December 2022 Compliance Journal

Compliance Journal December 2022

Special Focus

Wisconsin Updates its Limited Partnership and Limited Liability Company Laws

Under 2021 Wisconsin Act 258, Wisconsin’s Uniform Limited Partnership Act (Ch. 179) and the Uniform Limited Liability Company Act (Ch. 183) have been updated to reflect recent revisions to the uniform laws Wisconsin’s existing laws were based upon.

The revisions affect the business operations of a limited partnership and limited liability company (LLC) and duties owed amongst partners to a limited partnership and amongst members and managers to an LLC. Revisions also affect the content of filings with the Wisconsin Department of Financial Institutions (WDFI), entity dissolutions, and other business activities.

The changes do not have a direct impact on existing, common bank procedures used to establish a deposit or lending relationship or to complete bank customer due diligence (CDD) and customer identification program (CIP) procedures. Existing bank policies and procedures can continue as is further discussed below.

Act 258 has a phased-in effective date. The changes made by Act 258 apply to a limited partnership or LLC formed on or after January 1, 2023. The changes also apply on January 1, 2023, to a limited partnership or LLC formed before this date unless the limited partnership or LLC elect to be governed by the existing law applicable before enactment of Act 258. Limited partnerships or LLCs formed before January 1, 2023, also have the option to elect to be governed by Act 258 prior to January 1, 2023

Each limited partnership and LLC in existence at the time of enactment of Act 258 need determine whether to follow existing law or be wrapped into the revised law. To be subject to the revisions made by Act 258, the limited partnership or LLC need do nothing; the new law will automatically apply to the limited partnership and LLC on January 1. Some limited partnerships and LLCs with a more complex and robust partnership agreement or operating agreement may desire to be governed by the old law. If this is the case, the limited partnership or LLC need file a Statement of Nonapplicability with WDFI by December 31, 2022, to remain subject to existing law. If an existing limited partnership or LLC sought to be subject to the new law prior to the January effective date, the entity would have filed a Statement of Applicability with WDFI.

The following is a summary of law changes regarding limited partnerships and LLCs as a result of Act 258.

Limited Partnership

Background

Wisconsin first adopted its Uniform Limited Partnership Act in 1919. The law was revised in 1983 to adopt the Revised Uniform Limited Partnership Act, with modifications, and then again in 1985. Act 258 repeals and recreates Wisconsin’s limited partnership law to adopt the Revised Uniform Limited Partnership Act (2021), as last amended in 2013, with modifications.

Special Focus

Many provisions of the new law and Wisconsin’s existing limited partnership law are similar, including the following:

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A limited partnership is a legal entity separate from its partners, and the filing of a certificate of limited partnership is required to form a limited partnership;

A limited partnership is distinguished from a general partnership by the presence of limited partners;

A limited partnership must have at least one general partner and at least one limited partner;

The limited partnership generally is managed by general partners, and limited partners primarily provide capital for the limited partnership; and

A partnership agreement usually provides rules of governance for the limited partnership, and, in many instances, statutory provisions are default rules that govern the limited partnership only in the absence of applicable terms in the partnership agreement. However, in some instances, the terms of the partnership agreement may not vary from statutory requirements.

The following are some of the more significant changes to Ch. 179 made by the enactment of Act 258.

Formation and Partnership Agreement

Currently, the limited partnership law in Wisconsin defines “limited partnership” as a partnership formed by two or more persons and having one or more general partners and one or more limited partners. To form a limited partnership, a certificate of limited partnership, containing certain information, is required to be filed with WDFI. The limited partnership is formed upon the filing of the certificate of limited partnership or, if a later date was specified in the certificate, on the later date.

Under Act 258, the formation of a limited partnership still requires a certificate of limited partnership containing specific information to be filed with WDFI. However, the limited partnership is not formed until the certificate of limited partnership is filed, and becomes effective, and the limited partnership has at least one general partner and at least one limited partner. A limited partnership now has perpetual duration unless the duration is otherwise modified in the partnership agreement. Under current law, the duration of the limited partnership (when the limited partnership must be dissolved) is required information within the certificate of limited partnership.

Act 258 permits a person to be both a general partner and a limited partner and that the rights, powers, duties, and obligations of such person are determined in the capacity in which the person acts. The name of a limited partnership may contain the name of any partner. The name of a limited partnership that is not a limited liability limited partnership must contain the words “limited partnership,” or a variation of these words that differs only with respect to the capitalization of letters, or the abbreviation of “LP” or a variation of this abbreviation that differs only with respect to the capitalization of letters or punctuation.

Currently, a “partnership agreement” is defined to mean any valid agreement of the partners (limited and general partners) as to the affairs of the limited partnership and the conduct of its business. Provisions of the existing law relating to rights and duties of, and restrictions on a partner in a limited partnership apply only if there were no contrary provisions in the partnership agreement. Act 258 revises chapter 179 to provide more specific guidance than the existing law regarding when the provisions of a partnership agreement override contrary statutory provisions, and when they do not.

December 2022 Volume 28, Number 7

Wisconsin Bankers Association 4721 South Biltmore Lane, P.O. Box 8880, Madison, Wisconsin, 53708-8880

Senior Writers Heather MacKinnon Scott Birrenkott Editor Katie Reiser Layout Sonja Vike

Copyright ©2022 Wisconsin Bankers Association. All rights reserved. Reproduction by any means of the entire contents or any portion of this publication without prior written permission is strictly prohibited. This publication is intended to provide accurate information in regard to the subject matter covered as of the date of publication; however, the information does not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent and professional person should be sought.

Special Focus

Under Act 258, “partnership agreement” means the agreement, whether oral, implied, written or recorded in a tangible or electronic medium, of all the general and limited partners of a limited partnership concerning:

• Relations among the partners and between the partners and the limited partnership;

• The activities and affairs of the limited partnership and the conduct of those activities and affairs;

• The means and conditions for amending the partnership agreement; and

• Mergers and other reorganizations involving the limited partnership.

As to these matters, statutory provisions govern only in the absence of applicable provisions in the partnership agreement.

Act 258 also imposes restrictions on the terms of a partnership agreement, including that a partnership agreement may not vary from statutory provisions relating to the power of a person to dissociate as a general partner, the grounds for expulsion of a general partner because of certain conduct, causes of dissolution, requirements for winding up a limited partnership, requirements for filings with WDFI, law suits by and against partners and the limited partnership, records and information required to be kept by the limited partnership, a partner’s right to access records and information, a partner’s fiduciary and other duties, and the applicable law governing a limited partnership’s internal affairs and the liability of its partners.

Partnership Liability and LLLPs

Currently, a general partner of a limited partnership has the same liabilities as a partner in a partnership without limited partners (general partnership). In general, all partners in a general partnership are jointly and severally liable for all debts, obligations, and other liabilities of the general partnership. In contrast, a limited partner is generally not liable for the obligations of the limited partnership. However, there are exemptions if the limited partner is also a general partner or if the limited partner participates in the control of the business and a person who transacts business with the limited partnership reasonably believes that the limited partner is a general partner.

Under Act 258, general partners are, with exceptions, liable jointly and severally for all debts, obligations, and other liabilities of the limited partnership. Act 258 also eliminates the “control” exception under the previous law to a limited partner’s exemption from liability. Under Act 258, a limited partner is not personally liable for a debt, obligation, or other liability of the limited partnership solely by reason of being or acting as a limited partner, even if the limited partner participates in the management and control of the limited partnership.

Currently, a general partnership may form as or become a limited liability partnership (LLP), and a partner in an LLP is not personally liable for any debt, obligation, or liability of the LLP, except that under some circumstances the partner may be liable for the partner’s own actions or the actions of a person under the partner’s supervision and control.

Act 258 allows a limited partnership to form as or become a limited liability limited partnership (LLLP) by including a statement to this effect in the certificate of limited partnership. If a limited partnership is an LLLP, a general partner is not personally liable for a debt, obligation, or other liability of the LLLP solely by reason of being or acting as a general partner. Instead, a debt, obligation, or other liability incurred by the LLLP is solely that of the LLLP.

The name of an LLLP must contain the phrase “limited liability limited partnership,” or a variation of these words that differs only with respect to the capitalization of letters, or the abbreviation of “LLLP” or a variation of this abbreviation that differs only with respect to the capitalization of letters or punctuation, and may not contain the words “limited partnership” other than in the phrase “limited liability limited partnership” or the abbreviation “LP” other than in the abbreviation “LLLP.”

Operating Requirements

Currently, a limited partnership was required to maintain in Wisconsin a records office where specified limited partnership records are kept. Act 258 retains that requirement, and the requirement that the limited partnership maintain a registered agent for service of process in Wisconsin.

Special Focus

Act 258 requires limited partnerships to file with WDFI annual reports containing specified information. The Act also specifies records and information that the limited partnership must furnish to general partners and limited partners without demand, as well as information that the limited partnership must furnish to partners on demand. The duty to furnish information also applies to each general partner on whom a demand is made, not just to the limited partnership.

Act 258 also modifies other aspects of the limited partnership law including the basis under which a partner’s dissociation from the limited partnership occurs, the conditions for which a limited partnership may merge, convert, or enter into other business-combination transactions, and actions by partners against the limited partnership. Act 258 also changes the grounds under which a limited partnership is dissolved and its activities and affairs wound up; there is no longer a presumptive dissolution of a limited partnership upon dissociation of a general partner.

Currently, except as provided in the partnership agreement, a general partner of a limited partnership generally has the rights and powers, and is subject to the restrictions, of a partner in a general partnership. In general, a partner in a general partnership owes to the partnership and to the other partners duties of loyalty and care and must discharge the partner’s duties and obligations consistently with the contractual obligation of good faith and fair dealing.

Under Act 258, a general partner’s duties to the limited partnership and to other partners is more directly specified. Act 258 also specifies the extent to which the statutory duties may be overridden by the partnership agreement and specifies a limited partner’s duties.

Act 258 also allows a limited partnership to file with WDFI a statement of partnership authority. The statement may recognize or limit, for purposes of a third party dealing with the limited partnership, the authority of a person to act for or enter into transactions on behalf of the limited partnership. In the statement, the limited partnership may identify the authority, or limitations on the authority, of any person or position (which covers all persons holding that position). The statement of authority is effective for five years from its original date or its most recent amendment or renewal, and the statement affects only the power of a person to bind the limited partnership to persons that are not partners. Act 258 also allows any person named in a statement of authority to file with WDFI a statement of denial of authority.

Limited Liability Companies

Background

While there have been modifications over the years, Wisconsin first authorized the creation of LLCs in 1994. Act 258 repeals and recreates Wisconsin’s LLC law (Ch. 183) to adopt the Revised Uniform Limited Liability Company Act (2006), as last amended in 2013 (RULLCA), subject to certain modifications.

