Important Updates Archive

Below is an archive of all Bankers' Compliance Group® Important Updates. To view each article, click on the link "Read more" below each description.

The California Holden Act prohibits redlining and other discriminatory practices. California Health & Safety Code Section 35800 et seq. and 21 California Code of Regulations (CCR) 7100 et seq. In addition, the Holden Act requires lenders to provide a Fair Lending Notice when an applicant submits a written application for housing financial assistance. Read more.

Dodd-Frank Act Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to compile, report and maintain specified information regarding certain women-owned, minority-owned, or small business loan applicants, in accordance with regulations to be issued by the CFPB. After a long wait, on September 1, 2021, the CFPB finally issued its proposal to implement Section 1071. Read more.

National banks, federal savings associations, and federal branches and agencies of foreign banking organizations (collectively, “OCC-supervised institutions”) must list the OCC’s address in their Community Reinvestment Act (CRA) public notice, the Equal Credit Opportunity Act (ECOA) notice within their adverse action notices, and their Fair Housing Act (FHA) poster. Read more.

The Bureau recently published a notice in the Federal Register at 86 FR 43999 requesting comment on a “Generic Information Collection” entitled, “Electronic Disclosure on Mobile Devices.” The Bureau plans to conduct several studies using methodologies rooted in psychology and behavioral economics to understand electronic disclosure on mobile devices. Read more.

The CFPB issued a final rule on June 28, 2021 that amended the early intervention and loss mitigation requirements in Regulation X’s mortgage servicing rules (specifically, Sections 1024.39 and 1024.41). Arguably, the biggest change this final rule makes is its addition of temporary foreclosure limitations that are in effect until January 1, 2022. Read more.

If a Regulation Z-covered loan is secured by a consumer’s principal dwelling and the loan is not a “residential mortgage transaction” (that is, the loan is not a purchase-money loan or an initial construction loan), the loan will be subject to Regulation Z’s rescission rules. Read more.

If a Regulation Z-covered loan is secured by a consumer’s principal dwelling and the loan is not a “residential mortgage transaction” (that is, the loan is not a purchase-money loan or an initial construction loan), the loan will be subject to Regulation Z’s rescission rules. Read more.

On April 14, 2021, FEMA publicly announced that it could be suspending certain Los Angeles cities’ National Flood Insurance Program (NFIP) eligibility on April 21, 2021 because the cities failed to comply with the flood plain management requirements. 86 FR 19580. Read more.

The CFPB has proposed a moratorium on most residential mortgage foreclosures until January 1, 2022. Specifically, the proposal would amend Regulation X, which implements RESPA, to prohibit a “large” servicer from commencing a foreclosure (whether judicial or nonjudicial) on any delinquent consumer-purpose loan secured by a borrower’s principal residence until after December 31, 2021. Read more.

As BCG reported in its January 2021 Newsletter, the CFPB issued two final rules amending Regulation Z’s ability-to-repay rule (ATR Rule) in December 2020. (Remember, the ATR Rule applies to applies to closed-end, Reg Z-covered credit secured by a dwelling, and there are generally two ways to comply with the ATR Rule – follow the General ATR Standard or make a Qualified Mortgage (QM).) Read more.

As BCG reported in its January 2021 Newsletter, the CFPB issued two final rules amending Regulation Z’s ability-to-repay rule (ATR Rule) in December 2020. (Remember, the ATR Rule applies to applies to closed-end, Reg Z-covered credit secured by a dwelling, and there are generally two ways to comply with the ATR Rule – follow the General ATR Standard or make a Qualified Mortgage (QM).) Read more.

On December 21, 2020, Congress passed the Consolidated Appropriations Act of 2021 (HR 133) (the “CAA”) with significant bipartisan support in Congress. President Trump signed the CAA into law on December 27, 2020. It combines $900 billion in stimulus relief for those affected by the COVID-19 pandemic in the United States with a $1.4 trillion omnibus spending bill for the 2021 federal fiscal year. Read more.

The California Holden Act prohibits redlining and other discriminatory practices. California Health & Safety Code Section 35800 et seq. and 21 California Code of Regulations (CCR) 7100. The Holden Act requires lenders to provide a Fair Lending Notice to when an applicant submits a written application for housing financial assistance. Lenders must also post the Fair Lending Notice in a conspicuous place for public inspection (such as in a public lobby). 21 CCR 7114. Read more.

