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Today is: July 21, 2024  
 

 

Important Updates

U.S. Supreme Court Overturns Chevron Decision, Banks May Benefit from Ruling Giving Judicial Branch More Power Over Federal Agencies* July 19, 2024
 
The debate over the extent to which judicial deference should be applied to federal agency decisions has persisted since the first federal agencies were created. For the last 40 years, the touchstone for judicial deference has been the U.S. Supreme Court’s decision in Chevron U.S.A., Inc. v. National Resources Defense Council, Inc., 467 U.S. 837 (Chevron). Read more.
 
Agencies Announce Regulation CC Threshold Adjustments* June 24, 2024
 
By way of background, Federal Reserve Board (FRB) Regulation CC (12 CFR Part 229) implements the Expedited Funds Availability Act, 12 USC 4001 et seq. (EFA Act), as well as the Check Clearing for the 21st Century Act, 12 USC 5001 et seq. (Check 21 Act). Among other things, Regulation CC Subpart B implements the EFA Act’s requirements regarding the availability schedules within which banks must make funds available for withdrawal. Read more.
 
CFPB Extends Compliance Dates for Small Business Data Collection Rule in Response to U.S. Supreme Court Ruling* June 24, 2024
 
Dodd-Frank Act Section 1071 (Section 1071) added small business loan data collection requirements to the Equal Credit Opportunity Act (ECOA) found in ECOA Section 704B (15 USC 1691c-2). On March 30, 2023, the CFPB issued a final rule to implement Section 1071 (SBLR). 88 FR 35150. Read more.
 
FDIC Reintroduces Proposed Rule on Incentive Compensation* June 24, 2024
 
In April 2011, federal financial regulators published proposed rules to implement Section 956 of the Dodd-Frank Reform Act (the “2011 Proposed Rule”). Section 956 generally requires that federal financial institution regulatory agencies (OCC, FRB, FDIC, NCUA, and Federal Housing Finance Agency (FHFA), collectively, the “Agencies”) jointly issue regulations or guidelines prohibiting incentive-based payment arrangements determined by the Agencies to encourage inappropriate risks and requiring certain financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate agency. Read more.
 
Supreme Court Finds that CFPB’s Funding Structure Passes Constitutional Muster* June 24, 2024
 
On May 16, 2024, the Supreme Court issued a long-awaited ruling in the challenge to the CFPB’s funding structure. The Court found that the funding mechanism of the CFPB does not violate the Appropriations Clause of the United States Constitution. CFPB v. Cmty. Fin. Servs. Ass’n of Am. Ltd, et al., No. 22-448 (U.S. May 16, 2024). Read more.
 
California Privacy Protection Agency Publishes CCPA Enforcement Advisory* May 20, 2024
 
The California Privacy Protection Agency (CPPA) is responsible for overseeing the regulation and enforcement of the California Consumer Privacy Act (CCPA). While the CPPA was originally granted the authority to enforce the CCPA (and its implementing regulations) starting from July 1, 2023, this enforcement capability was initially delayed due to a court order issued by a California Superior Court. See Cal. Chamber of Commerce v. Cal Privacy Protection Agency, No. 34-2023-8000416- CU-WM-GDS (Cal. Super. Ct. June 30, 2023).  Read more.
 
Proposed Legislation Would Expand California’s FDCPA to Cover Small Business Debt* May 20, 2024
 
California Senate Bill (SB) 1286 has been introduced to expand the scope of the Rosenthal Fair Debt Collection Practices Act (RFDCPA). Currently, the RFDCPA prohibits debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts. If enacted, SB 1286 would extend the protections in the RFDCPA to apply to certain covered commercial debt in addition to consumer debt. Read more.
 
CFPB Finalizes $8 Credit Card Late Fee Cap; Lawsuit Filed in Opposition* April 19, 2024
 
Currently, Regulation Z provides a safe harbor for credit card issuers, permitting penalty fees such as late payment fees that do not exceed certain dollar limits. The CFPB annually adjusts these dollar limits based on inflation. Since 2022, these limits have stood at $30 and, in cases where the card issuer has previously imposed a fee for the first violation of the same type within the same billing cycle and the subsequent six billing cycles, $41. 12 CFR 1026.52(b)(1)(ii)(A) and (B). Read more.
 
Trade Organizations Tout Successful Recent Technology Conversion* April 19, 2024
 
The merger of two complex financial technology systems can be fraught with difficulties. However, the recent BMO Financial Group (BMO)/Bank of the West technology merger has received praise from several trade organizations. A recent American Banker article highlighted BMO’s successful merger of Bank of the West’s technology with its own, citing the ease with which BMO transitioned two million Bank of the West account holders to its own platform. Read more.
 
BAFT Issues Letter of Credit Guidance Resource* April 19, 2024
 
While letters of credit are one of the most vital tools used in international trade, their complexity can create confusion among many lenders. In February 2023, the Bankers’ Association for Finance and Trade (BAFT), and the business-to-business financial technology firm Trade Finance Global (TFG), announced a joint guide on letters of credit (the “LOC Guide”). According to the announcement, the LOC Guide is intended to broaden the understanding of letters of credit and foster a more inclusive global trade environment. Read more.
 
SEC’s Climate Disclosure Rule Update* April 19, 2024
 
As previously reported by BCG, in March 2022, the Securities and Exchange Commission (SEC) issued a proposed rule to require publicly traded companies to include certain climate-related disclosures in their SEC filings, such as registration statements and periodic reports (the “Climate Disclosure PR”). Under the Climate Disclosure PR, public issuers would need to include information about climate-related risks that are reasonably likely to have a material impact on the issuer’s business, results of operations, or financial condition.  Read more.
 
