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Financial Services Law Insights and Observations


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  • Agencies update the Uniform Rules of Practice and Procedure

    On December 28, 2023, the Fed, OCC, FDIC, and NCUA published a final rule amending the Uniform Rules of Practice and Procedure to recognize the use of electronic communications and enhance the efficiency and equity of administrative hearings. The agencies have implemented measures recognizing the role of electronic communications across all facets of administrative proceedings. Among other things, the final rule (i) defines “electronic signature” in the Uniform Rules; (ii) codifies permitting electronic service and filings for administrative actions; (iii) allows for remote depositions; (iv) includes Equal Access to Justice Act procedures based on the 2019 Administrative Conference of the United States Model Rule; (v) adds provisions on when parties must pay civil money penalties; (vi) adds specific provisions pertaining to the forfeiture of a national bank, federal savings association, or federal branch or agency charter or franchise due to certain money laundering or cash transaction violations; (vii) modifies the discovery rules to recognize electronic documents and allow for electronic production; (viii) establishes new rules for expert and hybrid fact-expert witnesses; and (ix) consolidates the Uniform Rules and Local Rules for national banks and federal savings associations.

    Additionally, the OCC has revised its specific administrative practice and procedure regulations to harmonize rules for national banks and federal savings associations. Furthermore, adjustments were made to the OCC’s regulations on organization and operations to encompass service of process considerations.

    The rule is effective April 1, 2024.

    Bank Regulatory Agency Rule-Making & Guidance OCC Federal Reserve FDIC NCUA Administrative Procedures Act

  • NCUA to reinstate civil money penalties for late call reports

    Agency Rule-Making & Guidance

    Recently, the National Credit Union Administration (NCUA) announced it will reinstate assessing civil money penalties for credit unions that fail to submit a call report (NCUA Form 5300) in a timely manner. The call report program was suspended after December 2019 during the Covid-19 pandemic. “The December 2023 Call Report will be the first reporting cycle under the reinstated program and will be due by 11:59:59 p.m. Eastern time, January 30, 2024.” The NCUA states it will send a reminder to credit unions with outstanding call reports a week before their deadline. The NCUA will also consider extenuating circumstances, including the size and good faith of the credit union, the gravity of the violation, the history of previous violations, and other matters like natural disasters or incapacitation of key employees.

    Agency Rule-Making & Guidance NCUA Credit Union Civil Money Penalties

  • House Financial Services Committee questions financial agency representatives on technological implementations

    Federal Issues

    On December 5, the U.S. House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion held a hearing on “Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape the Future of Financial Services.” The Committee invited representatives to testify from the SEC, OCC, FDIC, CFPB, NCUA, and the Federal Reserve. The representatives fielded an array of questions focused on artificial intelligence, cryptocurrencies, and central bank digital currencies (CBDCs), and broadly focused on the need to balance technological innovation within the financial sector with managing risk.

    On cryptocurrencies, congressional representatives posed questions on the nature of criminal activity among other risks. The discussion addressed bank risks related to crypto assets—while banks do not hold crypto assets, the representative from the Federal Reserve noted how banks may face liquidity risks when holding deposits from crypto-related companies. On CBDCs, the Committee asked for an update on the U.S. CBDC; the Federal Reserve representative mentioned the Fed’s current research on CBDC technologies but noted that the agency is still “a long way off from thinking about the implementation of anything related to a CBDC.”

    On the topic of artificial intelligence, agency representatives discussed how banks are using the technology for fraud monitoring and customer service. The discussion addressed how artificial intelligence technology can create deepfakes using generative models to mimic an individual’s appearance or voice, and thus help scammers bypass traditional security checks. In response, some countries have implemented a secure digital ID that biometrically syncs to one’s smartphone, and the NCUA noted that it is currently evaluating this technology.

    Federal Issues Financial Services Central Bank Digital Currency Fintech OCC FDIC CFPB NCUA Federal Reserve

  • Agencies revise TCPA examination procedures

    Agency Rule-Making & Guidance

    On November 2, the OCC published revisions to the interagency examination procedures for the Telephone Consumer Protection Act (TCPA), which are utilized by the FDIC, NCUA, and the OCC.  The OCC also announced that it is rescinding the “‘Telephone Consumer Protection Act and Junk Fax Protection Act’ section of the ‘Other Consumer Protection Laws and Regulations’ booklet of the Comptroller’s Handbook” and explained that OCC examiners will rely on the new interagency procedures. 