A question the law firm is frequently receiving during the pandemic is whether a COVID-19 loan modification triggers the flood insurance regulations. In short, the requirement to pull a Standard Flood Hazard Determination Form is triggered when a lender makes, increases, renews or extends (MIREs) a loan secured by a building or mobile home. If that building or mobile home is in a flood zone (what FEMA refers to as a “Special Flood Hazard Area” or “SFHA”), which is an A- or V-rated flood zone, the lender must send the SFHA notice. If the building or mobile home is also in an NFIP-participating community, then the loan is a “designated loan” and the lender must require flood insurance coverage. Read more.

A question the law firm is frequently receiving during the pandemic is whether a COVID-19 loan modification triggers the flood insurance regulations. In short, the requirement to pull a Standard Flood Hazard Determination Form is triggered when a lender makes, increases, renews or extends (MIREs) a loan secured by a building or mobile home. If that building or mobile home is in a flood zone (what FEMA refers to as a “Special Flood Hazard Area” or “SFHA”), which is an A- or Vrated flood zone, the lender must send the SFHA notice. If the building or mobile home is also in an NFIP-participating community, then the loan is a “designated loan” and the lender must require flood insurance coverage. The flood escrow rules are triggered if a lender MIRES a designated loan secured by residential improved real estate or a mobile home after January 1, 2016, and none of the exceptions apply. In sum, all of these requirements hinge on whether the lender MIREd a loan. So, when a loan modification involves increasing, renewing or extending a designated loan, the flood insurance regulations are triggered. Read more.

On May 6, 2020 the CFPB issued useful guidance on when the 30-day deadline to send a notice of adverse action under Regulation B starts to run on Paycheck Protection Program (PPP) applications. The news is good—PPP applications are not deemed “completed” until the SBA has issued a loan number for the loan or a response about the availability of PPP funds. This means PPP applications will not “time out” solely due to delays in receiving loan numbers from the SBA or during interim periods while the PPP has exhausted its funding. Read more.

On April 23, 2020, California Governor Gavin Newsom signed Executive Order N-57-20 (“Order”) which exempts from garnishment federal, state or local government financial assistance payments received by individuals in response to the COVID-19 pandemic. This includes recovery rebates under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) whereby certain individuals are entitled to an advanced tax credit of up to $1,200, depending on their income level. Stated simply, the Order prevents debt collectors from garnishing federal stimulus funds from most Californians. Unfortunately, due to the broad and vague language used in the Order there are quite a number of unanswered questions that remain. Read more.

We want to advise you that we have canceled the in-person seminar locations for the BCG Letters of Credit Seminar in May.  Please note that we will automatically cancel your registration on our end, but we encourage you to register for any of the Recording Playbacks. Read more.

We regret to inform you that we are canceling all of the in-person seminar locations for the April Mortgage Lending Compliance Seminar in recognition of the state and federal governments' requests to limit public gatherings. In their place we have scheduled four Recording Playback dates. Read more.

On March 11, 2020 we emailed a statement to our clients (and posted the statement on the BCG website) regarding our firm’s efforts to help contain the spread of the coronavirus.  At that time we had determined that we would not cancel any BCG Seminars scheduled for March. However, due to increasing concerns regarding public gatherings, we have decided to be more proactive and therefore we have canceled the remaining BCG Electronic Banking Seminars this month. Read more.

On December 20, 2019, hours before the National Flood Insurance Program (NFIP) was set to expire, the President signed the “Further Consolidated Appropriations Act, 2020” (H.R. 1865) that, among other things, extended the NFIP for nine months through September 30, 2020. Read more.

On November 21, 2019, hours before the National Flood Insurance Program (NFIP) was set to expire, Congress passed and the President signed an appropriations bill (H.R. 3055) that, among other things, extended the NFIP through December 20, 2019. Read more.

On September 27, 2019, the President signed a bill (H.R. 4378) that, among other things, extended the National Flood Insurance Program (NFIP) through November 21, 2019. Without this bill, the NFIP was set to expire on September 30, 2019. The law firm will continue to monitor and report on the NFIP’s status. Read more.

