Financial Institutions

Tuesday, 10 November 2020

CFPB: Updated FAQs under the CARES Act and FCRA

Written by The Rehmann Team

Soon after the CARES Act was enacted in early 2020, the CFPB published a Compliance Aid to help address consumer reporting requirements. The Compliance Aid was updated in June 2020. Below are some highlights. Under the CARES Act amendments to the FCRA, a consumer whose account was not previously delinquent is current on their loan if they have received an accommodation and make any payments the accommodation requires...

Tuesday, 10 November 2020

CRA Modernization: What’s Up With The OCC, FRB and FDIC

Written by The Rehmann Team

Changing, updating or issuing a new regulation involves myriad complex issues, such as divergent bank business models, different needs of communities across the country and rapidly changing consumer preferences regarding the ways they want to bank and transact business. This is especially true related to CRA because not only bankers and regulators want to understand and respond to the issues, but also consumer and community advocacy groups, economic councils and those interested in public policy. The OCC issued its final rule on May 20, after two years of stakeholder research, changing the agency’s regulations to implement CRA (Regulation BB) and make CRA examination more consistent and predictable.  The rule includes a list of CRA-qualifying activities and a pre-approval process to confirm that a contemplated activity will receive CRA credit...

Tuesday, 10 November 2020

Prepare for the Transition from LIBOR

Written by The Rehmann Team

By the end of 2021, the London Interbank Offered Rate (LIBOR) will be phased out and replaced with a new interest rate reference for new and existing loans. Global financial services have used LIBOR since the 1980s as a reference rate to price mainly variable rate loans and securities, deposits and interest rate hedging transactions, as well as derivatives, discount products, debt securities/commercial paper and even default interest rates.  LIBOR is published daily and is calculated from hypothetical borrowing transactions submitted by a few banks, making it subject to manipulation. In fact, in a 2008 scandal, one banker manipulated LIBOR lower, the opposite of what would be expected during a credit squeeze...

Monday, 09 November 2020

Cybersecurity Best Practices for Remote Workers

Written by The Rehmann Team

While remote workers aren’t a new phenomenon, the number of people working remotely is. Millions are now working remotely due to the Coronavirus pandemic, increasing the risk of sensitive information being compromised and exposed to unauthorized individuals...

Monday, 09 November 2020

FDIC: Temporary Relief from Part 363 Audit and Reporting Requirements

Written by The Rehmann Team

As a result of the global COVID-19 pandemic’s impact on economic conditions, some insured depository institutions (IDIs) have experienced large cash inflows from participation in government relief programs including the Paycheck Protection Program (PPP), Money Market Mutual Fund Liquidity Facility (MMLF), and Paycheck Protection Program Liquidity Facility (PPPLF), among others. This temporary but significant growth in assets means they may be subject to the independent auditing and reporting requirements of Part 363 of the FDIC’s regulations, for fiscal years ending in 2021...

Tuesday, 09 June 2020

Stafford Act Provides Unique Benefit for Companies, Employees

Written by The Rehmann Team

On March 13, 2020 President Trump determined that the COVID-19 pandemic warranted a nationwide emergency declaration as a qualified disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) and gave employers the opportunity to provide tax-free assistance to employees under Section 139 of the Internal Revenue Code. It has been rarely used since enacted in 2002, when it was added after the September 11 attacks in 2001. Section 139 provides that qualified disaster relief payments from any source that are used to reimburse or pay an individual for eligible expenses in connection with a defined qualified disaster are not subject to income or employment taxes, including Social Security, Medicare and federal unemployment taxes and are generally tax-deductible for the employer...

Tuesday, 09 June 2020

2020 HMDA Reporting Threshold Changes

Written by The Rehmann Team

The Consumer Financial Protection Bureau recently issued a final Home Mortgage Disclosure Act (HMDA) rule that increases the threshold for required reporting of closed-end mortgage loans and dwelling-secured open-end lines of credit. It is applicable to depository and non-depository institutions. Closed-End Mortgage Loans If an institution originated at least 25 closed-end loans in both 2018 and 2019, then as of January 1, 2020 the institution has to collect, record and report HMDA data for calendar year 2020.  However, as of July 1, 2020, if an institution originated fewer than 100 closed-end loans in either 2018 or 2019, then it is a newly excluded institution (NEI) subject to these revised HMDA reporting guidelines: NEI may cease the collection of data for HMDA purposes beginning on July 1, 2020...

Tuesday, 09 June 2020

2020 Reg CC changes

Written by The Rehmann Team

In 2010, the Dodd-Frank Act amended the Expedited Funds Availability (EFA) Act requiring regular inflation adjustments to certain hold thresholds triggered every time there is an adjustment for inflation starting on July 1, 2020. The Consumer Financial Protection Bureau issued a 63-page final rule on June 24, 2019 that amended some parts of Regulation CC relating to check holds and funds availability and included customer notification requirements.  Inflation adjustments for holds and funds availability: $200 increases to $225 – this is the amount used on case-by-case holds (Note: the $200 amount is still referred to as $100 in Reg CC).  $5,000 increases to $5,525 – this is the amount used on certain special exception holds, such as large deposit holds, new account holds and repeatedly overdrawn holds...

Tuesday, 09 June 2020

Interagency Response to CECL Comments

Written by The Rehmann Team

In October 2019, the OCC, Federal Reserve Board, FDIC and NCUA (the agencies) invited public comment on proposed guidance on credit risk review to update the 2006 Interagency Policy Statement. The “Loan Review Systems” document focuses on assessing loan risks under the Allowance for Loan and Lease Losses (ALLL) methodology, which will no longer be applicable under Current Expected Credit Losses (CECL). Trade associations, banks, credit unions and members of the public submitted 19 comments. Most expressed general support for the guidance, while many also raised concerns including: a one-size-fits-all approach that would place a burden on smaller institutions; duplication of efforts due to overlap of responsibilities; the role of credit risk review and its relation to other functions such as internal audit; scope, frequency and internal responsibility; dispute resolution; and the use of technology and data...

Tuesday, 09 June 2020

ALLL Trends Due To CECL Implementation and COVID-19

Written by The Rehmann Team

The largest U.S. banks reported weak first-quarter 2020 earnings, with a median decline of 33%, a trend expected to continue at least into the second quarter and possibly beyond, according to a May 2020 report from S&P Global. This was largely due to buildups in ALLL based on downtrends in economic predictions and adoption of CECL accounting methods, coupled with fewer net charge-offs...

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