April 2024 Compliance Journal

Compliance Journal

April 2024

Special Focus

Summary of Recently Enacted State Legislation

The 2023–2024 Wisconsin legislative session concluded recently, with WBA’s state lobbying efforts achieving many of its goals. It was a busy and productive session which saw passage of WBA supported legislation such as the financial institutions modernization bill, an update to Wisconsin’s Uniform Trust Code, and creation of a tool to help combat elder financial abuse. This was also a historic session, during which an unprecedented state tax exemption was created for banks on interest income for certain commercial and ag purpose loans.

The above legislation, along with several other recently enacted state legislative items relevant to banks are summarized in this article. While some of the new laws affect banks directly, others may have no direct impact, but are included to provide an overall awareness of what occurred this session within the financial services industry as a whole. For more comprehensive information on each law, please review the applicable Act, for which a link is included at the end of each summary.

Note that all Acts are effective as of the day after publication, unless indicated otherwise.

Commercial Loan Tax Exclusion

A momentous moment occurred this session with passage of a commercial loan tax exclusion (tax exemption) for the banking industry. The tax exemption passed as part of the 2023–2025 state budget, and includes clarifications incorporated through a tax clean-up bill, and an emergency rule issued by the Wisconsin Department of Revenue (DOR). The result of these three components is the realization of a long-standing WBA advocacy priority in creation of an income tax-exemption for covered commercial loans. Each component is summarized below.

Wisconsin Budget

Governor Tony Evers signed 2023 Wisconsin Act 19 in July of 2023 which passed the 2023–2025 state budget. Included within the budget is the historic tax exemption discussed above, which provides an income tax exclusion on income earned from commercial loans for business or agricultural purposes of $5 million or less where the borrower resides, or is located, in the state of Wisconsin (covered commercial loan). Specifically, the budget creates section 71.05(1)(i) and section 71.26(i) which provides an exclusion from individual income taxes and an exclusion from corporation income, respectively. The change is effective for taxable years beginning after December 31, 2022. For purposes of the exclusion, income includes interest, fees, and penalties, derived from a covered commercial loan.

2023 Wisconsin Act 19: https://docs.legis.wisconsin.gov/2023/related/acts/19.pdf

Tax Clean-up Bill

Following signing of the budget, a legislative fix was proposed to clarify the new tax exemption. This fix was incorporated into 2023 Wisconsin Act 146, a tax clean-up bill. The fix creates new section 71.365(4m)(d)1.bd. which provides that “for taxable years beginning after December 31, 2022, the income exclusion under s. 71.05(1)(i) shall be allowed.” The purpose for this fix is to clarify that the commercial and agricultural loan income tax exemption also applies to Subchapter S banks where the state income tax is paid at the entity or franchise level rather than the individual shareholder level.

2023 Wisconsin Act 146: https://docs.legis.wisconsin.gov/2023/related/acts/146.pdf

DOR Emergency Rule

Since passage of the tax exemption in the state budget and clarification provided by the tax clean-up bill, DOR has published an emergency rule to provide additional certainty regarding income that qualifies for the exemption. The emergency rule clarifies what entities, loans, and income qualify for the new income exemption, as well as prescribing how the $5 million loan limitation is computed. The emergency rule creates Chapter Tax 3.10 and is included in the link below.

DOR Emergency Rule EmR2404: https://docs.legis.wisconsin.gov/code/ register/2024/819a3/register/emr/emr2404_rule_text/emr2404_rule_text.pdf

Financial Institutions Modernization Bill

During every legislative session WBA identifies and advocates for necessary changes to state laws regulating the banking industry. These changes are often presented in a modernization bill, sometimes referred to as an “omnibus bill,” given that they often include groupings of many different aspects of state law. The 2023-2024 legislative was no different, and the WBA supported financial institutions modernization bill was signed into law as 2023 Wisconsin Act 128. Act 128 contains several provisions positive for the financial institutions industry and comes as a bipartisan effort by the industry to modify, clarify, and simplify state statues governing financial institutions.

Modifications include:

• Increasing the amount of compensation available from DFI for losses resulting from the deposit of public moneys in a failed financial institution from $400,000 to $1,000,000.

• Extension for the maximum maturity date, from 10 to 20 years of a promissory note issued by a municipality, county, or school district.

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• Repeal of outdated provisions related to the installation and operation of off-site ATMs. Creation of a crime for interfering with an ATM.

Act 128 also eliminates certain lender disclosure requirements applicable to residential mortgage loans and variable rate loans. Specifically, Act 128 repeals Wis. Stat. sections 138.052(7e), 138.052(7m), and 138.056(6) of Wisconsin law. Prior to the repeal, sections 138.052(7e) and 138.052(7m) required disclosures at time of application and section 138.056(6) required variable rate loan disclosures. Both requirements applied to consumer purpose loans secured by first lien or equivalent security interest in borrower’s 1-4 family principal residence. These requirements were repealed due to their redundancy with Federal disclosure requirements. As a result, financial institutions are no longer required to meet the disclosure requirements required by sections 138.052(7e), 138.052(7m), and 138.056(6). Financial institutions must continue to meet any applicable Federal disclosure requirements.

2023 Wisconsin Act 128:

https://docs.legis.wisconsin.gov/2023/related/acts/128.pdf

Elder Financial Abuse

A longstanding priority of the industry is creation of new tools to assist in combatting elder financial abuse. This session, 2023 Wisconsin Act 132 was passed to authorize a financial service provider to maintain a contact list on behalf of a vulnerable adult, and to contact certain persons when the provider reasonably suspects financial exploitation of a vulnerable adult. The Act defines “vulnerable adult” as an individual who is either:

• At least 65 years of age, or

• An adult at risk, as further defined within existing Wisconsin law.

Special Focus

The usage of such a list is optional. If opting to use such a list, the vulnerable adult can submit and periodically update it with persons that the financial institution may contact when it has reasonable cause to suspect that the vulnerable adult is a victim or a target of financial exploitation. How and when the financial institution uses the list is up to the institution. It may also choose not to contact individuals on the list, limit the information, and choose to disclose only its reasonable suspicion, without disclosing any other details or confidential personal information regarding the vulnerable adult’s financial affairs. The Act provides immunity from all criminal, civil, and administrative liability for any financial service provider, or financial service provider’s employee, for actions taken in good faith to contact a person or elect not to contact a person as authorized under the Act, and for actions taken in furtherance of that determination, if the determination was made based on reasonable suspicion.

WBA will continue to advocate on behalf of the industry for additional tools to assist the industry in combating elder financial abuse.

2023 Wisconsin Act 132:

https://docs.legis.wisconsin.gov/2023/related/acts/132.pdf

Uniform Trust Code Trailer Bill

Wisconsin passed its Uniform Trust Code in 2013. Since then, the industry has been working on several technical changes. These changes include incorporating updates reflected in existing uniform laws such as those of other states, fixing issues identified since passage of the original law, and adoption of new concepts and tools as consistent with current Wisconsin law. These changes were incorporated into a trust code trailer bill and signed into law as 2023 Wisconsin Act 127 as a culmination of over a decade of industry work. While it is largely technical in nature, Act 127 represents a significant update to Wisconsin’s Trust Code which will provide trust and wealth management professionals with the ability to better serve their trust customers.

More specifically, the Act makes several changes to the administration of trusts, the power to decant trusts, the creation and exercise of powers of appointment, the disclosure of certain digital property, and the classification of digital property as individual property for purposes of determining marital property.

2023 Wisconsin Act 127:

https://docs.legis.wisconsin.gov/2023/related/acts/127.pdf

Financial Literacy

The banking industry shares a longstanding mission to promote financial literacy. In support of this goal, the governor signed 2023 Wisconsin Act 60 to create a requirement that high school students complete at least 0.5 credits of personal financial literacy. The course must include financial mindset, education and employment, money management, saving and investing, credit and debt, and risk management and insurance. The requirement first applies to students graduating from high school in 2028.

2023 Wisconsin Act 60: https://docs.legis.wisconsin.gov/2023/related/proposals/ab109.pdf.

Remote Notarial Acts

Two bills were signed into law this session relating to remote notarial acts. Wisconsin law generally permits a notary public to perform a notarization remotely for certain specified transactions but excludes others. Two bills signed into law this session relate to those prohibitions, expanding the types of notarial acts which may be performed remotely.

• 2023 Wisconsin Act 129, creates an exception to the general prohibition on remote notarization of powers of attorney, thus permitting remote notarization of a limited financial power of attorney for a real estate transaction.

• 2023 Wisconsin Act 130 authorizes and creates a process allowing for the remote notarization of an “estate planning document,” as that term is defined by the Act.

For purposes of Act 130, “estate planning document” includes a declaration to health care professionals, an authorization for final disposition, a power of attorney for health care, and the execution of a will. Specifically, the Act authorizes the remote notarization of an estate planning document where a remotely located individual appears before a notary public

Special Focus

via two-way, real-time audiovisual communication technology if various requirements are met.

2023 Wisconsin Act 129:

https://docs.legis.wisconsin.gov/2023/related/acts/129.pdf

2023 Wisconsin Act 130:

https://docs.legis.wisconsin.gov/2023/related/acts/130.pdf

Earned Wage Access

Wisconsin has adopted laws regulating companies that provide earned wage access services to individuals who reside in Wisconsin through 2023 Wisconsin Act 131. Act 131 requires such companies to be licensed by the Wisconsin Department of Financial Institutions (DFI) as a condition of doing business in Wisconsin. An earned wage access service is one which provides consumers with earned but unpaid income and is further defined by the Act. Providers of earned wage access services doing business in Wisconsin must take certain actions, such as developing policies and procedures, providing disclosures, and adhere to certain consumer protections specific to the provision of covered services.