Effective July 1, 2019, lenders must accept private flood insurance (PFI) on designated loans if the PFI policy meets the “Eight Criteria.” BCG members have asked whether they may charge a fee for this review – that is, whether they may charge a fee for reviewing a PFI policy to determine whether it meets the Eight Criteria. Read more.

We are excited to announce our newest innovation in delivering BCG Seminars to BCG Members!

Beginning with the August Financial Privacy & Information Security Seminar, which will be presented by Robert Olsen and Keith Forrester, we will introduce a new feature to our BCG Seminars – it’s called the “Recording Playback.”

So what is this exactly?  We will record the monthly seminar ahead of time and host a Recording Playback for BCG Members (only) to attend on a specified date from 8:30 a.m. to 3:00 p.m., with scheduled breaks (including a lunch break) as we normally do at live seminars.  In addition, during the Recording Playback, we will provide several live Question & Answer Sessions during which attendees will be able to ask questions of the speakers. Read more.

On June 3, 2019, Congress passed the Additional Supplemental Appropriations for Disaster Relief Act, 2019 (H.R. 2157), which, among other provisions, extends the National Flood Insurance Program (NFIP) through September 30, 2019. The president signed the bill on June 6, 2019, more than a week before the National Flood Insurance Program (NFIP) was set to expire. Read more.

In the April BCG Newsletter we reported that the FDIC issued a final rule eliminating the requirement that state nonmember banks prepare and make available an annual disclosure statement regarding the bank’s financial condition. Read more.

As we discussed during the February 2019 BCG Monthly Telephone Briefing and will discuss again during the BCG Webinar on April 30, 2019, starting July 1, 2019, regulated lenders must start accepting private flood insurance (PFI) policies that meet what we refer to as the “Eight Criteria.” Read more.

As BCG members are aware, lenders currently do not have to accept private flood insurance(PFI) policies. If a PFI policy meets certain criteria, a lender may choose to accept the policy. (It is the lender’s prerogative. It can do what it wants to do.) Read more.

On December 21, 2018, a day before the federal government shutdown, Congress approved and the president signed the National Flood Insurance Program Act (S. 3628), which extended the National Flood Insurance Program (NFIP) until May 31, 2019. Read more.

On December 21, 2018, a day before the federal government partially shut down, Congress approved and the President signed the National Flood Insurance Program Act (S. 3628), which extends the National Flood Insurance Program (NFIP) until May 31, 2019.  The law firm will continue to monitor and report on the NFIP’s status. Read more.

As BCG previously reported, the National Flood Insurance Program (NFIP) was set to expire on December 7, 2018. On that expiration date, President Trump signed Joint Resolution H.J. 143, extending NFIP funding through December 21, 2018. The law firm will continue to monitor and report on the status of the NFIP program. Read more.

The evening before the National Flood Insurance Program (NFIP) was set to expire on November 30, Congress passed H.R. 7187 which extends the NFIP through December 7, 2018. Separately, the Senate passed S. 3628 (National Flood Insurance Program Extension Act) which would have extended the NFIP for six months (through May 31, 2019) had the House also voted to also pass the Senate’s bill. Read more.

In May of this year, the Economic Growth, Regulatory Relief and Consumer Protection Act (Relief Act) became law.  Section 104(a) of the Relief Act amended HMDA by adding partial exemptions from HMDA’s collection and reporting requirements for certain types of lenders. On August 31, 2018, the CFPB issued an “interpretive and procedural rule” to implement the Relief Act amendments to HMDA (2018 HMDA Final Rule), which will be effective immediately upon publication in the Federal Register. Read more.

California Financial Code (FC) Section 22303 sets forth the maximum numerical rates of interest which California Financing Law (CFL) licensees may charge on consumer loans for a bona fide principal amount of less than $2,500 (i.e., usury). Section 22303 expressly excludes consumer loans of $2,500 or more from this usury limitation and no similar provision exists elsewhere in the FC that limits the numerical rate of interest on such larger loans. Read more.