Updates on the Implementation of the CRA Final Rule* April 19, 2024
 
Agencies Delay Applicability of Certain Provisions of CRA Final Rule. As readers are aware, in October 2023, the FRB, the FDIC, and the OCC (“agencies”) issued a final rule which contained sweeping changes to the Community Reinvestment Act regulations. Although the rule became effective on April 1, 2024, most of the changes to the CRA regulations are not applicable until January 1, 2026, at the earliest.  Read more.
 
Recent Developments: The Telephone Consumer Protection Act* March 20, 2024
 
In January and February 2024, a number of new developments occurred impacting the federal Telephone Consumer Protection Act, 47 USC 227 et seq. (TCPA), and the FCC’s implementing rules, 47 CFR 64.1100 et seq. First, the FCC issued a declaratory ruling in which it concluded that an artificial intelligence (AI)-generated voice communication falls within the TCPA’s definition of an “artificial or prerecorded voice,” and therefore requires the prior express consent of the called party prior to initiating such communications.  Read more.
 
FTC Warns that Changing Online Privacy Policies without Notifying Consumers Could be an Unfair or Deceptive Practice* March 20, 2024
 
On February 13, 2024, the Federal Trade Commission (FTC) published guidance entitled “AI (and other) Companies: Quietly Changing Your Terms of Service Could Be Unfair or Deceptive” (“AI Advisory”), warning companies that changing online privacy policies or terms of service without providing notice could be an unfair or deceptive practice.  Read more.
 
Corporate Transparency Act Ruled Unconstitutional* March 20, 2024
 
On March 1, 2024, the U.S. District Court for the Northern District of Alabama declared the Corporate Transparency Act (CTA) unconstitutional in the case Nat’l Small Bus. United v. Yellen, No. 5:22-cv-01448-LCB (N.D. Ala. 2022). By way of background, on January 1, 2021, U.S. Congress enacted the Anti-Money Laundering Act of 2020 (“AMLA”) as part of the Nationwide Protection Authorization Act, which is intended to reform and modernize BSA-related laws and regulations.  Read more.
 
Discontinuation of the BSBY Index* February 15, 2024
 
In November 2023, Bloomberg announced the "permanent cessation" of its Short Term Bank Yield Index (BSBY), starting on November 15, 2024. A Bloomberg spokesperson has indicated that the decision to cease publishing the BSBY index was due to the relatively low usage of the index.  Read more.
 
Banking Agencies Issue Interagency Statement Extending Relief from Regulation O for Investment Funds* January 17, 2024
 
In December 2021, the FRB, FDIC, and OCC (“Banking Agencies”) released a statement entitled “Status of Certain Investment Funds and their Portfolio Investments for Purposes of Regulation O and Reporting Requirements Under Part 363 of FDIC Regulations” (“No-Action Statement”). FIL-80 2021. This No-Action Statement superseded an earlier version of the statement (FIL-115-2020), which was issued on December 22, 2020. Read more.
 
Coming Soon – CFPB Proposals Would Characterize Certain Overdraft Fees as Finance Charges; Certain NSF Fees as UDAAP* January 17, 2024
 
The CFPB announced its Fall 2023 rulemaking agenda in early December. The agenda covers the CFPB’s regulatory plans for the period of November 2023 through October 2024. One of the more noteworthy items within the CFPB’s agenda was its announcement that the CFPB intends to issue proposed rules concerning overdraft and insufficient funds (NSF) fees. According to the CFPB’s agenda, these will be addressed in two separate proposals, to be issued in the next month. Read more.
 
FDIC Issues Advisory on Managing Concentration Risks in Commercial Real Estate* January 17, 2024
 
On December 18, 2023, the FDIC issued an advisory to insured state non-member banks and savings associations (the “FDIC-supervised institutions”) entitled “Managing Commercial Real Estate Concentrations in a Challenging Economic Environment” (the “CRE Advisory”). The FDIC issued the CRE Advisory to re-emphasize the importance of strong capital, appropriate credit loss allowance levels, and robust credit risk-management practices when managing commercial real estate (CRE) concentrations in challenging economic times. Read more.
 
FDIC’s Final Rule on Official Signs, Advertising Requirements, and False Advertising* January 17, 2024
 
On December 20, 2023, the FDIC adopted a final rule that amends Subpart A to 12 CFR Part 328 entitled, “FDIC Official Signs, Advertisement of Membership, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC’s Name or Logo,” (“Final Rule”). Briefly, the Final Rule modernizes the prior 2006 regulations governing an insured depository institutions’ (IDIs) use of the official FDIC signs and advertising statements, and also clarifies the regulations regarding false advertisement, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name or logo. Read more.
 
Preview of Supervisory Priorities for FRB and OCC in 2024* December  6, 2023
 
As we near the end of a somewhat turbulent year for the banking industry, institutions are likely wondering what they should be expecting from examiners in 2024. The Federal Reserve Board (FRB) and Office of the Comptroller of the Currency (OCC) have each given a glimpse as to what they will focus on in examinations that occur in 2024. Read more.
 
NFIP Temporarily Extended Through February 2024* December  6, 2023
 
Just hours before the National Flood Insurance Program (NFIP) was set to expire, the President signed legislation passed by Congress that extended the NFIP through February 2, 2024. Without this temporary funding law, the NFIP was set to expire on November 17, 2023 at 11:59 p.m. The law firm will continue to monitor and report on the NFIP’s status. Read more.
 
