Capitol Comments
March 2012
Recent News...... 2
Dodd-Frank agency actions...... 8
Publications, reports, studies, testimony & speeches...... 9
Selected upcoming federal compliance dates...... 9
Selected federal compliance dates from the past 12 months...... 10
How to submit comments to your federal regulators...... 12
C A P I T O L C O M M E N T S M A R C H 2 0 1 2 Page 1
When there is a deadline associated with an item, you will see this graphic:
RecentNews
FinCEN reminds of confidentiality of SARs
FinCEN issued anAdvisory[i] to remindfinancial institutions, and in particular, the lawyers that advise them, of the requirementto maintain the confidentiality of Suspicious Activity Reports (SARs).
Comment:FinCEN isconcerned that an increasing number of private parties, who are not authorized to knowof the existence of filed SARs, are seeking SARs from financial institutions for use incivil litigation and other matters.
Distribute this Advisory to any of your bank’s current and formerdirectors, officers, employees, attorneys, agents, and contractors who might know of the existence of filed SARs.
FinCEN creates online e-filing test system
FinCEN has created an online BSA e-Filing System (User Test System)[ii] where you can test electronic submissions of the new SAR and CTR forms. You can find the new SAR and CTR on the right hand side of the above Web site.
FinCEN guidance on aggregating CTRs on businesses with common ownership
FinCEN issued guidance (FIN-2012-G001[iii]) to clarify, for currency transaction reporting purposes, the aggregation of multiple transactions conducted by businesses with common ownership. Subsequent to a ruling on this issue, FinCEN received requests from financial institutions for further guidance. In particular, requestors were interested in guidance that addressed common ownership aggregation beyond the limited set of circumstances discussed in FinCEN Ruling 2001-2[iv] , Currency Transaction Reporting: Aggregation (Aug. 23, 2001).
FinCEN final notice of electronic BSA filing
FinCEN published a final notice[v] in the Federal Register regarding its adopted requirement that all financial institutions subject toBSA reporting use electronic filing for certain reports beginning nolater than July 1, 2012. FinCEN had previously announced a general exemption from mandatory electronic filing of the Report of Foreign Bank and Financial Accounts (FBAR) until July 1, 2012. (See July 24, 2012, Notice[vi])
Comment: FinCEN will consider limited hardship exemptions in certain circumstances. The above notice contained the instructions for submitting a request for temporary exemption. For all exemption requests that are emailed or postmarked by March 26, 2012, FinCEN will make best efforts to notify the requesting institution of its decision no later than April 25, 2012.
FFIEC: Revisions to Call Report
The FFIEC has approved several revisions to the reporting requirements for the Call Report. These revisions will take effect in the first two quarters of 2012, subject to the approval of the U.S. Office of Management and Budget. Click here[vii] for a list of changes that take effect March 31, 2012 and June 30, 2012. To assist you in understanding the revisions to the Call Report, drafts of the report forms for March and June 2012 and draft instructions for new and revised Call Report items are available for your review on the FFIEC’s Web site[viii] and on the FDIC’s Web site[ix].
Comment: Except for those individual savings associations that elected to submit the Call Report beginning as of either September 30 or December 31, 2011, all savings associations are scheduled to convert from filing the Thrift Financial Report (TFR) to the Call Report effective March 31, 2012. Information to assist savings associations to prepare for this conversion is available at
Federal Reserve: Upgrade of supervisory ratings
The Board of Governors issued guidance (SR 12-4[x])to describe the factors the Federal Reserve will consider in evaluating whether to upgrade an institution’s supervisory ratings consistent with interagency rating guidance and Federal Reserve risk management rating guidance.
Comment:To be eligible for an upgrade, banks are expected to demonstrate, among other things, improvement in financial condition and risk management, as well as show that such improvement is likely to continue.
Countdown to electronic federal benefits
The Treasurer of the United States started an official countdown clock, marking one year until the March 1, 2013 deadline when all federal benefit recipients must receive their Social Security and other federal benefit payments electronically.
CFPB’s final round of testing mortgage disclosure prototypes
The week of February 20th, the CFPB was in Austin, Texas conducting the final round of testing of the integrated mortgage loan disclosure. The CFPB has now shifted to the second phase of the project—writing the proposed rules for these disclosures.
Comment: With all the various iterations of these prototypes that the CFPB produced, community banking associations and community bankers could not have commented on every one. However, now that the CFPB has moved to the final phase of the project (writing the rules) and announced that they will likely issue a proposed rule for comment in July, it is time to for community banks to weigh in. Post a comment to the blog[xi] or email the CFPB at . Here are the prototypes:
Loan Estimate
Settlement Disclosure
CFPB seeking nominations for Consumer Advisory Board
The CFPB is looking for members for its new Consumer Advisory Board with diverse perspectives and innovative ideas. These nominees may have a background in one or more of the following areas: consumer protection, financial services, fair lending, civil rights, consumer financial products and services, or community development. By March 30, 2012, submit a nomination letter and a complete resume/CV to orby mail to:
ATTN: Monica Jackson/CAB Nominations
Consumer Financial Protection Bureau
1500 Pennsylvania Avenue NW (Attn: 1801 L Street)
Washington, DC 20220
Comment: This board needs a member who understands community banking. Please nominate worthy candidates by March 30th. If you or someone you know is interested, act quickly.