2023 Wisconsin Act 131:

https://docs.legis.wisconsin.gov/2023/related/acts/131.pdf

Robbery of a Financial Institution

2023 Wisconsin Act 133 expands the definition of robbery of a financial institution. Wisconsin law governing crimes against financial institutions defines the offense of robbery of a financial institution as committed when a person, by use of force or threat to use imminent force, takes money or property that is owned by or under the custody of another or control of a financial institution from an individual or in the presence of an individual. A person who commits this offense is guilty of a Class C felony. Act 133 expands this definition to provide that a person is also guilty of robbery of a financial institution if he or she creates circumstances that would cause a reasonable person to believe use of force was imminent.

2023 Wisconsin Act 133: https://docs.legis.wisconsin.gov/2023/related/acts/133.pdf

Unclaimed Property

2023 Wisconsin Act 138 makes various technical changes to a variety of areas of law. One aspect relevant to financial institutions is a change made to Wisconsin’s Revised Uniform Unclaimed Property Act (RUUPA). When Wisconsin adopted RUUPA, a “loyalty card” was defined, in part, as a record given without direct monetary consideration under an award, reward, benefit, loyalty, incentive, rebate, or promotional program. Act 138 clarifies the definition of “loyalty card” by creating the term “financial organization loyalty card” and defines that term, in part, as a card or electronic record given without direct monetary consideration under an award, reward, benefit, loyalty, incentive, rebate, or promotional program established by a financial organization. This clarification helps establish how financial organization loyalty cards, as defined by the Act, are governed by Wisconsin’s abandoned property laws.

2023 Wisconsin Act 138:

https://docs.legis.wisconsin.gov/2023/related/acts/138.pdf

College Savings Accounts

Some changes were made this session to Wisconsin college savings programs, as well as to the employee college savings account contribution tax credit. The Wisconsin 529 College Savings Program offers two savings plans to save for higher education under Section 529 of the U.S. Internal Revenue Code: Edvest 529 and Tomorrow’s Scholar (529 accounts). Both plans are qualified tuition programs under 26 USC 529 and are administered by DFI. 2023 Wisconsin Act 148 made several changes to Wisconsin’s 529 accounts including:

• Modifications to the individual income tax treatment for contributions to and withdrawals from 529 accounts and the employee college savings account contribution credit.

• Increases the maximum amount that can be deducted from contributions to a 529 account to $5,000 for most filers and $2,500 for married-separate filers.

• Requires the use of a first-in, first-out accounting method for determining which withdrawals would be added to adjusted gross income and would restrict the use of carryover contributions in excess of the maximum deduction threshold if the carryover amount was withdrawn within 365 days of being first contributed.

Special Focus

• Links the definition of “qualified higher education expense” to federal law, which has been expanded to include expenses for apprenticeship programs and qualified education loan repayments.

2023 Wisconsin Act 148: https://docs.legis.wisconsin.gov/2023/related/acts/148.pdf

Uniform Fraudulent Transfers Act

The Uniform Fraudulent Transactions Act (UFTA) permits a creditor to challenge certain transfers of assets by a debtor that are intended to deprive the creditor of assets that would otherwise be available if the debtor is or were to become insolvent. 2023 Wisconsin Act 246 modifies the current UFTA as follows:

• The Act renames the UFTA to the Uniform Voidable Transactions Law (UVTL) and replaces the term fraudulent with voidable throughout.

• The Act allocates the burden of proof for claims and defenses related to UVTL and defines the standard of proof as a preponderance of the evidence.

• The Act creates a choice-of-law rule for courts to determine which state’s voidable transactions law applies. Under the Act, a court must apply the law of the state where the debtor is located at the time the transfer is made or obligation incurred.

• The Act eliminates the special definition of insolvency for partnerships, making partnerships subject to the same general definition as any other party governed by the UVTL.

2023 Wisconsin Act 246:

https://docs.legis.wisconsin.gov/2023/related/acts/246.pdf

ABLE Accounts

Federal law allows for the establishment of tax-advantaged savings accounts for certain individuals with disabilities under the Achieving a Better Life Experience (ABLE) Act, these accounts being known as ABLE accounts. Until this session, Wisconsin residents could only establish an ABLE account in another state. 2023 Wisconsin Act 267 requires DFI to implement a qualified ABLE program, allowing tax-exempt accounts for qualified expenses incurred by individuals with disabilities to be established under Wisconsin law, and Wisconsin consumers to establish ABLE accounts under the state-administered program.

2023 Wisconsin Act 267:

https://docs.legis.wisconsin.gov/2023/related/acts/267.pdf

Mobile Branches

DFI has issued Clearinghouse Rule CR 23-039 which proposes to modify Wis. Admin. Code DFI-Bkg 8.01 (1), which currently defines a state bank branch as a “permanent” facility. The new definition would allow state banks to offer services through attended mobile or intermittent branches, subject to the approval of the Division of Banking. This change will enable banks to extend services to Wisconsinites in areas that may be underbanked, whose residents may be underserved, and to areas where permanent branches may not be feasible. This would also maintain with national banks (which are authorized to operate mobile and intermittent branches), and state savings banks, state savings and loan associations, and state credit unions (which are not subject to rules limiting their branches to “permanent” locations).

DFI Clearinghouse Rule CR 23-039: https://docs.legis.wisconsin.gov/code/register/2024/818b/register/cr/cr_23_039_rule_ text/cr_23_039_rule_text.pdf

Conclusion

WBA will continue to monitor and advocate on issues, including those discussed above and others, which impact the Wisconsin banking industry. If you have any additional questions on any of the above bills or issues, do not hesitate to contact us at wbalegal@wisbank.com.

FDIC Releases 2023 Consumer Compliance Examination Observations

The Federal Deposit Insurance Corporation (FDIC) released its 2024 Consumer Compliance Supervisory Highlights (Highlights) which provides a summary of the results of consumer compliance examinations in 2023. FDIC also provides a description of the most frequently cited violations, other consumer compliance examination observations, and an overview of trends in consumer complaints that were processed by FDIC in 2023. The following are several notable takeaways from the latest edition of FDIC’s Highlights.

Overall Performance

FDIC reported it conducted close to 900 consumer compliance examinations in 2023 and that overall, the majority of FDIC-supervised institutions continue to maintain an effective compliance management system (CMS) and adequately manage consumer compliance risk. FDIC reported that through its use of the Federal Financial Institutions Examination Council’s (FFIEC) Uniform Interagency Consumer Compliance Rating System, as of 12/31/2023, 98 percent of all FDICsupervised institutions were rated satisfactory or better for consumer compliance (i.e., ratings of 1 or 2), and 99 percent were rated “Outstanding” or “Satisfactory” for the Community Reinvestment Act (CRA).

FDIC also concluded that institutions which rated less than satisfactory for consumer compliance (i.e., ratings of 3, 4, or 5) had overall CMS weaknesses, which often resulted in violations of law and the risk of consumer harm. Institutions rated “Needs to Improve” or “Substantial Noncompliance” for CRA represented a weak performance under the lending, investment and service tests, the community development test, the small bank performance standards, or an approved strategic plan, as applicable.

Most Frequently Cited Violations

During 2023, FDIC consumer compliance examiners identified regulatory violations that ranged in severity from highest to lowest level of concern (i.e., Levels 3, 2, and 1, with Level 1 representing the lowest level of concern). The Highlights focused on the five most frequently cited instances of Level 3 or Level 2 violations.

The most frequently cited violations (representing approximately 74 percent of the total violations cited in 2023) involved the Truth in Lending Act (TILA) and its implementing regulation, Regulation Z; the Flood Disaster Protection Act (FDPA) and its implementing regulation, Part 339; the Electronic Fund Transfers Act (EFTA) and its implementing regulation, Regulation E; the Truth in Savings Act (TISA) and its implementing regulation, Regulation DD; and Section 5 of the Federal Trade Commission Act (Section 5 of the FTC Act).

The list contains the same laws and regulations from FDIC’s 2022 publication; however, Section 5 of the FTC Act violations dropped from the second most frequently cited violation to the fifth most frequently cited violation. Of the top regulatory areas cited for violations, the following list describes the most frequently cited violation in each area.

• TILA/Regulation Z: Regulation Z sections 1026.38(f)-(k) requires the creditor to accurately disclose certain closing cost information on the Closing Disclosure. While TILA violations cited during 2023 were widely distributed among the various provisions of the regulation, this section represented 9 percent of the total TILA violations cited.

• FDPA/12 CFR Part 339: Section 339.3(a) of FDIC Rules and Regulations requires that adequate flood insurance be in place at the time a covered loan is made, increased, extended, or renewed. This section represented 47 percent of the total FDPA violations cited in 2023.

• EFTA/Regulation E: Section 1005.11(c) of Regulation E requires a financial institution to investigate allegations of electronic fund transfer (EFT) errors, determine whether an error occurred, report the results to the consumer, and correct the error within certain timeframes. This section represented 46 percent of the total EFTA violations cited in 2023.

Special Focus

• TISA/Regulation DD: Sections 1030.4(a) and (b) of Regulation DD set forth timing and content requirements for deposit account disclosures. While TISA violations cited during 2023 were widely distributed among the various provisions of the regulation, this section represented 9 percent of the total TISA violations cited.

