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Financial Services Law Insights and Observations


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  • OCC seeks comments on compliance risk for reverse mortgages

    On January 28, the OCC published a notice and request for comment in the Federal Register seeking feedback on the renewal of its guidance for managing compliance and reputation risks for reverse mortgage products. The OCC, along with the FDIC, Federal Reserve Board, and the NCUA issued final guidance in 2010 focusing on the need for institutions “to provide adequate information to consumers about reverse mortgage products, to provide qualified independent counseling to consumers considering these products, and to avoid potential conflicts of interest.” The 2010 guidance also addressed related policies, procedures, internal controls, third party risk management, training, and program maintenance. The current notice seeks feedback on (i) whether the collection of the information is necessary and carries a practical utility; (ii) the accuracy of the estimates of the information collection burden; (iii) methods for enhancing the quality, utility and clarity of the information to be collected; (iv) ways to minimize the information collection burden for respondents; and (v) “[e]stimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.” Comments are due March 29.

    Bank Regulatory Federal Issues Agency Rule-Making & Guidance OCC Federal Register Reverse Mortgages Compliance Risk Management

  • Fed solicits comments on insurance supervision guidance

    On January 28, the Federal Reserve Board announced it is soliciting comments on proposed guidance, which would implement a framework for the supervision of certain insurance organizations overseen by the Board. According to the Fed, the proposed framework for depository institution holding companies significantly engaged in insurance activities would apply guidance and allocate supervisory resources based on the risk of a firm and would “formalize a supervisory rating system for these companies and describe how examiners work with state insurance regulators.” Comments are due 60 days after publication in the Federal Register.

    Bank Regulatory Federal Reserve Federal Register Agency Rule-Making & Guidance Supervision Insurance

  • Treasury requests comments on certain nonbanks

    Agency Rule-Making & Guidance

    On January 28, the U.S. Treasury Department published a notice and request for comment in the Federal Register on the proposed information collection “Determinations Regarding Certain Nonbank Financial Companies.” According to the notice, “information collected in § 1310.20 from state and federal regulatory agencies and from nonbank financial companies will be used generally by the [Financial Stability Oversight Council] to carry out its duties under Title I of the Dodd-Frank Act.” Additionally, “[t]he collections of information in §§ 1310.21, 1310.22 and 1310.23 provide an opportunity for a nonbank financial company to request a hearing or submit written materials to the Council concerning whether, in the company’s view, material financial distress at the company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the company, could pose a threat to the financial stability of the United States.” Comments are due March 29.

    Agency Rule-Making & Guidance Department of Treasury Nonbank Federal Register

  • CFPB seeks comment on BNPL inquiry

    Federal Issues

    On January 24, the CFPB issued a notice and request for comment in the Federal Register regarding the Bureau’s inquiry into “buy now, pay later” (BNPL) providers. As previously covered by InfoBytes, in December, the Bureau issued a series of orders to five financial technology companies seeking information regarding the risks and benefits of the BNPL credit model. According to the notice, the Bureau seeks to obtain information from “any interested parties” on “the size, scope, and business practices of the BNPL market” to assist the Bureau in understanding “how consumers interact with BNPL providers, and how BNPL business models impact the broader e-commerce and consumer credit marketplaces.” Comments are due by March 25.

    Federal Issues CFPB Buy Now Pay Later Federal Register Consumer Finance

  • FinCEN requests comments on renewal of the OMB control number

    Financial Crimes

    On January 11, FinCEN issued a notice in the Federal Register soliciting comments on the renewal of the Office of Management and Budget (OMB) control number assigned to the regulation requiring reports of transactions with foreign financial agencies (FFAs). According to the notice, the regulation in the Bank Secrecy Act authorizes the Treasury Secretary “to promulgate regulations requiring specified financial institutions to file reports with [FinCEN] of certain transactions with designated [FFAs].” Although no changes are proposed to the information collection itself, the notice gives stakeholders an opportunity to comment on existing regulatory requirements and related burden estimates under the Paperwork Reduction Act (PRA). The notice also proposes for review and comment a methodology to expand the scope of future estimates for purposes of the PRA to account for cost and time when a financial institution must also report on multiple prior (“backward-looking”) and future (“forward-looking”) transactions with a designated FFA, thus “intending to be more granular in the estimates of resources expended to comply with these regulatory requirements.” Comments must be received by March 14, 2022.

    Financial Crimes Agency Rule-Making & Guidance FinCEN Federal Register OMB Bank Secrecy Act Of Interest to Non-US Persons

  • Fed streamlines reporting requirements for member banks

    On January 10, the Federal Reserve announced a final rule regarding reporting requirements for member banks related to adjusting subscriptions to Federal Reserve Bank capital stock. Specifically, the Fed noted that the “technical rule” amends Regulation I to decrease the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to Federal Reserve Bank capital stock, except in the context of mergers. Under the new process, Reserve Banks will adjust a member bank’s stock subscription each time the member bank files a Call Report, eliminating the need for member banks to file applications to adjust their stock subscriptions (except in the context of mergers). Additionally, the Fed codified its current practices of requiring a surviving member bank to apply to adjust its stock subscription prior to merging or consolidating with another bank. The final rule is effective 30 days after publication in the Federal Register.

    Bank Regulatory Federal Register Federal Reserve Call Report Agency Rule-Making & Guidance

  • OFAC issues amended Weapons of Mass Destruction Trade Control Regulations

    Financial Crimes

    On December 23, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced amendments to the Weapons of Mass Destruction Trade Control Regulations. The amendments, among other things: (i) add Executive Order 13382, “Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters” as an authority to the regulations; (ii) eliminate appendix I, containing an outdated list of persons subject to import measures, from the regulations; and (iii) revise three definitions in the regulations to reflect the removal of appendix I and to make technical edits to the authority citation. The amendments took effect on December 27.