    The revisions were made to reflect amendments to the TCPA that became effective on October 25, 2021.  “The revised interagency examination procedures address:

    • provisions governing how customers can revoke consent under the TCPA;
    • special exemptions from the customer consent provisions of the TCPA for banks using automated communications to notify customers of potential account fraud; and
    • safe harbors for callers that check a reassigned number database maintained by the Federal Communications Commission.”

    The revised examination procedures booklet can be found here.

    Agency Rule-Making & Guidance OCC FDIC NCUA Comptroller's Handbook TCPA

  • Federal and state financial regulatory agencies issue joint statement on the effects of Hurricane Idalia on supervisory practices

    On September 1, the FDIC, Fed, NCUA, OCC and CSBS issued a joint statement recognizing the serious impact of Hurricane Idalia on the customers and operations of many financial institutions in the effected area.

    The guidance discusses the following aspects of financial institution operations:

    • Lending: The agencies encourage financial institutions to work constructively with borrowers in affected communities, including prudent efforts to adjust existing loan terms, and declares that the agencies will not subject such efforts to examiner criticism. “The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound practices as well as in the public interest.”
    • Temporary Facilities: The agencies understand that many financial institutions face staffing, power, telecommunications, and other challenges in re-opening facilities and will expedite, as appropriate, any request to operate in temporary facilities.
    • Publishing Requirements: The agencies understand that the damage that the hurricane caused may affect compliance with publishing and other requirements for branch closings, relocations, and temporary facilities.  Impacted institutions should contact their primary federal and/or state regulator.
    • Regulatory Reporting Requirements: Impacted institutions that expect to encounter difficulty meeting the agencies' reporting requirements should contact their primary federal and/or state regulator to discuss their situation. 
    • Community Reinvestment Act: Financial institutions may receive CRA consideration for community development loans, investments or services that revitalize or stabilize federally designated disaster areas.
    • Investments: The agencies encourage financial institutions to monitor municipal securities and loans affected by the hurricane, including those related to local government projects.


    Bank Regulatory Federal Issues OCC FDIC NCUA CSBS Disaster Relief Consumer Finance

  • Agencies announce guidance regarding institutions affected by Hawaiian wildfires.

    Federal Issues

    On August 17, the Federal Reserve Board, the FDIC, the Hawaii Department of Commerce and Consumer Affairs’ Division of Financial Institutions, the NCUA, and the OCC issued a joint interagency statement covering supervisory practices for financial institutions affected by the Hawaiian wildfires. The agencies announced that, among other things, the regulators would expedite requests made by institutions for temporary operating facilities. The regulators noted that in most cases, “telephone notice to the primary federal and/or state regulator will suffice” for such requests. The agencies also encouraged financial institutions to work with borrowers in affected communities, explaining that “prudent efforts” to adjust terms on existing loans should not be subject to examiner criticism, in light of the unusual circumstances faced by the financial institutions.

    Further, the agencies announced that they understood that damage caused by the wildfires may affect the ability of institutions to comply with publishing requirements for branch closings, relocations, or temporary locations, and instructed institutions experiencing such difficulties to contact their primary federal and/or state regulator. The agencies additionally instructed institutions that face difficulty meeting reporting requirements due to the wildfires to contact their primary federal and/or state regulator, explaining that the agencies “do not expect to assess penalties or take other supervisory action” against institutions that take reasonable steps to comply with reporting requirements. The agencies also announced that financial institutions may receive CRA consideration for loans, investments, or services that revitalize or stabilize federally designated disaster areas. Finally, the agencies encouraged financial institutions to monitor any municipal securities and loans affected by the Hawaii wildfires.


    Federal Issues Bank Regulatory Consumer Finance NCUA OCC Federal Reserve FDIC Disaster Relief

  • FFIEC updates BSA/AML examination manual

    Agency Rule-Making & Guidance

    On August 2, the Federal Financial Institutions Examination Council (FFIEC) updated its Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual, which provides examiners with instructions for assessing a bank or credit union’s BSA/AML compliance program and adherence to BSA regulatory requirements. The revisions include updates to the following sections:

    The FFIEC noted that the “updates should not be interpreted as new instructions or as a new or increased focus on certain areas,” but rather are intended to “provide information and considerations related to certain customers that may indicate the need for bank policies, procedures, and processes to address potential money laundering, terrorist financing, and other illicit financial activity risks.” In addition, the Manual itself does not establish requirements for financial institutions, which are found in applicable statutes and regulations but rather reinforce the agency’s risk-focused approach to BSA/AML examinations.