• Section 5 of FTC Act: Section 5 of the FTC Act prohibits unfair or deceptive acts or practices in or affecting commerce. FDIC cited violations for instances when financial institutions charged multiple nonsufficient funds (NSF) fees for the re-presentment of the same transaction, but the disclosures did not fully or clearly describe the financial institution’s re-presentment practice. This included instances where the institution did not explain that the same unpaid transaction might result in multiple NSF fees if an item was presented more than once. FDIC frequently cited this issue, which represented 58 percent of all Section 5 of the FTC Act violations in 2023.

Additionally in 2023, FDIC initiated 16 formal enforcement actions and 16 informal enforcement actions to address consumer compliance examination findings. During this period, FDIC issued civil money penalty (CMP) orders totaling approximately $474,000 against institutions to address violations of the FDPA, Section 5 of the FTC Act, and the Home Mortgage Disclosure Act. Supervised institutions provided voluntary restitution payments totaling $10.6 million to more than 130,000 consumers for violations of various laws and regulations.

Consumer Compliance Examination Observations

FDIC’s Highlights also includes a description of some of the more significant consumer compliance issues identified by examiners in 2023. Many consumer compliance examination observations involve deficiencies in bank oversight of its third-party relationships. In some cases, the third-party relationships described involve arrangements in which products and services were offered directly to consumers by non-bank entities that have relationships with FDIC-supervised banks. The third-parties failed to comply with consumer compliance rules when offering consumer products or services which then resulted in compliance violations for the institutions. These third-party activities included the misuse of FDIC’s name or logo in crypto-related asset activities, offering credit building products, performing EFT dispute investigations, and offering unsecured consumer loans and other credit products. FDIC offers several mitigating risk activities to help prevent compliance violations from occurring.

Consumer Complaint Trends

FDIC also reported on consumer complaint trends received in 2023. FDIC’s Consumer Response Unit (CRU) of the National Center for Consumer and Depositor Assistance (NCDA), which investigates consumer complaints involving FDICsupervised banks, reportedly closed 23,287 written complaints and telephone calls in 2023 compared to 22,195 closed in 2022, a 5 percent increase. FDIC also reported that CRU acknowledged all written complaints within 14 days and closed 98.2 percent of investigated complaints within established timeframes.

The following is further consumer complaint trend data of FDIC, including a five-year trend:

Special Focus

Conclusion

FDIC has released its 2024 Consumer Compliance Supervisory Highlights which provides a summary of the overall results of 2023 consumer compliance examinations. The release also includes descriptions of the most frequently cited violations, other consumer compliance examination observations, and an overview of trends in consumer complaints that were processed by FDIC in 2023. Knowledge of these findings and consumer complaint trends helps FDIC-regulated institutions know what will likely be atop examiners’ minds in upcoming compliance examinations. Knowing the findings, recommended risk mitigation steps, and consumer complaint trends will further help compliance staff be prepared for upcoming compliance examinations.

The March 2024 FDIC Consumer Compliance Supervisory Highlights release may be viewed at: https://www.fdic.gov/regulations/examinations/consumer-compliance-supervisory-highlights/documents/ccs-highlightsmarch2024.pdf

Regulatory Spotlight

Agencies Issue Interim CRA Rule.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) (collectively, the agencies) issued an interim final rule regarding the agencies’ Community Reinvestment Act (CRA) final rule which was issued 10/24/2023, and published in the Federal Register on 02/012024. The interim final rule has two components. First, the agencies have amended the applicability date of the facility-based assessment areas provision and public file provision included in the 2023 CRA final rule. Second, the agencies have made technical amendments to the 2023 CRA final rule and related regulations as outlined in the interim final rule. In addition, the interim final rule corrects the preamble to the 2023 CRA final rule regarding OCC’s Unfunded Mandates Reform Act regulatory analysis. The interim final rule is effective 04/01/2024. Comments regarding the applicability date for §§ 25.16, 25.43, 228.16, 228.43, 345.16, and 345.43 are due 05/13/2024. The interim final rule may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06497.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 2206022069.

Agencies Issue Temporary Appraisal Exceptions for Maui County.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and National Credit Union Administration (NCUA) (collectively, the agencies) issued a temporary exception to Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) appraisal requirements in Maui County as affected by the Hawaii wildfires. In the statement and order, the agencies exercised their authority to grant temporary exceptions to FIRREA appraisal requirements for real estate-related financial transactions, provided certain criteria are met, in an area in the State of Hawaii following the major disaster declared by President Biden as a result of wildfires. The expiration date for the exceptions is 08/10/2026. The order is effective 03/12/2024. The order may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-12/pdf/2024-05159.pdf. Federal Register, Vol. 89, No. 49, 3/12/2024, 17710-17711.

CFPB Issues Final Credit Card Penalty Fee Rule.

The Bureau of Consumer Financial Protection (CFPB) issued a final rule to amend Regulation Z, which implements the Truth in Lending Act (TILA), to address late fees charged by card issuers that together with their affiliates have one million or more open credit card accounts (Larger Card Issuers). The final rule adopts a late fee safe harbor threshold of $8 for Larger Card Issuers and provides that the annual adjustments to reflect changes in the Consumer Price Index (CPI) do not apply to the $8 amount. The final rule is effective 05/14/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR2024-03-15/pdf/2024-05011.pdf. Federal Register, Vol. 89, No. 52, 03/15/2024, 19128-19223.

Regulatory Spotlight

CFPB Publishes Circular Regarding Digital Comparison Shopping Tools.

CFPB published Circular 2024-01 titled, Preferencing and Steering Practices by Digital Intermediaries for Consumer Financial Products or Services, in the Federal Register. In the circular, CFPB responds to the question of whether operators of digital comparison-shopping tools or lead generators violate the Consumer Financial Protection Act by preferencing products or services based on financial or other benefits to the operator. CFPB first released the circular on its website 02/29/2024. The circular may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-12/pdf/2024-05141.pdf. Federal Register, Vol. 89, No. 49, 03/12/2024, 17706-17710.

CFPB Seeks Comment on Information Collections.

CFPB seeks comment regarding an information collection titled, Regulation F: Fair Debt Collection Practices Act, State Application for Exemption. Regulation F implements the Fair Debt Collection Practices Act (FDCPA) and prescribes rules governing the activities of debt collectors. Regulation F addresses communications in connection with debt collection and prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection. Regulation F includes information collections related to information that debt collectors must provide to consumers at various points during the debt collection process, before reporting a debt to a consumer reporting agency, and in response to certain consumer requests or actions. Regulation F also includes information collections related to recordkeeping and State applications to CFPB for an exemption of a class of debt collection practices. Comments are due 05/13/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-14/pdf/2024-05449.pdf. Federal Register, Vol. 89, No. 51, 03/14/2024, 18606-18607.

CFPB seeks comment regarding an information collection titled, Making Ends Meet Survey. The Dodd-Frank Act charges CFPB with researching, analyzing, and reporting on topics relating to its mission including consumer behavior, consumer awareness, and developments in markets for consumer financial products and services. To improve its understanding of how consumers engage with financial markets, CFPB has successfully used surveys under its Making Ends Meet program. Comments are due 05/28/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-26/ pdf/2024-06407.pdf. Federal Register, Vol. 89, No. 59, 03/26/2024, 20950-20951.

CFPB seeks comment regarding an information collection titled, Consumer Response Government and Congressional Portal Boarding Forms. Section 1013(b)(3)(A) of the Dodd-Frank Act requires CFPB to “facilitate the centralized collection of, monitoring of, and response to consumer complaints regarding consumer financial products or services.” The Act also requires CFPB to collect consumer complaint information with prudential regulators, the Federal Trade Commission, and other agencies. To facilitate the collection of complaints, CFPB accepts consumer complaints submitted by members of Congress on behalf of their constituents with the consumer’s express written authorization for the release of personal information. In furtherance of its statutory mandates related to consumer complaints, CFPB uses Government and Congressional Portal Boarding Forms to register users for access to secure, web-based portals. Comments are due 05/28/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-27/pdf/2024-06509.pdf. Federal Register, Vol. 89, No. 60, 03/27/2024, 21244-21245.

FRB Issues Final Financial Market Utilities Rule.

The Board of Governors of the Federal Reserve System (FRB) issued a final rule to amend the requirements relating to operational risk management in Regulation HH, which applies to certain financial market utilities (FMUs) that have been designated as systemically important (designated FMUs) by the Financial Stability Oversight Council (FSOC) under Title VIII of the Dodd-Frank Act. The amendments update, refine, and add specificity to the operational risk management requirements in Regulation HH to reflect changes in the operational risk, technology, and regulatory landscape in which designated FMUs operate. The final rule also adopts specific incident-notification requirements. The final rule is effective 04/15/2024. Designated FMUs must be in compliance with the final rule by 09/11/2024, except for the incident management and notification requirement in §234.3(a)(17)(vi), under Amendatory Instruction 3, with which designated FMUs must be in compliance with by 06/13/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-03-15/pdf/2024-05322.pdf. Federal Register, Vol. 89, No. 52, 03/15/2024, 18749-18767.

Regulatory Spotlight

FRB Announces Final Approval of Information Collections.

FRB announced final approval of an information collection titled, Whistleblower Intake Guide. The guide collects information regarding alleged misconduct or retaliation by an FRB-supervised institution or an affiliated party of such institution. The information collected assists in FRB’s supervision of financial institutions. The notice may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-03-12/pdf/2024-05139.pdf. Federal Register, Vol. 89, No. 49, 03/12/2024, 17849-17850.

