Pub. 3 2013-2014 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S September • October 2013 23 year-end. Banks should count on the fact that the regulations that govern the banking industry, more specifically in the area of consumer regulations, will likely be finalized, if not by the end of the year, then by mid-2014. What should banks do in this environment of continuing uncertainty while we all wait for issuance of final rules and clarification of previously issued rules? The best advice, simply put, is to ensure that all the bank’s strategic plans include a well thought out and documented risk management process. That being said, what about the CFPB? The agency issued their mid-year agenda in July. The agenda includes: Rules that are in the “Pre-rule” Stage: • Regulation C (HMDA) – expand the scope of information relating to mortgage applications and loans that must be compiled, maintained and reported under HMDA. • Regulation P (Annual Privacy Notices) – the CFPB received comments suggesting the elimination of the requirement to provide annual notices when there has been no change in underlying policies. • Payday Loans and Deposit Advance Products – the CFPB issued a whitepaper on findings from a review of these types of products, noting a number of consumer protection concerns, including consumers’ “sustained use” of these short-term, high-cost products. • Fair Debt Collection Practices (FDCPA) – government agencies receive more consumer complaints about debt collectors than any other industry, yet until the formation of the CFPB, no agency was given authority to implement regulations to govern debt collectors. Rules in the proposed stage: • Amendments to TILA and FIRREA Concerning Appraisals – this is an interagency process; the agencies are working to develop a supplemental proposal concerning possible additional exemptions from the revisions to the appraisal rule for certain refinance transactions, smaller-dollar loans and manufactured housing transactions. • Requirements for pre-paid cards (Regulation E) – in the comment review stage from the advance notice of rule- making to determine what rules may be appropriate. • Supervision of Non-bank financial industries. • Amendments to the 2013 Mortgage Rules – the CFPB is working on proposing further amendments and clarifications to the January 2013 mortgage rules. These issuances may include, further proposed clarifications to the mortgage servicing and the ability-to-repay and qualified mortgage standards final rules, as well as amendments to final rules issued in January 2013 amending Regulations B, X, and Z. The final servicing rules for ATR/QM were issued July 2013. • Consumer Financial Civil Penalty Fund – implements what kinds of payments to victims are appropriate by establishing procedures for allocating funds for payments to victims and for consumer education and financial literacy programs. The final rule is expected February 2014. Rules that are in the Finalization process: • Recodification of the regulations implementing Federal consumer financial laws. The rules will be complete by December 2013. • Integrated Mortgage Disclosures Under RESPA (Reg X) and TIL (Reg Z), including the revised definition of a finance charge. The final rule is expected by October 2013. • The CFPB’s supervision over non-bank entities. The final rule was issued in July 2013, but had no effect on banks. • Expedited Funds Availability (Reg CC) – The Fed proposed amendments to Regulation CC in March 2011 to facilitate the banking industry’s transition to electronic interbank check collection and return. The Board’s proposal includes some provisions that are subject to the CFPB’s joint rulemaking authority, which includes the period for funds availability and revising model form disclosures. The final rule is expected by December 2013. • Disclosures for Remittance Transfer Transactions (Regulation E) – The final rule was issued, with an effective date of October 28, 2013. • Definition of Larger Participants of the Student Loan Servicing Market - the proposed rule would identify a market for student loan servicing and define “larger participants” that would be subject to the Bureau’s supervisory authority. The final rule is expected in September 2013. It is promising to be a very busy fourth quarter. Stay tuned to Compliance Alliance for information on the regulatory issuances. We have made it through the first three years since the signing of DFA, and there are more regulations still winding their way through the bureaucracy. We will keep our staff focused on as - sisting our bankers in compliance with these requirements – the old as well as the new. n There is a general consensus that more than half of the rules required by DFA are yet to be finalized.