Insights and Resources
COVID-19 regulatory compliance updates
Comprehensive list of regulatory updates & changes due to the pandemic
AML AND COMPLIANCE NEWS |
Authored by RSM US LLP
In response to the COVID-19 pandemic, the Consumer Financial Protection Bureau (CFPB) and other regulatory agencies have issued various guidance to assist financial institutions with operational and consumer service challenges that have arisen during this national health crisis while still maintaining compliance with regulatory requirements. RSM has been tracking these issuances. Following is a list of guidance related to consumer protection regulations.
We’re sharing this summary so you have a convenient place to find information on these various issuances. We encourage you to read the guidance and share it with applicable departments in your institution to:
- Review and update policies or operational procedures
- Provide training to applicable personnel
- Review and update compliance monitoring or audit programs
Regulation B: Compliance with Paycheck Protection Plan loans
- 30-day clock for notification starts when the creditor receives a loan number from the Small Business Administration or a response about the availability of funds
- Adverse action is required if a creditor receives a PPP loan application and refuses to grant the credit request without submitting to the SBA for incomplete or denied applications
- Source: The Bureau’s Equal Credit Opportunity Act and Regulation B FAQs related to the COVID-19 Emergency
Regulation B: Appraisal waiting period
- Noted in the Sept. 14, 2018, Statement on Supervisory Practices Regarding Financial Institutions and Consumers Affected by a Major Disaster or Emergency, the Equal Credit Opportunity Act valuations rule permits an applicant to waive the timing requirement through an affirmative oral or written statement and agree to receive any copy at or before consummation or account opening, except where otherwise prohibited by law. This regulatory flexibility available under the ECOA valuations rule can expedite access to credit secured by a first lien on a dwelling for consumers affected by the COVID-19 pandemic.
- Source: Federal banking agencies to defer appraisals and evaluations for real estate transactions affected by COVID-19
Regulation C: CFPB reporting
- Institutions are not expected to submit quarterly information reporting as required by Regulation C (Home Mortgage Disclosure Act), Regulation Z (Truth in Lending Act), and/or Regulation E (Electronic Funds Transfer Act) until further notice.
- Source: CFPB Provides Flexibility During COVID-19 Pandemic
Regulation C: HMDA Getting It Right Guide
- Effective July 1, 2020, the threshold for reporting data about closed-end mortgage loans will increase from 25 to 100 closed-end mortgage loans.
- Effective Jan. 1, 2022, when the current temporary threshold of 500 open-end lines of credit expires, the threshold for reporting data about open-end lines of credit will be permanently set at 200 open-end lines of credit.
- Source: Consumer Financial Protection Bureau Issues Final Rule Raising Data Reporting Thresholds Under the Home Mortgage Disclosure Act
Regulation D: Reserve requirements
- Effective April 24, 2020, customers are no longer limited to six withdraws from savings/money market accounts. The limit has been removed. This is an interim final rule open to comments until June 29, 2020.
- Source: Regulation D: Reserve Requirements of Depository Institutions
Regulation E: Remittance transfer funds
- Failure to deliver remittance transfer funds to recipient by disclosed availability date due to government mandated closure of commercial activity is not considered an error if the provider could not have reasonably anticipated the closure.
- Source: Remittance Rule FAQs related to the COVID-19 Pandemic (Regulation E)
Regulation E: Remittance transfer final rule
- Effective July 21, 2020, the threshold for identifying which banks are subject to the remittance rule’s requirements is increased. Under the final rule, institutions submitting 500 or fewer remittance transfers annually will not be considered remittance providers for the purposes of the rule, up from a previous threshold of 100 remittances or fewer.
- Replaces temporary exception that has been granted to allow institutions to estimate costs rather than quote exact third-party fees and exchange rates if they met certain conditions.
- Source: Remittance Transfers under the Electronic Fund Transfer Act (Regulation E)
Mandatory purchase of flood insurance: Policy renewal waiting period
- Grace period to renew flood insurance policies has been extended from 30 days to 120 days for all policies with an expiration date of Feb. 12, 2020–June 15, 2020.
- Source: FEMA extends grace period for flood insurance renewal premiums
Regulation X: CFPB mortgage servicing Q&A—COVID
- A mortgage servicer can offer a CARES Act forbearance to a borrower to comply with CFPB loss mitigation rules.
- A mortgage servicer can offer a short-term forbearance program/short-term repayment plan to help borrowers affected by COVID-19 as allowable by Regulation X, 12 CFR 1024.41(c)(2)(iii). In general, all required communications to borrowers remain applicable during COVID.
- Source: The Bureau’s Mortgage Servicing Rules FAQs related to the COVID-19 Emergency
Regulation X: Incomplete loss mitigation applications
- A mortgage servicer can offer COVID-19-related loss mitigation options even if the loss mitigation application is incomplete.
- A mortgage servicer can offer relief for COVID-19-affected borrowers based on an evaluation of limited application information. Normally, Regulation X requires a complete loss mitigation application before making an offer and requires additional due diligence and consumer notifications for incomplete applications. The interim final rule eases these additional requirements for incomplete loss mitigation applications.
- Source: Treatment of Certain COVID-19 Related Loss Mitigation Options Under the Real Estate Settlement Procedures Act (RESPA), Regulation X; Interim Final Rule
Regulation Z: TRID and rescission waiting periods
- Borrowers who affirm, via a brief signed statement, that their financial situation due to the coronavirus pandemic necessitates a faster closing before the end of the TILA-RESPA Integrated Disclosure rule (TRID) or Regulation Z rescission waiting periods would be permitted to waive those waiting periods, the CFPB said. The rule also states that the pandemic is a “changed circumstance” for purposes of TRID’s fee disclosure tolerance provisions, which allows creditors to use revised estimates reflecting changes in settlement charges when determining good faith compliance.
- Source: CFPB Announces Relief From TRID, Reg Z Waiting Periods
Call us at +1 213.873.1700, email us at email@example.com or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by Julia De France and originally appeared on 2020-07-29.
2020 RSM US LLP. All rights reserved.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Vasquez & Company LLP is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Vasquez & Company LLP can assist you, please call +1 213.873.1700.
Subscribe to receive important updates from our Insights and Resources.