California Court Deals Blow to DFPI’s True Lender Theory* December  6, 2023
 
As previously reported by BCG, since 2022 the Delaware-based limited liability company, Opportunity Financial, LLC (“OppFi”), has been involved in litigation with the California Department of Financial Protection and Innovation (“DFPI”) due to the DFPI’s threatened enforcement of California’s Fair Access to Credit Act (AB 539) against OppFi. Opportunity Financial, LLC v. DFPI, Case No. 22STCV08163, (Cal. Sup. Ct. L.A. Cty. filed Mar. 7, 2022). Read more.
 
Regulators Release New Climate-related Financial Risk Management Guidance* November 15, 2023
 
On October 24, 2023, the OCC, the FDIC, and the FRB released new interagency guidance entitled “Principles for Climate-Related Financial Risk Management for Large Financial Institutions” (the “Principles”). Intended to apply to financial institutions with over $100 billion in total consolidated assets, the Principles provide a high-level framework for the safe and sound management of exposures to climate-related financial risks. Read more.
 
Court’s Nationwide Delay of the CFPB’s Small Business Lending Data Collection Rule and Senate’s Joint Resolution* November 15, 2023
 
On October 26, 2023, the U.S. District Court for the Southern District of Texas in Tex. Bankers Ass’n, et al. v. CFPB, Case No. 23-144 (S.D. Cal. Oct. 24, 2023) issued a nationwide preliminary injunction prohibiting the Consumer Financial Protection Bureau (CFPB) from enforcing its final rule implementing Section 1071 of Dodd-Frank Act, which requires financial institutions to collect and report data on business credit applications received from small businesses. Read more.
 
Agencies Finally Approve Jointly Proposed Rule to Modernize CRA Regulations* October 27, 2023
 
On Tuesday, October 24, 2023, the Federal Reserve, FDIC, and OCC approved a rule (Final Rule) that will jointly finalize a six-year saga to modernize the regulations that implement the 46-year old Community Reinvestment Act (CRA). The Final Rule, which generally adopts the May 2022 proposed rule, is the first major update to the CRA regulations since 1995, other than the OCC rule that was rescinded a few years ago. Read more.
 
FRB Enforcement Action is a Reminder to Provide Advance Notice Before Deviating from Approved Business Plans* October 13, 2023
 
On July 18, 2023, the Federal Reserve Board (FRB) issued a cease and desist order against Farmington State Bank (FSB), a Washington state chartered member bank, for failing to notify the FRB of a change to its business plan (the “Order”). Read more.
 
Kentucky Court Blocks Enforcement of CFPB’s Small Business Data Collection Rule for All Lenders* October 13, 2023
 
Section 1071 of the Dodd-Frank Act amended the Equal Credit Opportunity Act to require financial institutions to compile, report, and maintain specified information regarding small business loan applications received from certain women-owned businesses, minority-owned businesses, and other small businesses, in accordance with regulations issued by the CFPB. On March 30, 2023, the CFPB issued a final rule to implement Section 1071 (the “SBLR”). Read more.
 
OCC Publishes Lending Limit Guidance on Loan Purchase Activities* September 11, 2023
 
On August 8, 2023, the Office of the Comptroller (OCC) published Bulletin 2023-27 entitled “Loan Purchase Activities: Legal Lending Limit Guidance” (the “Bulletin”). The Bulletin provides national banks, federal savings associations, and federal branches and agencies of foreign banking organizations (together “Covered Institutions”), guidance regarding the applicability of the legal lending limit to purchased loans. Read more.
 
Not So Fast – State Member Banks to Obtain Fed’s Approval to Issue Stablecoins* September 11, 2023
 
On August 8, 2023, the Federal Reserve Board (FRB) notified its state member banks that it must first obtain written notification of supervisory nonobjection from the agency before issuing, holding, or transacting in dollar tokens (or stablecoins) used to facilitate payments. In its supervisory letter, the FRB outlined the supervisory nonobjection process for member banks seeking to engage in transactions involving distributed ledger technology or similar technologies to facilitate payments. In the same letter, the FRB also announced the creation of the Novel Activities Supervision Program, formed to enhance state member banks’ activities related to such transactions. Read more.
 
Ninth Circuit Rejects Elderly Couple’s Claim to Find Bank Liable for Fraud by Third Party* September 11, 2023
 
In 2021, William Bortz received an email from Amazon requesting him to call the number provided in the email to fix an issue regarding a $1,500 transaction. Mr. Bortz obliged and over the next few weeks, he had given away nearly $700,000. The email was in fact not from Amazon, but instead scammers targeting senior citizens. Read more.
 
Federal Reserve Fines Bank $2.95 Million for Flood Insurance Violations and Practices* September 11, 2023
 
The Federal Reserve recently announced an enforcement action and fines against Alabama-based Regions Bank for alleged violations of the National Flood Insurance Act. It also claimed that the member bank failed to effectively monitor for compliance its home equity lines and loans after changes in loan servicing platforms and third-party service providers. It considered these failures, which were stated to have occurred over a period of more than one year, to be an unsafe and unsound pattern or practice. Read more.
 
CFPB Publishes Summer Edition of Supervisory Highlights* August 11, 2023
 
The CFPB recently issued the Summer 2023 edition of its Supervisory Highlights publication, which summarizes the Bureau’s UDAAP-related exam findings from July 2022 to March 2023. The publication touches upon UDAAP findings across a number of consumer financial products, services, and related practices, including mortgage servicing, auto loan origination and servicing, deposit accounts, debt collection, and consumer reports. Read more.
 
CFPB’s Section 1071 Small Business Lending Data Collection Rule: Delayed for Some Lenders* August 11, 2023
 
Dodd-Frank Act Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to compile, report, and maintain specified information regarding small business loan applications received from certain women-owned businesses, minority-owned businesses, and other small businesses, in accordance with regulations issued by the CFPB. After a long wait, on March 30, 2023, the CFPB issued a final rule to implement Section 1071 (the “Final Rule”). Read more.
 
