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What's New?

The Online Compliance Consulting Dashboard has been enhanced!


Agency Contact Information


Be Prepared! Training, Agency Contact Info. Rule, Reg. II, and Reg. Z Reminder




2023 Coverage Charts


Beneficial Ownership Information Reporting FAQs

Visit for more information.

Calendar Items

03/30 - SC+S Quarterly Be Prepared! Compliance Update Webinar

04/01 - CRA Public File Update

04/19 - Agency Contact Information Rule Effective

04/30 - HMDA LAR Quarterly Update

Featured Content

Artificial Intelligence...What's the big deal?

As those in the financial services industry have likely noticed, the application of artificial intelligence (AI) used in the financial marketplace has been a topic of increased discussion and scrutiny. While it might be considered an issue that has been running quietly in the background, it has definitely caught the attention of our regulators. And, is definitely worthy of our increased focus as well.

So how did we get to where we are today?


In looking back over the last couple of years for issuances related to the topic of AI, one important item stands out. In March 2021, the FRB, CFPB, FDIC, NCUA, and OCC published a “Request for Information” in the Federal Register. The request focused on collecting information and comments on AI, as well as Machine Learning (ML). 


As the regulators opined, the use of AI has various potential benefits, such as improved efficiency, enhanced performance, greater accuracy, lower cost, and faster underwriting. It may also enhance an institution’s overall ability to provide products and services.


However, they noted that it is very important for institutions to be able to identify and manage potential risks associated with AI. Potential risks could include operational vulnerabilities, internal process or control breakdowns, cyber threats, and IT lapses. As they noted, “The use of AI can also create or heighten consumer protection risks, such as risks of unlawful discrimination, unfair, deceptive, or abusive acts or practices (UDAAP) under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), unfair or deceptive acts or practices (UDAP) under the Federal Trade Commission Act (FTC Act), or privacy concerns.”


Moving forward, in May 2022, industry stakeholders might recall that the CFPB issued their Fair Lending Report. Within it, the Bureau announced the focus of their fair lending supervision on many various aspects, including artificial intelligence and machine learning. Of note, they also said that they "will be sharpening its focus on digital redlining and algorithmic bias.” As more and new technology platforms impact the marketplace, the Bureau is committed to identifying emerging risks and remains committed to protecting individuals and small businesses from discrimination, and to holding institutional bad actors accountable.


Most recently, in October 2022, the White House issued a “Blueprint for an AI Bill of Rights.” This proposed framework contains five principles guiding the design, use, and deployment of automated systems to protect the public. We encourage our clients to review the White House Administration’s Bill of Rights, paying particular attention to the chapter entitled “From Principles to Practice.” It provides great information on the expectations for automated systems and a rundown of key factors, which addresses consultation, testing, risk identification, monitoring, and oversight, among other things.


So what's a financial institution to do?

An important first step is to consider ways in which you currently utilize AI. While AI can be used in many capacities, you might consider whether you use it for:


  • Identifying unusual transactions
  • Personalizing customer service, including marketing
  • Making credit decisions
  • Augmenting risk management and control practices
  • Cybersecurity


Next, consider whether your AI process and/or “footprint” has yet to be captured in any policies and procedures.


Another important component is to look at processes for identifying potential AI risks and what is being done to manage those risks. If nothing has been formulated related to your AI risk, now is the time to start. It’s important that this task involve the participation of your internal stakeholders, such as management, IT, and the business line. 


Going forward, institutions should remain cognizant of ongoing developments in this area. 

More Movement on the Topic of Junk Fees

As we have highlighted in a prior newsletter and a Compliance Alert, the topic of surprise deposit account fees, and the White House’s initiative on junk fees, is an important topic of interest. 


Earlier this month, two new additional items caught our attention. 


First, the CFPB issued their “Supervisory Highlights, Junk Fees Special Edition.” The report reflects unlawful junk fees that were uncovered in deposit accounts and in multiple loan servicing markets, including in mortgage, student, and payday lending. The report highlights problematic areas, such as:


  • Deposit Accounts – surprise overdraft fees and multiple non-sufficient funds fees
  • Auto Loan Servicing – “out-of-bounds” and fake late fees, inflated estimated repossession fees, “pay-to-pay” payment fees, and kickback payments
  • Mortgage Loan Servicing – excessive late fees, fees for unnecessary inspections, fake private mortgage insurance charges, and failure to waive fees for homeowners entering some loss mitigation options


Interested persons may find the CFPB’s Supervisory Highlights Special Edition here.


Second, while the White House called on various agencies to support their junk fee initiative last year, they have since convened hundreds of state legislative leaders on state efforts to address junk fees. In connection with this, the White House released a new resource, “Guide for States: Cracking Down on Junk Fees to Lower Costs for Consumers”. Interested persons may find information on the White House convening here.


Sheshunoff continues to encourage clients to remain aware of developing issues related to junk fees. Institutions should compare their fee practices against agency guidance, and as necessary, adjust policies and practices in a manner that forestalls unfair treatment.

FinCEN Continues to Move Forward on CTA

As we reported in October 2022, FinCEN initiated regulatory action on implementing the Corporate Transparency Act (CTA). The CTA was enacted into law as part of the National Defense Authorization Act. FinCEN issued a final rule for implementation of section 6403 of the CTA, which addresses beneficial ownership information reporting requirements. That rule was the first of three rulemakings to implement the CTA. 


A new March 2023 issuance provides information that is now available on FinCEN’s beneficial ownership information reporting webpage, which includes FAQs, information on key filing dates, and other information. While banks, credit unions, and other depository institution holding companies are exempt from being a reporting company, the CTA is a topic that the financial industry should be aware of and remain cognizant of developing and implementing changes.


Interested persons may find FinCEN’s beneficial ownership information reporting webpage here.

On March 15th, the CFPB announced their release of new HMDA charts. 


More specifically, new HMDA Transactional and Institutional Coverage Charts have been posted to the CFPB’s website for 2023. The charts reflect the closed-end threshold pursuant to the United States District Court for the District of Columbia September 23, 2022, order in NCRC et al. v. CFPB. 


Interested persons may find the CFPB’s updated charts on their website 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 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.