Many provisions of the new law are similar to Ch. 183, including that an LLC: (a) is a distinct legal entity separate from its members and may be organized for any lawful purpose; (b) may be managed by its members or by managers; and (c) operating agreement between the members may provide rules of governance for the LLC. In many instances, the statutory provisions under Ch. 183 are merely default rules that govern an LLC only in the absence of applicable terms in an operating agreement. In some instances, however, the terms of an operating agreement may not vary from statutory requirements.

The following covers some of the more significant changes to Ch. 183 made by the enactment of Act 258.

Formation and Operating Agreement

Currently, an organizer files articles of organization with WDFI to form an LLC. The articles must include specific information and may not contain any additional information. Act 258 modifies the information required in articles of organization filed with WDFI and allows additional information to be included. Similar to the law change for limited partnerships outlined above, under Act 258, an LLC has perpetual duration, unless modified by the operating agreement. Act 258 allows a person to become a member of an LLC in any way provided for in the operating agreement.

Special Focus

Currently, an “operating agreement” is defined to include only a written document and allows for the possibility that an LLC could be formed and operate without an operating agreement. The term is defined as an agreement in writing, if any, among all of the members as to the conduct of the business of an LLC and its relationships with its members.

Under Act 258, the operating agreement may be oral or written, express or implied, and an LLC cannot exist without an operating agreement. Act 258 defines “operating agreement” to mean an agreement, whether or not referred to as an operating agreement and whether oral, implied, written or recorded in a tangible or electronic medium, or in any combination of these, of all the members of an LLC, including a sole member, concerning:

• Relations among the members as members and between the members and the LLC;

• The rights and duties of managers;

• The activities and affairs of the LLC and the conduct of those activities and affairs;

• The means and conditions for amending the operating agreement; and

• Mergers, conversions, and other business combinations.

Act 258 provides more specific guidance regarding when the provisions of an operating agreement override contrary statutory provisions and when they do not. Act 258 also includes a list of matters for which the operating agreement may not vary from statutory provisions, including matters related to a member’s fiduciary and other duties. The name of an LLC must contain the phrase “limited liability company” or “limited company” or the abbreviation “LLC” or “LC” or a variation of these abbreviations that differ only with respect to capitalization of letters or punctuation. “Limited” may be abbreviated as “Ltd.,” and “company” may be abbreviated as “Co.”.

Act 258 makes changes to the information that must be contained in an LLC’s annual report and makes some changes with respect to the records that an LLC must keep at its office. Act 258 also requires an LLC to furnish certain information, without request, to members and managers of LLCs. The updated law also contains provisions relating to the rights to information after a person dissociates as a member.

Other Changes

Act 258 also modifies other aspects of the LLC law including the duties owed by a member or manager to an LLC, dissolution and winding up the affairs of an LLC, requirements applicable to a merger or conversion involving an LLC, the option for a derivative action brought by a member against an LLC to enforce a right of the LCC and the ability of the LLC to appoint a special litigation committee to investigate the claims, and changes several terms used in LLC business filings.

Further, Act 258 generally eliminates the concept of “apparent authority” in connection with LLCs. Currently, in a member-managed LLC, each member is an agent of the LLC and, subject to exceptions, the act of a member for apparently carrying on the business of the LLC binds the LLC. This principle does not apply in a manager-managed LLC, where the managers, not the members, are the agents of the LLC for purposes of carrying on its business. Under Act 258, a member is not an agent of an LLC solely by reason of being a member.

Similar to the filing by a limited partnership as outlined above, an LLC may file with WDFI a statement of authority identifying the authority of any position with the LLC (which covers all persons holding that position), identifying the authority of any specific person, or identifying limitations on the authority of any position or person. The statement of authority is effective for five years from its original date or its most recent amendment or renewal. The statement affects only the power of a person to bind the LLC to persons that are not members. Act 258 allows any person named in a statement of authority to file with WDFI a statement of denial of authority.

Impact on Current Banking Procedures

The changes made by Act 258 primarily impact the duties and responsibilities partners have to the limited partnership and other partners and members and managers to their LLC and fellow members. The changes help provide clarity when

Special Focus

there is conflict between the terms of a partnership agreement or operating agreement and a statutory provision and help clarify what statutory provisions cannot be altered by agreement. The changes made by Act 258 to chapters 179 and 183 largely do not change common, existing procedures used by banks to establish a deposit or loan relationship.

Currently, some partnerships do not have a partnership agreement and some LLCs do not have an operating agreement. In these situations, bank CDD and CIP procedures typically utilized information filings with WDFI and other nondocumentation methods for satisfying Bank Secrecy Act (BSA) requirements. Under the revised law, for a limited partnership or LLC who have opted for an oral partnership agreement or oral operating agreement, banks can utilize their same methods as used before Act 258 when working with entities without partnership agreements or operating agreements.

Despite having the option of an oral partnership agreement or operating agreement, both limited partnerships and LLCs still have filing requirements with WDFI to create either entity. Banks could also look to WDFI filings to see whether a limited partnership or LLC filed a statement of authority as further indication of who has what authorities. Given the potential uncertainty of oral agreements as between partners or members, it remains to be seen how many limited partnerships or LLCs may adopt the oral agreement approach. There is certainly more clarity for partners and members to have such agreements in writing.

When establishing a deposit account relationship with an entity, banks still need execute a business signature card and business depository declaration or resolution. Similarly, when establishing a lending relationship with an entity, banks still need execute borrowing resolutions and other loan documents. Both deposit and borrowing resolutions or declarations have language stating that the executed bank documents are adopted in accordance with all agreements in existence with partners or in compliance with an LLC’s articles of organization and any operating agreement. The representations, acknowledgments, and authorizations expressed in executed bank depository and borrowing resolutions remain effective despite Act 258.

For banks that collect partnership agreements or operating agreements of their limited partnership and LLC customers, existing limited partnerships and LLCs may update their partnership agreements or operating agreements as a result of Act 258. In such settings, banks could anticipate the limited partnership or LLC sharing its updated documents with the bank.

Conclusion

Through the enactment of 2021 Wisconsin Act 258, Wisconsin has revised its limited partnership and LLC uniform laws. The revisions apply to a limited partnership or LLC formed on or after January 1, 2023. The changes also apply on January 1, 2023, to a limited partnership or LLC formed before this date unless the limited partnership or LLC filed a Statement of Nonapplicability with WDFI by December 31, 2022, to remain subject to previous law. Limited partnerships or LLCs formed before January 1, 2023, also have the option to elect to be governed by Act 258 prior to January 1, 2023. To elect such option, the entity need file a statement of applicability with WDFI before the January 1 effective date.

The revisions can affect duties owed amongst partners to a limited partnership and amongst members and managers to an LLC. Revisions also broaden the content of filings with WDFI, affect entity dissolutions, and other business activities. The changes do not have a direct impact on existing, common bank procedures used to establish a deposit or lending relationship or to complete bank CDD and CIP procedures.

2021 Wisconsin Act 258 may be viewed at: https://docs.legis.wisconsin.gov/2021/related/acts/258.pdf

Special Focus

Technical Amendment Lowers Closed-End Mortgage Loan HMDA Reporting Threshold

The Bureau of Consumer Financial Protection (CFPB) issued a technical amendment to lower the closed-end mortgage loan reporting threshold for Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The amendment was issued as a result of a recent court case which invalidated the higher reporting threshold for closedend mortgage loans. WBA first reported on the court case in the October 2022 WBA Compliance Journal. The technical amendment followed a previously issued blog post by CFPB. The amendment is effective upon publication in the Federal Register, December 21, 2022. A link to the technical amendment may be found below.

Summary

In April 2020, CFPB issued a final rule (2020 HMDA Rule) to amend Regulation C to increase the threshold for reporting data about closed-end mortgage loans. The 2020 HMDA Rule increased the closed-end mortgage loan reporting threshold from 25 loans to 100 loans in each of the two preceding calendar years, effective July 1, 2020.

On September 23, 2022, the United States District Court for the District of Columbia vacated the 2020 HMDA Rule as to the increased loan-volume reporting threshold for closed-end mortgage loans. As a result of the September 23, 2022 order, the threshold for reporting data about closed-end mortgage loans is 25, the threshold established by the 2015 HMDA Rule. Accordingly, the technical amendment updates the Code of Federal Regulations to reflect the closed-end mortgage loan reporting threshold of 25 mortgage loans in each of the two preceding calendar years.

Background

HMDA requires certain banks, savings associations, credit unions, and for-profit non-depository institutions to collect, report, and disclose data about originations and purchases of mortgage loans, as well as mortgage loan applications that do not result in originations (for example, applications that are denied or withdrawn). CFPB’s Regulation C, 12 CFR part 1003, implements HMDA, 12 U.S.C. 2801 through 2810.

In October 2015, CFPB issued a final rule (2015 HMDA Rule) that, among other things, established institutional and transactional loan-volume coverage thresholds in Regulation C that determine whether financial institutions are required to report certain HMDA data on closed-end mortgage loans or open-end lines of credit. The thresholds apply uniformly to covered depository and non-depository institutions; they took effect for depository institutions on January 1, 2017, and for non-depository institutions on January 1, 2018. The loan-volume thresholds in the 2015 HMDA Rule required an institution that originated at least 25 closed-end mortgage loans or at least 100 open-end lines of credit in each of the two preceding calendar years to report HMDA data, provided that the institution meets all other criteria for institutional coverage.

In April 2020, CFPB issued a final rule (2020 HMDA Rule) to amend Regulation C to increase the thresholds for reporting data about both closed-end mortgage loans and open-end lines of credit. In particular, the 2020 HMDA Rule set the closed-end mortgage loan reporting threshold at 100 in each of the two preceding calendar years, effective July 1, 2020, and the open-end line of credit reporting threshold at 200 in each of the two preceding calendar years, effective January 1, 2022.

On July 30, 2020, five nonprofit organizations and the City of Toledo, Ohio, initiated a lawsuit challenging the 2020 HMDA Rule. On September 23, 2022, the United States District Court for the District of Columbia concluded that the 2020 HMDA Rule’s increased reporting threshold for closed-end mortgage loans was arbitrary and capricious. The court issued an order vacating and remanding the loan-volume reporting threshold for closed-end mortgage loans under the 2020 HMDA Rule. Accordingly, the threshold for reporting data about closed-end mortgage loans is 25 in each of the two preceding calendar years, which is the threshold set by the 2015 HMDA Rule.

The technical amendment reflects the vacatur in the Code of Federal Regulations by replacing the closed-end reporting threshold numbers in Regulation C sections 1003.2(g)(1)(v)(A) and (2)(ii)(A), and 1003.3(c)(11), and comments 2(g)–5 and 3(c)(11)–2 with those in effect on June 30, 2020; and replacing in their entirety, comments 2(g)–1 and 3(c)(11)–1 with the versions in effect on June 30, 2020.

