With a straight face, President Trump has issued an executive order on June 20th that would expand Apprenticeship opportunities in the US in order to expand jobs. The CFTC has adopted some final rules on records administration and its whistleblower program. It has also introduced a new project to evaluate its system of rules to see where simplification is warranted. FinCEN is moving against a Chinese bank that helps North Korea.
Recordkeeping for Qualified Financial Contracts
On July 31, 2017, the FDIC published a final rule regarding recordkeeping by banks in troubled condition of QFC documentation. The final rule requires that more comprehensive information be maintained to facilitate the FDIC's understanding of complex QFC portfolios of IDIs in receivership. Only one comment was received on the proposal. See the final rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-07-31/html/2017-15488.htm
Real estate Appraisals
On July 31, 2017, the banking agencies published a proposed rule on appraisals. The proposal would increase the threshold level at or below which appraisals would not be required for commercial real estate transactions from $250,000 to $400,000. See the proposal at:
https://www.gpo.gov/fdsys/pkg/FR-2017-07-31/html/2017-15748.htm
Open-end Credit Lines Reporting for Small Banks
On July 20, 2017, the CFPB published a proposed rule that would delay reporting for 2 years for bank with less than 500 open end lines of credit. See the proposal at:
https://www.gpo.gov/fdsys/pkg/FR-2017-07-20/html/2017-15220.htm
Arbitration Agreements in Consumer Financial Products
On July 19, 2017, the CFPB published a final rule to regulate arbitration agreements in contracts for specified consumer financial product and services. First, the final rule prohibits covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service. Second, the final rule requires covered providers that are involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau. This rule is effective September 18, 2017, but only affects agreements entered into 6 months later. See the final rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-07-19/html/2017-14225.htm
FinCEN Special Measure against Bank of Dandong a Chinese Bank
On July 7, 2017, FinCEN published a proposed rule to prohibit opening or maintaining of a correspondent account in the United States for, or on behalf of, Bank of Dandong. This is a Chinese bank that helps North Korea. It is a surprise given that the regulators have previously determined that China exercises sufficient supervision over its banks in the AML area. See the proposed measure at:
https://www.gpo.gov/fdsys/pkg/FR-2017-07-07/html/2017-14026.htm
Credit Unions safe harbor for securitizations
On June 30, 2017, the NCUA published a final rule that would protect securitizations from disaffirmance in a liquidation of a CU. See the final rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-30/html/2017-13636.htm
CFPB Policy on Enforcing its Mortgage Servicing Rule
On June 30, 2017, the CFPB announced that it would not take any supervisory actions against servicers who implement its new rules before the effective date of the rule changes. This reflects complaints made by the industry that they need weekends to get ready to implement rule changes See the policy at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-30/html/2017-13799.htm
Rate increases at the Fed
On June 26, 2017, the Fed increased the interest it will pay on reserves held at the Fed and what it will charge on discount window advances.
National Emergencies with North Korea and Western Balkans
On June 23, 2017, the President continued the national emergencies that were in place with these countries for another year.
OFAC Removes Burma Sanctions
On June 16, 2017, OFAC published its final rule to remove the sanctions. On October 7, 2016, the President found that the situation that prompted the national emergency no longer existed and that democratic rule was developing. Accordingly, OFAC has removed the rules. See the final rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-16/html/2017-12557.htm
Check Collection Rules
On June 15, 2017, the Fed published its final Regulation CC regarding check collection. 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. See the final rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-15/pdf/2017-11379.pdf
Treasury is Reviewing its Regulations
On June 14, 2017, the Treasury published a request for information to aid in reducing the regulatory burden. On January 30, 2017, the President signed Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs, to direct agencies to eliminate two regulations for each new regulation issued and to limit costs for this fiscal year to zero. On February 24, 2017, the President issued Executive Order 13777, Enforcing the Regulatory Reform Agenda, which requires agencies to convene a regulatory reform task force. The Treasury wants suggests about which rules to streamline or eliminate. See the notice at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-14/html/2017-12319.htm
Mergers of Credit Unions
On June 8, 2017, the NCUA published a proposed rule to amend the procedures that a Credit Union needs to follow to merge with another CU. The proposed changes: Revise and clarify the contents and format of the member notice; require merging FCUs to disclose all merger-related financial arrangements for covered persons; increase the minimum member notice period; and provide procedures to allow reasonable member-to-member communications regarding the proposed merger. The NCUA recognizes that credit unions are experiencing a period of significant consolidation. Much of this consolidation is occurring through voluntary mergers. This increase in merger activity is a natural part of the business lifecycle. Some prospective merger partners may be seeking to influence the merging credit union by offering financial incentives to management and certain highly compensated employees to support the merger. See the proposed rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-08/html/2017-11331.htm
