Bankers Compliance Task Force Current News Archive - December 2004
December 22, 2004 The Federal Financial Institutions Examination Council (FFIEC) has issued the "Retail Payment Systems (RPS) Booklet" to provide updated guidance on the risks and risk management practices applicable to financial institutions' retail payment activities, including checks, card-based electronic payments, and other electronic payment media. The booklet is the seventh in a series that will completely update and replace the 1996 FFIEC Information Systems (IS) Examination Handbook. Electronic versions of the RPS and other updated FFIEC booklets are available at http://www.ffiec.gov/.
December 22, 2004 The Federal Reserve Board recently announced a final rule amending the staff commentary of Regulation C (HMDA). The amendment increases the asset-size exemption threshold for depository institutions from $33 million to $34 million. Thus, depository institutions with assets of $34 million or less as of December 31, 2004, are exempt from data collection in 2005. For more information, go to http://www.federalreserve.gov/.
December 22, 2004 The Federal regulatory agencies recently issued a final rule implementing section 216 of the Fair and Accurate Credit Transaction Act of 2003 (FACT Act) by amending the Interagency Guidelines Establishing Standards for Safeguarding Customer Information. The final rule generally requires each financial institution to develop, implement, and maintain, as part of its existing information security program, appropriate measures to properly dispose of consumer information derived from consumer reports on address the risks associated with identity theft. The final rules are effective July 1, 2005 and can be found at http://www.federalreserve.gov/.
December 22, 2004 The Federal Trade Commission announces that the ceiling on allowable charges under section 612(f) of the Fair Credit Reporting Act (FCRA) will increase from $9.00 to $9.50 on January 1, 2005. For more information you can access Volume 69, Number 245, Page 76767-76768 of the Federal Register at http://www.access.gpo.gov/.
December 22, 2004 Visa U.S.A. announced plans to cut it's automated teller machine interchange reimbursements from $.50 to $.40, but keep the same reimbursement structure for banks that implement specific security and service standards. Visa's plan was detailed in a letter sent to banks on Tuesday. The letter outlines what banks must do to continue getting a $.50 reimbursement. To read the full article, please visit www.americanbanker.com.
December 21, 2004 HOEPA January 2005 Reference Rates: The Federal Reserve has posted the new reference rates which lenders must use to determine if loans for which applications are received in January 2005 will be subject to HOEPA under the APR trigger test. Use the daily or weekly FRB H.15 to find applicable release which lists the Treasury Security with the same maturity term as your loan. To make the calculation, you use the yield in effect on the 15th of the month prior to the month you received the application. The daily rates can be found at the following site: http://www.federalreserve.gov/ and the weekly rates can be found at: http://www.federalreserve.gov/
December 21, 2004 FDIC’s Winter 2004 Issue of Supervisory Insights: This professional journal that promotes the practice of bank supervision includes an article on "The Importance of a Loan Policy "Tune-up" and a section entitled "Regulatory and Supervisory Roundup" which provides an overview of recently released regulations and supervisory guidance, arranged in reverse chronological order. Supervisory Insights is available on the FDIC's Web site at the following Internet address: http://www.fdic.gov/.
December 15, 2004 The FDIC has issued a study on "account-hijacking" identity theft, which outlines the problem and suggests steps to reduce online fraud for both bank and regulatory agency consideration. The FDIC hopes to use the study to formulate guidance to bankers next year. Comments on the study are due on February 11, 2005. You can read the study at http://www.fdic.gov/.
December 15, 2004 FinCEN has issued an interpretive release clarifying the regulation requiring Money Services Businesses that are required to register with FinCEN to establish and maintain anti-money laundering programs. Specifically, the release clarifies that such MSBs are required to establish adequate and appropriate policies, procedures and controls commensurate with the risk of money laundering and the financial terrorism posed by their relationship with foreign agents or foreign counterparties of the MSB. This release can be found at http://www.fincen.gov/.
December 15, 2004 The Fair and Accurate Credit Transactions Act of 2003 (FACT Act) contains some provisions that will be implemented through regulations and other provisions that are self-executing. The FDIC has issued FIL-130-2004, which explains the FDIC’s compliance expectations for both. You can read more at http://www.fdic.gov/.
December 15, 2004 The Federal Reserve Board has announced changes to the tables used to publicly release data collected by lenders under the Home Mortgage Disclosure Act (HMDA). Details on these changes can be found at http://www.federalreserve.gov/.
