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What's New?

The Online Compliance Consulting Dashboard has been enhanced!



FDIC Guidance on Multiple Re-Presentment NSF Fees 


Flood Q&As on Force Placement, Recent Enforcement Action


New Fair Debt Collection FAQs, Additional LIBOR Transition Information



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Calendar Items

08/29 - HMDA LAR Quarterly Submission (Large Filers)

Featured Content

The Dog Days of Summer

With record heat this summer, and no new regulatory effective dates to entertain us in August or September, one might wonder… Is anything going on?


From an enforcement action perspective, there is plenty going on.


There seems to be a wave of press releases lately involving actions taken against institutions or fintech companies related to activities resulting in consumer harm. Compliance staff are encouraged to familiarize themselves with these actions and consider some takeaways that could benefit their own institution and their Compliance Management System (CMS).


A Summer Reading List


In looking at actions taken in July and August, these five items captured our attention:



Collectively, these actions represent over $306 million in fines.


While each action can be used as a case study for us to learn some important lessons in deficient or illegal practices and resulting harm, one case in particular really caught our attention. That is, the CFPB fining U.S. Bank for illegally exploiting personal data to open sham accounts. That description reminded us of a 2016 revelation where another one of the nation’s largest banks, Wells Fargo, ended up with a $3 billion fine related to a Justice Department action for a fake account scandal.


CFPB Fines U.S. Bank $37.5 Million


So let’s take a closer look at the U.S. Bank-related action. At a high level, the CFPB shared their initial observations that the Bank, in order to increase sales of certain products and services, imposed sales goals and implemented incentives that rewarded employees for selling those products and services. 


While that sounds like a typical sales program, problems arose. And, one might wonder… how did the Bank go from incenting employees to sell, to creating an environment resulting in unlawful practices? 


Well, the Bureau observed that this program applied pressure to Bank employees to reach their goals and obtain rewards. But, it was noted that in response to that pressure, employees… ”opened deposit accounts, submitted applications for and issued credit cards, and opened lines of credit linked to deposit accounts without consumers’ knowledge and consent.” The CFPB concluded that the Bank’s processes were not reasonably designed to prevent improper sales acts or practices. Another factor that exacerbated this environment was that when a consumer or employee alleged improper action, the process for elevating such complaints or allegations was often stalled at the branch level, which resulted in many complaints not being escalated or acknowledged. 


Besides the opening of non-authorized accounts, the resulting consumer harm was apparent in a variety of ways, for example: the charging of fees, negatively impacting consumer reports, loss of control over use of personal information, as well expending time and effort to resolve unauthorized accounts.


So, What Can an Institution Takeaway from this Enforcement Action?


While reading the Bureau’s consent order will be helpful (linked above), some questions to ask yourself and consider in your own environment might include these:

  1. How is my institution’s compensation plan documented, in either policy, procedures, or job descriptions?
  2. Do those documentary controls clearly include a prohibition against opening accounts without a permissible purpose or authority?
  3. What controls are in place to ensure a customer authorized an account opening?
  4. Are FCRA-related policies and procedures robust enough to ensure credit reports are not used for non-permissible purposes?
  5. What controls are in place to ensure credit reports are obtained only with a permissible purpose?
  6. Do complaint procedures limit reporting in a manner which would keep allegations from being seen by anyone above the branch level?

New Fannie and Freddie Requirements

Lenders that sell loans to Fannie Mae and Freddie Mac (the Enterprises), or servicers of such loans, should be aware of new, upcoming requirements. While the topic of Enterprise requirements is not considered a regulatory compliance issue, Sheshunoff is aware that this is impactful to our clients.


The Federal Housing Finance Agency (FHFA) has announced these new requirements in two news releases.


First, the FHFA’s May 2022 release highlighted the Enterprises new requirement for lenders to use a “Supplemental Consumer Information Form” (SCIF) in their application process for loans sold to the Enterprises. Focal points of this announcement reflect that:


  • This will impact applications dated on or after March 1, 2023.
  • Lenders are to present the SCIF questions to the borrowers.
  • Lender are to report any data collected to the Enterprise purchasing the loan.
  • The SCIF includes questions related to homeownership education, housing counseling, and language preference.
  • In connection with this, the Bureau has stated that the collection of applicants’ language preference does not violate the Equal Credit Opportunity Act or Regulation B.


Second, the FHFA’s August 2022 release announces an update for servicers to maintain certain data, which includes information collected in the SCIF. More specifically, the Enterprises will require servicers to maintain fair lending data, which includes among other things, the borrowers’ preferred language, for the term of the mortgage, starting on March 1, 2023.


The SCIF, along with instructions, is available via the FHFA’s website – Mortgage Translations.

Impacted lenders and servicers should take necessary steps to implement these new Enterprise requirements, as applicable, by March 1, 2023.


In case you missed it… the FDIC has simplified their deposit insurance rules for trust and mortgage service accounts.    


The final rule amending the FDIC’s regulations governing deposit insurance coverage was published earlier this year and establishes a “trust accounts” category that governs coverage of deposits for both revocable and irrevocable trusts. The rule also provides a consistent deposit insurance treatment for all mortgage servicing account balances that are held to satisfy certain obligations to a lender. The new rule is effective on April 1, 2024.


Interested persons can find the FDIC’s final rule, as published in the Federal Register, here.  The FDIC’s “Small Entity Compliance Guide” that addresses this simplification of deposit insurance rules can be found here.

CRE Update

The FDIC recently issued their Supervisory Insights publication for Summer 2022. 


Commercial Real Estate (CRE) staff may be interested in the FDIC’s analysis of CRE lending amid the evolving pandemic. More specifically, the related article takes a look at the performance of banks with a concentration in CRE since the onset of the COVID-19 crisis through 2021. 


Besides looking at financial performance, the article also highlights observations related to risk management practices, which include remarks related to governance, credit underwriting, credit risk rating systems, and stress testing. The article also provides comment on the FDIC’s supervisory approach to CRE in the 2022/2023 exam cycle.


Interested persons can find the FDIC’s Supervisory Insights publication here.

Convenient and Affordable Compliance Assistance

Do you know someone that needs help preparing for the upcoming regulatory requirements? As you know, we can help with our Online Compliance Consulting Services, which combines the ease of online tools with the guidance of a compliance expert.


Clients have access to an online compliance expert who:

  • Answers compliance questions;
  • Reviews new policies and disclosures for compliance; and
  • Trains Boards of Directors on upcoming regulatory requirements.


Clients also receive access to our online tools, including:

  • Our Compliance Calendar;
  • Our Regulatory Deadline resources and Implementation Checklists that enable our clients to determine what steps they need to take to comply with new requirements and track progress as they implement them;
  • Our exclusive Knowledge Base of compliance Q&As; and
  • FREE access to our quarterly Be Prepared! webinar series.


For anyone interested in a free Demo, please have them contact Rhonda Coggins at 

(512) 703-1509.