Special Focus

Separate CFPB Statement

On December 6, 2022, a blog post appeared on CFPB’s website regarding the change to HMDA’s closed-end reporting threshold as a result of the court case. In that post, CFPB stated:

“The CFPB recognizes that financial institutions affected by this change may need time to implement or adjust policies, procedures, systems, and operations to come into compliance with their reporting obligations. In these limited circumstances, in allocating the CFPB’s enforcement and supervisory resources, the CFPB does not view action regarding these institutions’ HMDA data as a priority. Thus, the CFPB does not intend to initiate enforcement actions or cite HMDA violations for failures to report closed-end mortgage loan data collected in 2022, 2021, or 2020 for institutions subject to the CFPB’s enforcement or supervisory jurisdiction that meet Regulation C’s other coverage requirements and originated at least 25 closed-end mortgage loans in each of the two preceding calendar years but fewer than 100 closed-end mortgage loans in either or both of the two preceding calendar years.”

Unfortunately, the blog post did not offer further guidance to first assist small banks with how best to proceed given the new lower threshold. No other banking regulator has issued guidance as a result of the court case or CFPB’s releases. WBA continues its efforts with the federal banking regulators to obtain more guidance regarding the lower reporting thresholds for small entities impacted by the outcome of this court case. Given the impact of the court case and technical amendment to Regulation C, banks which meet the 25 closed-end mortgage loan threshold for 2021 and 2022 should look to collect and report closed-end mortgage loan HMDA data for 2023. The exemption threshold for open-end lines of credit remains untouched at 200 open-end lines of credit originated in each of the prior two years.

The technical amendments may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-21/pdf/2022-27204.pdf

The blog post may be viewed at: https://www.consumerfinance.gov/about-us/blog/changes-to-hmda-closed-end-loan-reporting-threshold/

Regulatory Spotlight

CFPB Issues Final Rule on Supervisory Authority Over Certain Nonbank Covered Persons Based on Risk Determination.

The Bureau of Consumer Financial Protection (CFPB) issued a final rule regarding procedures for establishing supervisory authority over a nonbank covered person based on a risk determination, which CFPB recently amended in April 2022 (Updated Procedural Rule). The Updated Procedural Rule added a new process to the procedures, for CFPB to consider making final decisions and orders public, in whole or in part. While CFPB strongly believes in supervisory confidentiality, these particular decisions and orders present unique circumstances that implicate important public interests in transparency. The Updated Procedural Rule did not affect the confidentiality of supervisory examinations or other aspects of the supervisory process. CFPB has made specific changes in response to comments, in order to clarify the standard that will govern whether a decision or order will be publicly released, as well as to give respondents in proceedings additional time to provide input. The final rule is effective 11/21/2022. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-21/pdf/2022-25139.pdf Federal Register, Vol. 87, No. 223, 11/21/2022, 70703-70707.

CFPB Establishes Maximum Allowable Charges for Disclosures by CRAs.

CFPB issued a final rule to amend an appendix for Regulation V, which implements the Fair Credit Reporting Act (FCRA). CFPB is required to calculate annually the dollar amount of the maximum allowable charge for disclosures by a consumer reporting agency (CRA) to a consumer pursuant to FCRA section 609. The final rule establishes the maximum allowable charge of $14.50 for the 2023 calendar year. The final rule is effective 01/01/2023. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-25/pdf/2022-25751.pdf Federal Register, Vol. 87, No. 226, 11/25/2022, 72364-72365.

CFPB Amends HMDA Closed-End Mortgage Threshold Due to Court Case.

CFPB issued a final rule to make a technical amendment to Regulation C which implements the Home Mortgage Disclosure Act (HMDA). In April 2020, CFPB issued a final rule (2020 HMDA Rule) to amend Regulation C to increase the threshold for reporting data about closed-end mortgage loans. The 2020 HMDA Rule increased the closed-end mortgage loan reporting threshold from 25 loans to 100 loans in each of the two preceding calendar years, effective 07/01/2020. On 09/23/2022, the United States District Court for the District of Columbia vacated the 2020 HMDA Rule as to the increased loan-volume reporting threshold for closed-end mortgage loans. As a result of the 09/23/2022 order, the threshold for reporting data about closed-end mortgage loans is 25, the threshold established by the 2015 HMDA Rule. Accordingly, the technical amendment updates the Code of Federal Regulations to reflect the closed-end mortgage loan reporting threshold of 25 mortgage loans in each of the two preceding calendar years. The technical amendment is effective upon publication in the Federal Register. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2022-12-21/pdf/2022-27204.pdf. Federal Register, Vol. 87, No. 244, 12/21/2022, 77980-77982.

CFPB Issues Circular Regarding Reasonable Investigation of Consumer Reporting Disputes.

CFPB issued Circular 2022-07: Reasonable Investigation of Consumer Reporting Disputes. In the circular, CFPB responds to two questions. The first question is whether consumer reporting agencies (CRAs) and the entities that furnish information to them are permitted under the Fair Credit Reporting Act to impose obstacles that deter submission of disputes. The second question is whether CRAs need forward to furnishers consumer-provided documents attached to a dispute. CFPB released the circular on its website on 11/10/2022. The circular may be viewed at: https://www.govinfo. gov/content/pkg/FR-2022-11-23/pdf/2022-25138.pdf Federal Register, Vol. 87, No. 225, 11/23/2022, 71507-71509.

CFPB Publishes Fall 2022 Supervisory Highlights.

CFPB published its twenty-eighth edition of Supervisory Highlights. The publication was posted on CFPB’s website on 11/16/2022. The findings included in the report cover examinations completed between January 2022 and June 2022 in the areas of credit card account management, debt collection, deposits, fair lending, mortgage servicing, payday lending, prepaid accounts, and remittance transfers. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-202211-25/pdf/2022-25733.pdf Federal Register, Vol. 86, No. 237, 11/25/2021, 72449-72458.

Regulatory Spotlight

CFPB Seeks Comment on Information Collections.

CFPB seeks comment regarding an information collection titled, Disclosure Requirements for Depository Institutions Lacking Federal Deposit Insurance, Regulation I. Regulation I, 12 CFR part 1009, applies to all depository institutions lacking federal deposit insurance. It requires the disclosure of certain insurance-related information in periodic statements, account records, locations where deposits are normally received, and advertising. The regulation also requires such depository institutions to obtain a written acknowledgment from depositors regarding the institution’s lack of federal deposit insurance. The information collection is used in connection with the requirements under Regulation I. Comments are due 12/22/2022. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-22/ pdf/2022-25373.pdf. Federal Register, Vol. 87, No. 224, 11/22/2022, 71310-71311.

CFPB seeks comment regarding an information collection titled, Home Mortgage Disclosure Act, Regulation C. The Home Mortgage Disclosure Act (HMDA) requires certain depository institutions and for-profit, non-depository institutions to collect, report, and disclose data about originations and purchases of mortgage loans. Additionally, the institutions must report mortgage loan applications that do not result in originations. Regulation C, 12 CFR part 1003, implements HMDA. The information collection is used in connection with the requirements under Regulation C. Comments are due 12/22/2022. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-22/ pdf/2022-25411.pdf Federal Register, Vol. 87, No. 224, 11/22/2022, 71311.

CFPB seeks comment regarding an information collection titled, Generic Information Collection Plan for Foundational Research about Consumer Credit Markets and Household Financial Decision-Making. Under the Dodd-Frank Act, CFPB is tasked with researching, analyzing, and reporting on topics relating to CFPB’s mission, including developments in markets for consumer financial products and services, consumer awareness, and consumer behavior. Under the information collection, CFPB collects data through qualitative and quantitative methods, including focus groups, interviews, and controlled trials in field and laboratory settings. Comments are due 01/23/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-23/pdf/2022-25547.pdf. Federal Register, Vol. 87, No. 225, 11/23/2022, 71586-71587.

FRB Revises Regulation A.

The Board of Governors of the Federal Reserve System (FRB) issued a final rule to adopt amendments to Regulation A to reflect FRB’s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The Federal Reserve Banks make primary and secondary credit available to depository institutions as a back-up source of funding on a shortterm basis, usually overnight. The primary and secondary credit rates are the interest rates that the Federal Reserve Banks charge for extensions of credit under the programs. In accordance with the Federal Reserve Act, the primary and secondary credit rates are established by the boards of directors of the Federal Reserve Banks, subject to review and determination of FRB. On 11/02/2022, FRB voted to approve a 0.75 percentage point increase in the primary credit rate, thereby increasing the primary credit rate from 3.25 percent to 4.00 percent. In addition, FRB had previously approved the renewal of the secondary credit rate formula, the primary credit rate plus 50 basis points. Under the formula, the secondary credit rate increased by 0.75 percentage points as a result of FRB’s primary credit rate action, thereby increasing the secondary credit rate from 3.75 percent to 4.50 percent. The final rule is effective 11/17/2022. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-17/pdf/2022-25081.pdf. Federal Register, Vol. 87, No. 221, 11/17/2022, 68887-68888.

FRB Revises Regulation D.

FRB issued a final rule to adopt amendments to Regulation D to revise the rate of interest paid on balances (IORB) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORB is 3.90 percent, a 0.75 percentage point increase from its prior level. The amendments are intended to enhance the role of IORB in maintaining the federal funds rate in the target range established by the Federal Open Market Committee (FOMC). The amendments are effective 11/17/2022. The final rule may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2022-11-17/pdf/2022-25082.pdf. Federal Register, Vol. 87, No. 221, 11/17/2022, 68888-68889.

Regulatory Spotlight

FRB issued a final rule to amend Regulation D, Reserve Requirements of Depository Institutions, to reflect the annual indexing of the reserve requirement exemption amount and the low reserve tranche for 2023. The annual indexation of these amounts is required notwithstanding FRB’s action in March 2020 of setting all reserve requirement ratios to zero. The Regulation D amendments set the reserve requirement exemption amount for 2023 at $36.1 million (increased from $32.4 million in 2022) and the amount of the low reserve tranche at $691.7 million (increased from $640.6 million in 2022). The adjustments to both amounts are derived using statutory formulas specified in the Federal Reserve Act. The annual indexation of the reserve requirement exemption amount and low reserve tranche, though required by statute, will not affect depository institutions’ reserve requirements, which will remain zero. The final rule is effective 01/03/2023. The new low reserve tranche and reserve requirement exemption amount apply beginning 01/01/2023 The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-01/pdf/2022-26065.pdf. Federal Register, Vol. 87, No. 230, 12/01/2022, 73633-73634.

