wyndham “unreasonably and unnecessarily” exposed consumers’ personal data in more than… Continue Reading

Mortgage Loan Rate Locks: A New Risk Environment Under TRID

By Faye Ricci on Posted in CFPB, Mortgage Servicing, Regulatory Developments, TILA/RESPA
The Consumer Finance Protection Bureau’s (the “CFPB”) amendments to the 2013 TILA-RESPA Integrated Disclosure Rule (“TRID”) will become effective on October 3, 2015.  The amendment extends the timing requirement for revised disclosures when consumers of mortgage loans lock a rate or extend a rate lock after the Loan Estimate is provided.  Lenders can now provide… Continue Reading

Updated Compliance Resources for the TILA-RESPA Integrated Disclosure Rule

By Faye Ricci on Posted in CFPB, Compliance Resources, Mortgage Servicing, Regulatory Developments, TILA/RESPA, Trending News
As many of you know, the effective date of the TILA-RESPA Final Rule and the related TILA-RESPA Amendments has been delayed to October 3, 2015. Please take note of the following updates from the CFPB: Freddie Mac and Fannie Mae Data Standards Freddie Mac and Fannie Mae have released a common industry dataset, called the… Continue Reading

CFPB Fines PayPal $25 Million for Violations of UDAAP

By Faye Ricci on Posted in CFPB, Regulatory Developments, UDAAP
On May 19, 2015, the CFPB announced that it was filing a complaint and proposed consent order in federal court against PayPal, Inc., based on allegations that PayPal Credit (fka “Bill Me Later”), had violated the prohibition against unfair, deceptive, abusive acts and practices (UDAAP).  This filing is noteworthy for two reasons. First, it was… Continue Reading

CFPB Allows Consumers to Publish Complaint Narratives in CFPB’s Public Database

By Faye Ricci on Posted in CFPB, Compliance Resources, Regulatory Developments
Dodd-Frank empowered CFPB to treat consumer complaints as an integral part of CFPB’s mission. As of March 1, 2015, CFPB has handled 558,800 complaints on many consumer financial products, including credit cards, mortgages, bank accounts, private student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection and payday loans. Despite objections from… Continue Reading

Why Banks Should Care about Bitcoin and New York’s Proposed Virtual Currency Regulation

By Faye Ricci on Posted in Banking Technology, Regulatory Developments, Trending News, Virtual Currency
On February 25, 2015, the New York Department of Financial Services (NYDFS) published its proposal to regulate virtual currencies in the New York Federal Register. Since the issuance of its initial proposal in July, 2014, the NYDFS received over 3000 public comments on its proposed regulation. Superintendent Benjamin Lawsky claims that the reproposed legislation incorporates many of… Continue Reading

Spotlight on TILA’s Duty to Provide Timely Mortgage Payoff Statements

By Faye Ricci on Posted in CFPB, Mortgage Servicing, Regulatory Developments, TILA/RESPA
Given the growing complexity of the mortgage servicing rules faced by both bank and non-bank mortgage servicers, it is worthwhile to shine a spotlight on some rules which at first glance seem fairly straight forward, but upon scrutiny, require more analysis. As previously discussed on this blog, the CFPB amended the Truth in Lending Act (TILA)… Continue Reading

Bank Regulatory Agencies Develop Automated Tool to Calculate Risk-Based Capital Requirements for Securitizations

By Faye Ricci on Posted in Basel III, Compliance Resources, Regulatory Developments
Today, the Office of the Comptroller of the Currency (“OCC”) issued a regulatory capital bulletin (“Bulletin”) stating that the OCC, the Federal Reserve Board, and the Federal Deposit Insurance Corporation have developed an automated tool to help national banks and federal savings associations calculate risk-based capital requirements for securitization exposures.   This automated tool is not… Continue Reading

Mortgage Industry Continues to Face New Regulatory Proposals in 2015

By Faye Ricci on Posted in Basel III, CFPB, Mortgage Servicing, Regulatory Developments, TILA/RESPA
CFPB Proposes to Give Relief to Small Lenders On January 29, 2015, in response to comments from industry groups and stakeholders, the CFPB proposed amendments to certain mortgage rules that were issued in 2013.  The CFPB will take comments until March 30, 2015 on these proposed rules.  The proposed rule expands the CFPB’s definition of… Continue Reading

CFPB Issues Regulations Governing the Use and Disclosure of Confidential Supervisory Information

By Faye Ricci on Posted in CFPB, Regulatory Developments
Yesterday, the CFPB issued CFPB Compliance Bulletin 2015-01 (“Bulletin 2015-01”).  The purpose of the bulletin was two-fold.  First, the CFPB reminded “supervised” financial and nonbank institutions that are in possession of confidential information, including Confidential Supervisory Information (“CSI”) that they may not disclose such information to third parties.  Second, the CFPB warned these entities that… Continue Reading

Washington Supreme Court Confirms Guarantor Liability Following Foreclosure

By Mark Northrup on Posted in Debt Collection, Foreclosure, Graham & Dunn, Regulatory Developments
The Washington Supreme Court has confirmed a personal guarantor’s liability to a lender following the lender’s nonjudicial foreclosure of its borrower’s real property collateral.  In Washington Federal v. Harvey/Washington Federal v. Gentry, Nos. 90078-7, 90085-0, slip op. at 2-3 (Wash. Jan. 8, 2015), the Court held that “guarantors of commercial loans whose own property has… Continue Reading

The Adverse Impact of Basel III on the Retention of Mortgage Servicing Assets

By Faye Ricci on Posted in Basel III, Mortgage Servicing, Regulation AB, Regulatory Developments
Basel III       As we start of the New Year, I think it is a good idea to assess Basel III’s impact on banks.  We have just finished year one of the five year phase in of Basel III. As many of you are well aware, when the Federal Reserve Board approved the Basel III Regulatory Capital and… Continue Reading

Proposed Expansion of Military Lending Act Protections Would Increase Burden on Banks and Credit Unions

By Faye Ricci on Posted in CFPB, Regulatory Developments
In a previous blog post, we noted that the Department of Defense (DOD) has proposed expanding the scope of Military Lending Act (MLA) protections to service members and their dependents on all payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans, unsecured open-ended lines of credit, and credit cards. In 2007,… Continue Reading

CFPB Proposes Additional Restrictions for Mortgage Servicers

By Faye Ricci on Posted in CFPB, Mortgage Servicing, Regulatory Developments
On November 20, 2014, the CFPB proposed several amendments to the mortgage servicing rules under Regulation X and Regulation Z, after previously implementing amendments to these regulations in January, 2014.  As previously described in this blog, the prior amendments addressed 9 key areas and included rules governing the transfer of servicing between servicers.  The new… Continue Reading

Non-Disparagement Clauses Prohibited in California

By Faye Ricci on Posted in Regulatory Developments
On September 9, 2014, Governor Jerry Brown of California signed Bill No. 2365 which prohibits a contract or proposed contract for the sale or lease of consumer goods or services from including “non-disparagement clauses” in the contract.  “Non-disparagement clauses” are clauses that waives a person’s right to review: the seller, lessor or its employees or agents;… Continue Reading