CFPB inquiries into overdraft practices
On February 22, 2012, the CFPB issued a press release[xii] stating that they were initiating an inquiry into checking account overdraft programs to determine how the programs impact consumers.
Comment: The CFPB is seeking feedback on a prototype penalty fee box[xiii] for periodic statements. The Bureau is also collecting data from several of the largest banks in the country to evaluate how those institutions’ overdraft policies affect consumers. We hope that the data collecting involves more than just analyzing the fees paid because there is more to overdraft protection than the fees.
CFPB begins accepting complaints about bank accounts
On March 1, the CFPB began accepting consumer complaints about bank accounts, including checking accounts, savings accounts, CDs, and related services.Consumers can file a bank account complaint with the CFPB using the Bureau’s website, or by mail, fax, or telephone.The Bureau expects banks to respond to complaints within 15 days and seeks to close all complaints within 60 days. Consumers are given a tracking number after submitting a complaint. They are then able to log in to the CFPB website at any time and check the status of their case. Each complaint will be processed individually and consumers will have the option to dispute a bank’s resolution.
Comment:Although the CFPB only has authority over banks of over $10 billion in assets, there’s no distinction in its press release. And, even if it did make the distinction, most customers would have no idea as to whether their bank was over or under $10 billion in assets. We assume that the CFPB will refer complaints on banks of $10 billion or less, the CFBP to the bank’s prudential regulator.
CFPB seeking comments on responses to Regulatory Streamlining Notice
On December 5, 2011, the CFPB published a Federal Register notice and request for information requesting specific suggestions from the public for streamlining regulations it recently inherited from other Federal agencies (the Streamlining Notice). The Streamlining Notice provided for a two-stage comment process. Initial comments were due March 5, 2012. The Notice then allowed a 30-day period, closing on April 3, 2012, for submitting responses to the comments filed. The Bureau has determined that an extension of the comment reply period until June 4, 2012, is appropriate. This action will allow interested persons more time to analyze the submitted comments and prepare their responses.
Comment:To make it easier to comment, the CFPB launched theRegulation Streamlining Feedback Web Tool[xiv].
Although initial comments on streamlining the inherited regulations must have been received on or before the original date of March 5, 2012, responses to those comments now must be received on or before June 4, 2012.
Click here[xv] to find the list of comments received by the CFPB.
Email purportedly from CFPB
The CFPB learned that businesses have received emails that falsely purport to originate from the CFPB. These emails contain the subject line “Consumer complaint regarding your Company.” They direct recipients to respond to consumer complaints filed against them.
The CFPB did not send or direct anyone to send these emails.These emails may be malicious. To minimize the risks they may present to you, we suggest the following actions. The CFPB continues to investigate this incident and will respond accordingly.
Comment: If a customer receives such an email, advise them:
- Do not respond to it.
- Refrain from opening or clicking on any links in such emails.
- Do not provide any personal, consumer, or commercial information in response to these emails.
CFPB convenes small business panel for mortgage disclosures
The CFPB began its Know Before You Owe initiative to combine mortgage loan disclosure forms in May 2011. The project’s goal is to integrate two federally required mortgage disclosures into a single form.
The CFPB is following the requirements of the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996. Generally, unless a proposed rule will not have a significant economic impact on a substantial number of small entities, the CFPB will seek input directly from small entities about potential costs of a proposed rule and potentially less-burdensome alternatives before issuing the proposal for public comment.
Under this law, representatives from the CFPB, the Chief Counsel for Advocacy of the Small Business Administration (SBA), and the Office of Management and Budget’s Office of Information and Regulatory Affairs will form a review panel. The panel meets with a group of representatives of small financial service providers selected by the CFPB, in consultation with the SBA. The representatives will provide the panel with feedback on the benefits and burdens of complying with the proposals the CFPB is considering. The representatives may also suggest alternatives that would minimize those burdens.
Within 60 days of convening, the review panel completes a report on the input received from small providers during the panel process. The report also contains the panel’s findings on the potential effects of the proposed regulation on small providers and any significant alternatives that accomplish the objectives of the proposed rule while minimizing such impacts. The CFPB then considers the panel’s report and the comments and advice provided by small providers as it prepares the proposed rule. The CFPB plans to formally release a proposed rule for comment in July.
Comment: Probably the most significant thing here is that the CFPB plans to formally release a proposed rule on combining the TILA and RESPA mortgage disclosures in July.
CFPB referring small bank vehicle and installment loan complaints
According to a recent CFPB blog[xvi] entry, they are handling complaints about vehicle loans and installment loans with large banks. However, when a complaint involves a small bank or a nonbank, they refer it to another federal agency with the authority to handle it. When this happens, the CFPB will immediately notify the consumer and identify which agency the complaint was referred to. The blog additionally stated that over time, they will expand their complaint handling functionality to include nonbank auto lenders.
