Consumer Financial Protection Bureau (CFPB)
CFPB Issues Rule Explaining Authority to Continue Examining Institutions Regarding MLA
After discontinuing the Military Lending Act examinations in 2018, the Consumer Financial Protection Bureau announced an interpretive rule that established an explanation regarding their authority to resume examining certain institutions for conduct that violates the MLA and puts active military members and their dependents at risk.
The Office of the Comptroller of the Currency (OCC)
OCC Reports Decline in Mortgage Performance
According to the Mortgage Metrics Report from the Office of the Comptroller of the Currency, first-lien mortgages performance declined in the first quarter of this year. The report showed that 94.2 percent of the mortgages included were current and performing. Last year, that number was up to 96.5 percent due to the pandemic.
National Credit Union Administration
Regulators Update BSA/AML Examination Manual
The Nation Credit Union Administration reported that federal and state regulators released updates to several areas of the Bank Secrecy/Anti-Money Laundering (BSA/AML) Examination Manual regarding the International Transportation of Currency or Monetary Instruments Reporting, Purchase and Saleof Monetary Instruments Recordkeeping, Reports of Foreign Financial Accounts, and Special Measures sections of the Manual. The updates are meant to increase transparency regarding the examination process and improve risk-focused examination work.
The Securities and Exchange Commission
SEC and Other Regulators Announce New Resource to Prevent Abuse of Seniors
The Securities and Exchange Commission (SEC) along with the NASAA and FINRA announced a new free training program that would assist security firms in training certain personnel in how to detect, prevent and report senior financial exploitation and financial exploitation of other vulnerable adult investors. This training program will serve as a resource for institutions as they implement the Senior Safe Act, which addresses problems in reporting the suspected financial exploitation of seniors.
FDIC Issues New Policy Statement Regarding Minority Depository Institutions
The Federal Deposit Insurance Corporation board approved a final policy enhancing efforts to preserve and promote Minority Depository Institutions (MDIs). The new policy statement clarifies the agency’s policies regarding the existing MDI actions in response to public comment for a proposal form August of 2020.
Consumer Financial Protection Bureau (CFPB)
CFPB Details Challenges COVID-19 Continues to Place on Mortgage Borrowers
The Consumer Financial Protection Bureau issued two reports that reveal mortgage borrowers are in need of more help coping with the COVID-19 pandemic and subsequent downturn in the economy. One report issued stated that overall complaints to the CFPB are higher than they’ve been in three years. The other reports that Black and Hispanic mortgage borrowers are more likely to be delinquent or in forbearance programs. Acting CFPB Director, Dave Uejio, said “More borrowers are behind on their mortgage payments than any time since the height of the Great Recession.”
The Office of the Comptroller of the Currency (OCC)
OCC Published Final Rule Establishing Exception to Withdrawal Period Requirement for CIFs
The Office of the Comptroller of the Currency finalized a rule that creates an exception to the requirement for banks that administer collective investment funds for real estate or other assets that aren’t readily marketable. The new rule codifies the time a bank has for withdrawing an account from a covered CIF and the bank may receive and extension to the usual time window with OCC approval, if certain requirements are met.
National Credit Union Administration
NCUA Approves Final Rule Regarding Derivatives and Requests Comment on the Share Insurance Fund Normal Operating Level Policy
The Board of the National Credit Union Administration held its fifth open meeting of 2021, unanimously approving a final rule that modernizes the administration’s derivatives rule by shifting it to an approach based more on principles while still retaining safety and soundness components. The Board also approved a notice requesting comment on the Share Insurance Fund Normal Operating Level Policy.
The Securities and Exchange Commission
SEC Names New Chief Economist and Director of the Division of Economic and Risk Analysis
The Securities and Exchange Commission announced that Jessica Wachter was appointed the Chief Economist and Director of the Division of Economic and Risk Analysis (DERA). Dr. Wachter comes to the SEC after 23 years as a professor at the Wharton School of the University of Pennsylvania.
