Compliance Blog

Posted by Anthony Demangone

Welcome back, everyone.   I hope everyone is getting over their sunburns and overloaded email inboxes.   Now, on to the post...

Red Flags Delayed...Again.  The FTC has delayed enforcement of its Identity Theft Red Flags rule...again. Enforcement is now delayed until December 31, 2010.

At the request of several Members of Congress, the Federal Trade Commission is further delaying enforcement of the “Red Flags” Rule through December 31, 2010, while Congress considers legislation that would affect the scope of entities covered by the Rule. Today’s announcement and the release of an Enforcement Policy Statement do not affect other federal agencies’ enforcement of the original November 1, 2008 deadline for institutions subject to their oversight to be in compliance.

The delay only benefits state chartered credit unions.  Federally-chartered credit unions have been under NCUA's identity theft regulation for quite some time.

Reg Z's Closed End Final Rule. A little birdie told us that the Fed is nowhere close to releasing the final rule that will amend its closed end lending rules. 

Fraud and insider abuse. OTS has released an updated version of Regulatory Bulletin 37-54.  The bulletin addresses the issue of fraud and insider abuse.  The bulletin discusses virtually every angle of this issue, from filing SARs to risk mitigation techniques.  I'd share this with your security officer.  While the citations flow to OTS requirements, the basic information is sound and worthy of your attention.

1099s.  NAFCU is in no way an expert on tax issues, but we do track IRS-related issues to see how they could affect our members.  You may not have seen this yet, but buried inside the health care reform legislation was language that will change how 1099s are prepared.  The changes will take effect in 2012.  Here's a general article that highlights how those changes may affect American businesses - including credit unions. (CNNMoney.com)

But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.

The bill makes two key changes to how 1099s are used. First, it expands their scope by using them to track payments not only for services but also for tangible goods. Plus, it requires that 1099s be issued not just to individuals, but also to corporations.

Taken together, the two seemingly small changes will require millions of additional forms to be sent out.

Shameless plug.  Tomorrow, I'll moderate a NAFCU webcast on Hot Issues at NCUA.  There's still time to sign up!