One fact that doesn’t change is change happens. Compliance is an ever-evolving world and you must change with it. Your institution’s policies, procedures, risk assessments and training programs should not remain stagnant as it will increase risk to your institution. Our Temenos Compliance Advisors will be discussing the various recent changes and reviewing previous updates to regulatory compliance topics during the 2020 Temenos Synergy event in September. Here’s is a sneak preview of those various topics.
Subpart B of Regulation CC addresses Funds Availability and the Funds Availability Disclosure requirements. Six different areas within Subpart B of Regulation CC were changed this year effective July 1, 2020. Not only did the next day availability of $200 increase to $225 for certain checks, the first $5,000 required by a Large Deposit hold increased to $5,525 as did the New Account hold for next day items. Also, when determining whether the exception hold reason of Repeated Overdrafts will be applied, the amount increased to $5,525.
On March 24, 2020, the Federal Reserve Board made changes to Regulation D this year as well. These changes were final changes, not just temporary due to COVID. Savings accounts are no longer separated from transaction accounts. Financial Institutions are no longer required to monitor for excessive transactions. You may continue to implement withdrawal limitations, but Regulation D no longer requires that you do so.
In addition, effective July 21, 2020, Remittance Transfers (which are addressed in Subpart B of Regulation E) received a facelift this year. The Safe Harbor threshold increased from 100 to 500. What does this change mean to you? Well, if you sent more than 500 remittance transfers in the previous or current calendar year then you will be subject to the remittance transfer rule. This means you will need to comply with the disclosure requirements as well as the error resolution requirements of the rule.
TRID – TILA/RESPA Integrated Disclosures
Moving along to the lending side of things, there are always topics to discuss with TRID. Some of the questions we receive from our customers deal with changed circumstances and revised disclosures. When trying to determine whether you need to send a revised Loan Estimate (LE), remember the only time a lender is required to issue a revised LE is when you are locking the rate on a previously unlocked transaction, or you are attempting to increase fees beyond a previously disclosed tolerance. If you are not doing either of those two things, then you can update any necessary information on any subsequently issued disclosure, even if that is the Closing Disclosure (CD).
As we are reviewing various compliance matters, we can’t forget to take another look at Flood and the Private policy requirements. Private policies must meet the following seven elements:
- The policy must be issued by an insurance company that is licensed, admitted or otherwise approved in the state where the property to be insured is located, including surplus lines insurers who are recognized or not disapproved by the applicable insurance regulator.
- The policy must provide coverage that is at least as broad as the coverage afforded under the Standard Flood Insurance (SFIP) issued under the National Flood Insurance Program (NFIP).
- The policy must include a requirement for the insurer to give 45 days’ written notice of cancellation or non-renewal to both the insured and the lender or servicer acting on the lender’s behalf.
- The policy must include information that informs the policyholder of the availability of NFIP coverage.
- The policy must contain a mortgage interest clause similar to that found in the SFIP.
- The policy must contain a provision requiring the insured to file suit no later than one year after the date written denial for all or part of a claim.
- The policy must contain cancellation provisions as restrictive as those in an SFIP.
Please join us on September 23rd for Synergy Online, a free, 1-day virtual event featuring Regulatory compliance sessions:
Future-Proofing Deposit Changes
The Temenos Compliance Team will discuss deposit changes for 2020 (Reg C, Reg E – Remittance Transfers, Reg D), and the Privacy Draft Bills in the House and how to plan for the future. Our team of Compliance Experts will be joined by Margaret Chamberlain, Vice President of Risk at OneAZ Credit Union to discuss these regulatory topics.
Managing Risk While Maximizing Rewards
The Temenos Compliance Advisory Team will be joined by Jessica Phillips, Compliance Officer at Peoples Bank of Alabama to discuss the most pressing compliance risks concerns for financial institutions as we navigate ever-changing policies. This session is focused on TRID updates, mortgage servicing challenges, and flood.