compliance town hall year in review and year ahead · 2020-02-22 · compliance town hall year in...

Compliance Town HallYear in Review and Year AheadEleanor Hopkins, NCCOProduct Manager, Compliance

December 13th , 2017

2This presentation does not provide legal advice.

Enhancement dates contained in this document are provided as estimates only and can be

changed at any time at the sole discretion of Jack Henry & Associates, Inc.


Speaker InformationEleanor Hopkins, NCCOEpisys Product Manager, ComplianceSymitar, a Jack Henry & Associates CompanyTel: (619) 542 - 6839E-mail: [email protected]


Agenda

2017 in Review

2018 Preview

Future

Product Announcements

Resources

Questions

2017 in Review


2017 in Review: Political Climate

2016 Election ResultsRepublican Trump elected PresidentRepublicans dominate House and Senate

Fast sweeping compliance changes were expected…


2017 in Review: Political ClimateExecutive Orders (EO)

1/20/17 Priebus memo – Regulatory Freeze1/30/17 EO13771 Reduce regulations and control regulatory costs, “One in – Two out”2/3/17 EO 13772 Secretary of the Treasury to meet with Financial Stability Oversight Council2/24/17 EO 13777 Agencies to establish Regulatory Reform Task Force to eliminate red tape


2017 in Review: Political ClimateEO 13772 Secretary of the Treasury to meet with Financial Stability Oversight Council (13772)

Dept. Treasury Report Titled: A Financial System That Creates Economic Opportunities: Banks and Credit Unions

Discusses the impacts of Federal Regulations on banks and credit unions (specifically the Dodd-Frank Act)Recommends that the White House work to strip the CFPB of much of its power and for Trump to replace Director Cordray



EO 13777 Agencies to establish Regulatory Reform Task Force to eliminate red tape

Head of each agency to designate Regulatory Reform Officer (RRO), provide a report detailing progress

i. improving implementation of regulatory reform initiativesIi. Identifying regulations for repeal, replacement, or modification

10/24/17 Congressional Hearing: 24 agencies provided briefings..”agencies are accomplishing substantial progress towards regulatory cleanup and seeing unprecedented reduction in federal regulatory footprint.”


2017 in Review: Political ClimateRegulatory relief – is coming….

“Trump finally filling key positions at regulatory agencies –making deregulation a potential theme in 2018” -ALMFirst Callahan Industry Trendwatch webinar

“(Trump) wants me to fix it (CFPB)…get it back to a place were it can protect people without trampling on capitalism. Without choking off access to financial services that are critical to so many folks.” - Acting CFPB Director, Mick Mulvaney at a recent conference


CHOICE Act of 2017 Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs

Aimed to scale back and replace Dodd-FrankRepeal Volker Rule and Durbin AmendmentProvide regulatory relief for community banksLimit CFPB authority

Passed the House in JuneSome of the measures were adopted into other bills by the Senate, but overall the bill died on Senate floor as it did not have enough bi-partisan support.



Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155)

The Credit Union Residential Loan Parity ActAllow credit unions to treat loans for one-to-four-unit, non-owner-occupied dwellings that qualify for the MBL exemption as residential loans with lower interest rates – similar to how banks make these loans to small businesses.

The Home Mortgage Disclosure Adjustment ActWould exempt depository institutions that have originated fewer than 500 open-end lines of credit and closed-end mortgages in the previous two years from certain HMDA reporting and recordkeeping requirements.Approved by Senate Banking Committee – moving to the floor for a vote



Tax Reform – Tax Cuts and Jobs Act11/16 passed House, 12/02 passed SenateReconciliation process underway, will likely:

Reduce corporate tax rate from 35% to 20%Eliminate popular deductions: Interest on Student loans, Mortgage Interest on future home loans (home valued over $500K)State and local income tax deduction eliminatedCU tax exemption unchanged



