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FFIEC releases 2019 HMDA reporting guide
On March 25, the CFPB announced that the Federal Financial Institutions Examinations Council (FFIEC) issued the 2019 edition of the “Guide to HMDA Reporting: Getting It Right!,” which reflects the amendments made to HMDA by the May 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act and the August 2018 interpretive and procedural rule issued by the CFPB. (Covered by InfoBytes here.) The guide includes (i) a summary of responsibilities and requirements; (ii) directions for assembling the necessary tools; and (iii) instructions for reporting HMDA data.
CFPB seeks to extend ECOA and credit card plan information collections
On March 20, the CFPB published in the Federal Register two requests to renew information collections, one on the “Report of Terms of Credit Card Plan,” which collects data from at least 150 financial institutions on credit card pricing and availability, and the other on ECOA and Regulation B. For both information collections, the Bureau is seeking comments on (i) whether the information collections are necessary for the proper function of the Bureau; (ii) if the Bureau accurately estimates the burden of the collection and how to minimize that burden; and (iii) how the Bureau can “enhance the quality, utility, and, clarity of the information” collected. Comments on both requests must be received by May 20.
OCC proposes partial assessment fee refunds
On March 20, the OCC published in the Federal Register proposed revisions to its assessment rules to provide partial assessment refunds to banks under OCC jurisdiction that exit OCC jurisdiction within the prescribed timeframe by the rule. In addition to technical and conforming changes, the proposed rule would maintain semiannual assessment fee payments, but would provide refunds equal to the prospective half of the assessment to banks that leave the OCC’s jurisdiction between the date of the applicable Call Report and the date of collection. Comments on the proposal are due by April 19, 2019.
FDIC rescinds disclosure requirements for insured state nonmember banks
On March 18, the FDIC published a final rule to rescind and remove 12 CFR Part 350, Disclosure of Financial and Other Information By FDIC-Insured State Nonmember Banks. Effective April 17, all insured state nonmember banks and insured state-licensed branches of foreign banks will no longer be subject to the annual disclosure statement requirement set out in the existing regulations. The FDIC’s rescission and removal is an attempt by the FDIC to simplify its regulations and “remov[e] unnecessary or redundant regulations.” The FDIC concluded that Part 350 is “outdated and no longer necessary” because information technology advancements now provide the public with direct access to information on the condition and performance of individual banks.
OCC updates recovery planning threshold in Comptroller’s Handbook
On March 15, the OCC announced an update to the Recovery Planning booklet of the Comptroller’s Handbook. Among other things, the revised booklet explains the purpose of effective recovery planning and provides guidance for OCC examiners to use when assessing the “appropriateness and adequacy of [a] covered bank’s recovery planning process and the integration of that process into the covered bank’s overall risk governance framework.” The updates reflect revisions made to the agency’s rule on enforceable guidelines, published December 27, 2018, which increased the average total consolidated assets threshold from $50 billion to $250 billion for covered insured national banks, federal savings associations, and federal branches that are required to comply, unless determined otherwise. Additionally, a bank must now comply with the guidelines within 12 months after it first becomes subject to the guidelines.
Democratic AGs threaten legal action over proposed Payday Rule compliance delay
On March 18, a coalition of 25 Democratic state Attorneys General urged the CFPB not to delay the August 19, 2019 compliance date for any aspect of the Payday, Vehicle Title, and Certain High-Cost Installment Loans rule (Rule) and warned that they would consider taking legal action if the Bureau does so. (CFPB’s Notice of Proposed Rulemaking, which announced the proposed delay in the effective date, was covered by InfoBytes here.) The AGs assert that the Bureau did not provide enough legal justification for delaying the underwriting provisions until November 2020 because the 2017 Rule already provided affected lenders ample time to comply. Moreover, the AGs emphasize that the Bureau cannot use the related proposal of future rescission of the underwriting requirements as a justification for the compliance delay; the delay “must be justified on its own merits.” As for the merits of the Bureau’s justification, among other things, the AGs reject the Bureau’s conclusion that “it should not assign the weight that it did in the 2017 [Rule] to ‘the interest of enacting protections for consumers as soon as possible,’” arguing that diminishing the weight assigned to consumer protection is in opposition to the Bureau’s statutory mandate. The AGs also raise concern about the ambiguity in the compliance date for the payment-related provisions of the Rule and stress that the August 19, 2019 date should stay in effect because “lenders will have had 21 months to prepare.” The AGs conclude that they “will closely examine whether to take action to address any unlawful action by CFPB” should the proposed delay be finalized.