    Financial Crimes OFAC Federal Register Of Interest to Non-US Persons

  • FHFA proposes rule on GSE capital plans

    Federal Issues

    On December 16, FHFA issued a noticed of proposed rulemaking (NPRM) that would require Fannie Mae and Freddie Mac (GSEs) to submit annual capital plans and provide prior notice for certain capital actions, “consistent with the regulatory framework for capital planning for large bank holding companies.” Under the NPRM, the GSEs would be required to assess their risks and submit capital plans to FHFA annually by May 20. These capital plans must include several mandatory elements, including (i) “[a]n assessment of the expected sources and uses of capital over the planning horizon that reflects the [GSE]’s size, complexity, risk profile and scope of operations, assuming both expected and stressful conditions”; (ii) “[e]stimates of projected revenues, expenses, losses, reserves and pro forma capital levels,” along with any additional capital measures the GSEs deem relevant; (iii) “[a] description of all planned capital actions over the planning horizon”; (iv) a discussion of stress test results and how the capital plans will account for these results; and (iv) a discussion of any anticipated changes to a GSE’s business plan that may likely have a material impact on the GSE’s capital adequacy or liquidity. FHFA stated that it intends to review the capital plans for comprehensiveness, reasonableness, and relevant supervisory information, and plans to review the GSEs’ regulatory and financial reports, as well as the results of any conducted stress tests and any other information required by FHFA or related to the GSEs’ capital adequacy. Should the GSEs determine that there has been or will be a material change to their risk profile, financial condition, or corporate structure since the submission of the last plan (or if directed by FHFA), they must resubmit their capital plans within 30 days. The NPRM also incorporates the determination of the stress capital buffer into the capital planning process, which will be provided to the GSEs by August 15 of each year, along with an explanation of the results of the supervisory stress test. Comments on the NPRM are due within 60 days of publication in the Federal Register.

    Federal Issues Agency Rule-Making & Guidance FHFA Fannie Mae Freddie Mac GSE Capital Planning Federal Register

  • FinCEN seeks comments on updating AML/CFT regime

    Agency Rule-Making & Guidance

    On December 14, the Financial Crimes Enforcement Network (FinCEN) issued a request for information (RFI) in the Federal Register seeking comments from regulated entities; state, local, and Tribal governments; law enforcement; regulators; and other consumers of Bank Secrecy Act (BSA) data, on ways to redevelop the anti-money laundering and countering the financing of terrorism (AML/CFT) regime in the U.S. According to the announcement, FinCEN intends to collect comments regarding ways to modernize risk-based AML/CFT regulations and guidance so that they protect U.S. national security in a cost-effective and efficient manner. Additionally, the RFI “supports FinCEN’s efforts to conduct a formal review of BSA regulations and related guidance, which is required by Section 6216 of the Anti-Money Laundering Act of 2020.”

    As previously covered by InfoBytes, the Anti-Money Laundering Act of 2020 made numerous changes to the BSA, including amendments to the definition of “financial institution” to include a “person engaged in the trade of antiquities, including an advisor, consultant, or any other person who engages as a business in the solicitation or the sale of antiquities.” According to FinCEN, this “review will help FinCEN ensure that BSA regulations and guidance continue to safeguard the U.S. financial system from threats to national security posed by various forms of financial crime, and that BSA reporting and recordkeeping requirements continue to be highly useful in countering financial crime.” This review will also permit the agency “to identify regulations and guidance that are outdated, redundant, or otherwise do not promote a risk-based AML/CFT compliance regime for financial institutions, or that do not conform with U.S. commitments to meet international AML/CFT standards.” The findings of the review will be reported to Congress, and will include administrative and legislative recommendations. Comments are due by February 14, 2022.

    Agency Rule-Making & Guidance FinCEN Bank Secrecy Act Combating the Financing of Terrorism Financial Crimes Anti-Money Laundering Anti-Money Laundering Act of 2020 Federal Register

  • FinCEN issues NPRM on beneficial ownership

    Financial Crimes

    On December 7, FinCEN issued a notice of proposed rulemaking (NPRM) implementing the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA). As previously covered by InfoBytes, the CTA is included within the Anti-Money Laundering Act of 2021, which was enacted in January as part of the National Defense Authorization Act for Fiscal Year 2021. The proposed rule implements the reporting requirements under the CTA and “reflects FinCEN’s careful consideration of public comments received in response to its April advance notice of proposed rulemaking on the same topic.” (Covered by InfoBytes here.) Among other things, the NPRM addresses who must report beneficial ownership information, when to report it, and what information they must provide. According to FinCEN, gathering “this information and providing access to law enforcement, financial institutions, and other authorized users will diminish the ability of malign actors to hide, move, and enjoy the proceeds of illicit activities.” Treasury Deputy Secretary Wally Adeyemo released a statement noting that Treasury, through the public comments gathered from the NPRM, intends to “develop a regulatory approach that will safeguard the integrity of our markets and root out corruption in American real estate.” The comment period ends 60 days after publication in the Federal Register.

    Financial Crimes FinCEN Agency Rule-Making & Guidance Of Interest to Non-US Persons Anti-Money Laundering Act of 2020 Anti-Money Laundering Bank Secrecy Act Beneficial Ownership Federal Register Corporate Transparency Act


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