FRB announced final approval of an information collection titled, Reporting, Recordkeeping, and Disclosure Requirements Associated with Regulation LL. Regulation LL, Savings and Loan Holding Companies, requires certain large savings and loan holding companies (SLHCs) to submit a capital plan to FRB on an annual basis, request prior approval from FRB under certain circumstances before making a capital distribution, conduct company-run periodic stress tests, report the results of its company-run stress tests to FRB, disclose a summary of the results of such stress tests, and comply with certain other reporting and recordkeeping requirements. Revisions to the collection are applicable 03/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06716.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22144-22145.

FRB announced final approval of an information collection titled, Board Public Website Usability Surveys. FRB uses the surveys to seek input from users or potential users of FRB’s website and social media tools, about FRB’s outreach, and about other communication tools. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-03/ pdf/2024-07093.pdf. Federal Register, Vol. 89, No. 65, 04/03/2024, 23016.

FRB announced final approval of an information collection titled, Government-Administered, General-Use Prepaid Card Survey. The survey collects data from issuers of government-administered, general-use prepaid cards, including information on the prepaid card program, the number of cards outstanding, card funding, purchase transactions, interchange fees, and cardholder fees. FRB uses data from the survey to support an annual report to Congress on the prevalence of use of generaluse prepaid cards and on the interchange and cardholder fees charged with respect to the use of such cards. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-03/pdf/2024-07092.pdf. Federal Register, Vol. 89, No. 65, 04/03/2024, 23016-23017.

FRB announced final approval of an information collection titled, Quarterly Report of Interest Rates on Selected Direct Consumer Installment Loans and the Quarterly Report of Credit Card Plans. FRB collects information on interest rates on loans for new vehicles and loans for other consumer goods and personal expenses from a sample of commercial banks. The data collected helps FRB analyze current household financial conditions and the implications of the conditions for household spending and, as such, the data provide valuable input to the monetary policymaking process. The data are also used to create aggregate statistics on consumer loan terms that are published in some of FRB’s monthly statistical releases. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-03/pdf/2024-07091.pdf. Federal Register, Vol. 89, No. 65, 04/03/2024, 23018-23019.

FRB Seeks Comment on Information Collections.

FRB seeks comment regarding an information collection titled, Structure Reporting and Recordkeeping Requirements for Domestic and Foreign Banking Organizations. The information collection comprises of four reports. FRB proposes revisions to one report, Annual Report of Foreign Banking Organizations, FR Y-7, as discussed in the notice. Comments are due 05/28/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06717.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22145-22147.

FRB seeks comment regarding an information collection titled, Recordkeeping Guidance Associated with Changes in Foreign Investments Made Pursuant to Regulation K. Internationally active U.S. banking organizations are expected to maintain adequate internal records to allow examiners to review compliance with the investment provisions of Regulation K. The information collection is used in connection with recordkeeping requirements. Comments are due 05/28/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06713.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22147-22148.

FRB seeks comment regarding an information collection titled, Interagency Guidance on Managing Compliance and Reputation Risks for Reverse Mortgage Products. In August 2010, the federal banking agencies adopted supervisory

Regulatory Spotlight

guidance regarding reverse mortgage products designed to assist financial institutions with risk management and efforts to ensure that their reverse mortgage lending practices adequately address consumer compliance and reputation risks. The reverse mortgage guidance includes recordkeeping requirements which pertain to the information collection. Comments are due 05/28/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06714.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22148-22149.

FRB seeks comment regarding an information collection titled, International Applications and Prior Notifications under Subpart B of Regulation K. Subpart B of Regulation K implements the International Banking Act (IBA). Under IBA foreign banks are required to obtain prior FRB approval to establish a branch, agency, or representative office in the United States; to establish or acquire ownership or control of a commercial lending company in the United States; or to change the status of an agency or limited branch to a branch in the United States. The information collection is used in the approval process. Comments are due 05/28/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/ pdf/2024-06715.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22149-22150.

FRB seeks comment regarding an information collection titled, Reporting, Recordkeeping, and Disclosure Requirements Associated with Regulation YY. Section 165 of the Dodd-Frank Act authorizes FRB to implement enhanced prudential standards and impose requirements related to stress tests on certain financial companies. The information collection includes reporting, recordkeeping, and disclosure requirements contained in Regulation YY. Comments are due 05/28/2024 The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06718.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22150-22151.

FRB Seeks Members for Community Advisory Council.

FRB seeks members for its Community Advisory Council (CAC). FRB established CAC as an advisory committee on issues affecting consumers and communities. The CAC is composed of a diverse group of experts and representatives of consumer and community development organizations and interests, including from such fields as affordable housing, community and economic development, employment and labor, financial services and technology, small business, and asset and wealth building. CAC members meet semiannually with the members of FRB in Washington, DC to provide a range of perspectives on the economic circumstances and financial services needs of consumers and communities, with a particular focus on the concerns of low- and moderate-income consumers and communities. Applications are due 05/31/2024, to be considered for selection to the CAC for terms beginning 01/01/2025. The notice may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2024-04-01/pdf/2024-06766.pdf. Federal Register, Vol. 89, No. 63, 04/01/2024, 22404-22406.

FDIC Announces Termination of Receiverships.

The Federal Deposit Insurance Corporation (FDIC), as Receiver, for the insured depository institutions listed in the notice, was charged with the duty of winding up the affairs of the former institutions and liquidating all related assets. The Receiver has fulfilled its obligations and made all dividend distributions required by law. The Receiver has further irrevocably authorized and appointed FDIC-Corporate as its attorney-in-fact to execute and file any and all documents that may be required to be executed by the Receiver which FDIC-Corporate, in its sole discretion, deems necessary, including but not limited to releases, discharges, satisfactions, endorsements, assignments, and deeds. Effective on the termination dates listed in the notice, the Receiverships have been terminated, the Receiver has been discharged, and the Receiverships have ceased to exist as legal entities. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-08/ pdf/2024-07371.pdf. Federal Register, Vol. 89, No. 68, 04/08/2024, 24477-24478.

FDIC Seeks Comment on Information Collections.

FDIC seeks comment regarding several information collections. The information collection titled, Interagency Notice of Change in Director or Executive Officer, is used for an insured depository institution or depository institution holding company to notify FDIC of changes to a director or executive officer. The Prompt Correction Action information collection consists of applications required to obtain prior approval to engage in certain activities or when exceptions to restrictions that may otherwise be imposed. Comments are due 04/11/2024. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-03-11/pdf/2024-05115.pdf. Federal Register, Vol. 89, No. 48, 03/11/2024, 17467-17468.

Regulatory Spotlight

FDIC seeks comment regarding an information collection titled, Interagency Bank Merger Application. Section 18(c) of the Federal Deposit Insurance Act requires an insured depository institution (IDI) that wishes to merge or consolidate with any other IDI or, either directly or indirectly, acquire the assets of, or assume liability to pay any deposits made in, any other IDI, to apply for the prior written approval of the responsible agency. The information collection is used for any merger transaction subject to Section 18(c). Comments are due 04/11/2024. The notice may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-03-12/pdf/2024-05166.pdf. Federal Register, Vol. 89, No. 49, 3/12/2024, 17847-17848.

FDIC seeks comment regarding an information collection titled, Recordkeeping Requirements Associated with Real Estate Appraisals and Evaluations. FDIC prescribes appropriate performance standards for real estate appraisals connected with federally-related transactions under its jurisdiction. The information collection is used to show compliance with real estate appraisal and evaluation requirements. Comments are due 05/20/2024. The notice may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-03-20/pdf/2024-05900.pdf. Federal Register, Vol. 89, No. 54, 03/20/2024, 19829.

FDIC seeks comment regarding an information collection titled, Application for Waiver of Prohibition on Acceptance of Brokered Deposits. Section 29 of the Federal Deposit Insurance Act prohibits undercapitalized insured depository institutions from accepting, renewing, or rolling over any brokered deposits. Adequately capitalized institutions may do so with a waiver from FDIC, while well-capitalized institutions may accept, renew, or roll over brokered deposits without restriction. The information collection captures the burden associated with preparing and filing an application for waiver of the prohibition on the acceptance of brokered deposits. Comments are due 05/20/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-20/pdf/2024-05898.pdf. Federal Register, Vol. 89, No. 55, 03/20/2024, 19829-19831.

FDIC seeks comment regarding an information collection titled, Qualified Financial Contracts. The collection consists of recordkeeping requirements for qualified financial contracts held by insured depository institutions in troubled condition. Comments are due 05/24/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-25/ pdf/2024-06257.pdf. Federal Register, Vol. 89, No. 58, 03/25/2024, 20653-20654.

FDIC seeks comment regarding three information collections. The collection titled, Interagency Biographical and Financial Report, is used for a merger, consolidation, or other combining transaction to provide information about the applicants involved in the transactions. The second information collection in the notice is titled, Foreign Banks. The collection is used in connection with relocating an insured state licensed branch of a foreign bank. The third information collection is titled, Liquidity Coverage Ratio: Liquidity Risk Measurement, Standards, and Monitoring (LCR). The LCR rule implements a quantitative liquidity requirement and contains recordkeeping requirements. FDIC outlined in the notice its rationale for requesting comment regarding each information collection. Comments are due 06/03/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-02/pdf/2024-06881.pdf. Federal Register, Vol. 89, No. 64, 04/02/2024, 22724-22726.

OCC Seeks Comment on Information Collections.