Recall that in May 2018, FinCEN issued a ruling providing a 90-day limited exception from its beneficial ownership rule requirements for certificate of deposit (CD) accounts and loans that (i) automatically rollover or renew, and (ii) were established before May 11, 2018.  Thus, this exception was effective until August 9, 2018. Read more.

The Community Reinvestment Act (CRA) requires the federal banking agencies to assess a financial institution’s record of helping to meet the credit needs of the institution’s local community (or communities), including low- and moderate-income (LMI) neighborhoods, consistent with safe and sound operations.  On June 15, 2018, the OCC issued Bulletin 2018-17 clarifying its supervisory policies and processes for conducting CRA exams and communicating the results. Read more.

On May 24, 2018 President Trump signed into law S. 2155 – a measure that eases some rules adopted under the Dodd-Frank Reform Act.  This article highlights some of the provisions of S. 2155, the “Economic Growth, Regulatory Relief, and Consumer Protection Act” (Relief Act), that are of particular interest to BCG members.  We will discuss the new law in more detail at an upcoming BCG Monthly Telephone Briefing. Read more.

After threatening to veto the appropriations bill passed by Congress, and after a news conference where President Trump declared “I will never sign another bill like this again,” on Friday, March 23, 2018, the president acquiesced by signing the Consolidated Appropriations Act, 2018, funding various federal government programs, including the National Flood Insurance Program (NFIP).  Under this measure, the NFIP has been extended to July 31, 2018. Read more.

In the wee hours of Friday, February 9, 2018, Congress agreed and the President signed the Bipartisan Budget Act, funding the federal government, including the National Flood Insurance Program, until March 23, 2018. Read more.

On Monday, January 22, 2018 the U.S. Senate finally agreed via a continuing resolution to fund the federal government, including the National Flood Insurance Program, until February 8, 2018. Read more.

Editor’s Note: We inadvertently failed to include this summary of SB 2 in BCG Handout #17-12A, “2018 California Legislation.” The Handout has been revised to include a discussion of the bill on page 2 of the Handout. The Handout also has been reposted  to the BCG website at www.bankerscompliancegroup.com/monthly-telephone-briefing.php.

Effective January 1, 2018, SB 2 adds Section 27388.1 to the Government Code to provide for a new $75 per document recording fee to be charged on most recordable documents, except in purchase and sale transactions. Read more.

On Friday, November 24, 2017, the former Director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray, appointed his chief of staff, Leandra English, as the Deputy Director of the agency. Cordray thereafter resigned from his post. That same day, President Trump appointed the Director of the Office of Management and Budget, Mick Mulvaney, to the position of Director of the CFPB. Read more.

On November 1, 2017, President Trump signed legislation overturning the CFPB’s arbitration rule that was published in July 2017.  The Bureau’s arbitration rule would have prohibited class action waivers in pre-dispute arbitration clauses contained in certain consumer financial services agreements.  82 FR 33210. Read more.

On October 10, 2017, President Trump declared the following California counties as major disaster areas as a result of wildfires in these counties: (i) Butte; (ii) Lake; (iii) Mendocino; (iv) Napa; (v) Nevada; (vi) Sonoma; and (vii) Yuba.  On the same day, FEMA posted a major disaster declaration of the California wildfires on its website, www.fema.gov/disaster/4344. Read more.

On July 19, 2017 the Consumer Financial Protection Bureau (CFPB) published its long delayed final rule that prohibits class action waivers in pre-dispute arbitration clauses contained in covered consumer financial services agreements. 82 FR 33210. While the final rule becomes effective on September 18, 2017, compliance will be mandatory only for pre-dispute arbitration agreements entered into on or after March 19, 2018. Read more.

We want to bring to members attention an omission in the sample Community Reinvestment Act (CRA) notices applicable to FDIC-supervised state nonmember banks that were included with the January 2017 "Important Update" posted to the BCG website. The sample notices did not include the FDIC’s website, www.fdic.gov/ regulations/cra, that the public can use to submit comments electronically. Note also, as reported in the January 2017 Important Update, the FDIC also amended its CRA public notices due to a change in the responsible FDIC official’s title from Regional Manager to Regional Director. We apologize for any inconvenience or confusion we may have caused. Read more.