Key Accomplishments:Published 16 final rules and five proposed rulesRecovered over $14 million for over 100,000 consumers harmed by illegal practices in first half of 2017Took action, sued or fined over 30 financial service providers, collection agencies, credit service providers and attorneys for harmful consumer practices

2017 in Review: CFPB


2017 in Review: CFPBCFPB New Boss - Timeline of Events

11/24 Cordray steps down from roll as director of CFPB, appointing Leandra English as interim director until term complete on July 201811/24 Trump named Mick Mulvaney deputy director11/26 Leandra English files a lawsuit11/27 US District Judge Timothy Kelly ruled in favor of Mulvaney as interim director11/27 Mulvaney delivered a press conference scorching the CFPB and placing a 30 day freeze on hiring and new regulations


2017 in Review: CFPBBallard Spahr webinar Cordray Resigns: What’s Next for the CFPB Payday Loans – addressed by litgation, Congressional review or possible repeal by CFPBPrepaid Cards – effective date already extended from 10/1/17 to 4/1/18, Mulvaney’s freeze may forestall it furtherTRID – timeline for estimates and disclosures, waivers for mandatory waiting periods expected to be reviewedATR/QM – assessment of the rule underway – expected to be acceleratedHMDA – CFPB will likely revisit expanded data fields in light of security concerns; possibly see new exemptions. Debt Collection – likely on hold under Mulvaney moratoriumCFPB Auto Finance – auto dealer pricing is a subject under review by Republicans in Congress


2017 in Review: FCC

Ajit Pai, Chairman of the FCCAppointed by Trump on 1/2017Prior, served as Commissioner at the FCC since 2012

Signature rulemakingNet Neutrality

Wants to abolish rules which currently prevent telecoms for charging for faster access to certain content providers.

Telephone Communication Protection ActDisagreed with the FCC’s July 2015 TCPA Declatory Ruling


2017 in Review: FCC & TCPA Telephone Consumer Protection Act (TCPA), 47 C.F.R. § 64.1200 (enacted in 1991):

Limits the use of phone calls for both telemarketing and informational purposes, particularly where communications are sent using an automated dialing system or a prerecorded artificial voice. Requires different types of consent based on type of call and phone numbers.

Change in 2013Included cell phones (calls and text messages) requiring a separate express written consent. Also added express written consent (versus express consent) for residential phones (landlines).Removal of an exemption for when there is a prior business relationships with a consumers.

Before 2013, if a FI had a preexisting relationship they were allowed to use automated dialing calls to their customers. This change has made TCPA a concern for banks and credit unions.

Change July 10, 2015Added “clarifications”, expanded definitions and new requirements. Including, expanded definition of “auto-dialer”, added text messages, addressed cell-phone number reassignments, and introduced new rules for types calls that are exempt from the general rule


2017 in Review: FCC & TCPA

TCPA may change:Ajit Pai disagreed with the FCC July 2015 declatory ruling, signaling he will be sympathetic to appeals for change.

ACA Int’l vs FCC court case is still pending – the FCC is waiting for this to wrap up before making any changes

CUNA petitioned the FCC in regards to several provisions of the regulation and its impact to credit unions

Over a dozen bipartisan members of Congress have written to Pai, in support of CUNA’s request

NAFCU met with FCC on TCPA, FCC will consider possible exemptions for credit unions


2017 in Review: NCUAMark McWatters, Chairman of NCUA

Appointed by Trump in 6/2017NCUA board member since 8/2014

Goal to update regulations to meet the current realities of 2017.