Federal Banking Agencies Release Addendum on Interagency Statement on Liquidity Risk* August 11, 2023
 
In response to the bank failures earlier this year, the Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Administration, and the Office of the Comptroller of the Currency (together, the “Agencies”) issued an addendum to the Interagency Policy Statement on Funding and Liquidity Risks (“Addendum”). The interagency statement was published in the Federal Register on March 22, 2010. Read more.
 
OCC Identifies Key Risks Facing Federal Banking System* July 14, 2023
 
On June 14, 2023, the Office of the Comptroller of the Currency (OCC) issued its Semiannual Risk Perspective Spring 2023 report. While noting that the overall strength of the federal banking system is sound, the report also identifies trends in key risks facing the federal banking system. Read more.
 
Regulators Release Updated Policy Statement on Prudent Commercial Real Estate Loan Accommodations and Workouts* July 14, 2023
 
On June 29, 2023, the federal financial regulators (including the OCC, FRB, FDIC, and NCUA) issued an updated Policy Statement on Prudent Commercial Real Estate Loan Accommodations and Workouts (the “2023 Policy Statement”), updating their prior interagency policy statement on the topic issued in October 2009 (the “2009 Policy Statement”). Read more.
 
CFPB Issues Time-barred Debt Collection Advisory* June 12, 2023
 
On May 1, the CFPB issued an Advisory Opinion affirming that debt collectors attempting to collect on time-barred mortgage debt may violate the Fair Debt Collection Practices Act (FDCPA) and its implementing Regulation F. 88 FR 26475. The advisory opinion took effect on May 1, 2023. Read more.
 
CFPB Issues Small Entity Compliance Guide For Section 1071 Final Rule* June 12, 2023
 
Dodd-Frank Act Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to compile, report, and maintain specified information regarding certain women-owned, minority-owned, or small business loan applicants, in accordance with regulations to be issued by the CFPB. On March 30, 2023, the CFPB issued a final rule amending Regulation B to implement changes to ECOA made by Section 1071 (“Final Rule”), as reported in the May 2023 BCG newsletter. Read more.
 
FDIC Proposes Special Assessment Rates to Make Up For Losses* June 12, 2023
 
In the April 2023 newsletter, BCG reported that the Federal Deposit Insurance Corporation (FDIC) completed its resolution of Silicon Valley Bank and Signature Bank in a manner that protected all depositors, including the uninsured deposits. Read more.
 
CFPB Further Amends Regulation Z's Libor Transition Rules* May 12, 2023
 
Previously, the Consumer Financial Protection Bureau (CFPB) published a final rule in the federal register on December 8, 2021 to facilitate the transition from LIBOR with regard to loans subject to Regulation Z (the “Initial LIBOR Transition Final Rule”). 86 FR 69716. One of many things the CFPB addressed in the Initial LIBOR Transition Final Rule was to provide a safe harbor with respect to closed-end credit when transitioning from one-month, three-month or six-month USD LIBOR tenors to a specified replacement benchmark in order to avoid having to provide additional disclosures due to the change in the index, and to address related issues with regard to open-end credit subject to Regulation Z. Read more.
 
SBA Issues Final Rule Amending Lending Criteria for SBA Business Loan Programs*
May 12, 2023
 
On April 10, 2023, the Small Business Administration (SBA) issued a final rule amending various regulations governing the SBA’s 7(a) Loan Program and the 504 Loan Program, including regulations on use of proceeds for partial changes of ownership, lending criteria, loan conditions, reconsiderations, and affiliation standards (the “Final Rule”). 88 FR 21074. Read more.
 
FRB Response to the Recent Bank Failures: Bank Term Funding Program* April 19, 2023
 

In response to the failures of Silicon Valley Bank (SVB) and Signature Bank, on March 13, 2023, the FRB announced the establishment of the Bank Term Funding Program (BTFP). The purpose of the program is to provide an additional source of liquidity against high-quality securities, and to eliminate the need for an institution to quickly sell those securities in times of stress. Read more.

 
CFPB Finalizes Section 1071 Small Business Lending Data Rule* April 19, 2023
 

Dodd-Frank Act Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to compile, report, and maintain specified information regarding certain women-owned, minority-owned, or small business loan applicants, in accordance with regulations to be issued by the CFPB. After a long wait, on September 1, 2021, the CFPB issued its proposal to implement Section 1071 (“Proposed Rule”), and then (finally) finalized the rule on March 30, 2023 (the “Final Rule”). Read more.

 
California Proposes Law Regulating Use of Artificial Intelligence* April 19, 2023
 

The development of artificial intelligence technology has recently become a hot button topic. Several reports have highlighted the advancements in the field, and how AI could potentially become more widespread in our daily lives. Read more.

 
California Privacy Protection Agency Finalizes Updates to CCPA Regulations* April 19, 2023
 

As the law firm reported in last month’s BCG Newsletter, on February 14, 2023, the California Privacy Protection Agency (CPPA) submitted the final rulemaking package of the updated California Consumer Privacy Act (CCPA) regulations to California’s Office of Administrative Law (OAL). The updated CCPA regulations address new requirements created by the California Consumer Privacy Rights Act of 2020 (CPRA). Read more.

 
California Privacy Protection Agency CCPA Rulemaking Update* March 10, 2023
 

As reported in last month’s BCG Newsletter, on February 3, 2022, the California Privacy Protection Agency (CPPA) voted to approve a final version of its updated regulations to implement the California Consumer Privacy Act (CCPA). The CCPA regulations address new statutoryrequirements created by the California Privacy Rights Act of 2020 (CPRA). Read more.

