Dodd-Frank News Center

Capito, Maloney Introduce Legislation to Address Concerns Regarding Fairness of Bank Examinations

This story appeared in Bank Digest.

Financial Institutions Subcommittee Chairman Shelley Moore Capito, R-W.Va., and Ranking Member Carolyn Maloney, D-N.Y., have introduced the “Financial Institutions Examination Fairness and Reform Act” to clarify concerns regarding the increase in regulatory compliance issues for financial institutions and the fairness of the examination process since the recent financial crisis. Capito’s announcement stated that the bipartisan measure is the result of “extensive subcommittee hearings and conversations” with many members from across the country about the challenges facing financial institutions in their communities.

Payment of Registry Fee to Be Extended Under Extenuating Circumstances

This story appeared in Bank Digest.

The FFIEC Appraisal Subcommittee has notified all states that it will consider requests for an extension of the effective date of the modified National Registry fee based on extenuating circumstances. Under authority in the Dodd-Frank Act, the ASC approved an increase of the annual National Registry fee from $25 to $40. The increase was to support ASC supervisory activities, including additional authority under the Dodd-Frank Act. In the event that a state encounters difficulty implementing the modified National Registry fee by Jan. 1, 2012, the state must notify the ASC no later than Oct. 31, 2011. The ASC will consider a state's request for an extension of the effective date of the modified National Registry fee when extenuating circumstances prevent compliance and the state has acted in good faith to implement any actions necessary for achieving compliance.

Regulators Update Online Banking Security Guidelines

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter. 

Federal regulators, responding to an “increasingly hostile” online environment, are concerned that online banking customer authentication methods and controls, implemented in response to recommendations made in 2005, have become less effective.

The Federal Financial Institutions Examination Council issued a supplement June 28, 2011, to its original 2005 guidance, noting that there have been “significant changes” in the threat landscape.

State Appraiser Officials Notified of Dodd-Frank Act Changes

This story appeared in Bank Digest.

The Appraisal Subcommittee of the Federal Financial Institutions Examination Council has alerted state appraiser regulatory officials that the Dodd-Frank Act contains a number of provisions addressing the authority of the FFIEC appraisal subcommittee and requirements for states' appraiser regulatory programs. The agency issued a bulletin to provide information to the state appraiser regulatory officials on certain changes to the appraisal subcommittee's review process for monitoring state appraiser regulatory programs, which will be implemented July 1, 2011, and the statutory provisions that states must implement by July 1, 2013. To provide sufficient time for states to amend their rules, regulations or operating procedures, the FFIEC is providing states with a two-year implementation period for requirements addressed in the bulletin.

New Reg. Z Exam Procedures Focus on Dodd-Frank TILA Provisions

This story appeared in Bank Digest.

The Federal Reserve Board has issued a Consumer Affairs letter notifying compliance personnel that the Federal Financial Institutions Examination Council has adopted updated examination procedures for Reg. Z—Truth in Lending (12 CFR 226) that are intended to address recent regulation amendments on loan originator compensation practices. Appraisal independence provisions and escrow accounts also are covered by the revised procedures.

The amendments prohibit loan originators from receiving compensation based on the interest rate or other loan terms other than the amount of credit extended, the Federal Reserve Board said. They also prohibit a loan originator that receives compensation directly from the consumer from also receiving compensation from the lender or a third party. Additionally, loan originators are prohibited from directing or “steering” a consumer to accept a mortgage loan that is not in the consumer's interest in order to increase the originator's compensation.

OTS Guides on Mapping Thrift Financial Report Line Items to the Call Report

This story appeared in Bank Digest.

The Office of Thrift Supervision notified its regulated institutions that last week the OTS, Office of the Comptroller of the Currency, Federal Reserve Board and Federal Deposit Insurance Corp. announced proposed changes to reporting requirements for OTS-regulated savings associations and savings and loan holding companies. The proposals were published in the Federal Register on Feb. 8, 2011.

Reg. Z Exam Procedures Revised

This story appeared in Bank Digest.

The Fed has sent CA 10-10 to its examiners that the Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council recently approved interagency examination procedures for Regulation Z—Truth in Lending. These revised procedures supersede the Regulation Z interagency examination procedures transmitted with CA 10-6. The Fed's alert notes that the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act) amended the Truth in Lending Act and established a number of new requirements for open-end consumer credit plans. The Credit CARD Act provisions were effective in three stages. This latest update to the examination procedures reflects the third stage of revisions, which became effective on Aug. 22, 2010. The latest revisions to the examination procedures incorporate rules to protect credit card users from unreasonable late payment and other penalty fees and to require credit card issuers to evaluate interest rate increases imposed since Jan. 1, 2009.

FFIEC Releases Small Business, Small Farm and Community Development Lending Data

This story appeared in Bank Digest.

The Federal Financial Institutions Examination Council has announced the availability of data on small business, small farm and community development lending reported by certain commercial banks and savings institutions, pursuant to the Community Reinvestment Act.  An FFIEC disclosure statement on the reported 2009 CRA data, in electronic form, is available for each reporting commercial bank and savings institution. The FFIEC also has prepared aggregate disclosure statements of small business and small farm lending for all of the metropolitan statistical areas and non-metropolitan counties in the United States and its territories.

Dodd Asks Regulators for Answers on Commercial Real Estate Market

This story appeared in Bank Digest.

Senate Banking Committee Chairman Chris Dodd, D-Conn., has sent a letter to federal bank regulators asking them to report on their efforts to stabilize the troubled commercial real estate (CRE) market. He asked the agencies to provide an update on how the guidance issued by the Federal Financial Institutions Examination Council is helping to stabilize the CRE market. Dodd's letter continued, “In addition, I would like an explanation of how [each agency] has addressed the CRE issue so far, and what additional steps you plan to take.”

White Paper on Mortgage Fraud Updated

This story appeared in Bank Digest.

The Federal Financial Institutions Examination Council has released an updated edition of its white paper on mortgage fraud detection and deterrence. The primary objective is to help examiners understand, identify, and detect mortgage fraud schemes and elements. The white paper defines various types of fraud, gives examples of how individuals commit fraud, provides a list of red flags, and outlines best practices.