Regulatory Relief in 2017Closing credit union stabilization fund early – dividend expected in 2018Revisiting field of membership, alternative capital, asset securitization rules and appeals processRestructuring CFPB to improve efficiency, including closing and restructuring offices and providing more resources to assist credit unionsTask force to further identify changes to clarify, improve, revise or eliminate regulation


2017 in Review: DOJJeff Sessions, Attorney General DOJ

Confirmed 2/8/17Outstanding Issues

Nondiscrimination on the Basis of Disability; Accessibility of Web Information and Services of State and Local Government Entities and Public Accommodations - American Disabilities Act (ADA); ANPR (initial proposal 7/26/10)

Current status: “Inactive” through 2018Lower courts issuing opinions that conflict with one another. CUNA has petitioned DOJ on this matter

61 bipartisan members of Congress have written to DOJ in support of this petition


Regulation EffectiveTCPA Amendments 1/15/17

NACHA Same Day 9/15/17

NACHA – Third Party Sender Registration 9/27/17

The Consumer Data Industry Association (CDIA)– National Consumer Assistance Plan

9/15/2017

CFPB Prepaid Consumer Accounts 10/1/1710/1/18

CFPB Amendments to the 2013 Mortgage Servicing Rule 10/19/174/19/18

DoD Military Lending Act (MLA) 10/3/1610/3/17

Furnisher Data Reporting & Process (Metro 2) 9/15/2017

2017 in Review: Rules Effective 2017


2017 in Review: Rules Effective 2017Amendments to the Mortgage Servicing RulesClarification on delinquency, requests for information, amendments to force-place insurance disclosures and model forms, early intervention, clarification on loss mitigation, prompt payment crediting.

Effective: October 19, 2017 & April 19, 2018Impact to Episys: Amendments to the 2013 Mortgage Rules: Statements, DQ, and Formatting

Targeted Releases 2016.01, 2017.00, 2017.01, 2018 SP (spring), 2018.00

Please see the November Episys Bulletin


2017 in Review: Military Lending ActMilitary Lending Act

Credit cap of 36% expanded to include: payday loans, deposit advance products, auto title and installment loans.Military APR modified to include certain fees as part of the calculation; qualified credit card (a.k.a. bona-fide fees) are different than for other loan products.

Effective: 10/3/2016 open and closed loans; 10/3/2017 credit cards

Impact to Episys: Rate Cap for Military APR and Credit Card MAPR enhancementsPlease see SLA “Important Notice Regarding MLA Credit Card Changes”

2017 in Review: Enhancements


2017 Review: Enhancements

Release 2017.00Amendments to the 2013 Mortgage Rules: Statements, DQ, and Formatting (Part 2)Rate Cap for Military APR (Part 2)Credit Card MAPR CapHMDA Reporting Modifications


2017 in Review: EnhancementsAmendments to the 2013 Mortgage Servicing Rules

Updates to mortgage statements that will be effective on 10/19/17, that allow you to do the following:

Generate a final charge-off statementStore the last date that Episys sent an early Intervention NoticeProvide for temporary loss mitigation paymentsProvide for an acceleration amount and include the acceleration amount on the statementDisplay new messages to statement sections


2017 in Review: EnhancementsRate Cap For Military APR (Part 2)

Enhance Episys to support the 36% rate cap expansion for open-end and closed-end loans under DoD amendments to the Military Lending Act, as required in 10/3/16.



Rate Cap For Military APR (Part 2)Ensure consistent work flows for loan application process to support newly required information.

Ensure that the Application Person record has the four new fields (Act. Duty V Date; Act. Duty Start Date; Act Duty Sep Date; Act Duty). Ensure the Application Record has the new Military APR Status field.

Ensure that RD.LOAN.CALCULATE.MAPR and Reg Z calculates the Interest from Statement Date +1 thru Transaction End Date. Ensure the closed-end loan MAPR/APR calculations in the Loan Projection Screen are accurate for 360 Actual and Variable Payment Loans.Provide the ability to call Projections calculation of MAPR from a specfile.



Credit Card MAPRFor Credit Cards, enhance Episys to support the 36% rate cap expansion under DoD amendments to the Military Lending Act; effective 10/3/17

Provides the ability to exclude or include fees that are not “reasonable” and or “bonafide” in the MAPR calculation for credit cards.