The Office of the Comptroller of the Currency (OCC) seeks comment regarding an information collection titled, Investment Securities. Under 12 CFR 1.3(h)(2), a national bank may request a determination that it may invest in an entity that is exempt from registration under section 3(c)(1) of the Investment Company Act if the portfolio of the entity consists exclusively of assets that a national bank may purchase and sell for its own account. A national bank may also request approval to extend the five-year holding period for securities held in satisfaction of debts previously contracted for up to an additional five years. OCC uses the information contained in the requests as a basis for ensuring that a bank’s investment or retention of securities is consistent with its investment authority under applicable law and does not pose unacceptable risk. Comments are due 05/10/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-11/ pdf/2024-05104.pdf. Federal Register, Vol. 89, No. 48, 03/11/2024, 17542-17543.

OCC seeks comment regarding an information collection titled, Bank Activities and Operations, Investment in Bank Premises. The information collection requirements ensure that institutions conduct operations in a safe and sound manner and in accordance with applicable banking law and regulations. The collection provides information for examiners and offers protections for institutions. Comments are due 04/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2024-03-28/pdf/2024-06594.pdf. Federal Register, Vol. 89, No. 61, 03/28/2024, 21660-21661.

Regulatory Spotlight

OCC seeks comment regarding an information collection titled, Examination Survey. OCC provides each national bank, federal savings association, and federal branch or agency with an Examination Survey at the end of its supervisory cycle. The information collection permits banks to access OCC’s supervisory activities. Comments are due 04/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06702.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22230.

HUD Issues Final Rule to Strengthen Section 184 Indian Housing Loan Guarantee Program.

The Department of Housing and Urban Development (HUD) issued a final rule to amend the regulations governing the Section 184 Indian Housing Loan Guarantee Program (Section 184 Program) to strengthen the program by clarifying rules for stakeholders. The final rule adds participation and eligibility requirements. The final rule also clarifies the rules governing Tribal participation in the program, establishes underwriting requirements, specifies rules on the closing and endorsement process, establishes stronger and clearer servicing requirements, establishes program rules governing claims submitted by servicers and paid by HUD, and adds standards governing monitoring, reporting, sanctions, and appeals. The final rule also adds new definitions and makes statutory conforming amendments, including the categorical exclusion of the Section 184 Program in HUD’s environmental review regulations. The final rule is effective 06/18/2024. HUD also issued a correction to the final rule to correct inadvertent errors in §§ 1005.749, 1005.579, and 1005.805 as outlined in the correction. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-20/pdf/2024-05515.pdf. Federal Register, Vol. 89, No. 55, 03/20/2024, 20032-20092. The correction may be viewed at: https://www.govinfo.gov/content/pkg/FR-202403-29/pdf/2024-06676.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22083-22084.

HUD Releases Administrative Actions of Mortgagee Review Board.

HUD issued a notice which advises of the cause and description of administrative actions taken by HUD’s Mortgagee Review Board against Federal Housing Administration (FHA) approved mortgagees from 10/01/2022 through 09/30/2023, where settlement agreements have been reached, civil money penalties were imposed, or FHA participation was terminated as of 12/09/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06735. pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22168-22174.

HUD Seeks Comment on HECM Insurance Application for Origination of Reverse Mortgages.

HUD seeks comment regarding an information collection titled, Home Equity Conversion Mortgage (HECM) Insurance Application for the Origination of Reverse Mortgages and Related Documents. The HECM program is Federal Housing Administration’s (FHA) reverse mortgage program that enables seniors who have equity in their homes to withdraw a portion of the accumulated equity. The information collection is used to screen mortgage insurance applications. Comments are due 04/26/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-27/pdf/2024-06506. pdf. Federal Register, Vol. 89, No. 60, 03/27/2024, 21262-21263.

FEMA Announces Financial Assistance/Subsidy Arrangement for WYO Companies.

The Federal Emergency Management Agency (FEMA) announced the Fiscal Year (FY) 2025 Financial Assistance/Subsidy Arrangement (Arrangement) for private property insurers interested in participating in the National Flood Insurance Program’s (NFIP’s) Write Your Own (WYO) Program. Under the National Flood Insurance Act, FEMA may use insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations as fiscal agents of the United States to help it carry out the NFIP. Pursuant to the authority, FEMA enters into a standard Arrangement with private sector property insurers, also known as WYO companies, to sell NFIP flood insurance policies under their own names and adjust and pay claims arising under the Standard Flood Insurance Policy (SFIP). Interested insurers must submit intent to subscribe or re-subscribe to the Arrangement by 07/01/2024. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-04-01/pdf/2024-06805.pdf. Federal Register, Vol. 89, No. 63, 04/01/2024, 22420-22429.

FEMA Issues Final Flood Hazard Determinations.

FEMA issued a notice which identifies communities in the states of Indiana, Minnesota, and Ohio, where flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps

Regulatory Spotlight

(FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final. The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in FEMA’s National Flood Insurance Program (NFIP). The date of 06/20/2024, has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-03-18/pdf/2024-05671.pdf. Federal Register, Vol. 89, No. 53, 03/18/2024, 19331-19334.

FEMA issued a notice which identifies communities in the state of Ohio, where flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final. The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in FEMA’s National Flood Insurance Program (NFIP). The date of 07/03/2024, has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community. The notice may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-03-18/pdf/2024-05672.pdf. Federal Register, Vol. 89, No. 53, 03/18/2024, 19334-19335.

FEMA issued a notice which identifies communities in the states of Kentucky, Michigan, Minnesota, Ohio, and Wisconsin, where flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final. The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in FEMA’s National Flood Insurance Program (NFIP). The date of 07/31/2024, has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-01/pdf/2024-06781.pdf. Federal Register, Vol. 89, No. 63, 04/01/2024, 22429-22433.

FEMA issued a notice which identifies communities in the states of Iowa, Minnesota, and Wisconsin, where flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final. The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in FEMA’s National Flood Insurance Program (NFIP). The date of 07/17/2024, has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community. The notice may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-04-01/pdf/2024-06783.pdf. Federal Register, Vol. 89, No. 63, 04/01/2024, 22433-22436.

FEMA Issues Notices of Changes in Flood Hazard Determinations.

FEMA issued a notice which lists communities in the states of Indiana, Iowa, Michigan, Minnesota, and Ohio, where the addition or modification of Base Flood , Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or the regulatory floodway (hereinafter referred to as flood hazard determinations), as shown on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports, prepared by FEMA for each community, is appropriate because of new scientific or technical data. The FIRM, and where applicable, portions of the FIS report, have been revised to reflect the flood hazard determinations through issuance of a Letter of Map Revision (LOMR), in accordance with federal regulations. The flood hazard determinations will be finalized on the dates listed in the table in the notice and revise the FIRM panels and FIS report in effect prior to the determination for the listed communities. From the date of the second publication of notification of the changes in a newspaper of local circulation, any person has 90 days in which to request through the community that the Deputy Associate Administrator for Insurance and Mitigation reconsider the changes. The flood hazard determination information may be changed during the 90-day period. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-14/pdf/2024-05353.pdf. Federal Register, Vol. 89, No. 51, 03/14/2024, 18656-18659.

Regulatory Spotlight

FEMA Issues Proposed Flood Hazard Determinations.

FEMA seeks comment regarding proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for communities in the state of Indiana, as listed in the table in the notice. The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP). Comments are due 06/12/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-14/ pdf/2024-05354.pdf. Federal Register, Vol. 89, No. 51, 03/14/2024, 18664-18665.

FinCEN Seeks Comment on CIP TIN Collection Requirements.

The Financial Crimes Enforcement Network (FinCEN), in consultation with the federal banking supervisory agencies, seeks information and comment regarding the Customer Identification Program (CIP) rule requirement for banks to collect a taxpayer identification number (TIN), among other information, from a customer who is a U.S. person, prior to opening an account. FinCEN seeks information to understand the potential risks and benefits, as well as safeguards that could be established, if banks were permitted to collect partial social security number (SSN) information directly from the customer for U.S. individuals and subsequently use reputable third-party sources to obtain the full SSN prior to account opening. FinCEN seeks information to evaluate and enhance its understanding of current industry practices and perspectives related to the CIP rule’s TIN collection requirement, and to assess the potential risks and benefits associated with a change to that requirement. Comments are due 05/28/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-202403-29/pdf/2024-06763.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22231-22234.

Agencies Extend Comment Period for SECURE 2.0 Reporting and Disclosure Proposal.

The Internal Revenue Service (IRS) and Department of Labor (DOL) (collectively, the agencies) announce the extension of the comment period for the request of information titled, SECURE 2.0 Section 319, Effectiveness of Reporting and Disclosure Requirements, which was published in the Federal Register on 01/23/2024. Specifically, SECURE 2.0 Section 319 includes a wide-ranging directive to the agencies to review existing reporting and disclosure requirements under the Internal Revenue Code (Code) and the Employee Retirement Income Security Act (ERISA) for retirement plans. The agencies are directed to then report to Congress on the effectiveness of the reporting and disclosure requirements, including recommendations to consolidate, simplify, standardize, and improve such requirements. The comment period has been extended. Comments are now due 05/22/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR2024-04-03/pdf/2024-07018.pdf. Federal Register, Vol. 89, No. 65, 04/03/2024, 22971-22972.

IRS Amends Definition of Short-Term, Limited-Duration Insurance.

The Internal Revenue Service (IRS) issued a final rule to amend the definition of short-term, limited-duration insurance, which is excluded from the definition of individual health insurance coverage under the Public Health Service Act. The final rule amends the regulations regarding the requirements for hospital indemnity or other fixed indemnity insurance to be considered an excepted benefit in the group and individual health insurance markets. The final rule is effective 06/17/2024 The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-03/pdf/2024-06551.pdf. Federal Register, Vol. 89, No. 65, 04/03/2024, 23338-23421.