December 8, 2004 OCC Gives Holiday Tips On Utilization Of Gift Cards: The OCC has issued a consumer advisory which urges holiday shoppers to study the terms and conditions that apply to gift cards. For more information go to: http://www.occ.treas.gov/
December 8, 2004 E-Payments Exceed Checks: The FRB has announced that the results of the 2004 Federal Reserve Payments Study indicate that electronic payments in the United States have exceeded payments by check for the first time. For complete story see: http://www.federalreserve.gov/
December 8, 2004 Fall 2004 Issue of FDIC Consumer News: The Fall 2004 issue of FDIC Consumer News can now be found on the FDIC Web site. Featured articles include: Strategies and Help for Fighting ID Theft; New Consumer Rights to Their Credit Records; The Basics of Deposit Insurance for Businesses; and New Financial Education from the FDIC. For the full issue go to: http://www.fdic.gov/
December 3, 2004 The FFIEC has issued additional guidance addressing the 2002 amendments to Regulation C that took effect on January 1, 2004. Based on analysis of some preliminary 2004 data, the FFIEC believes this additional guidance is necessary to ensure that data is reported accurately. The areas of discussion pertain to: transition rules; ethnicity, race, and sex (government monitoring information); property location information on refinancings and preapprovals; lien status reporting; loans subject to the Home Ownership and Equity Protection Act (HOEPA); and reporting the sale of home purchase loans. This new guidance can be accessed at http://www.ffiec.gov/
December 1, 2004 Most sections of the Fair and Accurate Credit Transactions Act (FACT Act) take effect today, but many of the rules on how to comply with the year-old law remain unfinished. Eight trade groups, including the American Bankers Association, recently approached federal regulators, requesting more time to comply with various provisions of the Act. "The agencies appreciate the difficulties associated with developing compliance procedures, modifying systems and training staff to implement new requirements," the regulators' general counsels wrote in a November 24th letter. "Consequently, the agencies will take into account these difficulties together with all other relevant circumstances ... when considering whether to bring enforcement actions under the FACT Act." To read the full article, please visit www.americanbanker.com.
December 1, 2004 In the case of Koons Buick Pontiac GMC v. Bradley Nigh, the Supreme Court ruled Tuesday that the $1,000 cap on punitive damages in the Truth-in-Lending Act applies to a wide range of loan transactions. You can read the court ruling at http://supct.law.cornell.edu/.
December 1, 2004 The OCC recently issued a memorandum that provides additional guidance to examiners reviewing banks' compliance with the requirements of section 404 of the Sarbanes-Oxley Act of 2002. Section 404 requires banks to issue a report that asserts management's responsibility over internal control, identifies the framework used to evaluate internal control and provides an assessment of the effectiveness of the organization's internal control over financial reporting. The OCC memo can be accessed at http://www.occ.treas.gov/.
The three nationwide consumer reporting companies – Equifax, Experian, and TransUnion – announced that consumers in 13 Western states can request a free annual credit report beginning December 1, 2004, by visiting www.annualcreditreport.com, calling 877-322-8228, or mailing a standardized form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Free annual reports will be phased in across the country from west to east over a nine-month period. After September 1, 2005, all U.S. consumers will be eligible to request a free report. Annualcreditreport.com is the only authorized source for consumers to access their credit reports online for free. For more information, go to: http://www.ftc.gov/
The Fair and Accurate Credit Transaction Act of 2003 (FACT Act) required the Federal Reserve, OCC, FDIC, OTS, NCUA, SEC and FTC, in coordination with one another, to adopt consistent and comparable rules regarding the proper disposal of consumer report information and records. The final rules have been issued and will become effective on June 1, 2005. You can find the final rules at the following link: http://www.ftc.gov/.
The FDIC is providing guidance on the internal control attestation standards that auditors of insured institutions with $500 million or more in total assets should follow to comply with the FDIC's audit and reporting requirements. FIL-122-2004 can be found at http://www.fdic.gov/.
The FDIC is issuing guidance to financial institutions on performing proper due diligence when selecting computer software or a service provider. This due diligence includes making sure that the software or service provider is compliant with applicable laws, including the Bank Secrecy Act, with includes the USA PATRIOT Act. You can access FIL-121-2004 at http://www.fdic.gov/.
The OCC recently issued Bulletin 2004-50, which provides examiners guidance and a consistent approach for citing violations and taking enforcement actions with respect to the Bank Secrecy Act compliance rule (12 CFR 21.21) and the suspicious activity reporting requirements (12 CFR 21.11) This bulletin can be accessed at http://www.occ.treas.gov/.
The FDIC has produced a digital video on deposit insurance coverage for bank employees and bank customers. The 27-minute video provides an overview of how deposit insurance works, focusing on the most common account ownership categories used by individuals and families. To place an order for this free video, complete and submit the order form located on the FDIC's Web site at http://www2.fdic.gov/.
The FFIEC’s Task Force on Consumer Compliance recently approved updated interagency Regulation CC examination procedures for consumer compliance issues. The new examination procedures can be found at http://www.occ.treas.gov/.
Details concerning the recent Cease and Desist Order and Assessment of Civil Money Penalties issued by the Federal Reserve and FinCEN against AmSouth Bank can be found at http://www.fincen.gov/.