HMDA Reporting ModificationsProvides the ability to store new HMDA reporting data elements in Episys. Updates to Professional Services products include:

HMDA Data Entry Screen Enhanced Lending Application “(ELA)

Please see the 11/2017 SLA “Important HMDA Changes effective 1/2018”



Release 2017.01FinCEN Customer Due DiligenceeCTR Format ChangesAmendments to the 2013 Mortgage Rules: Statements, DQ, and Formatting 2017 IRS Reporting ChangesHMDA Universal Loan Identifier SBA 1502 Reporting Enhancement


2017 in Review: EnhancementsFinCEN Customer Due Diligence

Provide the ability to indicate Benefical Ownership types and percent ownership associated with a legal entity account.

New Name Type:– “Information Only”

New Name and Application Person Record Fields:– Legal Entity Identifier– Beneficial Owner Percent– Beneficial Owner Type

This presentation does not provide legal advice.



eCTR Format ChangesUpdates eCTRs with the FinCEN CTR XML schema 2.0

File format in XML

Include new data elements



Amendments to the 2013 Mortgage Servicing Rules

Updates to mortgage statements that will be effective on 4/19/18, that allow you to do the following:

Support successor in interest tracking, statements and noticesGenerate a bankruptcy mortgage statement

Model H – 30 (E) Ch 7 or Ch 11Model H – 30 (F) Ch 12 or Ch 13

Store a pre-petition amount in a sub-record under the Loan recordApply loan payments to the pre-petition amount


2017 Preview: Enhancements

IRS 2017 ReportingUpdates for 2017 IRS reporting changes to the IRS forms and electronic files



IRS 2017 ReportingExtra Address and Extra Information Fields on the IRS 1099-R and 5498 Forms

IRS Notice CP 2100

Form 1099-C (Cancellation of Debt)


HMDA Universal Loan Identifier Creation and Storage

Provide the ability to create and store the ULI number as required by HMDA.

Universal Loan Identifier is comprised of:– Credit union’s unique financial institution’s Legal Entity Identifier– 23 unique characters (unique to the institution and to the application)– Two character check digit

• Check digit is based on ISO/IEC 7064 MOD 97-10 (ISO/IEC 70164:2003)

– ULI must follow the loan for the life of the loan.



2017 Preview: EnhancementsSBA 1502 Reporting Enhancement

Project provides fixes for several SBA 1502 Reporting defects involving incorrect data being reported.

2018 Preview


Regulation EffectiveCFPB HMDA Rule 3/16/2018,1/1/2019, 5/30/2020 1/1/18

CFPB Revised Uniform Residential Loan Application (URLA) 1/1/18

CFPB Amendments to the Equal Credit Opportunity Act (Reg B) Ethnicity and Race Information Collection

1/1/18

CFPB Prepaid Accounts Under the Electronic Funds Transfer Act (Reg X) and the Truth in Lending Act (Reg Z)

4/1/18

CFPB Amendments to the 2013 Mortgage Rules 4/18/18

FinCEN CTR Revised Layout and Additional Data Fields 5/18

FinCEN Customer Due Diligence (CDD) 5/11/18

CFPB Availability of Funds and Collection of Checks (Reg CC)- Electronic check processing

7/1/18

CFPB Amendments to the Federal Mortgage Disclosure Requirementsunder the Truth in Lending Act (Reg Z) TRID

10/1/18

CFPB Payday, Vehicle Title, and Certain High – Cost Installment Loans 21 months after pub in Fed Register

2018 Preview: Rules Effective 2018



Release 2018.00Remove OFAC PowerON SpecfilesAmendments to the 2013 Mortgage Rules: Statements, DQ, and Formatting FFIEC HMDA v3.2 Updates



Remove OFAC PowerOn SpecfilesRemoves OFAC PowerOn Specfiles from the core library.

Please see: Final Reminder: OFAC PowerOn SpecfileSolution End of SupportAmendments to the 2013 Mortgage Servicing Rules

Remaining database changes to support new BK records, such as the ability to purge the new Term and Balance records.