Check Collection
On June 2, 2017, the Fed published a proposed rule to amend Regulation CC regarding forgery claims where the original paper check is no longer available. The proposed rule would adopt a presumption of alteration for any dispute over whether the dollar amount or the payee on a substitute check or electronic check has been altered or whether the substitute check or electronic check is derived from an original. See the proposed rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-02/html/2017-11380.htm
CFPB Report on Fair Lending
On June 1, 2017, the CFPB published a report regarding fair lending enforcement. The report provides information on future priorities and these include: Redlining. CFPB will continue to evaluate whether lenders have intentionally discouraged prospective applicants in minority neighborhoods from applying for credit. Mortgage and Student Loan Servicing. CFPB will evaluate whether some borrowers who are behind on their mortgage or student loan payments may have more difficulty working out a new solution with the servicer because of their race, ethnicity, sex, or age. Small Business Lending. Congress expressed concern that women-owned and minority-owned businesses may experience discrimination when they apply for credit. See the report at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-01/html/2017-11318.htm
CFPB Will Assess the Ability to Repay Rule
On June 1, 2017, the CFPB published notice that it was gathering information on the experience with the ability to repay rule. See the notice at:
https://www.gpo.gov/fdsys/pkg/FR-2017-06-01/html/2017-11218.htm
CFTC Recordkeeping
On May 30, 2017, the CFTC published a final rule regarding recordkeeping obligations set forth in Commission regulations along with corresponding technical changes to certain provisions regarding retention of oral communications and record retention requirements applicable to swap dealers and major swap participants. The amendments do not alter any existing requirements regarding the types of regulatory records to be inspected, produced, and maintained set forth in other Commission regulations. See the final rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-05-30/html/2017-11014.htm
CFTC Whistleblower Program
On May 30, 2017, the CFTC published a final rule regarding the process for reviewing whistleblower claims and for administration of the program. The Commission also is making appropriate rule amendments to implement its reinterpretation of the Commission's anti-retaliation authority. See the final rule at:
https://www.gpo.gov/fdsys/pkg/FR-2017-05-30/html/2017-10801.htm
CFTC Compliance Duties and Annual Reports from FCMs
On May 8, 2017, the CFTC published a proposed rule regarding the duties of chief compliance officers and what should be contained in an annual report of compliance activities. Under current rules, the CCO has to sign and submit an annual compliance report. The duties discussed are unremarkable and include duty to administer policies and procedures, resolve internal conflicts, ensure compliance and fix identified issues. With regard to the report, the rule seeks to ease the burdens of reporting and follow the requirements developed by the SEC for its compliance submission. See the proposal at:
https://www.gpo.gov/fdsys/pkg/FR-2017-05-08/html/2017-09229.htm
CFTC Project KISS
In order to reduce regulatory burdens and costs in the markets that the Commodity Futures Trading Commission oversees, the Commission is seeking suggestions from the public about how the Commission's existing rules, regulations, or practices could be applied in a simpler, less burdensome, and less costly manner. See the request at:
https://www.gpo.gov/fdsys/pkg/FR-2017-05-09/html/2017-09318.htm
Continuations of National Emergencies
On May 9, 2017, the President published orders continuing the national emergencies declared with regard to Yemen, Central African Republic and Syria.
RESPA Servicing Rule Assessment
On May 11, 2017, the CFPB published a notice that it was conducting an assessment of its mortgage servicing rules under RESPA. This assessment is required by Dodd-Frank and relates to the CFPB’s rule published in February, 2013. 78 Fed. Reg.10695 (Feb. 14, 2013). The comments from the public will aid in the review of the effectiveness of the rules.
Supervisory Highlights of the CFPB
On May 12, 2017, the CFPB published a notice that it published its Supervisory Highlights covering their examination findings in mortgage servicing, student loan servicing, mortgage origination, and fair lending. These Highlights provide a sort of roadmap for avoiding violations as well as the types of violations the CFPB looks for. See the notice at:
https://www.gpo.gov/fdsys/pkg/FR-2017-05-12/html/2017-09658.htm
Credit Union Grants and Loans Programs
On May 18, 2017, the NCUA published notices that credit unions could apply for grants and loans under programs to foster community development and servicing low-income customers. See the notices at: https://www.gpo.gov/fdsys/pkg/FR-2017-05-18/html/2017-10087.htm and https://www.gpo.gov/fdsys/pkg/FR-2017-05-18/html/2017-10088.htm