IRS Issues Proposed Rule on Charitable Remainder Annuity Trust Listed Transactions.

IRS issued a proposed rule that would identify certain charitable remainder annuity trust (CRAT) transactions and substantially similar transactions as listed transactions, a type of reportable transaction. Material advisors and certain participants in the listed transactions would be required to file disclosures with IRS and would be subject to penalties for failure to disclose. The proposed rule affects participants in the transactions as well as material advisors but provide that certain organizations whose only role or interest in the transaction is as a charitable remainderman will not be treated as participants in the transaction or as parties to a prohibited tax shelter transaction subject to excise taxes and disclosure requirements. Comments are due 05/24/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-03-25/pdf/2024-06156.pdf. Federal Register, Vol. 89, No. 58, 03/25/2024, 20569-20577.

Regulatory Spotlight

IRS Seeks Comment on Information Collections.

IRS seeks comment regarding an information collection titled, Carryover of Passive Activity Losses and Credits and At-Risk Losses to Bankruptcy Estates of Individuals. The information collection relates to individual taxpayers who file bankruptcy petitions under chapter 7 or chapter 11 of Title 11 of the United States Code and have passive activity losses and credits under Code section 469 or losses under Code section 465. Comments are due 05/13/024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-13/pdf/2024-05334.pdf. Federal Register, Vol. 89, No. 50, 03/13/2024, 18484-18485.

IRS seeks comment regarding an information collection titled, Adjustments to Basis of Stock and Indebtedness to Shareholders of S-Corporations and Treatment of Distributions by S-Corporations to Shareholders. The collection pertains to passthrough of items of an S-Corporation to its shareholders, the adjustments to the basis of stock of the shareholders, and the treatment of distributions by an S-Corporation. Comments are due 05/24/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-25/pdf/2024-06182.pdf. Federal Register, Vol. 89, No. 58, 03/25/2024, 20762-20763.

IRS seeks comment regarding an information collection titled, Application for Determination of Employee Stock Ownership Plan (ESOP). The Internal Revenue Code section 404(a) allows employers an income tax deduction for contributions to their qualified deferred compensation plans. The information collection is used to request an IRS determination letter about whether the plan is qualified under Code section 409 or 4975(e)(7). Comments are due 05/24/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-25/pdf/2024-06180.pdf. Federal Register, Vol. 89, No. 58, 03/25/2024, 20763.

FHFA Creates Exception to Restrictions on Private Transfer Fee Covenants for Certain Loans.

The Federal Housing Finance Agency (FHFA) issued a final rule to amend its regulation that restricts its regulated entities, Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises), and the Federal Home Loan Banks (Banks), from purchasing, investing in, accepting as collateral, or otherwise dealing in mortgages on properties encumbered by certain types of private transfer fee covenants (PTFCs), or related securities, subject to certain exceptions. The final rule establishes an additional exception that authorizes the Enterprises and Banks to engage in such transactions if the loans meet the shared equity loan program requirements for Resale Restriction Programs in FHFA’s Duty to Serve Underserved Markets Regulation, without regard to any household income limit. The final rule is effective 05/13/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-03-12/pdf/2024-05194.pdf. Federal Register, Vol. 89, No. 49, 03/12/2024, 17711-17716.

FHFA Orders Regulated Entities to Report Stress Testing Results.

FHFA ordered regulated entities to report stress testing results. Section 165(i)(2) of the Dodd-Frank Act, as amended by section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), requires certain financial companies with total consolidated assets of more than $250 billion, and which are regulated by a primary Federal financial regulatory agency, (Regulated Entities) to conduct periodic stress tests to determine whether the companies have the capital necessary to absorb losses as a result of severely adverse economic conditions. FHFA ordered each Regulated Entity to report to FHFA and the Board of Governors of the Federal Reserve System (FRB) the results of the stress testing. The order is applicable 03/13/2024. The order can be viewed: https://www.govinfo.gov/content/pkg/FR-2024-03-20/pdf/202405757.pdf. Federal Register, Vol. 89, No. 55, 03/20/2024, 19731.

SBA Issues Peg Rate.

The Small Business Administration (SBA) publishes an interest rate called the optional “peg” rate on a quarterly basis. The rate is a weighted average cost of money to the government for maturities similar to the average SBA direct loan. The rate may be used as a base rate for guaranteed fluctuating interest rate SBA loans. The rate will be 4.25 percent for the April-June quarter of FY 2024. Pursuant to 13 CFR 120.921(b), the maximum legal interest rate for any third party lender’s commercial loan which funds any portion of the cost of a 504 project shall be 6% over the Prime rate or, if that exceeds the maximum interest rate permitted by the constitution or laws of a given state, the maximum interest rate will be the rate permitted by the constitution or laws of the given state. The notice may be viewed at: The notice may be viewed at:

Regulatory Spotlight

https://www.govinfo.gov/content/pkg/FR-2024-04-03/pdf/2024-06981.pdf. Federal Register, Vol. 89, No. 65, 04/03/2024, 23078.

SBA Issues Correction to 8(a) Business Development Program.

SBA issued a correction to a technical error in the definition of substantial bundling that appeared in the Federal Register on 04/27/2023, for the final rule titled, Ownership and Control and Contractual Assistance Requirements for the 8(a) Business Development Program. The definition of substantial bundling, as it relates to Blanket Purchase Agreements (BPAs), improperly limited substantial bundling to BPAs entered against a U.S. General Services Administration (GSA) Schedule Contract. The notice removes that limitation so that the definition of substantial bundling applies to all BPAs and not only BPAs entered against GSA Schedule Contracts. The correction is effective 03/28/2024. The correction may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-28/pdf/2024-05977.pdf. Federal Register, Vol. 89, No. 61, 03/28/2024, 21431-21432.

SBA Seeks Comment on Transaction Report on Loan Serviced by Lender.

SBA seeks comment regarding an information collection titled, Transaction Report on Loans Serviced by Lender. The information collection is only used by lenders for loans that have been purchased by SBA and are being serviced by approved SBA lending partners. The lenders use the collection to report loan payment data to SBA on a monthly basis. The purpose of the reporting is to show the remittance due SBA on a loan serviced by participating lending institutions and to update the loan receivable balances. Comments are due 05/06/224. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-04-05/pdf/2024-07229.pdf. Federal Register, Vol. 89, No. 67, 04/05/2024, 24077.

SBA Seeks Nominations for Small Business Lending Advisory Council.

SBA seeks nominations of individuals to the Small Business Lending Advisory Council. The council advises SBA on a number of matters as outlined in the notice. Nominations will be accepted through 05/10/2024, on a rolling basis. SBA will retain nominations received after this date for consideration should additional vacancies occur. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-08/pdf/2024-07325.pdf. Federal Register, Vol. 89, No. 68, 04/08/2024, 24556-24557.

FCA Issues Final Rule on Risk-Weighting of High Volatility CRE Exposures.

The Farm Credit Administration (FCA) issued a final rule to amend its regulatory capital requirements for Farm Credit System (System) banks and associations to define and establish a risk weight for High Volatility Commercial Real Estate (HVCRE) exposures. The final rule is meant to update capital requirements to reflect the increased risk characteristics exposures to certain acquisition, development or construction (ADC) loans pose to System institutions, and ensure the System’s capital requirements are comparable to the Basel Framework issued by the Basel Committee on Banking Supervision and the standardized approach the Federal banking regulatory agencies have adopted, with deviations as appropriate to accommodate the different regulatory, operational, and credit considerations of FCA. The final rule is effective 01/01/2025. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-10/pdf/2024-07060.pdf. Federal Register, Vol. 89, No. 70, 04/10/2024, 25117-25130.

FCIC Seeks Comment on Standard Reinsurance Information Collection.

The Federal Crop Insurance Corporation (FCIC) seeks comment regarding an information collection associated with the Standard Reinsurance Agreement and Appendices I, II and IV administered by FCIC. Appendix III is excluded because it contains the Data Acceptance System requirements. FCIC is authorized to provide reinsurance to insurers approved by FCIC that insure producers of any agricultural commodity under one or more plans acceptable to FCIC. The information collection is used in connection with approving reinsurance requests. Comments are due 05/10/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-11/pdf/2024-05057.pdf. Federal Register, Vol. 89, No. 48, 03/11/2024, 17372-17374.

Regulatory Spotlight

RBC Issues NOFO for Rural Cooperative Development Grant Program.

The Rural Business-Cooperative Service (RBC) issued a notice of funding opportunity (NOFO) for grants under the Rural Cooperative Development Grant (RCDG) program for fiscal year (FY) 2024. The primary objective of the RCDG program is to improve the economic condition of rural areas by helping individuals and businesses start, expand, or improve rural cooperatives and mutually owned businesses through Cooperative Development Centers. See the NOFO for application details and deadlines. The NOFO may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-04/pdf/202407136.pdf. Federal Register, Vol. 89, No. 66, 04/04/2024, 23551-23560.

RUS to Consider Consumer Oriented Operating Loans.

The Rural Utilities Service (RUS) announced it will be utilizing its longstanding statutory authority to consider operating loans under an initiative known as Consumer Oriented Operating Loans (COOL). COOL funding may be approved at the discretion of RUS to finance operations for current system borrowers to meet financing needs where the borrower faces hardship circumstances involving unique, transitory, or exigent conditions. The notice is applicable 03/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-29/pdf/2024-06719.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22117-22118.

RHS Changes Reserve Account Administration for MFH Direct Loan Programs.

