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When should our (Compliance, BSA, Fair Lending, Other) Risk Assessment be updated?
Answer: Updating your institution’s compliance risk assessments is crucial for maintaining regulatory standards and ensuring effective risk management. The Risk Assessment communicates the Board of Directors’ tolerance of risks and identifies controls for managing risks within those tolerances. Examples of events that may require a Risk Assessment update: As the basis for updating policies and procedures, […]
An institution allows service charges to overdraw our checking accounts but not our savings accounts. Should that be in our disclosures somewhere?
Answer: The FDIC has been criticizing Institution’s for not disclosing this possibility. Under Regulation DD, Institutions are required to disclose what can cause overdrafts. The typical language is: Overdraft fees apply to overdrafts created by check, in-person withdrawal, ATM withdrawal, or other electronic means. TCA recommends additional changes based on whether or not the Institution […]
Beneficial Ownership Injunction
With the deadline for reporting entities to register their beneficial ownership information (BOI) with FinCEN’s Beneficial Ownership Secure System (BOSS) just three weeks away, the U.S. District Court of Eastern Texas issued a preliminary injunction blocking the implementation of the Corporate Transparency Act (CTA) citing that the Act is unconstitutional. Bloomberg Law published the Court’s […]
Does Lender Paid Mortgage Insurance (LPMI) and compliance with 12 U.S.C. 4905(c)(2) apply to HELOCs?
Answer: HOPA’s rules apply to residential mortgage transactions. This is defined in HOPA as – 12 USC §4901(15) – a transaction consummated on or after the date that is 1 year after July 29, 1998 , in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual […]
How should a CTR be completed when a customer takes cash back from a deposit? Would the cash out amount be listed in Field 27 as a withdrawal or a negotiable instrument cashed?
Answer: Since the source of funds originates with a check(s) being deposited, it would be a negotiable instrument cashed. The FinCEN XML User Guide for CTRs defines: Negotiable Instruments – All checks and drafts (including business, personal, bank, cashier’s and third-party), money orders, and promissory notes. For purposes of this FinCEN CTR, all traveler’s checks […]
What are the timing and content requirements of an escrow closing notice?
Answer: There are two different timing requirements when closing an escrow account. If the customer requests that an escrow account be cancelled, then the Institution must provide and the customer must receive an escrow closing notice, three business days before the escrow account is closed. This means that if mailed to the customer, the account […]
Can a financial institution have all borrowers waive the Appraisal Delivery or is there special circumstances required to waive the Appraisal Delivery timing requirements?
Answer: A customer may waive delivery of an appraisal without a reason as long as the waiver is collected at least 3 business days prior to consummation or account opening. The Institution is permitted to offer every customer the opportunity to waive the delivery of the Appraisal and then follow what the customer decides. The […]
What is a Community Development loan?
Answer: There is often confusion surrounding what does or does not qualify as a Community Development loan for your financial institution. To put it simply, a community development loan is a product that provides financing to support the credit needs and development of low- and moderate-income (LMI) communities. Community Development activities are generally defined as […]
Is there a specific frequency for BSA/AML/OFAC model tuning?
Answer: There is not a one-size-fits-all frequency for tuning BSA/AML/OFAC systems. The frequency depends on several factors, including regulatory expectations, significant changes in business operations, risks, and system performance. However, Supervisory Guidance on Model Risk Management and best practices suggest the following guidelines for model tuning: Remember to document any tuning efforts – this gives […]
Does an institution have to pull a flood determination on multi-parcels which have the same PIN?
Answer: Since the property is being deeded over to the borrower, the borrower is essentially purchasing the property for what is remaining Yes. Although no new money is being advanced, this is a new HELOC that will allow a customer to redraw on funds from the line once the loan is paid down. The Right […]