 
E-Commerce Lighting, Inc. v. E-Commerce Trade, LLC: Impact of Third-party Arbitration on Lenders* March 10, 2023
 

In general, lenders do not include arbitration clauses in commercial loan documents in order to preserve the lender’s right to seek judicial relief in the event a borrower defaults on the loan. However, could lenders now find themselves needing to intervene in arbitration between their borrowers and another party involving collateral pledged for the loan? Based on a recent decision from the California Court of Appeals, the answer may be “yes” if the lender wants to ensure its rights to collateral are preserved in certain situations. 
 
Supreme Court will Hear CFPB Constitutionality Case* February 27, 2023
 

As we have reported over the past few months, there have been a few cases in which the CFPB’s adversaries are alleging that the agency’s funding violates the Appropriations Clause and, thus, is unconstitutional. One of those cases involves a group of plaintiffs who sued the CFPB, attempting to have a court vacate what remained of the Payday Lending Rule. Read more.

 
FDIC/FRB/NCUA/OCC: Reg C’s Closed-end Mortgage Loan Threshold is 25* February 15, 2023
 

Regulation C implements HMDA. One component to Regulation C coverage is how many closed-end mortgage loans an institution originated in each of the two preceding calendar years. In 2020, the CFPB set that threshold at 100 – that is, 100 closed-end mortgage loans. Read more.

 
Fannie Mae and Freddie Mac Release Additional LIBOR Transition Guidance* February 15, 2023
 

With all London Interbank Offered Rate, or LIBOR, tenors expected to cease to be published immediately after June 30, 2023, lenders will need to transition their Fannie Mae and Freddie Mac (collectively “GSEs”) loans tied to LIBOR. However, up until recently it was unclear how the GSEs expected the transition to occur with regard to GSE loans. Read more.

 
CFPB Proposes $8 Credit Card Late Fee Maximum* February 15, 2023
 

Currently, Regulation Z provides a safe harbor for credit card issuers if they impose penalty fees (such as a late payment fee) that do not exceed certain dollar limits. The CFPB annually adjusts those dollar limits based on inflation. In 2022, those limits were $30 and $41, if the card issuer previously imposed a fee for the first violation of the same type during the same billing cycle and the next six billing cycles. Read more.

 
California Privacy Protection Agency Votes to Approve Submission of CCPA Regulations to OAL* February 15, 2023
 

In November 2020, California voters approved Proposition 24, “The California Privacy Rights Act of 2020” (CPRA). The CPRA is a comprehensive privacy statute that made a number of significant changes to the California Consumer Privacy Act (CCPA). The statutory amendments to the CCPA, created by the CPRA, went into effect on January 1, 2023. Read more.

 
NCUA Extends 18 Percent Interest Rate Ceiling* February 15, 2023
 

Federal credit unions may not charge a rate above 15 percent per year on loans. 12 CFR 701.21(c)(7). Section 701.21(c)(7)(ii) requires the NCUA to determine at least every 18 months whether federal credit unions may extend credit to members at an interest rate above 15 percent. Read more.

 
CFPB’s Notice of Intent Regarding Preemption of State Commercial Financing Disclosure
Laws*
January 11, 2023
 

On December 15, 2022 the Consumer Financial Protection Bureau (CFPB) published a notice of its intent to make a preemption determination involving the federal Truth in Lending Act (TILA) (the “Preemption Notice”). 87 FR 76551. The CFPB published the Preemption Notice in response to a request from a trade organization asking the CFPB to determine whether TILA preempts certain provisions of New York’s Commercial Financing Law requiring certain disclosures to be provided to borrowers (the “NY Commercial Financing Disclosure Law”). Read more.
 
 
FRB Publishes Final Rule to Implement the LIBOR Act* Janurary 11, 2023
 

On March 15, 2022, the president signed an omnibus bill, H.R. 2471, the “Consolidated Appropriations Act, 2022,” which enacted the “Adjustable Interest Rate (LIBOR) Act” (LIBOR Act), set forth in Division U of H.R. 2471. The LIBOR Act is intended to establish a clear and uniform nationwide process to replace LIBOR in contracts that do not provide for a clearly defined or practicable replacement benchmark rate once LIBOR ceases to be published for certain U.S. dollar (USD) tenors after June 30, 2023 or an earlier date if the FRB declares LIBOR to be unrepresentative sooner (the “Cessation Date”). Read more.

 
NFIP Extended Through September 30, 2023* December 29, 2022
 

Just hours before the National Flood Insurance Program (NFIP) was set to expire, President Biden signed into law the 2023 Omnibus Appropriations Bill, legislation which extended the NFIP through September 30, 2023. Read more.

 
 
FRB and FDIC Publish CRA Asset-Size Threshold Adjustments for Small and Intermediate Small Banks December 21, 2022
 

Recently, the FRB and FDIC jointly published the CRA asset-size thresholds used to define the terms “small bank” and “intermediate small bank.” 85 FR 83747. These asset thresholds are adjusted annually for inflation. The OCC is expected to issue a similar announcement before January 1, 2023. Read more.

 
NFIP Extended Through December 23, 2022* December 16, 2022
 

Again, just hours before the National Flood Insurance Program (NFIP) was set to expire, President Biden signed Further Continuing Appropriations and Extensions Act, 2023, H.R. 1437, which extended the NFIP through December 23, 2022. Without this measure, the NFIP was set to expire on December 16, 2022 at 11:59 p.m. The law firm will continue to monitor and report on the NFIP’s status. Read more.