FRB Adjusts Asset Threshold for Dividend Rate on Federal Reserve Bank Capital Stock.

FRB issued a final rule that applies an inflation adjustment to the threshold for total consolidated assets in Regulation I. Federal Reserve Bank (Reserve Bank) stockholders that have total consolidated assets above the threshold receive a different dividend rate on their Reserve Bank stock than stockholders with total consolidated assets at or below the threshold. The Federal Reserve Act requires that FRB annually adjust the total consolidated asset threshold to reflect the change in the Gross Domestic Product Price Index, published by the Bureau of Economic Analysis. Based on the change in the Gross Domestic Product Price Index as of 09/29/2022, the total consolidated asset threshold will be $12,124,000,000 through 12/31/2023. The final rule is effective 01/03/2023. The adjusted threshold for total consolidated assets apply beginning 01/01/2023. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2022-12-01/pdf/2022-26066.pdf. Federal Register, Vol. 87, No. 230, 12/01/2022, 73634-73635.

FRB Adopts Changes to Policy on Payment System Risk.

FRB issued a notice to announce it has adopted changes to part II of the Federal Reserve Policy on Payment System Risk (PSR policy) substantially as proposed. The changes expand the eligibility of depository institutions to request collateralized intraday credit from the Federal Reserve Banks (Reserve Banks) while reducing administrative steps for requesting collateralized intraday credit. In addition, FRB has adopted changes to the PSR policy that clarify the eligibility standards for accessing uncollateralized intraday credit from Reserve Banks and modify the impact of a holding company’s or affiliate’s supervisory rating on an institution’s eligibility to request uncollateralized intraday credit capacity. FRB has also adopted changes to part II of the PSR policy to support the deployment of the FedNow Service. Finally, FRB has simplified the Federal Reserve Policy on Overnight Overdrafts and incorporated into the PSR policy as part III. The FedNow Service-related changes to the PSR policy and the changes related to the Overnight Overdrafts policy will become effective when Reserve Banks begin processing live transactions for FedNow Service participants (expected in 2023). The exact date will be announced on FRB’s website. The remaining changes to part II of the PSR policy will become effective 02/06/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-08/ pdf/2022-26615.pdf. Federal Register, Vol. 87, No. 235, 12/08/2022, 75254-75267.

FRB Announces Final Approval of Several Information Collections.

FRB announced the final approval of the following information collections: (a) Savings Association Holding Company Report; (b) Securities of State Member Banks as Required by Regulation H; (c) Interchange Transaction Fees Survey; (d) Recordkeeping and Disclosure Requirements Associated with the Consumer Financial Protection Bureau’s Regulation E, Electronic Fund Transfers; (e) Reporting and Disclosure Requirements of Community Reinvestment Act-Related Agreements; (f) Annual Report of Holding Companies, Annual Report of Foreign Banking Organizations, Report of Changes in Organizational Structure, Supplement to the Report of Changes in Organizational Structure; and (g) Annual Daylight Overdraft Capital Report for U.S. Branches and Agencies of Foreign Banks. See the notices for more information about each collection. The notices may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-1128/pdf/2022-25891.pdf. Federal Register, Vol. 87, No. 227, 11/28/2022, 72997-72998; https://www.govinfo.gov/ content/pkg/FR-2022-11-28/pdf/2022-25892.pdf. Federal Register, Vol. 87, No. 227, 11/28/2022, 72999; https://www. govinfo.gov/content/pkg/FR-2022-11-29/pdf/2022-25967.pdf. Federal Register, Vol. 87, No. 228, 11/29/2022, 7330173302; https://www.govinfo.gov/content/pkg/FR-2022-11-29/pdf/2022-25968.pdf. Federal Register, Vol. 87, No. 228, 11/29/2022, 73302-73303; https://www.govinfo.gov/content/pkg/FR-2022-11-29/pdf/2022-25969.pdf

Regulatory Spotlight

Federal Register, Vol. 87, No. 228, 11/29/2022, 73303-73304; https://www.govinfo.gov/content/pkg/FR-2022-11-29/ pdf/2022-26035.pdf Federal Register, Vol. 87, No. 228, 11/29/2022, 73304-73307; and https://www.govinfo.gov/ content/pkg/FR-2022-11-29/pdf/2022-25966.pdf Federal Register, Vol. 87, No. 228, 11/29/2022, 73307-73308.

FRB

Seeks Comment on Guidelines for Evaluating Account and Services Requests.

FRB seeks comment on proposed amendments to its Guidelines for Evaluating Account and Services Requests (Guidelines) that would require the Federal Reserve Banks to publish a periodic list of depository institutions with access to Reserve Bank accounts and/or financial services. Comments are due 01/17/2023. The notice may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2022-11-16/pdf/2022-24929.pdf Federal Register, Vol. 87, No. 220, 11/16/2022, 68691-68692.

FRB Seeks Comment on Principles for Climate-Related Financial Risk Mitigation for Large Financial Institutions.

FRB seeks comment on draft principles that would provide a high-level framework for the safe and sound management of exposures to climate-related financial risks for FRB-supervised financial institutions with over $100 billion in assets. Although all financial institutions, regardless of size, may have material exposures to climate-related financial risks, the principles are intended for the largest financial institutions, i.e., those with over $100 billion in total consolidated assets. The draft principles are intended to support efforts by large financial institutions to focus on key aspects of climaterelated financial risk management. Comments on the draft principles are due 02/06/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-08/pdf/2022-26648.pdf Federal Register, Vol. 87, No. 235, 12/08/2022, 75267-75271.

FDIC Announces Termination of Receiverships.

The Federal Deposit Insurance Corporation (FDIC), as Receiver for each of 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-2022-12-06/pdf/2022-26505.pdf Federal Register, Vol. 87, No. 233, 12/06/2022, 74616.

FDIC Announces Intent to Terminate Receiverships.

FDIC, as Receiver for the institutions listed in the notice, announced it intends to terminate its receiverships for the institutions. The liquidation of the assets for the receiverships has been completed. To the extent permitted by available funds and in accordance with law, the Receiver will be making a final dividend payment to proven creditors. Based upon the foregoing, the Receiver has determined that the continued existence of the receiverships will serve no useful purpose. Consequently, notice is given that the receiverships shall be terminated, to be effective no sooner than thirty days after the date of the notice. If any person wishes to comment concerning the termination of the receiverships, such comment must be made in writing, identify the receivership to which the comment pertains, and sent within thirty days of the date of the notice to: Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Department 34.6, 1601 Bryan Street, Dallas, TX 75201. No comments concerning the termination of the receivership will be considered which are not sent within this time frame. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-17/pdf/2022-25072.pdf Federal Register, Vol. 87, No. 221, 11/17/2022, 69021.

Regulatory Spotlight

FDIC Seeks Comment Regarding National Survey of Unbanked and Underbanked Households.

FDIC seeks comment on the survey collection instrument for its eighth biennial survey of households, which has been renamed the FDIC National Survey of Unbanked and Underbanked Households (Household Survey). The 2023 Household Survey is scheduled to be conducted in partnership with the U.S. Census Bureau as a supplement to its June 2023 Current Population Survey. The survey collects information on U.S. households’ use of bank accounts, prepaid cards, nonbank online payment services and other nonbank financial transaction services, and bank and nonbank credit. The results of the biennial surveys will be published by FDIC, and help inform policymakers, bankers, and researchers about bank account ownership and household use of the banking system and nonbank financial products and services to meet their financial needs. Comments are due 01/13/2023. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2022-11-14/pdf/2022-24642.pdf Federal Register, Vol. 87, No. 218, 11/14/2022, 68155-68156.

OCC Seeks Comment Regarding Diverse Policies and Practices Information Collection.

The Office of the Comptroller of the Currency (OCC) seeks comment regarding an information collection titled, Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies and Diversity SelfAssessment Template for OCC-Regulated Entities. The information collection sets forth standards for OCC-regulated entities to voluntarily self-assess their diversity and inclusion policies and practices and includes a template to assist with the self-assessment. The template is now a PDF fillable form, which replaces the current Excel spreadsheet template. OCC may use the information submitted to monitor progress and trends in the financial services industry regarding diversity and inclusion in employment and contracting activities and to identify and highlight diversity and inclusion policies and practices that have been successful. Comments are due 01/04/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-05/pdf/2022-26345.pdf Federal Register, Vol. 87, No. 232, 12/05/2022, 74469-74470.

OCC Seeks Comment Regarding Annual Stress Test Reporting Information Collection.

OCC seeks comment regarding an information collection titled, Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of $250 Billion or More under the DoddFrank Wall Street Reform and Consumer Protection Act. Section 165(i)(2) of the Dodd-Frank Act requires certain financial companies, including national banks and federal savings associations, to conduct annual stress tests and requires the primary financial regulatory agency of those financial companies to issue regulations implementing the stress test requirements. Under section 165(i)(2), a covered institution is required to submit to the Board of Governors of the Federal Reserve System (FRB) and to its primary financial regulatory agency a report at such time, in such form, and containing such information as the primary financial regulatory agency may require. OCC recognizes that many covered institutions with total consolidated assets of $250 billion or more are required to submit reports using Comprehensive Capital Analysis and Review (CCAR) reporting form FR Y-14A. OCC also recognizes FRB has made modifications to the FR Y-14A and, to the extent practical, OCC will keep its reporting requirements consistent with FRB’s FR Y-14A in order to minimize burden on covered institutions. Comments are due 02/03/2022. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-05/pdf/2022-26402.pdf Federal Register, Vol. 87, No. 232, 12/05/2022, 74470-74472.

HUD Issues Final Rule on Acceptance of Private Flood Insurance for FHA-Insured Mortgages.

The Department of Housing and Urban Development (HUD) issued a final rule to amend Federal Housing Administration (FHA) regulations to allow mortgagors the option to purchase private flood insurance on FHA-insured mortgages for properties located in Special Flood Hazard Areas (SFHAs), in satisfaction of the mandatory purchase requirement of the Flood Disaster Protection Act (the FDPA). The FDPA, as amended, requires the owner of a property mapped in a SFHA, and located in a community participating in the National Flood Insurance Program, to purchase flood insurance as a condition of receiving a mortgage backed by the Government Sponsored Entities, Department of Veterans Affairs, U.S. Department of Agriculture, or FHA. The final rule is effective 12/21/2022. The final rule may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2022-11-21/pdf/2022-25258.pdf Federal Register, Vol. 87, No. 223, 11/21/2022, 70733-70744.

Regulatory Spotlight

HUD Publishes List of Regulatory Waiver Requests Granted for Second Quarter 2022.