CFPB: Supervision and Examination Manual – Version 1.0
This first edition of the CFPB Supervision and Examination Manual, released on October 13, 2011, is a guide to how the CFPB will supervise and examine consumer financial service providers under its jurisdiction for compliance with Federal consumer financial law.
The Manual is divided into three parts. The first part[xvii] describes the supervision and examination process. The second part[xviii] contains examination procedures, including both general instructions and procedures for determining compliance with specific regulations. The third part[xix] presents templates for documenting information about supervised entities and the examination process, includingexamination reports.
Comment: Remember, federally insured financial institutions with assets of $10 billion or less are not under the CFPB’s jurisdiction for compliance with Federal consumer law.
CFPB accepting complaints on student loans
On March 5, 2012, the CFPB announced that they are “open for business and ready to hear from you” with respect to student loans. Consumers who have a question, want to file a complaint, or just want to share a story may go to or they may call toll-free at 1-855-411-CFPB. The CFPB has also created a “Student debt repayment assistant[xx]” and created a Web page entitled: “Know Before You Owe, Student Loans[xxi].”
Comment: Although the CFPB doesn’t have jurisdiction over banks with assets of $10 billion or less, if you make student loans, you should be familiar with the CFPB’s actions with respect to student loans because the CFPB is where a student loan customer with an issue will likely turn initially
OCC and Fed extend deadline to seek review of mortgage foreclosure
The OCC and the Federal Reserve announced that the deadline for submitting requests for review under the Independent Foreclosure Review[xxii] has been extended. The new deadline, July 31, 2012, provides an additional three months for borrowers to request a review if they believe they suffered financial injury as a result of errors in foreclosure actions on their homes in 2009 or 2010 by one of the servicers covered by enforcement actions issued in April 2011.
Comment: Borrowers are eligible for an Independent Foreclosure Review if they meet the following basic criteria:
- The mortgage loan was serviced by one of theparticipating mortgage servicers.
- The mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
- The property securing the mortgage loan was the borrower's primary residence.
Fake FDIC emails, again
Click here if you wish to see the latest fraudulent emails purporting to originate from the FDIC. As always, consumer and business accountholders who receive unsolicited emails from the FDIC, should consider them fraudulent attempts to collect information.
Federal Reserve joins Twitter
The Federal Reserve Board launched its official Twitter channel--@federalreserve--with the aim of increasing the accessibility and availability of Federal Reserve news.The Board’s website will remain its primary channel of communication. Selected announcements will be tweeted after they are first posted on the website.To start, tweets will include items such as press releases, speeches, testimony, reports to the Congress, the Monthly Report on Credit and Liquidity Programs and the Balance Sheet, and the Federal Reserve’s weekly balance sheet (H.4.1). Additionally, the Board will tweet about educational frequently asked questions (FAQs) and Board video links.
NCUA announces credit union locator mobile application
The National Credit Union Administration (NCUA) announced[xxiii] on March 2, 2012, the availability of a free mobile application—CU Locator—for consumers. Available for the iPhone, the iTouch, and Android devices, the app puts finding the nearest credit union location at consumers’ fingertips.
Comment: We don’t usually post news about credit unions, but this press release from NCUA caught our eye and caused us to wonder when the bank regulators would roll out their bank finder mobile app. This seems more like something the Credit Union National Association would do for its members.
Dodd-FrankAct(DFA) agencyactions
NotetotheReader: ThissectionisdevotedtomattersrelatingdirectlytotheDodd-FrankAct. Inthissection,wewillreportonbothproposedandfinalrulemaking. Wedon’tusuallyreportonproposedrulemakingbecausereaderscanconfusetheproposalswithfinalrules;however,anexceptionwillbemadewithrespecttoselectedrulesproposedinresponsetotheDoddFrankAct. Pleasebeawarethatruleslistedasproposedhavenotbeenadoptedbytheregulators. Weencourageyoutocommentonproposals.
Recent DFA final rules adopted:
There were no final rules emanating from the Dodd-Frank Act to report to community banks this month.
Proposed DFArules with open comment periods:
CFPB: Proposed Reg. YY comment period extended
On January 5, 2012, the Board published in the Federal Register (77 FedReg 13513[xxiv]) anotice of proposed rulemaking for public comment to implement theenhanced prudential standards requiredto be established under section 165 ofthe Dodd-Frank Wall Street Reform andConsumer Protection Act (Dodd-FrankAct or Act) and the early remediationrequirements established under section166 of the Act.
Due to the range and complexity of the issues addressed in the rulemaking, the Board determined that anextension of the end of the publiccomment period from March 31, 2012,until April 30, 2012, is appropriate.
Comment:The proposal includes a wide range of measures addressing issues such as capital, liquidity, single counterparty credit limits, stress testing, risk management, and early remediation requirements.