FDIC Begins Gathering Information on Digital Assets
The Federal Deposit Insurance Corporation announced that it was requesting information and asking for comments from those interested about the digital asset activities of insured depository institutions. Recognizing the unique factors associated with digital assets, the FDIC is requesting this information to better understand the interest in digital assets from an institution’s standpoint and that of consumers.
Consumer Financial Protection Bureau (CFPB)
Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X
The Bureau of Consumer Financial Protection (Bureau) is proposing amending Regulation X to assist borrowers affected by the COVID-19 emergency. The proposed amendments would generally prohibit servicers from making the first notice or filing required for foreclosure until after December 31, 2021, amend early intervention and reasonable diligence obligations to ensure that servicers are communicating timely and accurate information to borrowers about their loss mitigation options during the current crisis, and temporarily permit mortgage servicers to offer certain loss mitigation options made available to borrowers experiencing a COVID-19-related hardship based on the evaluation of an incomplete application.
The Office of the Comptroller of the Currency (OCC)
Agencies Invite Comment on Proposed Rule for Income Tax Allocation Agreements
The federal bank regulatory agencies today invited comment on a proposed rule that updates and codifies existing guidance on income tax allocation agreements involving depository institutions and their affiliates.
Under the proposed rule, banks that file tax returns as part of a consolidated tax filing group would be required to enter into tax allocation agreements with their holding companies and other members of their consolidated group. The proposed rule also describes the provisions required to be included in those agreements and specifies regulatory reporting treatment.
Comments must be received within 60 days of the proposed rule’s publication in the Federal Register.
Federal Reserve Board
Federal Reserve issues FOMC statement
The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
National Credit Union Administration
NCUA Board Briefed on Emerging Cybersecurity Threats, PCA Relief Measures
Board Briefed on Evolving Cyberthreats to the Financial System
The COVID-19 pandemic has increased cybersecurity vulnerabilities for federally insured credit unions and financial services market participants, which remain a target for hackers and thieves. Top threats include ransomware, malware and phishing attacks, identity theft, denial of service, ATM skimming, pandemic-themed attacks, and supply chain attacks.
As stressed in the briefing provided to the Board by the Chairman’s Special Advisor for Cybersecurity, supply chain risk is a significant threat to financial services because of the layered dependencies that exist in a complex, multi-service provider environment found in the financial services sector.
The NCUA continues to encourage credit union boards of directors to use previously issued advisories to review their relationships, assess and mitigate risk as it relates to their specific supply chain, and continue to strengthen their institution’s cyber vigilance and preparedness efforts.
Interim Final Rule Renews Prompt Corrective Action Relief
The NCUA Board received a briefing by the Office of Examination and Insurance staff on an interim final rule(opens new window) that temporarily modifies certain regulatory requirements to help ensure federally insured credit unions remain operational and able to provide needed financial services during the COVID-19 pandemic.
Specifically, the interim final rule makes two temporary changes to the NCUA’s prompt corrective action regulations. The first change temporarily reduces the earnings retention requirement for federally insured credit unions classified as adequately capitalized. The second change temporarily permits an undercapitalized credit union to submit a streamlined net worth restoration plan if it becomes undercapitalized predominantly because of share growth. If a credit union becomes less than adequately capitalized for reasons other than share growth, it must still submit a net worth restoration plan under the current requirements in NCUA’s regulations.
The Securities and Exchange Commission
SEC Issues Notice of Substituted Compliance Application and Proposed Substituted Compliance Order for United Kingdom and Reopens Comment Period for Notice and Proposed Substituted Compliance Order for France
The Securities and Exchange Commission voted to take two actions to continue to advance implementation of security-based swap regulation under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Commission is publishing a notice of application and proposed substituted compliance order in response to an application from the United Kingdom’s Financial Conduct Authority (FCA). In addition, the Commission is re-opening the comment period on the notice of application and proposed substituted compliance order in relation to the application by France’s Autorité des Marchés Financiers (AMF) and Autorité de Contrôle Prudentiel et de Résolution (ACPR).