HUD published the list of regulatory waiver requests granted for second quarter of calendar year 2022. Section 106 of the Department of Housing and Urban Development Reform Act (the HUD Reform Act) requires HUD to publish quarterly Federal Register notices of all regulatory waivers that HUD has approved. Each notice covers the quarterly period since the previous Federal Register notice. The purpose of the notice is to comply with the requirements of section 106 of the HUD Reform Act. The notice contains a list of regulatory waivers granted by HUD during the period beginning 04/01/2022, and ending 06/30/2022. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR2022-12-05/pdf/2022-26413.pdf Federal Register, Vol. 87, No. 232, 12/05/2022, 74435-74442.

FEMA Issues Final Flood Hazard Determinations.

The Federal Emergency Management Agency (FEMA) issued a notice which identifies communities in the state of 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 03/21/2023, 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-2022-11-28/pdf/2022-25909.pdf Federal Register, Vol. 87, No. 227, 11/28/2022, 73020-73021.

FEMA Issues Notice of Changes in Flood Hazard Determinations.

FEMA issued a notice which lists communities in the state of Wisconsin, 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-2022-11-28/pdf/2022-25907.pdf Federal Register, Vol. 87, No. 227, 11/28/2022, 73023-73027.

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 states of Michigan and Ohio, 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 02/27/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR2022-11-28/pdf/2022-25905.pdf Federal Register, Vol. 87, No. 227, 11/28/2022, 73022-73023.

FEMA Seeks Comment on Information Collections.

FEMA seeks comment regarding an information collection titled, Application for Community Disaster Loan (CDL) Program. The loan package for the CDL Program provides local governments that have suffered substantial loss of

Regulatory Spotlight

tax or other revenues as a result of a major disaster the opportunity to obtain financial assistance in order to perform their governmental functions. The loan must be justified on the basis of need and actual expenses. Comments are due 01/17/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-15/pdf/2022-24803.pdf. Federal Register, Vol. 87, No. 219, 11/15/2022, 68512-68513.

FEMA seeks comment regarding an information collection titled, FEMA Mitigation Grant Programs. FEMA’s Flood Mitigation Assistance (FMA) and Building Resilient Infrastructure and Communities (BRIC) programs use an automated grant application and management system called FEMA GO. The Pre-Disaster Mitigation (PDM) program and the FMA program also uses an automated grant application and management system called Mitigation (MT) eGrants. The FEMA GO and MT eGrants systems include application information needed to apply for funding under the grant programs. The information collection is used in connection with the PDM, FMA, and BRIC programs. Comments are due 01/23/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-23/pdf/2022-25453.pdf Federal Register, Vol. 87, No. 225, 11/23/2022, 71657-71659.

FEMA seeks comment regarding an information collection titled, Hazard Mitigation Grant Program (HMGP) Application and Reporting. The HMGP is a post-disaster program that contributes funds toward the cost of hazard mitigation activities to reduce the risk of future damage, hardship, loss or suffering in any area affected by a major disaster. The information collection is used in connection with qualifying under HMGP. Comments are due 01/23/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-23/pdf/2022-25452.pdf Federal Register, Vol. 87, No. 225, 11/23/2022, 71659-71660.

IRS Issues Corrections to Section 42 Low-Income Housing Credit Average Income Test Regulations.

The Internal Revenue Service (IRS) issued corrections to the final regulations published in the Federal Register on 10/12/2022. The corrections include final and temporary regulations which set forth guidance on the average income test for purposes of the low-income housing credit. Corrections have been made to section 1.42-19 and to pages 61489, 61490, 61492, 61494, 61495, 61497, 61498, and 61500 as further explained in the corrections. The corrections are effective 11/14/2022, and applicable on or after 10/12/2022. The corrections may be viewed at: https://www.govinfo. gov/content/pkg/FR-2022-11-14/pdf/2022-24636.pdf. Federal Register, Vol. 87, No. 218, 11/14/2022, 68048; https://www.govinfo.gov/content/pkg/FR-2022-11-14/pdf/2022-24634.pdf. Federal Register, Vol. 87, No. 218, 11/14/2022, 68048-68049; and https://www.govinfo.gov/content/pkg/FR-2022-11-30/pdf/2022-26073.pdf Federal Register, Vol. 87, No. 229, 11/30/2022, 73458-73459.

IRS Issues Corrections to Affordability of Employer Coverage for Family Members of Employees Rule.

IRS issued corrections to a final rule published in the Federal Register on 10/13/2022, regarding section 36B of the Internal Revenue Code which amended the regulations regarding eligibility for the premium tax credit. The final rule clarified that affordability of employer-sponsored minimum essential coverage (employer coverage) for family members of an employee is determined based on the employee’s share of the cost of covering the employee and those family members, not the cost of covering only the employee. See the final rule for the specific corrections. The corrections are effective 12/12/2022. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-02/pdf/202225429.pdf. Federal Register, Vol. 87, No. 231, 12/02/2022, 73937.

IRS Proposes Guidance to Foreign Tax Credit.

IRS issued a proposed rule related to the foreign tax credit, including guidance regarding the reattribution asset rule for purposes of allocating and apportioning foreign taxes, the cost recovery requirement, and the attribution rule for withholding tax on royalty payments. The proposed rule addresses the definition of a reattribution asset for purposes of allocating and apportioning foreign income taxes, the application of the cost recovery requirement, and the application of the source-based attribution requirement to withholding taxes on certain royalty payments. Comments are due 01/23/2023. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-22/pdf/202225337.pdf Federal Register, Vol. 87, No. 224, 11/22/2022, 71271-71286.

IRS Seeks Comment on Information Reporting on Real Estate Transactions.

IRS seeks comment regarding an information collection titled, Revenue Procedure 2007-12, Certification for Information Reporting on Real Estate Transactions. The revenue procedure sets forth the acceptable form of written assurances (certification) that a real estate reporting person must obtain from the seller of a principal residence to except such sale or exchange from the information reporting requirements for real estate transactions under section 6045(e)(5) of the Internal Revenue Code. Comments are due 01/17/2023. The notice may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2022-11-16/pdf/2022-24936.pdf Federal Register, Vol. 87, No. 220, 11/16/2022, 68796-68797.

FHFA Seeks Comment on Information Collections.

The Federal Housing Finance Agency (FHFA) seeks comment regarding an information collection titled, Community Support Requirements. The Federal Home Loan Bank System consists of eleven regional Federal Home Loan Banks (Banks) and the Office of Finance. The Banks are wholesale financial institutions, organized under authority of the Federal Home Loan Bank Act (Bank Act). FHFA’s community support regulation, which establishes standards and review criteria for determining compliance with section 10(g) of the Bank Act, is set forth at 12 CFR part 1290. Part 1290 requires that each Bank member subject to community support review submit to FHFA biennially a completed Community Support Statement. FHFA uses the information collection to assess the responding member’s compliance with the statutory and regulatory community support standards. Comments are due 12/28/2022. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-28/pdf/2022-25868.pdf. Federal Register, Vol. 87, No. 227, 11/28/2022, 72994-72997.

FHFA seeks comment regarding an information collection titled, National Survey of Mortgage Originations (NSMO). The NSMO is a recurring quarterly survey of individuals who have recently obtained a loan secured by a first mortgage on single-family residential property. The survey is designed to obtain information about borrowers’ experiences in choosing and in taking out a mortgage. FHFA also seeks clearance to pretest future iterations of the survey questionnaire and related materials from time to time through the use of cognitive pre-testing. Comments are due 02/06/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-06/pdf/2022-26420.pdf Federal Register, Vol. 87, No. 233, 12/06/2022, 74616-74630.

FHFA seeks comment regarding an information collection titled, Affordable Housing Program. Section 10(j) of the Federal Home Loan Bank Act (Bank Act) requires FHFA to promulgate regulations under which each of the eleven Federal Home Loan Banks (Banks) must establish an Affordable Housing Program (AHP) to provide subsidy to the Bank’s member institutions to finance: (1) homeownership by households with incomes at or below 80 percent of the area median income (low- or moderate-income households); and (2) the purchase, construction, or rehabilitation of rental housing in which at least 20 percent of the units will be occupied by, and affordable for, households with incomes at 50 percent or less of the area median income (very low-income households). The information collection is used to determine whether the Banks are meeting the requirements under the Bank Act. Comments are due 01/09/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-08/pdf/2022-26707.pdf. Federal Register, Vol. 87, No. 235, 12/08/2022, 75251-75254.

SBA Adjusts Monetary-Based Industry Size Standards for Inflation.

The Small Business Administration (SBA) finalized, without change, a 2019 interim final rule that adjusted monetarybased industry size standards (i.e., receipts- and assets-based) for inflation that occurred since 2014. The rulemaking also includes three interim final actions. First, SBA added an additional 13.65 percent inflation increase to the monetary small business size standards, which have been recently adjusted as part of the second five-year review of size standards pursuant to the Small Business Jobs Act (Jobs Act). The concurrent additional adjustment accounts for the inflation that has occurred since 2019 that has not been adequately addressed by SBA’s previous adjustments to its small business size standards under the Jobs Act. Second, the rulemaking adjusted three program-specific monetary size standards to account for inflation: the size standards for sales or leases of government property, the size standards for stockpile purchases, and alternative size standard based on tangible net worth and net income for the Small Business Investment Company (SBIC) program. Third, SBA adjusted for inflation the economic disadvantage thresholds applicable to the 8(a) Business Development and Economically Disadvantaged Women-Owned Small Business programs, and

Regulatory Spotlight

the dollar limit for combined total 8(a) contracts. The rules are effective 12/19/2022. Comments on the interim final provisions of the rule must be received by 01/17/2023. The rules may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2022-11-17/pdf/2022-24595.pdf. Federal Register, Vol. 87, No. 221, 11/17/2022, 69118-69154.

SBA Implements Certifications Under Veteran Small Business Programs.

SBA issued a final rule to amend its regulations to implement a statutory requirement to certify Veteran-Owned Small Business Concerns (VOSB) and Service-Disabled Veteran-Owned Small Business Concerns (SDVOSB) participating in the Veteran Small Business Certification Program. VOSB and SDVOSB authorized federal contracting offices to restrict competition to eligible VOSBs and SDVOSBs for VA contracts. SBA will implement the Veteran Small Business Certification Program in a new 13 CFR part 128. The final rule is effective 01/01/2023. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-29/pdf/2022-25508.pdf Federal Register, Vol. 87, No. 228, 11/29/2022, 73400-73429.

SBA Issues First Quarter FY 2023 Interest Rate for Military Reservist Economic Injury Disaster Loans.

SBA publishes an interest rate for Miliary Reservist Economic Injury Disaster Loans (13 CFR 123.512) on a quarterly basis. The interest rate for the first quarter of fiscal year 2023 will be 3.305 for loans approved on or after 10/26/2022 The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-01/pdf/2022-26114.pdf Federal Register, Vol. 87, No. 230, 12/01/2022, 73801.