FFIEC HMDA v3.2 UpdatesUpdates Episys to support the revised FFIEC HMDA Filing Instruction Guide. Expands certain free format fields from a limit of 40 characters to new allowed limits (100 to 255 depending on data type).

Note: v3.3 published since project start and will be addressed



Release 2018.01IRS Reporting Updates



IRS 2018 ReportingUpdates for 2018 IRS reporting changes to the IRS forms and electronic files

Future


Regulation EffectiveCFPB Payday, Vehicle Title, Installment and Open-End LOC 7/2019

CFPB Revised Uniform Residential Loan Application (URLA) - May use 7/1/19

2/2020

FASB Current Expected Credit Losses (CECL) 2021

Federal Reserve Board ISO 20022 for Wires 2022

Future Rules


Regulation Phase

CFPB HMDA Disclosure of Loan Level Data Proposed

CFPB Amendments to the 2013 Mortgage servicing rules – timing of the modified statements effective 4/19/18

Proposed

CFPB Availability of Funds and Collection of Checks (Reg CC)-funds availability, e check liability

Proposed

CFPB Amendments to TRID (Reg Z) Proposed

CFPB Prepaid Accounts (Reg E & Z) Proposed

FCC TCPA Advanced Methods to Target and Eliminate Unlawful Robocalls Proposed

Joint Regulators – Private Flood Insurance Proposed

Fed Reserve – Legal Entity Identifier (LEI) Proposed

Future Rules


Future RulesRegulation PhaseCFPB Debt Collection Proposed Rule

NCUA - Modernizing Data Collection for Regulatory Oversight of Credit Unions5300 Call Report & AIRES

Notice and Request Information

CFPB Web Based Testing of POS/ATM Overdraft Disclosure Forms Notice and Request for Comment

CFPB Overdraft – new Overdraft Opt in Forms Pre-rule

CFPB Business Lending Data (Small Business) Pre-rule

CFPB Student Loan Borrower Communications Notice and Request for Comment

CFPB High Cost Mortgage and Homeownership Counseling (Reg Z) Notice and Request for Comment

CFPB ATR/QM Rule (Reg Z) Assessment


Future RulesRegulation PhaseFTC Disposal of Consumer Report Information and Records Notice and

Request for Comment

FTC Standards for Safeguarding Customer Information Request for Public Comment

Joint Regulators Enhanced Cyber Risk Management ANPR

FinCEN Exempt Person Report Updates Notice and Request for Comment

FinCEN SAR Electronic Data Fields Updates Notice and Request for Comment

FinCEN Cross Border Electronic Transmittals of Funds Notice of Proposed Rulemaking

DOJ ADA Web Accessibility Advance Notice of Proposed Rulemaking


Future Rules

Federal Reserve ISO 20022Federal Reserve Financial Services is leading an investigation on adopting International Standards of Organization (ISO) 20022 standards for Wire Transactions.

Effective: Wires – 2022, ACH TBDImpact to Episys: changes to Wires


Future Rules

Federal Reserve LEIRequirement for financial institutions to include their LEI on certain regulatory reporting formsLegal Entity Identifier (LEI) is a 20-character alphanumeric code assigned to a legal entity of a financial or non-financial firm.

Effective: TBD – still in Proposed phaseImpact to Episys: addressed in the HMDA Reporting Modifications enhancement in Release 2017.00

Provided a new field in Misc Parameters “Legal Entity Identifier”


Future

NCUA Modernizing Data CollectionModernizing Data Collection for Regulatory Oversight of Credit Unions

5300 Call Report and Form 4501 Profile changesEffective: TBD – Notice and Request for Information (comment period ended 8/1/16)

Electronic Loan, Deposit, and Investment Data CollectionAIRES changesEffective: TBD – Request for Information (comment period ended 1/2/18)

Impact to Episys: TBD

Future Enhancements


Future Enhancements

TCPA TrackingFedWire Format ISO Changes

… and more to come


Future Enhancements

TCPA TrackingFuture enhancement will provide the ability to store affirmative consent for telephone contact via a specified phone number on the core.