 
FRB Publishes Long Awaited LIBOR Transition Regulations* December 16, 2022
 

As reported by BCG in the August 2022 Newsletter, on July 28, 2022, the FRB issued a notice of proposed rulemaking (NPR) and request for comment entitled, “Regulation Implementing the Adjustable Interest Rate (LIBOR) Act.” 87 FR 45268. After months of waiting for the delayed final rule, on December 16, 2022, the FRB finally issued its Final Regulation Implementing the Adjustable Interest Rate (LIBOR) Act (LIBOR final rule). Read more.

 
CFPB Makes Technical Amendment to Regulation C Reflecting HMDA Loan Threshold* December 16, 2022
 

As reported by BCG earlier in the month, the CFPB announced the decreased Regulation C threshold for depository institutions from 100 to 25 closed-end mortgage loans. As a reminder, in 2020, the CFPB increased the Regulation C threshold for depository institutions from 25 to 100 closed-end mortgage loans and from 100 to 200 open-end lines of credit, in each of the two preceding calendar years. Read more.

 
FFIEC Releases 2021 Community Reinvestment Act (CRA) Data* December 16, 2022
 

On December 15, 2022, the FFIEC released its 2021 CRA statistical data, including information on small business, small farm, and community development lending. The data revealed that in 2021, 685 banks reported the originations and purchases of small business loans. Among the 685 reporting banks, 618 reported community development lending activity. Read more.

 
CFPB Issues Guidance on HMDA’s Invalidated 100 Closed-End Loan Threshold* December 7, 2022
 

As reported by BCG earlier in the month, the CFPB announced the decreased Regulation C threshold for depository institutions from 100 to 25 closed-end mortgage loans. As a reminder, in 2020, the CFPB increased the Regulation C threshold for depository institutions from 25 to 100 closed-end mortgage loans and from 100 to 200 open-end lines of credit, in each of the two preceding calendar years. Read more.

 
Remember: Depository Institutions are Exempt from CA’s New Commercial Financing Disclosure Rules November 17, 2022
 

California’s new commercial financing disclosure regulations become effective on December 9, 2022. Previously, on June 9, 2022, California’s Office of Administrative Law approved the final regulations the Department of Financial Protection and Innovation (DFPI) issued to implement California’s Commercial Financing Disclosures law (Division 9.5 of the Financial Code Sections 22800-22805). The new regulations are published in Title 10 California Code of Regulations Sections 900-956. Read more.

   
NFIP Extended Through December 16, 2022 November 4, 2022
 

As reported in BCG’s October 2022 Newsletter, the president signed an amendment to the Affordable Insulin Now Act, H.R. 6833, which extended the National Flood Insurance Program (NFIP) through December 16, 2022. Without this law, the NFIP was set to expire on September 30, 2022 at 11:59 p.m. The law firm will continue to monitor and report on the NFIP’s status. Contact Stephanie Shea at SShea@ABLawyers.com with questions on the flood insurance regulationsRead more.

   
California “Middle Class Tax Refunds” Not Subject to Garnishment! October 21, 2022
 

The California Middle Class Tax Refund payments that are scheduled to go out starting this month are not subject to garnishment orders, with the exception of orders in connection with child support, spousal support, family support, or a criminal restitution payable to crime victims. Read more.

 
COVID-19 Affected Tenant Eviction Protections Extended through June 30 April 12, 2022
 

On March 31, 2022, Acting California Governor Eleni Kounalakis signed Assembly Bill (AB 2179) into law, which: (i) extends statewide eviction protections for tenants who have applied for the state-administered Emergency Rental Assistance Program (ERAP) but their applications have not yet been processed; and (ii) preempts certain local government eviction ordinances. As an urgency measure, the bill became effectively immediately. Read more.

 
NFIP Extended through September 30, 2022 March 15, 2022
 

Just hours before the National Flood Insurance Program (NFIP) was set to expire, the president signed an omnibus bill, H.R. 2471, the “Consolidated Appropriations Act, 2022” which extends the NFIP through September 30, 2022.  Without this law, the NFIP was set to expire on March 15, 2022 at 11:59 p.m.  The law firm will continue to monitor and report on the NFIP’s status.  Contact Stephanie Shea at SShea@ABLawyers.com with questions on flood insurance regulationsRead more.

   
NFIP Extended through March 15, 2022  March 11, 2022
 

Just hours before the National Flood Insurance Program (NFIP) was set to expire, the president signed H.J. Res. 75 which only extends the federal government until March 15, 2022. Without this resolution, the NFIP was set to expire on March 11, 2022 at 11:59 p.m. The law firm will continue to monitor and report on the NFIP’s status. Contact Stephanie Shea at SShea@ABLawyers.com if you have any questions about flood insurance regulationsRead more.

 
NFIP Extended through March 11, 2022 February, 2, 2022
 

Just hours before the National Flood Insurance Program (NFIP) was set to expire, the president signed the “Further Additional Extending Government Funding Act” (H.R. 6617) that, among other things, extended the NFIP for three weeks from the date authorized, to March 11, 2022Read more.

 
NFIP Extended Through February 18, 2022 December 6, 2021
 

Last week, just hours before the National Flood Insurance Program (NFIP) was set to expire, the president signed the “Further Extending Government Funding Act” (H.R. 6119) that, among other things, extended the NFIP for a little more than two months from the date authorized, to February 18, 2022Read more.

 
DFPI Issues Updated Fair Lending Notice October 12, 2021
 

The California Holden Act prohibits redlining and other discriminatory practices. California Health & Safety Code Section 35800 et seq. and 21 California Code of Regulations (CCR) 7100 et seq. In addition, the Holden Act requires lenders to provide a Fair Lending Notice when an applicant submits a written application for housing financial assistance. Read more.