Agencies adopt interim final rule facilitating transfers of legacy swaps
On March 15, five federal agencies—the FDIC, FHFA, Federal Reserve Board, OCC, and Farm Credit Administration (collectively, the “Agencies”)—adopted an interim final rule amending the agencies’ regulations that require swap dealers and security-based swap dealers under the Agencies’ respective jurisdictions to exchange margin with their counterparties for swaps that are not centrally cleared (Swap Margins Rule). The interim final rule seeks to address the situation where the United Kingdom withdraws from the European Union without a negotiated agreement and entities located in the U.K. transfer existing swap portfolios that face counterparties located in the E.U. over to affiliates located in the U.S. or the E.U. Specifically, the interim final rule provides that certain swaps under this situation will not lose their “legacy” status—will not trigger the application of the Swap Margin Rule—if carried out in accordance with the conditions of the rule. The interim final rule is effective immediately and the Agencies are accepting comments for 30 days after publication in the Federal Register.
CFPB does not request lift of compliance date stay for payment-related provisions of Payday Rule
On March 8, the CFPB and two payday loan trade groups filed a joint status report with the U.S. District Court for the Western District of Texas in the litigation over the Bureau’s final rule on payday loans, vehicle title loans, and certain other installment loans (Rule). As previously covered by InfoBytes, the two payday loan trade groups initiated the suit against the Bureau in April 2018, asking the court to set aside the Rule on the grounds that, among other reasons, the Bureau is unconstitutional and the rulemaking failed to comply with the Administrative Procedures Act. In June 2018 and November 2018, the court stayed the litigation and the compliance date of the Rule, after the Bureau’s announcement that it intended to issue a proposed rulemaking to reconsider parts of the Rule. In February 2019, the Bureau issued a proposal, which seeks to rescind certain provisions of the Rule related to the ability-to-repay underwriting standards and delay the compliance date of those affected provisions until August 2020. The proposal does not reconsider the payment-related provisions of the Rule, leaving the compliance date for those provisions at August 19, 2019. (Covered by InfoBytes here.)
In the joint status report, both parties agree that the court’s stay of compliance date and stay of litigation should remain with regard to the underwriting provisions until the Bureau concludes the rulemaking process. As for the payment-related provisions, the payday loan trade groups request the court maintain both the litigation stay and compliance stay of payment provisions until the Bureau completes the underwriting rulemaking process, because the Bureau acknowledged in the proposals that it intends to examine issues related to the payment provisions and “and if the Bureau determines that further action is warranted, the Bureau will commence a separate rulemaking initiative,” which may ultimately moot the litigation. Moreover, the trade groups believe lifting the stays would lead to “piecemeal and potentially wasteful litigation.”
The Bureau also does not seek a lift to the stay of the litigation or compliance date for the payment-related provisions, but for separate reasons. The Bureau argues that the stay of the litigation should be “more limited,” at least until the 5th Circuit issues a decision on the Bureau’s constitutionality in a pending action (covered by InfoBytes here). As for the compliance date stay for the payment-related provisions, the Bureau believes it is not an issue the court needs to decide at this time, but acknowledges that should it request the court lift the stay in the future, the trade groups and the Bureau would have an opportunity to address whether lifting the stay should be delayed to “allow companies to come into compliance with the payments provisions.”
In response to the joint status report, on March 19, the court entered an order continuing the stay of the litigation and the compliance date for both the Rule’s underwriting provisions and its payment-related provisions.
OCC identifies key data fields for HMDA reporters
On March 7, the OCC released Bulletin 2019-12, which identifies the key HMDA data fields for full and partial reporters. Specifically, the Bulletin highlights the 37 key data fields for banks required to report all of the data set forth in the CFPB’s October 2015 and August 2017 HMDA amendments, as well as, the 21 key data fields required for banks that qualify for the partial HMDA exemption pursuant to the May 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act. According to the Bulletin, OCC examiners will focus on the identified key data fields during transaction testing pursuant to HMDA for data collected on or after January 1, 2018. The Bulletin rescinds OCC Bulletin 2017-41, “Home Mortgage Disclosure Act: Interagency Key Fields.”
As previously covered by InfoBytes, in December 2018, the Federal Reserve Board, the FDIC, and the OCC issued joint guidance regarding the same key data fields that Federal Reserve examiners would use to evaluate the accuracy of HMDA data collected since January 1, 2018.
FFIEC issues new policy statement on examination reports
On March 6, the Federal Financial Institutions Examinations Council (FFIEC) announced it adopted a Policy Statement on the Report of Examination, which documents the findings and conclusions of an examination conducted by a FFIEC member agency. The Policy Statement is a principles-based approach for completing the report of examination (ROE) in order to promote consistency among the FFIEC members while allowing flexibility for individual supervisors to document exam assessments of financial institutions of different sizes, risk profiles, and other conditions. The policy provides a short outline that instructs all ROEs to, among other things: (i) include identifying information; (ii) convey that the ROEs contain confidential supervisory information; (iii) present conclusions and issues in order of importance; and (iv) document the institution’s risk profile and discuss the institution’s risk management practices. The new policy statement rescinds an interagency policy statement from 1993.