FCIC Issues Final Rules to Amend Crop Insurance Provisions.

The Federal Crop Insurance Corporation (FCIC) issued a final rule to amend the Common Crop Insurance Regulations, Small Grains Crop Insurance Provisions, Processing Sweet Corn Crop Insurance Provisions, Cabbage Crop Insurance Provisions, and the Fresh Market Tomato (Dollar Plan) Crop Insurance Provisions. The changes will allow revenue coverage for oats and rye under the Small Grains Crop Insurance Provisions and extend the end of the insurance period date for processing sweet corn from September 20 to September 30 in Illinois, Minnesota, and Wisconsin. The amendments will benefit the producers by providing an additional 10 days of coverage, consistent with the existing coverage for producers in Iowa. In addition, the final rule made corrections to the Cabbage Crop Insurance Provisions and the Fresh Market Tomato Crop Insurance Provisions. The changes are effective for the 2023 and succeeding crop years for crops with a contract change date on or after 11/30/2022, and for the 2024 and succeeding crop years with a contract change date on or after 06/30/2023. The final rule is effective 11/25/2022. FCIC will consider comments received by 01/24/2023. FCIC may consider the comments received and may conduct additional rulemaking based on the comments. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-25/pdf/2022-25529. pdf Federal Register, Vol. 87, No. 226, 11/25/2022, 72359-72364.

FCIC issued a final rule to amend the Common Crop Insurance Regulations, Sugar Beet Crop Insurance Provisions to reinstate stage guarantees and make the stage removal option permanent to ensure all producers have maximum flexibility to obtain the crop insurance coverage needed for operation. The changes are effective for the 2023 and succeeding crop years for counties with a contract change date on or after 11/30/2022, and for the 2024 and succeeding crop years for counties with a contract change date prior to 11/30/2022. The final rule is effective 11/28/2022. FCIC will consider comments received by 01/27/2023. FCIC may consider the comments received and may conduct additional rulemaking based on the comments. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-1128/pdf/2022-25531.pdf Federal Register, Vol. 87, No. 227, 11/28/2022, 72859-72862.

RBC Issues NOSA Under FY 2023 Rural Business Development Grant Programs.

The Rural Business-Cooperative Service (RBC) issued a notice of solicitation of applications (NOSA) for grants under the Rural Business Development Grant (RBDG) Program for fiscal year 2023, subject to the availability of funding. The purpose of the RBDG program is to promote economic development and job creation projects through the awarding of grant funds to eligible entities. Applications will compete in two separate categories, business opportunity grants and

Regulatory Spotlight

business enterprise grants, for use in funding various business and community projects that serve rural areas. The notice has been issued prior to passage of a FY 2023 Appropriations Act in order to allow applicants sufficient time to leverage financing, prepare and submit their applications, and give RBC time to process applications within FY 2023. Applications are due 02/28/2023. The NOSA may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-23/pdf/202225532.pdf Federal Register, Vol. 87, No. 225, 11/23/2022, 71571-71576.

SEC Issues Final Rule to Require Tailored Shareholder Reports and Fee Information in Certain Advertisements.

The Securities and Exchange Commission (SEC) adopted a rule and form amendments that require open-end management investment companies to transmit concise and visually engaging annual and semi-annual reports to shareholders that highlight key information that is particularly important for retail investors to assess and monitor their fund investments. Certain information that may be more relevant to financial professionals and investors who desire more in-depth information will no longer appear in funds’ shareholder reports but will be available online, delivered free of charge upon request, and filed on a semi-annual basis on Form N-CSR. The amendments exclude open-end management investment companies from the scope of the current rule that generally permits registered investment companies to satisfy shareholder report transmission requirements by making the reports and other materials available online and providing a notice of that availability. The amendments also require that funds tag their reports to shareholders using the Inline eXtensible Business Reporting Language (Inline XBRL) structured data language to provide machine-readable data that retail investors and other market participants may use to more efficiently access and evaluate investments. Finally, SEC has adopted amendments to the advertising rules for registered investment companies and business development companies to promote more transparent and balanced statements about investment costs. The final rule is effective 01/24/2023. Applicable compliance dates are discussed in section II of the final rule. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-25/pdf/2022-23756.pdf Federal Register, Vol. 87, No. 226, 11/25/2022, 72758-72858.

SEC Issues Listing Standards for Recovery of Erroneously Awarded Compensation.

SEC adopted a new rule and rule amendments to implement Section 954 of the Dodd-Frank Act, which added Section 10D to the Securities Exchange Act. In accordance with Section 10D of the Exchange Act, the final rule directs the national securities exchanges and associations that list securities to establish listing standards that require each issuer to develop and implement a policy providing for the recovery, in the event of a required accounting restatement, of incentive-based compensation received by current or former executive officers where that compensation is based on the erroneously reported financial information. The listing standards must also require the disclosure of the policy. Additionally, the final rule requires a listed issuer to file the policy as an exhibit to its annual report and to include other disclosures in the event a recovery analysis is triggered under the policy. The final rule is effective 01/27/2023. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-28/pdf/2022-23757.pdf Federal Register, Vol. 87, No. 227, 11/28/2022, 73076-73142.

SEC Issues Proposed Rule on Outsourcing by Investment Advisers.

SEC proposed a new rule under the Investment Advisers Act to prohibit registered investment advisers (advisers) from outsourcing certain services or functions without first meeting minimum requirements. The proposed rule would require advisers to conduct due diligence prior to engaging a service provider to perform certain services or functions. It would further require advisers to periodically monitor the performance and reassess the retention of the service provider in accordance with due diligence requirements to reasonably determine that it is appropriate to continue to outsource the services or functions to that service provider. SEC has also proposed corresponding amendments to the investment adviser registration form to collect census-type information about the service providers defined in the proposed rule. In addition, SEC has proposed related amendments to the Investment Advisers Act books and records rule, including a new provision requiring advisers that rely on a third party to make and/or keep books and records to conduct due diligence and monitoring of that third party and obtain certain reasonable assurances that the third party will meet certain standards. Comments are due 12/27/2022. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2022-11-16/pdf/2022-23694.pdf Federal Register, Vol. 87, No. 220, 11/16/2022, 68816-68883.

Regulatory Spotlight

SEC Seeks Comment on List of Rules to be Revised Under Regulatory Flexibility Act.

SEC seeks comment regarding a list of rules to be reviewed pursuant to Section 610 of the Regulatory Flexibility Act. The list is published to provide the public with notice that the rules are scheduled for review by SEC and to comment on whether the rules should be continued without change, or should be amended or rescinded to minimize any significant economic impact of the rules upon a substantial number of small entities. Comments are due 01/03/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-02/pdf/2022-26133.pdf. Federal Register, Vol. 87, No. 231, 12/02/2022, 74057-74060.

FASB Seeks Comment on 2022 Annual Report and Three-Year Plan.

The Federal Accounting Standards Advisory Board (FASB) seeks comment on its Annual Report for Fiscal Year 2022 and Three-Year Plan which may be found at: https://fasab.gov/board-activities/documents-for-comment/. Comments are due 01/18/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-18/pdf/2022-25189.pdf Federal Register, Vol. 87, No. 222, 11/18/2022, 69270.

FTC Delays Effective Date for Portions of Safeguards Rule.

The Federal Trade Commission (FTC) issued a final rule to delay the effective date of portions of the amended Safeguards Rule as published in the Federal Register on 12/09/2021. FTC is aware there is a reported shortage of qualified personnel to implement information security programs and supply chain issues may lead to delays in obtaining necessary equipment for upgrading security systems. In addition, these difficulties were exacerbated by the COVID-19 pandemic that has been active as financial institutions have attempted to come into compliance with the amended Safeguards Rule. These issues may make it difficult for financial institutions, especially small ones, to come into compliance with the amended Safeguards Rule by 12/09/2022. Accordingly, FTC has delayed the effective date of the provisions set forth in section 314.5 of the Safeguards Rule of 12/09/2022 to 06/09/2023. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-23/pdf/2022-25201.pdf Federal Register, Vol. 87, No. 225, 11/23/2022, 71509-71511.

FTC Issues ANPR on Business Opportunity Rule.

FTC issued an advanced notice of proposed rulemaking (ANPR) regarding its Business Opportunity Rule, the trade regulation which governs the sale of certain business opportunities. FTC seeks comments about the efficiency, costs, benefits, and regulatory impact of the rule, as part of its ten-year regulatory review plan. FTC also seeks comments to inform its consideration of whether the rule should be extended to include business opportunities and other moneymaking opportunity programs not currently covered by the rule, including business coaching and work-from-home programs, investment coaching programs, and e-commerce opportunities. Comments are due 01/24/2023. The ANPR may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-25/pdf/2022-25587.pdf. Federal Register, Vol. 87, No. 226, 11/25/2022, 72428-72432.

EBSA Adopts Amendments to Investment Duties Regulation Under ERISA.

The Employee Benefits Security Administration (EBSA) issued a final rule to adopt amendments to the Investment Duties regulation under Title I of the Employee Retirement Income Security Act, as amended (ERISA). The amendments clarify the application of ERISA’s fiduciary duties of prudence and loyalty to selecting investments and investment courses of action, including selecting qualified default investment alternatives, exercising shareholder rights, such as proxy voting, and the use of written proxy voting policies and guidelines. The amendments reverse and modify certain amendments to the Investment Duties regulation adopted in 2020. The final rule is effective on 01/30/2023. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-01/pdf/2022-25783.pdf Federal Register, Vol. 87, No. 230, 12/01/2022, 73822-73886.

Regulatory Spotlight

NCUA Seeks Comment on Information Collections Related to Advertising of Excess Insurance, Exceptions to Employment Restrictions, BSA Monitoring, and NCUA Profile Form.

The National Credit Union Administration (NCUA) seeks comment on the four information collections: Advertising of Excess Insurance, 12 CFR 740.3; Written Reimbursement Policy, 12 CFR 701.33; IRPS 19-1, Exceptions to Employment Restrictions Under Section 205(d) of the Federal Credit Union Act (Second Chance IRPS); Monitoring Bank Secrecy Act Compliance; and NCUA Profile. See the notice for specific information regarding each collection. Comments are due 01/23/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-11-23/pdf/2022-25461.pdf Federal Register, Vol. 87, No. 225, 11/23/2022, 71689-71690.

SSA Announces 2023 Assessment Rate for Fees to Representatives.