 
CFPB Finally Issues Section 1071 Small Business Lending Data Proposal September 3, 2021
 

Dodd-Frank Act Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to compile, report and maintain specified information regarding certain women-owned, minority-owned, or small business loan applicants, in accordance with regulations to be issued by the CFPB. After a long wait, on September 1, 2021, the CFPB finally issued its proposal to implement Section 1071. Read more.

 
OCC Changes Address for CRA, FHA and ECOA Notices; Action Required by November 4 August 17, 2021
 

National banks, federal savings associations, and federal branches and agencies of foreign banking organizations (collectively, “OCC-supervised institutions”) must list the OCC’s address in their Community Reinvestment Act (CRA) public notice, the Equal Credit Opportunity Act (ECOA) notice within their adverse action notices, and their Fair Housing Act (FHA) poster. Read more.

 
CFPB Requests Comments on Whether it Should Collect Consumer Data on Electronic Disclosures; Comments Must Be Received On or Before September 10, 2021 August 19, 2021
 

The Bureau recently published a notice in the Federal Register at 86 FR 43999 requesting comment on a “Generic Information Collection” entitled, “Electronic Disclosure on Mobile Devices.” The Bureau plans to conduct several studies using methodologies rooted in psychology and behavioral economics to understand electronic disclosure on mobile devices. Read more.

 
CFPB's Foreclosure Limitations Apply Only to Large Servicers June 29, 2021
 

The CFPB issued a final rule on June 28, 2021 that amended the early intervention and loss mitigation requirements in Regulation X’s mortgage servicing rules (specifically, Sections 1024.39 and 1024.41). Arguably, the biggest change this final rule makes is its addition of temporary foreclosure limitations that are in effect until January 1, 2022. Read more.

 
Updated: New June 19 Federal Holiday's (Juneteenth's) Impact on Rescission and TRID June 21, 2021
 

If a Regulation Z-covered loan is secured by a consumer’s principal dwelling and the loan is not a “residential mortgage transaction” (that is, the loan is not a purchase-money loan or an initial construction loan), the loan will be subject to Regulation Z’s rescission rules. Read more.

Los Angeles Cities Remain Eligible for NFIP Coverage April 21, 2021
 

On April 14, 2021, FEMA publicly announced that it could be suspending certain Los Angeles cities’ National Flood Insurance Program (NFIP) eligibility on April 21, 2021 because the cities failed to comply with the flood plain management requirements. 86 FR 19580. Read more.

 
CFPB Proposed Foreclosure Moratorium Through End of 2021 April 14, 2021
 

The CFPB has proposed a moratorium on most residential mortgage foreclosures until January 1, 2022. Specifically, the proposal would amend Regulation X, which implements RESPA, to prohibit a “large” servicer from commencing a foreclosure (whether judicial or nonjudicial) on any delinquent consumer-purpose loan secured by a borrower’s principal residence until after December 31, 2021. Read more.

 
Recent ATR/QM Developments February 26, 2021
 

As BCG reported in its January 2021 Newsletter, the CFPB issued two final rules amending Regulation Z’s ability-to-repay rule (ATR Rule) in December 2020. (Remember, the ATR Rule applies to applies to closed-end, Reg Z-covered credit secured by a dwelling, and there are generally two ways to comply with the ATR Rule – follow the General ATR Standard or make a Qualified Mortgage (QM).) Read more.

 
New COVID-19 Relief Package Signed Into Law January 5, 2021
 

On December 21, 2020, Congress passed the Consolidated Appropriations Act of 2021 (HR 133) (the “CAA”) with significant bipartisan support in Congress. President Trump signed the CAA into law on December 27, 2020. It combines $900 billion in stimulus relief for those affected by the COVID-19 pandemic in the United States with a $1.4 trillion omnibus spending bill for the 2021 federal fiscal year. Read more.

 
New DFPI's Impact on State-Chartered Institutions' California Fair Lending Notice October 23, 2020
 

The California Holden Act prohibits redlining and other discriminatory practices. California Health & Safety Code Section 35800 et seq. and 21 California Code of Regulations (CCR) 7100. The Holden Act requires lenders to provide a Fair Lending Notice to when an applicant submits a written application for housing financial assistance. Lenders must also post the Fair Lending Notice in a conspicuous place for public inspection (such as in a public lobby). 21 CCR 7114. Read more.

COVID-19's Impact on Flood Insurance Regulations (Revised) June 9, 2020
 

A question the law firm is frequently receiving during the pandemic is whether a COVID-19 loan modification triggers the flood insurance regulations. In short, the requirement to pull a Standard Flood Hazard Determination Form is triggered when a lender makes, increases, renews or extends (MIREs) a loan secured by a building or mobile home. If that building or mobile home is in a flood zone (what FEMA refers to as a “Special Flood Hazard Area” or “SFHA”), which is an A- or V-rated flood zone, the lender must send the SFHA notice. If the building or mobile home is also in an NFIP-participating community, then the loan is a “designated loan” and the lender must require flood insurance coverage. Read more.

 
COVID-19's Impact on Flood Insurance Regulations May 19, 2020
 

A question the law firm is frequently receiving during the pandemic is whether a COVID-19 loan modification triggers the flood insurance regulations. In short, the requirement to pull a Standard Flood Hazard Determination Form is triggered when a lender makes, increases, renews or extends (MIREs) a loan secured by a building or mobile home. If that building or mobile home is in a flood zone (what FEMA refers to as a “Special Flood Hazard Area” or “SFHA”), which is an A- or Vrated flood zone, the lender must send the SFHA notice. If the building or mobile home is also in an NFIP-participating community, then the loan is a “designated loan” and the lender must require flood insurance coverage. The flood escrow rules are triggered if a lender MIRES a designated loan secured by residential improved real estate or a mobile home after January 1, 2016, and none of the exceptions apply. In sum, all of these requirements hinge on whether the lender MIREd a loan. So, when a loan modification involves increasing, renewing or extending a designated loan, the flood insurance regulations are triggered. Read more.

