Prepare for pending regulatory changes, including actionable insights for your organization!
Published monthly, BAI’s 90-Day Regulatory Outlook helps you plan for the compliance landscape in the upcoming fiscal quarter. Receive insights from BAI’s compliance experts on which policies and training courses of yours will be impacted by the most recent and relevant regulatory changes, including:
- Summaries of new regulatory announcements
- Key dates for the upcoming 90 days
- Details on which policies and courses are likely impacted
- Action items for your institution to be ready
- Publication dates for BAI policy changes and BAI course updates
March 17, 2023
Phase 2 of Micro-Entries Rule is Effective March 17
The Micro-Entry Rule was adopted in early 2022. Phase 1 has been in effect since Sept. 16, 2022. It defined Micro-Entries as ACH credits of less than $1, and any offsetting ACH debits, used for account verification. Additionally, it required the use of the “ACCTVERIFY” description. Starting March 17, 2023, Originators of Micro-Entries will have to use commercially reasonable fraud detection.
Action Item: Depository institutions that originate ACH transactions should review policies and procedures for using micro-entries and ensure fraud detection is incorporated into said policies.
March 20, 2023
CFPB Proposes Rule to Establish Public Registry of Terms and Conditions in Form Contracts That Claim to Waive or Limit Consumer Rights and Protections
Today, the Consumer Financial Protection Bureau (CFPB) proposed a rule to establish a public registry of supervised nonbanks’ terms and conditions in “take it or leave it” form contracts that claim to waive or limit consumer rights and protections, like bankruptcy rights, liability amounts, or complaint rights. In some cases, terms and conditions in non-negotiable form contracts mislead consumers into believing the terms or conditions are legally enforceable. Under the proposed rule, nonbanks subject to the CFPB’s supervisory jurisdiction would need to submit information on terms and conditions in form contracts they use that seek to waive or limit individuals’ rights and other legal protections. That information would be posted in a registry that will be open to the public, including to other consumer financial protection enforcers.
Action Item: Nonbanks should submit their comments to the CFPB.
March 24, 2023
HUD Announces New Proposed “Affirmatively Furthering Fair Housing” Rule
This proposed rule implements the Fair Housing Act’s affirmatively furthering fair housing mandate, which directs the government to promote fair housing choice, eliminate disparities in housing, and foster inclusive communities. While building avenues for greater accountability, this proposed rule streamlines the required fair housing analysis for local communities, states, and public housing agencies and requires them to set ambitious goals to address fair housing issues facing their communities, among other landmark changes.
Action Item: Institutions that originate mortgage loans should submit their comments to HUD.
CFPB Proposes Rule to Rein in Excessive Credit Card Late Fees
Today, the Consumer Financial Protection Bureau (CFPB) proposed a rule to curb excessive credit card late fees that cost American families about $12 billion each year. Major credit card issuers continue to profit off late fees that are protected by an expansive immunity provision. Credit card companies have also relied on this provision to hike fees with inflation, even if they face no additional collection costs. The proposed rule would help ensure that over the top late fee amounts are illegal. Based on the CFPB’s estimates, the proposal could reduce late fees by as much as $9 billion per year.
Action Item: Credit card issuers should submit comments to the CFPB.
April 7, 2023
FDIC Extends Comment Period for Proposed Changes to Regulation Regarding the FDIC Official Sign
The Federal Deposit Insurance Corporation (FDIC) today announced a 45-day extension to the public comment period for proposed changes to its regulations relating to the FDIC’s official sign, the FDIC’s official advertising statement, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name or logo. Comments must be received by the FDIC no later than April 7, 2023.
Action Item: Banks should submit comments to the FDIC.
April 17, 2023
FHFA Requests Input on Enterprise Single-Family Social Bond Program
Currently, each Enterprise issues labeled multifamily social bonds—neither issues labeled single-family social bonds. This RFI will help FHFA understand the opportunities and potential risks associated with the Enterprises issuing single-family social bonds, under the framework of Environmental, Social, and Governance (ESG) securities. FHFA also seeks input in defining the criteria and appropriate impact measures for Enterprise-labeled single-family social bonds.
Action Item: Mortgage brokers and securities dealers should submit comments to the FHFA.
April 24, 2023
CFPB Seeks Public Input on Consumer Credit Card Market
The Consumer Financial Protection Bureau (CFPB) issued a request for information today seeking public feedback on how the consumer credit market is functioning as part of a biennial review of the industry. The CFPB is seeking more and current information on various aspects of the consumer experience with credit cards. Congress enacted the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) to establish fair and transparent practices related to the extension of credit in the credit card market. The CARD Act mandates the CFPB to conduct a review of the credit card industry every two years and report to Congress.
Action Item: Credit card issuers should submit their comments on the credit card market to the CFPB.
FTC Extends Deadline by Six Months for Compliance with Some Changes to Financial Data Security Rule
The Federal Trade Commission today announced it is extending by six months the deadline for companies to comply with some of the changes the agency implemented to strengthen the data security safeguards financial institutions must put in place to protect their customers’ personal information. The deadline for complying with some of the updated requirements of the Safeguards Rule is now June 9, 2023.
Action Item: Financial institutions that offer consumer products should continue to implement data security policies for complying with the Safeguards Rule
June 30, 2023
Federal Reserve Adopts Rule Implementing Adjustable Interest Rate (LIBOR) Act
The Federal Reserve Board on Friday adopted a final rule that implements the Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023. The final rule is substantially similar to the proposal with certain clarifying changes made in response to comments.
Action Item: Institutions that utilize LIBOR in financial contracts should identify financial contracts that utilize LIBOR and modify them to reflect the new SOFR benchmark.
Past Highlights
Qualified Mortgage Definition to Change Fall 2022
In December 2020, the CFPB released a final rule that updated the definition of Qualified Mortgages. While the rule is effective March 1, 2021, compliance is not mandatory until October 1, 2022. The new definition eliminates the Debt-to-Income requirement and replaces it with price-based thresholds that compare a loan’s APR to the APOR. As a result, BAI has retired “Reg Z: Appendix Q” (20507BCMN) as the portion of the regulation it covers is now obsolete.
Recommended courses:
FinCEN Seeks Comments on Enhancing the Effectiveness of AML Programs (November 28th, 2020)
The Financial Crimes Enforcement Network (FinCEN) today issued an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on a wide range of questions pertaining to potential regulatory amendments under the Bank Secrecy Act (BSA). The proposals under consideration are intended to provide financial institutions greater flexibility in the allocation of resources and greater alignment of priorities across industry and government, resulting in the enhanced effectiveness and efficiency of anti-money laundering (AML) programs.
Course Updates: BAI will release new and updated courses upon finalization of rules. (Release Date TBD)
FinCEN Issues Final Rule to Require CIP, AML Program, and Beneficial Ownership Requirements for Banks Lacking a Federal Functional Regulator (March 28th, 2021)
To ensure consistent Bank Secrecy Act (BSA) coverage across the banking industry, the Financial Crimes Enforcement Network (FinCEN) today issued a final rule that requires minimum standards for anti-money laundering programs for banks lacking a Federal functional regulator. The final rule also extends customer identification program and beneficial ownership requirements to those banks.