Compliance Blog

Posted by Anthony Demangone

My inbox still runneth over. Here are some more items of note.

Da Fed.  The Fed just released two rule-makings.  I'll get into more details later in the week, but for now...

• They released this interim final rule (compliance deadline April 1, 2011), to address appraiser independence and compensation. The rule-making was required under Dodd-Frank.
• They released this proposal to close a few loopholes that popped up concerning Reg Z's rules on credit cards. 
• They also released a final rule that finalizes an interim final rule concerning the compliance date for gift cards. 

STS.  I guess that's the new acronym for NCUA's short-term, small amount loan regulation. NCUA recently released NCUA Regulatory Alert 10-RA-13, which is a FAQ document that addresses the recent changes. For example, the following question and answer addresses balloon payments in relation to STS loans. 

Must the loan be amortized, or can the borrower make a balloon payment at the end of the loan term?

The loan must be amortized in such a way that allows the borrower to repay the loan in the given term. FCUs must structure the payments so that the borrower is paying a portion of the principle and interest in equal or near-equal installments on a periodic basis over the course of the loan. While NCUA is not prescribing specific payment schedules (such as monthly or bi-weekly), FCUs should offer payment schedules that allow borrowers to easily repay the loan within the given term.

 FinCEN.  FinCEN was a busy beaver recently.

• FinCEN will reorganize its rules  next year in an effort to make the rules easier to understand.  Rules affecting a particular industry will be grouped together, for example.  Here's an index of the proposed reorganization.  Our rules will be under Part 1020.  Keep in mind that this will not change anything of substance.  But it will take some time to get used to, and all of our existing BSA citations will be dated once the changes go into affect.  Ugh.
• FinCEN published a study  that looked at SARs which reported identify theft.  There is a ton of information in there, and I would forward the study on to your fraud team.  Of note, credit card fraud continues to be the most common type reported on SARs.  And roughly 27 percent of fraud victims know the alleged suspect.  

FTC.  Speaking of identity theft, the FTC announced a bundling of consumer-oriented ID theft resources. You may be able to help consumers by pointing them toward these free resources.  (SHAMELESS PLUG ALERT!) In addition, NAFCU does sell a number of security and ID-related statement stuffers.