All compliance officers know change is inevitable. Flexibility with implementation, training material, monitoring schedules and meetings is the normal, everyday experience in the compliance professional’s world. Let’s face it; a large percentage of your time as a compliance officer is spent reading, researching, developing plans and associated risk assessment, changing that plan and risk assessment and, finally, changing it yet again. Oh, and, don’t forget – the constant training and re-training that must be done when the regulators throw you the “change” curve ball.
With the end of 2018 rapidly approaching, let’s walk down memory lane to briefly review a few of those changes.
The biggest change of 2018 was HMDA (Home Mortgage Disclosure Act). The criteria to determine the Institutional Coverage as to whether a financial institution was subject to HMDA changed. Then, there was a change in Transactional Coverage for determining whether a covered loan and application are reportable based on being dwelling-secured rather than purpose driven.
Also, there were new and modified data fields required for collection and reporting.
As we continue our stroll down memory lane, we must visit TRID. The 2017 Rule established that TRID will now cover closed-end consumer credit transactions, other than reverse mortgages, secured by a co-operative unit, regardless of whether or not state law classifies co-operative units as real property. Generally, you must have the “dirt” in order for TRID to apply, but, as a result of the new amendment, that no longer holds true.
Not to be outdone by the loan-related changes in TRID, Regulation CC decided to make some changes on the deposit side of compliance scope. These changes were made to keep up with the current climate of processing most items electronically. From establishing definitions for remotely created checks, electronic checks plus electronic returned checks, as well as electronically-created items, to creating a new indemnity which addresses the allocation of liability when a depository bank accepts deposit of a check through remote deposit capture; all of these changes required an action plan and implementation.
Now let’s hop over to the BSA path. In May 2018, the Beneficial Ownership Rule became effective. The beneficial ownership final rule added a fifth pillar to BSA and now requires institutions to identify and verify the identity of the beneficial owners of legal entities subject to certain exclusions and exemptions.
Although we are focused on changes in 2018, some “hot topics” do not change and one of those is Fair Lending. It will continue to be a “hot topic” in any year. Fair Lending makes an appearance in a 2018 Consumer Compliance Supervision Bulletin. The following five topics were addressed in the bulletin as fair lending considerations: Redlining, Mortgage Target Pricing, Maternity Leave Discrimination, Disability Discrimination, and Small Dollar Loan Pricing.
Last but not least, the European Union General Data Protection Regulation became a topic of interest within the United States Financial Institution climate. US based institutions began to look deeper to determine if their institutions were subject to this regulation and, if applicable, what measures should be taken to comply.