The Rural Housing Service (RHS) issued a final rule to update its regulations and implement changes related to the administration of property reserve accounts under the Multi-Family Housing, Rural Rental Housing, and Farm Labor Housing programs. The final rule will increase flexibility in project refinancing for additional capital improvements. The final rule is effective 04/17/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-18/ pdf/2024-05571.pdf. Federal Register, Vol. 89, No. 53, 03/18/2024, 19225-19228.

RHS Amends Section 538 Guaranteed Rural Rental Housing Program.

RHS issued a final rule to amend the current regulation for the Multifamily Family Housing Section 538 Guaranteed Rural Rental Housing Program. The final rule will align the current criteria of priority projects with the Housing Act of 1949 while improving the customer experience with more timely and proactive responses to housing market demands and RHS priorities. The final rule is effective 04/18/2024. The final rule may be viewed: https://www.govinfo.gov/content/pkg/FR2024-03-19/pdf/2024-05756.pdf. Federal Register, Vol. 89, No. 54, 03/19/2024, 19497-19499.

RHS Requires Advanced Notice of Lease Termination or Eviction.

RHS issued a final rule to amend its regulations for the Multi-Family Housing Direct Loans and Grants Programs to require that Section 515, 514, and 516 Multi-Family Housing program borrowers provide tenants with written notification a minimum of 30 days prior to a lease termination or eviction action for nonpayment of rent, as statutorily required by the Coronavirus Aid, Relief, and Economic Security Act, (CARES Act). The 30-day notice requirement applies regardless of the existence of a presidentially declared national emergency or the availability of emergency rental assistance funds. The final rule requires the notice to include instructions on how a tenant can cure the nonpayment to avoid eviction, and how to recertify household income. The final rule is effective 04/24/2024. See the final rule for mandatory compliance dates. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-25/pdf/2024-06245.pdf. Federal Register, Vol. 89, No. 58, 03/25/2024, 20539-20543.

RHS Issues NOSA for Off-Farm Labor Housing Loans.

RHS announced a notice soliciting applications (NOSA) for subsequent Section 514 Off-Farm Labor Housing (Off-FLH) loans and subsequent Section 516 Off-FLH grants to improve, repair, or make modifications to existing Off-Farm Labor Housing Properties for fiscal year 2024. The NOSA describes the method used to distribute funds, application process, and submission requirements. The NOSA may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-18/pdf/202405505.pdf. Federal Register, Vol. 89, No. 53, 03/18/2024, 19400-19468.

Regulatory Spotlight

RHS Proposed Rule on Use of Credit Reports for Multifamily Housing Program.

RHS proposed to update its regulations on how credit reports are obtained for the purposes of determining eligibility and feasibility for Multifamily Housing (MFH) Programs. In particular, RHS proposes to change the process by which credit reports are obtained to determine credit worthiness, eligibility, and feasibility for applicants and borrowers for MFH funding, transfers, and servicing actions. In lieu of the applicant submitting the fee, RHS will require the applicant to provide the credit report(s). It is RHS’ expectation that the regulation update for obtaining borrower credit reports will align RHS with current industry practices and create an efficiency for applicants and borrowers by streamlining the application process. Comments are due 05/28/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-0329/pdf/2024-06596.pdf. Federal Register, Vol. 89, No. 62, 03/29/2024, 22094-22097.

RHS Seeks Comment on Real Estate Title Clearance and Loan Closing Collection.

RHS seeks comment regarding an information collection titled, Real Estate Title Clearance and Loan Closing. Title clearance is required to assure RHS that a loan is legally secured and has the required lien priority. RHS collects information to assure that those participating in an RHS program remain eligible to proceed with loan closing and to ensure that loans are made with Federal funds are legally secured. The information required is used to verify that the required lien position has been obtained and to ensure the program is administered in a manner consistent with legislative and administrative requirements. If not collected, RHS would be unable to determine if the loan is adequately and legally secure. Comments are due 05/20/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-03-19/pdf/2024-05758.pdf. Federal Register, Vol. 89, No. 54, 03/19/2024, 19568-19569.

CCC Seeks Comment on Regional Agricultural Promotion Program.

The Commodity Credi Corporation (CCC) seeks comment regarding an information collection titled, Regional Agricultural Promotion Program (RAPP). Under RAPP, information is gathered from applicants to the program and from existing program participants that have been approved to conduct market promotion activities that promote U.S. agricultural commodities in foreign markets, including activities that address existing or potential non-tariff barriers to trade. The information collected will be used primarily to manage, plan, evaluate, and account for government resources. Comments are due 06/04/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-05/pdf/2024-07204. pdf. Federal Register, Vol. 89, No. 67, 04/05/2024, 23963.

Agencies Issue Final Rule to Amend Form for Confidential Reporting.

The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) (collectively, the agencies) issued a final rule to adopt amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds, including those that also are registered with CFTC as a commodity pool operator or commodity trading adviser. The amendments are designed to enhance the Financial Stability Oversight Council’s ability to monitor systemic risk as well as bolster SEC’s regulatory oversight of private fund advisers and investor protection efforts. In connection with the amendments to Form PF, SEC has amended a rule under the Investment Advisers Act to revise instructions for requesting a temporary hardship exemption. The final rule is effective 03/12/2025. See section II.F of the final rule for compliance dates. The final rule may be viewed: https://www.govinfo.gov/content/pkg/FR-2024-03-12/ pdf/2024-03473.pdf. Federal Register, Vol. 89, No. 49, 3/12/2024, 17984-18161.

CFTC Seeks Comment on Conflict of Interest Standard Proposal.

The Commodity Futures Trading Commission (CFTC) proposed new rules and amendments to existing regulations for designated contract markets (DCMs) and swap execution facilities (SEFs) that would establish governance and fitness requirements with respect to market regulation functions, as well as related conflict of interest standards. The proposed rule includes minimum fitness standards, requirements for identifying, managing, and resolving conflicts of interest, and structural governance requirements to ensure that SEF and DCM governing bodies adequately incorporate an independent perspective. The proposal addresses requirements relating to the following: composition requirements for board of directors and disciplinary panels, limitations on the use and disclosure by employees and certain others of material non-public information, requirements relating to Chief Regulatory Officers, Chief Compliance Officers, and Regulatory Oversight Committees, and notification of certain changes in the ownership or corporate or organizational structure of a SEF or DCM.

Regulatory Spotlight

Comments are due 04/22/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-0319/pdf/2024-04938.pdf. Federal Register, Vol. 89, No. 54, 03/19/2024, 19646-19726.

CFTC Seeks Comment on Large Trader Reporting Information Collection.

CFTC seeks comment regarding an information collection titled, Large Trader Reporting for Physical Commodity Swaps. Part 20 of CFTC’s regulations (Reporting Rules) require clearing organizations and any persons that are “reporting entities” to file swaps position data with CFTC. The Reporting Rules collect clearing member reports from clearing organizations. The Reporting Rules also require position reports from reporting entities for principal and counterparty positions in cleared and uncleared physical commodity swaps. For purposes of part 20, reporting parties are required to submit data on positions on a futures equivalent basis so as to allow CFTC to assess a trader’s market impact across differently structured but linked derivatives instruments and markets. The information collection is used in connection with the reporting requirements of Part 20. Comments are due 05/17/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-0318/pdf/2024-05718.pdf. Federal Register, Vol. 89, No. 53, 03/18/2024, 19298-19299.

SEC Issues Final Climate-Related Investor Disclosure Rule.

The Securities and Exchange Commission (SEC) issued a final rule to adopt amendments to rules under the Securities Act and Securities Exchange Act to require registrants to provide certain climate-related information in their registration statements and annual reports. The final rule will require information about a registrant’s climate-related risks that have materially impacted or are reasonably likely to have a material impact on, its business strategy, results of operations, or financial condition. In addition, under the final rule, certain disclosures related to severe weather events and other natural conditions will be required in a registrant’s audited financial statements. The final rule is effective 05/28/2024. See section II.O for further information on transition to the final rule. The final rule may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2024-03-28/pdf/2024-05137.pdf. Federal Register, Vol. 89, No. 61, 03/28/2024, 21668-21921.

SEC Adopts Final Share Repurchase Disclosure Modernization Rule.

SEC issued a final rule to adopt technical amendments to various rules and forms under the Securities Exchange Act and the Investment Company Act to reflect a Federal court’s vacatur of rule amendments that SEC adopted on 05/03/2023, to modernize and improve disclosure about repurchases of an issuer’s equity securities that are registered under the Exchange Act. The rule is referred to as The Repurchase Rule. The court’s vacatur of the Repurchase Rule was effective as of 12/19/2023, and had legal effect of reverting to the rule and forms that existing prior to the effective date of the Repurchase Rule. The technical amendments revise the Code of Federal Regulations to reflect the court’s vacatur of the Repurchase Rule. The final rule is effective 04/08/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-202404-08/pdf/2024-06187.pdf. Federal Register, Vol. 89, No. 68, 04/08/2024, 24372-24378.

SEC Exempts Certain Investment Advisors Operating Through the Internet.

SEC adopted amendments to the rule under the Investment Advisers Act that exempts certain investment advisers that provide advisory services through the internet (internet investment advisers) from the prohibition on SEC registration, as well as related amendments to Form ADV. The amendments are designed to modernize the rule’s conditions to account for the evolution in technology and the investment advisory industry since the initial adoption of the rule in 2002. The final rule is effective 07/08/2024. See section II.E of the final rule for mandatory compliance dates. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-09/pdf/2024-06865.pdf. Federal Register, Vol. 89, No. 69, 04/09/2024, 24693-24713.

DOL Issues Correction to Semiannual Regulatory Agenda.

