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OFAC removes Burundi sanctions regulations
On February 10, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced a final rule to remove the Burundi Sanctions Regulations. According to OFAC, the action is being taken “because the national emergency on which part 554 was based was terminated by the President on November 18, 2021.” The final rule took effect on February 11.
VA establishes threshold for reporting VA debts to CRAs
On February 2, the Department of Veterans Affairs published a final rule in the Federal Register amending its regulations around the conditions by which VA benefits debts or medical debts are reported to consumer reporting agencies (CRAs), and creating a methodology for determining a minimum threshold for debts reported to the CRAs. According to the VA, approximately 5,000 delinquent accounts are reported monthly to credit bureaus, and, in many cases, veterans complained about the loss of security clearance or an inability to obtain credit or rental housing. In amending the rule, the VA acknowledged that certain debts, such as medical debts, “are fundamentally different than consumer debt.” Under the new rule, debts are to be reported to a credit bureau if (i) they are considered to be “currently not collectible,” meaning the VA has exhausted available debt collection efforts; (ii) the debt is not owed by someone who has been determined to be catastrophically disabled or has a gross household income below a certain amount; and (iii) the debt owed is over $25. The rule is effective March 4.
On February 7, the CFPB published a blog highlighting the changes that the VA made in its final rule. Among other things, the blog discussed changes to VA’s debt collection practices, protections against surprise medical bills, and getting help with medical bills.
CFPB releases regulatory agenda
On January 31, the CFPB released its semiannual regulatory agenda in the Federal Register, as part of the Fall 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions. According to the CFPB, it “reasonably anticipates having the regulatory matters identified below under consideration during the period from November 1, 2021 to October 31, 2022.” The next agenda will be published in Spring 2022, which will update the recently released agenda through Spring 2023. Among other things, the agenda noted that the Bureau made “significant progress” on the implementation of Section 1071 of the Dodd-Frank Act, which covers banks’ collection, reporting, and disclosure of information on credit applications made by women-owned, minority-owned, and small businesses. Other highlights of the agenda include the Bureau’s: (i) continued collaboration with other federal agencies on regulations for automated valuation models under the FIRREA amendments to Dodd-Frank; (ii) expectation to issue a final rule on the transition away from the LIBOR index, which aims to ensure that loans tied to LIBOR are transitioned “in an orderly, transparent, and fair manner”; (iii) assessment of a rule implementing HMDA; (iv) work on regulations for PACE financing and its “continu[ed] engagement with stakeholders and collect information” from a Advance Notice of Proposed Rulemaking, issued in March 2019 (covered by InfoBytes here); and (v) continued monitoring of consumer financial product markets and creation of working groups to focus on specific markets for potential future rulemakings.
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.
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.
Treasury requests comments on certain nonbanks
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.
CFPB seeks comment on BNPL inquiry
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.
FinCEN requests comments on renewal of the OMB control number
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.
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.
OFAC issues amended Weapons of Mass Destruction Trade Control Regulations
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.