 
CFPB Issues Guidance on 30-Day Deadline for Notice of Adverse Action on PPP Loans May 7, 2020
 

On May 6, 2020 the CFPB issued useful guidance on when the 30-day deadline to send a notice of adverse action under Regulation B starts to run on Paycheck Protection Program (PPP) applications. The news is good—PPP applications are not deemed “completed” until the SBA has issued a loan number for the loan or a response about the availability of PPP funds. This means PPP applications will not “time out” solely due to delays in receiving loan numbers from the SBA or during interim periods while the PPP has exhausted its funding. Read more.

 
Governor Exempts CARES Act Assistance Payments from Levy April 27, 2020
 

On April 23, 2020, California Governor Gavin Newsom signed Executive Order N-57-20 (“Order”) which exempts from garnishment federal, state or local government financial assistance payments received by individuals in response to the COVID-19 pandemic. This includes recovery rebates under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) whereby certain individuals are entitled to an advanced tax credit of up to $1,200, depending on their income level. Stated simply, the Order prevents debt collectors from garnishing federal stimulus funds from most Californians. Unfortunately, due to the broad and vague language used in the Order there are quite a number of unanswered questions that remain. Read more.

 
BCG Letters of Credit In-Person Seminar Locations Canceled - Additional Recording Playback Dates Added April 8, 2020
 

We want to advise you that we have canceled the in-person seminar locations for the BCG Letters of Credit Seminar in May.  Please note that we will automatically cancel your registration on our end, but we encourage you to register for any of the Recording Playbacks. Read more.

 
BCG Mortgage Lending Compliance In-Person Seminar Locations Canceled - Additional Recording Playback Dates Added March 23, 2020
 

We regret to inform you that we are canceling all of the in-person seminar locations for the April Mortgage Lending Compliance Seminar in recognition of the state and federal governments' requests to limit public gatherings. In their place we have scheduled four Recording Playback dates. Read more.

 
BCG Electronic Banking Seminar March 13, 2020
 

On March 11, 2020 we emailed a statement to our clients (and posted the statement on the BCG website) regarding our firm’s efforts to help contain the spread of the coronavirus.  At that time we had determined that we would not cancel any BCG Seminars scheduled for March. However, due to increasing concerns regarding public gatherings, we have decided to be more proactive and therefore we have canceled the remaining BCG Electronic Banking Seminars this month. Read more.

 
NFIP Extended Through September 30, 2020 December 23, 2019
 

On December 20, 2019, hours before the National Flood Insurance Program (NFIP) was set to expire, the President signed the “Further Consolidated Appropriations Act, 2020” (H.R. 1865) that, among other things, extended the NFIP for nine months through September 30, 2020. Read more.

 
NFIP Extended Through December 20, 2019 December 20, 2019
 

On November 21, 2019, hours before the National Flood Insurance Program (NFIP) was set to expire, Congress passed and the President signed an appropriations bill (H.R. 3055) that, among other things, extended the NFIP through December 20, 2019. Read more.

 
NFIP Extended Through November 21, 2019 October 01, 2019
 

On September 27, 2019, the President signed a bill (H.R. 4378) that, among other things, extended the National Flood Insurance Program (NFIP) through November 21, 2019. Without this bill, the NFIP was set to expire on September 30, 2019. The law firm will continue to monitor and report on the NFIP’s status. Read more.

 
Imposing PFI Review Fees June 26, 2019
 

Effective July 1, 2019, lenders must accept private flood insurance (PFI) on designated loans if the PFI policy meets the “Eight Criteria.” BCG members have asked whether they may charge a fee for this review – that is, whether they may charge a fee for reviewing a PFI policy to determine whether it meets the Eight Criteria. Read more.

 
New BCG Happenings! June 20, 2019
 

We are excited to announce our newest innovation in delivering BCG Seminars to BCG Members!

Beginning with the August Financial Privacy & Information Security Seminar, which will be presented by Robert Olsen and Keith Forrester, we will introduce a new feature to our BCG Seminars – it’s called the “Recording Playback.”

So what is this exactly?  We will record the monthly seminar ahead of time and host a Recording Playback for BCG Members (only) to attend on a specified date from 8:30 a.m. to 3:00 p.m., with scheduled breaks (including a lunch break) as we normally do at live seminars.  In addition, during the Recording Playback, we will provide several live Question & Answer Sessions during which attendees will be able to ask questions of the speakers. Read more.

 
NFIP Extended Through September 30, 2019 June 10, 2019
 

On June 3, 2019, Congress passed the Additional Supplemental Appropriations for Disaster Relief Act, 2019 (H.R. 2157), which, among other provisions, extends the National Flood Insurance Program (NFIP) through September 30, 2019. The president signed the bill on June 6, 2019, more than a week before the National Flood Insurance Program (NFIP) was set to expire. Read more.

 
Clarification: Annual Disclosure Requirement for State-chartered Banks May 10, 2019
 

In the April BCG Newsletter we reported that the FDIC issued a final rule eliminating the requirement that state nonmember banks prepare and make available an annual disclosure statement regarding the bank’s financial condition. Read more.

 
The Private Flood Insurance Compliance Aid Provision: It Does Exist! March 13, 2019
 

As we discussed during the February 2019 BCG Monthly Telephone Briefing and will discuss again during the BCG Webinar on April 30, 2019, starting July 1, 2019, regulated lenders must start accepting private flood insurance (PFI) policies that meet what we refer to as the “Eight Criteria.” Read more.

 
 

 

* Janet Bonnefin is retired from the practice of law with the firm.
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