The Department of Labor (DOL) published the regulatory flexibility agenda of its semiannual regulatory agenda in the Federal Register on 02/09/2024. The listing of all of DOL’s regulatory flexibility items was inadvertently omitted from the publication. DOL has published a correction. A list may be found in the correction. The notice may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2024-03-14/pdf/2024-05428.pdf. Federal Register, Vol. 89, No. 51, 03/14/2024, 18744-18748.

Regulatory Spotlight

VA Revises Loss-Mitigation Terms.

The Department of Veteran Affairs (VA) issued a final rule to rename and clarify certain loss-mitigation terms used in VA’s regulations. VA made the changes to align the names and definitions with the general use in the housing finance industry. VA believes the revisions will help avoid confusion and enable servicers and veterans to address loan defaults more quickly and effectively. The final rule is effective 05/10/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-04-10/pdf/2024-07113.pdf. Federal Register, Vol. 89, No. 70, 04/10/2024, 25142-25144.

VA Seeks Comment on Loan Guaranty Servicing Collection.

VA seeks comment regarding an information collection titled, Loan Guaranty Servicing Procedures for Holders and Servicers of VA Guaranteed Loans. The VA Loan Guaranty program guarantees loans made by private lenders to veterans for the purchase, construction, and refinancing of homes owned and occupied by veterans. Under 38 CFR 36.4350, a holder of a loan guaranteed or insured by VA is required to develop and maintain a loan servicing program. The information collection is used in connection with the program requirements. Comments are due 05/28/2024. The notice may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2024-03-26/pdf/2024-06365.pdf. Federal Register, Vol. 89, No. 59, 03/26/2024, 21176.

NCUA Seeks Comment on Information Collections.

The National Credit Union Administration (NCUA) seeks comment regarding information collections titled, Truth in Lending (TILA), Regulation Z and Liquidity and Contingency Funding Plans. Regulation Z contains several provisions which impose information collection requirements. NCUA seeks to revise the TILA information collection as described in the notice. The liquidity information collection is used to ensure federally insured credit unions are maintaining appropriate liquidity levels for the amount of balance sheet risk exposure and help prevent losses to credit unions and the National Credit Union Share Insurance Fund. Comments are due 05/02/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR2024-04-02/pdf/2024-06953.pdf. Federal Register, Vol. 89, No. 64, 04/02/2024, 22749-22750.

NCUA seeks comment regarding an information collection titled, Loans to Members and Lines of Credit to Members. Section 107(5) of the Federal Credit Union Act authorizes Federal Credit Unions (FCU) to make loans to members and issue lines of credit (including credit cards) to members. NCUA uses the information collections to ensure compliance with applicable regulations and laws, and to assess the safety and soundness of the credit union’s lending program. NCUA also seeks comment regarding an information collection titled, Joint Standards for Assessing the Diversity Policies and Practices. The information collection is used in connection with section 342 of the Dodd-Frank Act which instructed each agency to develop standards for assessing the diversity policies and practices of entities regulated by each agency. The information collection is used in connection with NCUA’s policy and practices. Comments are due 06/10/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-09/pdf/2024-07464.pdf. Federal Register, Vol. 89, No. 69, 04/09/2024, 24868-24869.

NCUA Issues NOFO for Community Development Revolving Loan Fund.

NCUA issued a notice of funding opportunity (NOFO) to announce the availability of technical assistance grants for lowincome-designated credit unions through the Community Development Revolving Loan Fund (CDRLF). The CDRLF provides financial support in the form of loans and technical assistance grants that help credit unions support the communities in which they operate. See the NOFO for application details and deadlines. The NOFO may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-04-02/pdf/2024-06962.pdf. Federal Register, Vol. 89, No. 64, 04/02/2024, 22745-22749.

Compliance Notes

FinCEN issued a notice on the use of counterfeit U.S. passport cards to perpetrate identity theft and fraud schemes at financial institutions. The notice provides an overview of typologies associated with U.S. passport card fraud, highlights select red flags to assist in identifying and reporting suspicious activity, and reminds financial institutions of the reporting requirements under BSA. The notice may be viewed at: https://www.fincen.gov/sites/default/files/shared/FinCEN_Notice_ Counterfeit_US_Passport_FINAL508.pdf

Fannie Mae and Freddie Mac issued guidance regarding the treatment of property seller-paid buyer agent fees under their interested party contribution requirements. The guidance was issued due to a recent court settlement involving the National Association of Realtors regarding how realtors’ commissions are apportioned. The Fannie Mae and Freddie Mac guidance may be viewed at the following links, respectively: https://singlefamily.fanniemae.com/media/38706/ display?utm_source and https://guide.freddiemac.com/ci/okcsFattach/get/1009237_7

FTC warned of scammers taking advantage of news coverage of student loan forgiveness programs. Scammers have been calling consumers to say they are affiliated with Federal Student Aid (FSA) or the Department of Education, and that they are following up on the consumer’s eligibility for a new loan forgiveness program. The callers may have information about the consumer’s loan, including the balance or account number but are looking for upfront fee and information like the consumer’s FSA ID login information, which can be used by the scammer to cut the consumer off from their loan servicer or steal the consumer’s identity. The alert can be viewed at: https://consumer.ftc.gov/consumeralerts/2024/04/scammers-follow-news-about-student-loan-forgiveness

FHFA and the Conference of State Bank Supervisors have entered into a formal agreement designed to facilitate information sharing with respect to nonbank mortgage companies. The memorandum of understanding establishes substantive information sharing protocols between state financial regulators and FHFA, improves the ability to coordinate on market developments, and identify and mitigate risks. State financial regulators are the primary regulators of nonbank mortgage companies. The announcement may be viewed at: https://www.fhfa.gov//Media/PublicAffairs/Pages/StateFinancial-Regulators-and-FHFA-Enter-Into-Mortgage-Market-Information-Sharing-Agreement.aspx

CFPB released its 2023 Consumer Response Annual Report which shows a continued increase in credit or consumer reporting complaints, with more than one million complaints sent to the three nationwide consumer reporting companies Equifax, Experian, and TransUnion. Consumers also raised issues about fraudulent activity in nearly every product category, including credit or consumer reporting, debt collection, checking or savings accounts, and credit cards. The report may be viewed at: https://files.consumerfinance.gov/f/documents/cfpb_2022-consumer-response-annualreport_2023-03.pdf

CFPB also released a report, Trends in Discount Points Amid Rising Interest Rates, in which CFPB was critical of the amount of discount points paid by consumers for mortgage loans. Financial institutions should be aware of the report as it provides insight of a new focus of CFPB and its intent to classify disclosed costs as “junk fees.” The report may be viewed at: https://www.consumerfinance.gov/data-research/research-reports/data-spotlight-trends-in-discount-points-amidrising-interest-rates/

FRB’s most recent release of Consumer Compliance Outlook focuses on resources to combat increased check fraud. FRB recognizes that check fraud is a top concern of bankers given that in 2023, FinCEN noted that financial institutions reported 680,000 SARs for possible check fraud in 2022, a significant increase from 2021. FRB shared resources and sound practices to help financial institutions respond to check fraud. The Outlook may be viewed at: https://www. consumercomplianceoutlook.org/2024/first-issue/compliance-spotlight/

FRB has also released its latest Beige Book which highlights current economic conditions across the 12 Federal Reserve Districts. It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from each District’s sources. Reports are published eight times per year. The latest Beige Book may be viewed at: https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20240417.pdf

Are you a WBA memeber with a legal question?

Contact the WBA Legal Call Program

wbalegal@wisbank.com | 608-441-1200 | wisbank.com/resources/compliance

This WBA member-exclusive program provides information in response to compliance questions.

www.wisbank.com/resources/compliance

With all the changing regulations bankers face today, the Wisconsin Bankers Association offers a variety of resources to help you perform your job at the highest level:

• Recent WBA Compliance Journals

• WBA Compliance Corner videos

• Frequently Asked Questions to the WBA Legal Call Program

• Guides and Toolkits

• Information About Compliance Services and Training

May

June

July

August

15 Chair’s Member Appreciation Golf Outing

Wisconsin Dells

September

10–11 Secur-I.T. Conference

Wisconsin Dells – team pricing available

18 FIPCO Software & Compliance Forum: Loan & Mortgage

Wisconsin Dells or virtual

September

23–24 Management Conference

Green Bay – team pricing available

TBD IRA Workshops

Location(s) TBD – Essentials and Advanced sessions

October

8–10 Commercial Lending School

Madison – $895/attendee

10–11 Family-owned & Closely Held Bank Strategic Retreat

Madison

15–17 Deposit Compliance School

Madison or virtual – $795/attendee

17 Regulation E Workshop

Madison or virtual – $275/attendee

17 Directors Summit

Madison

22 Community Bankers for Compliance (CBC) –Session IV

Virtual half-day – annual membership/pricing varies

21–22 Supervisor Boot Camp

Madison – $535/attendee

TBD BSA/AML Workshop

One-day workshop, location(s) TBD

TBD Principles of Banking

Two-day sessions, location(s) TBD – $550/attendee

KEY: Color-Coded Event Descriptions

Conferences/Summits – One or more days, based on hot topics, industry news and best practices, scheduled time for peer networking

Schools/Boot Camps – Focused on a particular area of banking, allowing for a deep dive into that focused area over the course of two to six days

Workshops/Seminars – One-day programs, sometimes in multiple locations, focused on a specific topic or area of banking.

WBA-Hosted Webinars – Two-hour webinars instructed with a particular focus on Wisconsin state law and rules.

Other Events