June 8, 2017
In This Issue
Quick Links
ComplySight: FREE Recorded Webinars
Upcoming Educational Events

June 22nd

For a complete listing of educational opportunities available from LCUL and to register, visit the League website and click on "Education"
Compliance Toolkit
The BSA Officer's Toolkit contains tools to help manage your institution's BSA/AML program. It is designed to help you revamp and revitalize your BSA program before the examiners arrive.

Toolkit is provided by GetTechnical Inc. 

InfoSight Highlight: Ability to Repay/Qualified Mortgages 

Credit unions that make closed-end consumer loans secured by a dwelling must comply with Consumer Financial Protection Bureau's (CFPB) Ability-to-Repay/Qualified Mortgage (ATR/QM) Rule for loan applications.  When a credit union complies with the Ability to Repay rule and underwrites certain "qualified mortgages," it has certain protections from legal liability.  The rule requires the credit union assess a member's ability to repay for virtually all closed-end residential mortgage loans secured by the member's dwelling.

Prior to the ATR/QM rule, Regulation Z, which implements the Truth in Lending Act (TILA), prohibited a creditor from making a higher-priced mortgage loan without regard to the member's ability to repay the loan.  The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended TILA to adopt similar Ability-to-Repay (ATR) requirements for virtually all closed-end mortgage loans.  The Dodd-Frank Act also provides a presumption of compliance with ATR requirements and protections from legal liability for a certain category of mortgages, called Qualified Mortgages (QMs).

The ability-to-repay rule: 
  • Expands coverage of the ability-to-repay (ATR) requirements to any consumer credit transaction secured by a dwelling, except an open-end credit plan, credit secured by an interest in a timeshare plan, reverse mortgages, and temporary loan.
  • Prohibits a creditor from making a mortgage loan unless the creditor makes a reasonable and good faith determination, based on verified and documented information, that the consumer has a reasonable ability to repay the loan according to its terms, and all applicable taxes, insurance, and assessments.
  • Provides a presumption of compliance with the ability-to-repay requirements if the mortgage loan is a "qualified mortgage," which does not contain certain risky features and does not exceed certain thresholds for points and fees on the loan and which meets such other criteria as the CFPB may prescribe.
  • Prohibits prepayment penalties unless the mortgage is a fixed-rate qualified mortgage that is not a higher-priced mortgage loan, and the amount and duration of the prepayment penalty are limited.
FinCEN to update Currency Transaction Report 

In August of 2017, the Currency Transaction Report (CTR) available on the BSA E-Filing System will be updated to adhere to the changes defined in Federal Register notice posted on February 20th , 2016. New or updated data fields will be added to the online discrete CTR as well as the CTR batch files. The new or updated data fields are:
Part I Person Involved in Transaction
  • Renamed Item 2d from "Courier Service (private)" to "Common carrier"
Part II Amount and Type of Transaction
  • Added a checkbox to Item 24 to reflect "Shared Branching"
Part III Transaction Location
  • Added an Unknown option to Item 29, Primary Federal Regulator
  • Added an Unknown checkbox to Item 32, EIN
  • Added Item 37, Country
  • Added Item 41, Cash in amount for transaction location
  • Add Item 42, Cash out amount for transaction location
Part IV Filing Institution Contact Information
  • Added new Part IV "Filing Institution Contact Information" section to collect data about the institution that filed the CTR
FinCEN will host a technical webinar on June 21st, 2017 to provide an overview of the XML specifications and also address any questions regarding the XML User Guide. Application developers and programmers are urged to register and attend this webinar. Participants can register for the webinar at: https://attendee.gotowebinar.com/register/8816599296795401730
Source: FinCEN
Fiduciary rule effective June 9, 2017  

The Department of Labor has issued  Guidance FAQs   on a phased-in implementation of its  Fiduciary Conflict of Interest Rule   and related exemptions beginning at midnight Friday, June 9, 2017, with certain provisions in the exemptions delayed to January 1, 2018. As a result, on June 9, investment advice providers to retirement savers will become fiduciaries, and the "impartial conduct standards" will become requirements of the exemptions. The Department will continue to examine the Fiduciary Rule in compliance with the  president's February 3, 2017, memorandum .
Source:  Department of Labor
NCUA releases MBL rule FAQs 
Last week, NCUA posted a series of  Frequently Asked Questions in The NCUA Report related to implementation of the new MBL Rule.  The answers provide a bit of insight into NCUA's expectations surrounding the new rule.  The topics cover steps credit unions can take to prepare for the changes, where credit unions can find guidance and background information, expectations for making loans without a personal guarantee, steps for monitoring the level of risk in individual loans, and the process to follow in the event a credit union disagrees with the findings of an examiner.

There isn't really anything new here, as everything in this document is already contained in the  Examiner's Guide . However, this series of FAQs can be a helpful tool for quick reference and is presented in a very readable format, applying the guidance and the rule to different questions credit unions are facing. 
Final Reg CC rule and new proposal issued 

One part of the question concerning the future of Regulation CC has finally been solved.  The Federal Reserve Board has issued a final rule  to amend the check collection and return provisions in subparts C and D of the regulation, but left unchanged, for now, subpart B, which covers the funds availability and funds availability disclosure requirements. Rulemaking on subpart B must be done in partnership with the CFPB.

In the final rule, the Board has modified the current check collection and return requirements to reflect the virtually all-electronic check collection and return environment and to encourage all depositary banks to receive, and paying banks to send, returned checks electronically. The Board has retained, without change, the current same-day settlement rule for paper checks. The Board is also applying Regulation CC's existing check warranties under subpart C to checks that are collected electronically, and in addition, has adopted new warranties and indemnities related to checks collected and returned electronically (including those deposited via remote deposit capture and mobile remote deposit capture) and to electronically-created items. The final rule will be effective July 1, 2018.
The Board has also released for comment a proposed amendment to the regulation's existing liability provisions to address situations when it's unknown whether a substitute or electronic check was altered or forged in certain cases. Comments on the proposal will be accepted for 60 days following Federal Register publication. The proposal was published at  82 FR 25539, with a comment period ending August 1, 2017.
Compliance Calendar

July 2017

September, 2017

October, 2017

January, 2018