The Social Security Administration (SSA) issued a notice to announce the assessment percentage rate under the Social Security Act (Act) is 6.3 percent for 2023. Claimants may appoint a qualified individual as a representative to act on their behalf in matters before SSA. If the claimant is entitled to past-due benefits and was represented either by an attorney or by a non-attorney representative who has met certain prerequisites, the Act provides that SSA may withhold up to 25 percent of the past-due benefits and use that money to pay the representative’s approved fee directly to the representative. The Act requires SSA, each year, to set the assessment percentage rate at the lesser of 6.3 percent or the percentage rate necessary to achieve full recovery of the costs SSA incurs to determine and pay representatives’ fees. Based on the best available data, SSA has determined that the current rate of 6.3 percent will continue for 2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2022-12-07/pdf/2022-26560.pdf Federal Register, Vol. 87, No. 234, 12/07/2022, 75117.

Compliance Notes

On 12/21/2022, WBA has confirmed that WDFI has set the interest rate that must be paid on required escrow accounts under section 138.052(5) of the Wisconsin Statutes is 0.11% for 2023. Section 138.052(5)(am), Stats., except as provided in s. 138.052(5m)(b), Stats., and unless the escrow funds are held by a third party in a noninterestbearing account, provides that institutions which originate first lien or first lien equivalent residential mortgages on or after 01/01/1994 and before 04/18/2018, or a loan subject to s. 138.052(5)(am)3, Stats., need pay interest at the rate established by WDFI on the outstanding principal balance of an escrow account the institution requires in connection with such loans. The interest rate is effective 01/01/2023 through 12/31/2023. A notice regarding the 2023 interest rate will be posted to the Division of Banking portion of WDFI’s website, under the section titled, Other Information, Notice of Interest Rate on Required Residential Mortgage Loan Escrow Accounts: https://wdfi.org/fi/banks/default.htm

FDIC and FRB announced the 2023 updated asset-size thresholds used to define “small bank” and “intermediate small bank” under their CRA regulations. Annual adjustments to the asset-size thresholds are based on the average change in the CPI-W, which is a measure of inflation. As a result of the 8.60 percent increase in the CPI-W for the period ending in November 2022, the definitions of small and intermediate small banks for CRA examinations will change as follows: (a) “small bank” means an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.503 billion; and (b) “intermediate small bank” means a small institution with assets of at least $376 million as of December 31 of both of the prior two calendar years and less than $1.503 billion as of December 31 of either of the prior two calendar years. The announcement may be viewed at: www.federalreserve.gov/newsevents/ pressreleases/bcreg20221219a.htm

Revised examination procedures for the Fair Debt Collection Practices Act and its implementing regulation, Regulation F have been adopted by FFIEC’s Task Force on Consumer Compliance. The revised Interagency Examination Procedures incorporate CFPB’s 2020 and 2021 Fair Debt Collection final rules which went into effect 11/30/2021 The updated examination procedures may be viewed at: https://occ.gov/news-issuances/bulletins/2022/bulletin2022-26.html

Compliance Notes

FDIC released the latest Quarterly Banking Profile. Reports from commercial banks and savings institutions insured by FDIC reflect aggregate net income of $71.7 billion in third quarter 2022, an increase of $7.3 billion (11.3 percent) from the second quarter. An increase in net interest income drove the increase in net income. These and other financial results for third quarter 2022 are included in the profile. The profile may be viewed at: www.fdic.gov/news/ press-releases/2022/pr22082.html

Similarly, WDFI issued its third-quarter financial performance of Wisconsin’s 130 state-chartered banks. WDFI reported that banks continue to exhibit solid financial performance as of 09/30/2022. Total assets of Wisconsin’s statechartered banks stand at more than $67.1 billion through 09/30/2022, down from $67.8 billion reported 09/30/2021 Despite rising interest rates, the net interest margin is holding steady, decreasing slightly from 3.35% as of 09/30/2021, to 3.33% as of 09/30/2022. Net loans have increased 5.1% from 09/30/2021, up $2.2 billion. The release may be viewed at: www.wdfi.org/newsroom/press/2022/20221206_NewsRelease_Q3BankData_vFINAL.pdf

OCC published its assessment rates for the 2023 calendar year, reducing the rates in the general assessment fee schedule, and maintaining assessment rates from 2022 for the independent trust and independent credit card fee schedules. Changes to the general assessment fee schedule include reductions by 40 percent for all banks on their first $200 million in total balance-sheet assets, and a 20 percent reduction for all banks on balance-sheet assets above $200 million and up to $20 billion. There will be no inflation adjustment to assessment rates. The calendar year 2023 assessment rates will be in effect as of 01/01/2023, and will be reflected in assessments paid on 03/31/2023, and 09/30/2023. The announcement may be viewed at: www.occ.gov/news-issuances/news-releases/2022/nrocc-2022-145.html

FHFA announced the conforming loan limit (CLL) values for mortgages to be acquired by Fannie Mae and Freddie Mac in 2023. In most of the United States, the 2023 CLL value for one-unit properties will be $726,200, an increase of $79,000 from $647,200 in 2022. The release, which includes a map showing CLLs across the U.S., may be viewed at: www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Conforming-Loan-Limits-for-2023.aspx

FDIC released updates to its Consumer Compliance Examination Manual. The updates reflect changes made to FDIC’s adverting of membership rules under Part 328 and the abusive SOURCE violation code under Section 1036 of the Dodd Frank Act, manual section II-14.1; updated information within examination templates, manual section III-1.1; and updated citations within the Overdraft Payment Programs, section V-14.1. The updated manual may be viewed at: www. fdic.gov/resources/supervision-and-examinations/consumer-compliance-examination-manual/index.html

OCC announced revisions to its Civil Money Penalty (CMP) Manual which it will begin using in January 2023. OCC revised the CMP matrix applicable to its regulated institutions to allow for sufficient differentiation among varying levels of misconduct or by institution size and to update the mitigating factors to provide a stronger incentive for banks to fully address underlying deficiencies. The release may be viewed at: www.occ.gov/news-issuances/news-releases/2022/ nr-occ-2022-143.html

FDIC and OCC have posted their schedules of CRA examinations to be conducted in the first and second quarters of 2023. The schedules may be viewed at the following links, respectively: www.fdic.gov/news/pressreleases/2022/pr22081.html and https://occ.gov/news-issuances/news-releases/2022/nr-occ-2022-144.html

FHA announced new loan limits for calendar year 2023 for its Single Family Title II forward and Home Equity Conversion Mortgage (HECM) insurance programs. Loan limits for most of the country will increase in the coming year due to house price appreciation during the first half of 2022, which is factored into the statutorily mandated calculations FHA uses to determine the limits each year. The limits, based upon property size and location, range from $472,030 to $3,142,800. The 2023 loan limits may be viewed at: www.hud.gov/press/press_releases_media_advisories/HUD_ No_22_244

FHA also announced new flexibilities to help senior homeowners with FHA-insured HECMs who are behind on required property charge payments due to effects of the COVID-19 pandemic. The new COVID-19 HECM Property Charge Repayment Plan allows mortgage servicers to offer eligible homeowners up to five years to repay property charges, such as taxes and homeowners insurance, that the servicer advances on the homeowner’s behalf when the homeowner is unable to make these payments. With the new COVID-19 HECM Property Charge Repayment Plan:

Compliance Notes

(a) borrowers may receive a repayment plan regardless of the dollar amount of property charge payments owed; (b) borrowers can benefit from the use of jurisdictional Homeowner Assistance Funds; (c) servicers can offer homeowners a repayment plan of up to five full years (60 months) regardless of any prior repayment plan usage; (d) servicers can officer the COVID-19 HECM Property Charge Repayment Plan for up to one year after the end of the COVID-19 National Emergency. To be eligible, borrowers must attest that they have been impacted by the COVID-19 pandemic, which can be a verbal statement to the servicer. The announcement may be viewed at: https://www.hud.gov/press/press_releases_ media_advisories/HUD_No_22_244

FFIEC released data on small business, small farm, and community development lending during 2021. CRA requires the federal banking agencies to annually disclose the data. FFIEC also prepared aggregate disclosure statements of small business and small farm lending for all of the metropolitan statistical areas and non-metropolitan counties in the United States and its territories. The release may be viewed at: www.ffiec.gov/press/pr121522.htm

FDIC released part two of their Deposit Insurance Explained Podcast. Part one focused on FAQs regarding what deposit insurance is, and what it is not. Part two addresses the risks consumers need to keep in mind when it comes to deposit insurance – ranging from companies that misrepresent their products as FDIC-insured to legitimate firms offering pass-through deposit insurance. The podcasts and transcripts may be accessed here: https://www.fdic.gov/news/podcasts/

FTC released an updated Do-Not-Call Registry Data Book. The book provides the most recent fiscal year information available on robocall complaints, the types of calls consumers reported to FTC, and a state-by-state analysis. According to the Data Book, complaints about imposter calls again topped the list, with almost 287,000 received during the fiscal year ending on 09/30/2022, including both live calls and robocalls. In such calls, imposters falsely pose as government representatives, such as the Social Security Administration or the IRS, legitimate business entities, or as people affiliated with them. The release may be viewed at: www.ftc.gov/news-events/news/press-releases/2022/11/ftcreleases-updated-do-not-call-registry-data-book-impersonator-fraud-tops-list-consumer-complaints

OCC reported on the key issues facing the federal banking system in its Semiannual Risk Perspective. In its Fall 2022 release, OCC reported that economic growth slowed sharply in 2022, while high employment rates supported consumer spending and overall bank performance. Banks, in aggregate, remain well capitalized and with ample liquidity and sound credit quality, although macroeconomic headwinds are a concern. OCC highlighted interest rate, operational, compliance and credit risks, among the key risk themes in the report. The report may be viewed at: www.occ.gov/newsissuances/news-releases/2022/nr-occ-2022-147.html

Complex Issues When Dealing with Death of a Customer

Presenters: Christopher Schmidt and Thomas Vercauteren Boardman Clark Law Firm, Madison

The WBA In-House Legal Counsel Webinar Series is designed to give in-house bank attorneys the content they need to keep up to date on legal issues that affect a bank’s day-to-day operations.

Participants will also have the opportunity to earn CLE credits on topics that are specific to the banking industry.