    Agency Rule-Making & Guidance FDIC Federal Reserve OCC FFIEC NCUA Bank Secrecy Act Financial Crimes Bank Regulatory Anti-Money Laundering

  • Agencies update guidance on liquidity risks and contingency planning

    On July 28, the OCC, FDIC, NCUA and Fed issued an addendum to the Interagency Policy Statement on Funding and Liquidity Risk Management, issued in 2010. The update on liquidity risks and contingency planning emphasizes that depository institutions should regularly evaluate and update their contingency funding plans, referencing the unprecedented deposit outflows resulting from the early 2023 bank failures. According to the addendum, depository institutions should assess the stability of their funding, keep a range of funding sources, and regularly test any contingency borrowing lines in order to prepare staff in the case of adverse circumstances. Additionally, the addendum states that if contingency funding arrangements include discount windows, the depository institutions should ensure they can borrow from the discount window by (i) establishing borrowing arrangements; (ii) confirming that collateral is available to borrow in an appropriate amount; (iii) conduct small value transactions regularly to create familiarity with discount window operations; (iv) establish familiarity with the pledging process for collateral types; and (v) be aware that pre-pledging collateral can be useful in case liquidity needs arise quickly. The agencies also state that federal and state-chartered credit unions can access the Central Liquidity Facility, which provides a contingent federally sourced backup liquidity where a credit union’s liquidity and market funding sources prove inadequate.

    Bank Regulatory Federal Issues OCC NCUA Federal Reserve FDIC Credit Union Liquidity Risk Management

  • NCUA annual report to Congress covers cybersecurity

    Privacy, Cyber Risk & Data Security

    On June 28, the NCUA released its annual report on cybersecurity and credit union system resilience to the House and Senate banking committees. The report outlines measures the agency has taken to strengthen cybersecurity within the credit union system, outlines significant risks and challenges facing the financial system due to the NCUA’s lack of authority over third-party vendors, and addresses current and emerging threats. Explaining that cybersecurity is one of the NCUA’s top supervisory priorities with cyberattacks being a top-tier risk under the agency’s enterprise risk management program, the report discusses ways the NCUA continues to enhance the cybersecurity resilience of federally insured credit unions (FICUs). Measures include continually improving the agency’s examination program, providing training and support, and implementing a final rule in February, which requires FICUs to report any cyberattacks that disrupt its business operations, vital member services, or a member information system as soon as possible (and no later than 72 hours) after the FICU’s “reasonable belief that it has experienced a cyberattack.” The final rule takes effect September 1. (Covered by InfoBytes here.) The report also raises concerns regarding the NCUA’s lack of authority over third-party vendors that provide services to FICUs. Calling this a “regulatory blind spot” with the potential to create significant risks and challenges, the agency stresses that one of its top requests to Congress is to restore the authority that permits the agency to examine third-party vendors.

    Privacy, Cyber Risk & Data Security Federal Issues NCUA Credit Union House Financial Services Committee Senate Banking Committee Third-Party

  • Agencies put out policy on CRE workouts

    On June 29, the FDIC, OCC, Federal Reserve Board, and NCUA, in consultation with state bank and credit union regulators, jointly issued a final policy statement addressing prudential commercial real estate loan accommodations and workouts for borrowers experiencing financial difficulty. The policy statement applies to all supervised financial institutions and supersedes previous guidance issued in 2009. Building on existing supervisory guidance, the policy statement advises financial institutions “to work prudently and constructively with creditworthy borrowers during times of financial stress.” The policy statement (i) updates interagency supervisory guidance on commercial real estate loan workouts; (ii) adds a new section on short-term loan accommodations (for purposes of the policy statement, “an accommodation includes any agreement to defer one or more payments, make a partial payment, forbear any delinquent amounts, modify a loan or contract, or provide other assistance or relief to a borrower who is experiencing a financial challenge”); (iii) addresses relevant accounting standard changes on estimating loan losses; and (iv) provides updated examples on how to classify and account for loans modified or affected by loan accommodations or loan workout activity. The policy statement takes effect upon publication in the Federal Register.

    Bank Regulatory Federal Issues Federal Reserve OCC FDIC NCUA Real Estate Commercial Lending


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