Congress passed the Fair Labor Standards Act (FLSA) (29 USC 201 et seq.) which, among other things, guarantees a minimum wage for all hours worked during the workweek, as well as a premium of not less than one and one-half times the employee’s regular rate for the hours worked over 40 in a workweek. The FLSA contains a number of exemptions to the overtime requirement. Read more.

The Biggert-Waters Act requires the federal banking agencies to issue regulations that direct regulated lending institutions to accept private flood insurance if certain requirements are met. 42 USC 4012a(b)(1)(B). Despite what insurance agents may be telling your borrowers, this requirement is not effective until the federal banking agencies issue implementing rules. Read more.

On October 11, 2016 the federal appeals court for the D.C. Circuit held that the CFPB director must be subject to dismissal by the president to avoid an otherwise unconstitutional delegation of excessive power to one individual.  PHH Corp. v. CFPB, 2016 U.S. App. LEXIS 18332 (D.C. Cir. Oct. 11, 2016). Read more.

The Uniform Residential Loan Application (URLA) has long been used by lenders and brokers in the mortgage industry to collect certain data in connection with a consumer’s request for mortgage credit. Designed by the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal National Mortgage Association (FNMA), the URLA (often referred to as the FNMA 1003) can be used to request information about an applicant’s ethnicity, race and gender in order to comply with Section 1002.13 of Regulation B. Read more.

The FDIC recently updated its information technology and operations risk examination procedures. Dubbed "Information Technology Risk Examination (InTREx) Program," the Program is designed to enhance the ability of examiners to identify, assess and validate a financial institution’s information technology and operations risk and to ensure that institution management is affectively addressing identified risks.          Read more.

On July 1, 2016 the CFPB issued a proposed rule that would amend Regulation P (12 CFR 1016) to implement a new limited exception to providing annual privacy notices. The Bureau also proposed to eliminate as unnecessary the alternative method for delivering annual privacy notices that it adopted in October 2014. Read more.

The phrase “better late than never” sometimes seems to be the motto for Congress and the President. Recently, President Obama signed into law Senate Bill S. 2393, the Foreclosure Relief and Extension for Servicemembers Act of 2015 (P.L. 114-142), that revives the one year foreclosure protection provisions under the Servicemembers Civil Relief Act (50 USC 3901 et seq.). Under the measure, the 12-month provision is in effect until December 31, 2017.
Read more.

We dedicated the April 2016 BCG Monthly Telephone Briefing to frequently asked questions about the TILA-RESPA Integrated Disclosure (TRID) rule. Here are two follow-up questions we promised to address following the Briefing. Read more.

At the BCG Monthly Telephone Briefing held on February 19, 2016 one participant had a question the speakers wanted to re-think.

Question: Under the amendments to Regulation C (HMDA) that become effective on January 1, 2018, is the following loan reportable: a closed-end mortgage secured by a dwelling the borrower owns free and clear to provide cash out for nonspecific purposes? Read more.

Under amended regulations implementing the Military Lending Act (MLA), creditors are required to determine the military status of applicants for specified covered loans. Recently, the Department of Defense (DoD) agreed to extend until February 15, 2016 the deadline to request direct access to the Defense Manpower Data Center (DMDC) database. The DoD’s decision came in response to a request from the American Bankers Association after the trade group became aware through a teleconference on MLA held on January 12, 2016 that financial institutions had the option to directly connect with the DMDC database. Read more.

In response to a letter the Mortgage Bankers Association sent him, on December 29, 2015, CFPB Director Richard Cordray issued a letter explaining the Bureau’s stance on examining for TRID compliance and a creditor’s ability to cure TRID violations.  With regard to TRID enforcement, Director Cordray reiterated that the Bureau continues to take the same position it set forth in its October 2, 2015 release by stating that the CFPB’s “examiners will be squarely focused on whether companies have made good faith efforts to come into compliance with [TRID],” and “[a]ll of the regulators have indicated that their examinations for compliance in the first few months of implementing the new rule will be corrective and diagnostic, rather than punitive.” Read more.

On October 15, 2015 the CFPB released final amendments to Regulation C to implement the changes made to the Home Mortgage Disclosure Act (HMDA) under the Dodd-Frank Reform Act.  Recall that the Reform Act increased the types of data that must be reported by banks, credit unions and other financial institutions and authorized the Bureau to require additional information as it deems appropriate.  Of course in the Bureau's consistent fashion, the final rule requires lenders to report additional information beyond that required by the Reform Act. Read more.