Learn more or register online at: www.wisbank.com/LegalCounselWebinar

Compliance Notes

CFPB released research which finds members of the Reserves and National Guard are paying millions of dollars in extra interest each year because they are not always receiving the benefit of their right to rate reductions under the SCRA. The report may be viewed at: www.consumerfinance.gov/about-us/newsroom/cfpb-finds-members-of-thereserves-and-national-guard-paying-millions-of-dollars-in-extra-interest-each-year/

IRS reminds those over age 72 to start withdrawals from IRAs and retirement plans to avoid penalties. RMDs are minium amounts that many retirement plans and IRA account owners must generally withdraw annually after they reach age 72. Account owners can delay taking their first RMD until April 1 following the later of the calendar year they reach age 72, or in a workplace retirement plan, retire. RMDs are taxable income and may be subject to penalties if not timely taken. The reminder may be viewed at: www.irs.gov/newsroom/irs-reminds-those-over-age-72-to-start-withdrawalsfrom-iras-and-retirement-plans-to-avoid-penalties

IRS also issued a reminder for employers and self-employed individuals who chose to defer paying part of their 2020 Social Security tax liability that their second annual installment of the deferred amount is due on 12/31/2022 As part of the COVID relief provided during 2020, employers could choose to put off paying the employer’s share of their Social Security tax liability, which is 6.2% of wages. Self-employed individuals could also choose to defer a similar amount of their self-employment tax. Generally, half of that deferral was due on 12/31/2021. The other half is due on 12/31/2022. The reminder may be viewed at: https://www.irs.gov/newsroom/irs-reminder-for-many-employers-andself-employed-people-deferred-social-security-tax-payment-due-dec-31

DHS has extended full enforcement of REAL ID from 05/03/2023 to 05/07/2025. Under the new regulations published to execute the change, states will now have additional time to ensure their residents have driver’s licenses and identification cards that meet the security standards established by the REAL ID Act. As required by the law, following the enforcement deadline, federal agencies, including the Transportation Security Administration (TSA), will be prohibited from accepting driver’s licenses and identification cards that do not meet these federal standards. The announcement may be viewed at: www.dhs.gov/news/2022/12/05/dhs-announces-extension-real-id-fullenforcement-deadline

Insights of a Wisconsin Compliance Officer

This section of the WBA Compliance Journal is meant to highlight insights from fellow Wisconsin compliance officers. Through interactions on calls of the WBA Legal Call Program, in teaching at WBA Education compliance schools and programs, and as staff liaisons to banker-led WBA Committees and Sections, WBA Legal has developed many longstanding friendships with compliance officers from across Wisconsin.

These friendships are certainly not unique just for WBA Legal. The Wisconsin compliance community is a generous one and compliance officers routinely share expertise, experiences, and tips with each other and through that sharing many have a broad network of fellow compliance officer contacts and friendships.

As happens in every industry, there are times when an industry sees a changing of the guard so to speak as anchors of the industry retire. In Wisconsin’s compliance community, we are currently experiencing such a time as many longtime compliance professionals are or will be retiring over the next few years. As compliance manuals, files, and tidbits are being handed off to the next generation of compliance experts, WBA Legal also wanted to capture insights and wisdom from those retiring.

This month, WBA Legal is excited to share the insights of a compliance officer who starting in banking in 1978! Please enjoy some insights as shared from the eyes of Linda Blom, Vice President, Chief Risk Officer/Compliance, BLC Community Bank, Little Chute, Wisconsin.

Linda: I didn’t choose compliance; I must have been off the day they gave out the assignment, so I got what no one else wanted. However, I have no regrets. �� It was a job that needed to be done and as not many enjoy the puzzle compliance can be. For me that puzzle drew me in.

Q: When did you start in compliance? Why compliance?

Insights of a Wisconsin Compliance Officer

Q: Do you have any particular “trick” or how best do you tackle understanding a new reg or new requirement?

The best advice I can give is keep reading; every source has a take on everything new, it helps to get a look at the whole picture. Most new requirements are hinted at long before they are official. WBA is a great resource for breaking down regulations to an understandable level. In compliance you never stop learning!

Q: TRID aside (as many would all pick TRID) what is your least fav regulation to manage? Why? Probably flood. It seems so black and white but there is so much grey!

Q: What are you most proud of accomplishing in your career?

When I started in banking in 1978, our bank had no policies. I began taking on responsibilities related to loan policies and procedures after the FDIC began enforcing the need for them. What began with creating an understandable LAR grew into a full time position. Along the way people came and went, but I stayed. I am proud of that. Lots of ups and downs along the way! In community banking we wear so many hats, it’s been an enjoyable ride which has allowed me to know the entire bank’s processes and be a part of some amazing growth!

Q: What will you miss the most?

I will miss the people! I have been lucky to have known and worked with so many people during both stressful and bountiful times. You never forget those who appreciated the help you could give when they needed it.

Q: Now at this side of your career, and with all of your compliance experience and all that you have helped to implement, what advice would you have given yourself when you first started in compliance? Run…�� Seriously though, I think continuing education and listening to those who have come before me in the compliance arena. Early on in my career, compliance really wasn’t a thing. Training also wasn’t something the bank felt as a necessary thing to do our jobs. I would have pushed for more opportunity earlier. I really never expected to want to “do” compliance. Now there is an abundance of training available to everyone. I learned the hard way, through exam results. I have also learned that while the job is important, life and family are more so.

Q: How did you successfully train fellow compliance staff and/or other bank staff on the importance of paying attention to compliance and for the need to get compliance right?

Training opportunities are everywhere. First, you need to ensure that you have the right person in the role, someone who likes the puzzle and can think outside of the box. I’ve worked closely with staff to point out the pitfalls, trying to give opportunity to let the discussion happen first and then playing devil’s advocate with the “what if” scenarios. Working very closely as we go through day to day is priceless. The introduction to our compliance community is also so important. We have many strong compliance people in Wisconsin; everyone shares and is willing to talk out issues as they arise. Management has to have the backs of compliance; without that, exams and audits will teach them the hard way.

Q: Funniest compliance or banking related story/experience?

There are many, probably for me it was not compliance related. I locked the vault for a weekend on the Wednesday night before Thanksgiving. On Friday morning we were not getting in there! Thank goodness for a local financial who helped us with cash issues. It was not funny at the time but we were able to laugh in the long run!

Q: What are you looking forward to the most after leaving compliance behind?

For me it’s the time. I want more unscheduled time for family. I’ll probably still be looking at compliance/banking related articles for a long time! I’m weird that way!!

Q: Any parting thoughts for the new compliance guard?

Always look at all sides of everything; the good, the bad and the ugly. Reach out and ask if you’re not sure, and never stop learning!

WBA wishes Linda all the best in her retirement. It has been a great pleasure working with Linda over all the years and through the various changes in regulations and interpretations.

CLE Hours 2021 and 2022

List of Recent WBA Programs to Receive Continuing Legal Education Designation

Wisconsin Bank Attorney:

The Board of Bar Examiners of the Supreme Court of Wisconsin has approved the following completed WBA educational programs for use toward the Wisconsin mandatory Continuing Legal Education (CLE) requirement for attorneys. None of the activities listed below include Ethics and Professional Responsibility (EPR) hours or qualify for GAL education.

2021

WBA Compliance Forum, June 2021

3.0 CLE Hours

June 22, 2021 — Stevens Point

June 23, 2021 — Madison

WBA Trust Conference, May 2021

5.5 CLE Hours

May 18, 2021 — live webcast

WBA Compliance Forum, November 2021

4.0 CLE Hours

November 9, 2021 — Wausau

November 10, 2021 — Madison

WBA Compliance Forum, February 2022

3.0 CLE Hours

February 22, 2022 — Wausau

February 23, 2022 — Madison

WBA Compliance Forum, June 2022

4.5 CLE Hours

June 28, 2022 — Wisconsin Dells

WBA Trust Conference, May 2022

5.0 CLE Hours

May 25, 2022 — Madison

WBA Compliance Forum, November 2022

3.5 CLE Hours

November 15, 2022 — Wisconsin Dells

2022

WBA In-House Legal Counsel Series

September 2021

Mergers and Acquisitions, Pre and Post M/A Issues to Consider 2.0 CLE Hours — live webcast and on demand

October 2021 Troubled Business Borrowers Deal with Real and Personal Property in a Defaulted Loan 2.0 CLE Hours — live webcast and on demand

WBA In-House Legal Counsel Series

March 2022

Survey and Title Review (with Endorsements) 2.0 CLE Hours — live webcast and on demand

March 2022 Court Case Update: Recent Federal and State Cases 2.0 CLE Hours — live webcast and on demand

April 2022 Employment Law Overview and Update 2.0 CLE Hours — live webcast and on demand

May 2022

Municipal Lending Update 2.0 CLE Hours — live webcast and on demand

JANUARY 2023

• In-House Legal Counsel Webinar: Complex Issues When Dealing with Death of Customer

11 Virtual; $250/attendee

• Midwest Economic Forecast Luncheon

12 Virtual

• Community Bankers for Compliance (CBC) – Session I

24–25 Virtual half-days; membership (pricing options vary)

FEBRUARY 2023

• Branch Manager Boot Camp: Session 1

2 4-part series; virtual half-days; $800/attendee

• Bank Executives Conference

8–10 Wisconsin Dells

• Compliance Forum: Session 3

14 Wisconsin Dells; annual membership (pricing varies)

MARCH 2023

• Call Report Review & Update Workshop

1–2 Virtual half-days; $245/attendee

• Branch Manager Boot Camp: Session 2

2 4-part series; virtual half-days; $800/attendee

• Advanced IRA Workshop

7 Madison or virtual; $245/attendee

• Health Savings Accounts Workshop

8 Madison or virtual; $245/attendee

•Loan Compliance School

13–17 Madison or virtual; $1,295/attendee

•Real Estate Compliance School

15–17 Madison or virtual; $795/attendee

•Introduction to Commercial Lending School

20–22 Madison; $895/attendee

• WBA/ABA Washington Summit

20–23 Washington, D.C.

• Security Officer Workshops

22 Wisconsin Dells or virtual; $245/attendee

• Branch Manager Boot Camp: Session 3

23 4-part series; virtual half-days; $800/attendee

APRIL 2023

• Principles of Banking Course

5–6 Fond du Lac; $550/attendee

12–13 Mineral Point; $550/attendee

•Residential Mortgage Lending School 11–14 Madison; $1,045/attendee

• Agricultural Bankers Conference

13–14 Wisconsin Dells; $300/ag section member or $350/non-section member attendee

• Power of Community Week

17–22 www.wisbank.com/BanksPowerWI

• Compliance Management School

18–20 Madison; $795/attendee

• Women in Banking Conference 25 Wisconsin Dells or virtual; team pricing available

• Community Bankers for Compliance (CBC) – Session II 26 Wisconsin Dells or virtual; membership (pricing options vary)

• Branch Manager Boot Camp: Session 4 27 4-part series; virtual half-days; $800/attendee

• FinTech Showcase TBD Wisconsin Dells

MAY 2023

• American Mortgage Conference 1–3 South Carolina

•Personal Banker School 2–3 Wausau; $495/attendee

• HR Conference 4 Stevens Point; $245/attendee

•School of Bank Management 8–12 Madison; $1,395/attendee

KEY: Color-Coded Event Descriptions…

• ConferencesI Summits – One or more days, based on hot topics, industry news and best practices; scheduled time for peer networking. • SchoolsI 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. • WorkshopsI 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