Legal Briefs

Consumer Financial Protection Bureau (CFPB)

The CPFB released a consumer advisory on accessing scholarship and student loan funds. The main points of the advisory are that consumers cannot be required to use a specific bank card; consumers should consider choosing a bank account prior to arriving at their school; and if the school offers it, consumers should sign up for direct deposit.

The CFPB released proposed mortgage servicing rules that cover nine major topics and implement Dodd-Frank provisions. The nine mortgage servicing rules include proposed changes to Regulation Z and RESPA. The CFPB has issued a summary of the proposed rules, but in general the changes will cover: Clear Monthly Mortgage Statements; Warning Before Interest Rate Adjusts; Options for Avoiding Costly “Force-Placed” Insurance; Early Information and Options for Avoiding Foreclosure; Payments Promptly Credited; Maintain Accurate and Accessible Documents and Information; Errors Corrected Quickly; Direct and Ongoing Access to Servicer Personnel To Assist Delinquent Borrowers; Evaluate Borrowers For Options To Avoid Foreclosure. Comments on the proposed mortgage servicing rules are due by Oct. 9, 2012. The CFPB will review and analyze the comments before issuing final rules in January 2013.

The CFPB released a final report on the Small Business Review Panel regarding the mortgage servicing rules the bureau has recently published.

The CFPB issued an interim final rule on the enforcement of nondiscrimination on the basis of disability in programs and activities conducted by the bureau. The interim final rule applies to the CFPB itself and sets forth standards for what constitutes discrimination on the basis of mental or physical disability. The interim final rule was effective on August 6, 2012, and comments are due by October 4, 2012.

Six federal financial regulatory agencies, including the CFPB and National Credit Union Administration (NCUA), issued a joint proposed rule that will establish appraisal requirements for higher-risk mortgage loans. The proposed rule would require lenders to obtain an appraisal for all mortgage loans that meet the Higher Price Mortgage Loan definition. Comments are due by Oct. 15, 2012.

The CFPB has issued a proposed rule amending Regulation B that would require creditors to provide free copies of all written appraisals and valuations developed in connection with an application to be secured by a first lien on a dwelling. In addition, the creditors would be required to provide notice to the applicants of their right to receive the free copy. The proposed rule would also remove the Regulation B appraisal report exemption that federal credit unions currently have. Comments are due by Oct. 15, 2012.

National Credit Union Administration (NCUA)

The NCUA issued Legal Opinion Letter 11-0965. The letter discusses whether or not a video-teller machine is permitted to serve as a “service facility.” The NCUA believes that video-teller machines do meet certain qualifications as a service facility.

Office of Foreign Assets Control (OFAC)

The OFAC SDN list was updated again. Last update: Aug. 15, 2012.

Washington State Division of Credit Unions (DCU)

The DCU issued a report on The Dual Chartering System Benefits of the State Charter. The report discusses the birth of both state and federal charters, the current regulatory structure and the advantages of state charter.

Financial Crimes Enforcement Network (FinCEN)

FinCEN has issued ruling FIN-2012-R005 dealing with the compliance obligations of certain loan or finance company subsidiaries of federally related banks and other financial institutions. In this ruling, FinCEN has determined that subsidiaries of a financial institution that is subject to Bank Secrecy Act (BSA) requirements are subject to the same anti-money laundering (AML) and suspicious activity report (SAR) requirements of the parent company. In addition, the subsidiaries are subject to examination by the federal functional regulator of the parent financial institution.

Federal Financial Institutions Examination Council (FFIEC)

FFIEC announced the availability of 2011 small-business, small-farm, and community development lending data.

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, Compliance News, Federal, NCUA.