At the request of the American Bankers Association and other industry representatives, top heads of the CFPB, OCC and FDIC provided some insight as to what financial institutions should expect when being examined for compliance with the TILA-RESPA integrated disclosure (TRID) rule.  While each agency responded separately, reports indicate that all three letters were identical. Read more.   

In the Consumer Finance section of the September 2015 BCG Newsletter was a Q&A article titled, “TRID and Written List of Providers.”  That article stated that, “[w]hile the TRID rule and the CFPB’s commentary are silent on this point, the model form for the written list of providers (Model Form H-27(A)) includes an estimate column.  From this, it appears that creditors must provide an estimate of the cost of the services provided by each listed service provider.” Read more.   

With flood waters come muck and mire.  And, determining which is the appropriate version of the Standard Flood Hazard Determination Form (SFHDF) to be used in documenting a flood zone determination is no less murky.  However, a recent post on FEMA’s website regarding the approaching expiration of the SFHDF might help to clear away some of the murkiness. Read more.
 

Financial institutions that are not subject to the Basel III advanced approaches risk-based capital rules are reminded that an election regarding Accumulated Other Comprehensive Income (AOCI) is to be made with the filing of the March 31, 2015 Consolidated Reports of Condition and Income (Call Report). Read more.
 

In 2010, the U.S. Department of Labor (DOL) issued an interpretation which clarified that employees engaged in duties that are typical of a mortgage loan officer are not exempt administrative employees. Administrator's Interpretation No. 2010-1. Shortly after the 2010 interpretation was issued, the Mortgage Bankers Association brought a lawsuit challenging the 2010 interpretation on the grounds that the DOL failed to follow official rulemaking procedures under the Administrative Procedures Act (APA). While the lower court upheld the 2010 interpretation, the U.S. Court of Appeals for the District of Columbia vacated the interpretation, holding that the DOL did not follow proper rulemaking procedures. Mortgage Bankers Ass'n v. Harris, 720 F.3d 966 (D.C. Cir. 2013). Read more.
 

The CFPB is requesting comments on a proposal that is aimed at assisting smaller institutions, including those in rural areas, in complying with its mortgage rules. The proposal, issued on January 29, 2015, would amend Regulation Z in several respects. Read more.
 

On January 21, 2015, the CFPB issued a final rule which amends the TILA-RESPA Integrated Mortgage Disclosure (IMD) Rule in several respects. The final rule is based upon the CFPB’s earlier proposal, which was issued in October 2014. 79 FR 64336. The final rule, which is effective August 1, 2015, makes two much-needed modifications, as well as other clarifications, to the IMD Rule. Read more.
 

A bill (S. 3008) that would extend the sunset date on foreclosure protection provisions under the Servicemembers Civil Relief Act (SCRA) from December 31, 2014 to December 31, 2015 has been sent to President Obama for signature. Read more.
 

Governor Brown signed Senate Bill (SB) 1050 into law on August 15, 2014. SB 1050 amends Civil Code Sections 1189 and 1195 and Government Code Section 8202 to require a new notice to appear at the top of specified notarial documents. Specifically, a notary public or other officer completing a certificate of acknowledgment, proof of execution or jurat is required to include the following statutory notice that indicates that the certification verifies only the identity of the person who signed the document, and not the truthfulness, accuracy or validity of that document. Read more.
 

Following its typical “MO,” the Bureau has issued a 573-page proposal to amend Regulation C to implement revisions made to the Home Mortgage Disclosure Act (HMDA) by the Dodd-Frank Reform Act. The proposed amendments would, among other things, increase the types of data required to be collected and reported by banks, credit unions and other financial institutions. And while the authors of the Reform Act were able to limit the revisions to the statute to four pages, the Bureau for some reason cannot resist the temptation to be verbose! The following provides a brief overview of the Bureau’s proposed rule, which is broader than the revisions made under the Reform Act. We will discuss the proposal in more detail at an upcoming BCG Monthly Telephone Briefing. Read more.