Targeted Release: 2018.00 2019.00

Product Announcements


OFAC PowerOn® SpecfileProduct End of Support 12/31/2017


OFAC PowerOn® SpecfileProduct End of Support

ContactIf you have any questions about the Episys® Identity and Sanctions Screening Integration or LexisNexis®

OFAC Bridger Insight® XG products, please email the Symitar Inside Sales Team at [email protected].

Resources: Episys Now https://pages.jackhenrymail.com/episys

mailto:[email protected]

https://pages.jackhenrymail.com/episys


ProfitStars® CECL Calculator


ProfitStars Financial Performance Suite

For further product information contact:Lesley [email protected]

Resources: Episys Nowhttps://pages.jackhenrymail.com/episys

mailto:[email protected]

https://pages.jackhenrymail.com/episys

Resources


Final Reminder: OFAC PowerOn Specfile Solution End of SupportNovember Monthly Support Bulletin

Amendments to the 2013 Mortgage Rules Enhancement, Part 3: Release 2017.01 Preparing for Episys Release 2017.01 IRS Reporting Changes

Important Home Mortgage Disclosure Act (HMDA) Changes Effective January 2018 Important Notice Regarding MLA Credit Card Changes– For Clients > Products & Services > Core Solution >

Episys > SLAs

Resources: Compliance Communications

https://forclients.jackhenry.com/Pages/default.aspx

https://forclients.jackhenry.com/products-and-services/Pages/default.aspx

https://forclients.jackhenry.com/products-and-services/Core-Solution/Pages/default.aspx

https://forclients.jackhenry.com/products-and-services/Core-Solution/Episys/Pages/default.aspx


Resources: Episys Release InformationResource Details Where To Find ItNACHA SameDay FAQ

JHA’s position on the Same Day ACH changes & FAQ

For Clients > Products & Services > CoreSolution > Episys > Announcements & Alerts > Episys and NACHA Same-Day Settlement Rule Update

SymitarRegulatory News Report

Quarterly compliance newsletter – glimpse into regulations Symitar is monitoring.

For Clients > Compliance > Compliance Newsletters

SymitarCompliance Projects Summary

High level summary of all compliance enhancements in process as well as a handful of compliance hot topics

For Clients > Products & Services > Core Solution > Documentation > Compliance

Release Overview Class

Video replay that offers a high level review of enhancements

For Clients > Products & Services > Core Solution > Episys > Release Information > Episys Releases > Release Documentation

Release Executive Summary

List of enhancements in the release

For Clients > Products & Services > Core Solution > Episys > Release Information > Episys Releases > Release Documentation


Resources: Industry ComplianceResource Details Where to find itModernizing Data Collection for Regulatory Oversight of Credit Unions

Improvements to the 5300 Call Report and Form 4501 Profile

https://federalregister.gov/a/2016-13332

CFPB Spring 2017 Rule Making Agenda

Helps you forecast what regulatory changes will come next

Reginfo.gov

Legal Entity Identifier (LEI)

Proposal for financial institutions to include their LEI on certain regulatory reporting forms

http://www.federalreserve.gov/newsevents/press/bcreg/20150316a.htm

BSA/AML Self-Assessment Tool

Optional tool that can be used by a financial institution to help in its BSA/AML risk assessment process

https://www.csbs.org/state-financial-regulators-release-bsaaml-compliance-tool-industry


ContactEleanor Hopkins, NCCOEpisys Product Manager, ComplianceSymitar, a Jack Henry & Associates CompanyTel: (619) 542 - 6839E-mail: [email protected]

Do you have any questions?

This presentation does not provide legal advice.

compliance town hall year in review and year ahead · 2020-02-22 · compliance town hall year in...

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