February 2024 Compliance Journal

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Compliance Journal

February 2024

Special Focus

Agencies Release Examination Principles Related to Valuation Discrimination and Bias in Residential Lending

The Federal Financial Institutions Examination Council (FFIEC), on behalf of the Bureau of Consumer Financial Protection (CFPB), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA), and the State Liaison Committee, released principles for the examination of supervised institutions’ (institutions) residential property appraisal and evaluation (collectively, valuation) practices.

The examination principles are meant to help mitigate risks that may arise due to potential discrimination or bias in valuation practices and to promote creditable valuations. In the context of consumer compliance, “discrimination” is used to refer to prohibited discrimination based on protected characteristics in the residential property valuation process. “Bias” is considered to mean a preference or inclination that precludes an appraiser or other preparer of the valuation from reporting with impartiality, independence, or objectivity in an assignment.

The agencies are concerned over discrimination and bias in valuation practices given how critical an underwriting component real estate valuations are in residential real estate (RRE) lending, both from a consumer compliance and safety and soundness perspective. As a result, the agencies have set forth examination principles for both consumer compliance examinations and for safety and soundness examinations.

Consumer Compliance Examination Principles

Under a consumer compliance examination, examiners are to consider whether the institution’s risk management practices for RRE valuations are appropriate to identify and address valuation discrimination. In particular, examiners are to consider board and senior management oversight and the institution’s consumer compliance program.

Regarding board and senior management oversight, examiners are to evaluate whether the board of directors and management ensure that the institution has implemented and maintains a compliance management system, including third-party oversight, which is commensurate with the institution’s RRE lending risk profile. When evaluating an institution’s third-party risk management, examiners are to evaluate the institution’s oversight of RRE valuation of thirdparties’ consumer compliance-related policies, procedures, internal controls, and training.

Examiners will also evaluate an institution’s due diligence and ongoing monitoring of third parties, including persons or entities that prepare valuation reports, third-party appraisers, and appraisal management companies, to assess compliance with consumer protection laws and regulations, including anti-discrimination laws.

Regarding an institution’s consumer compliance program, examiners will: (a) assess an institution’s policies and procedures to determine if its collateral valuation review function includes identifying potential discriminatory valuation practices or results; (b) assess whether its training program appropriately addresses identification of potential discrimination in RRE lending and collateral valuation programs, whether internally identified or from consumer inquiries or complaints; (c) assess whether the institution adheres to policies and procedures designed to identify and address potential discriminations; and (d) evaluate the institution’s systems or processes for reviewing, documenting, tracking, addressing, monitoring, and managing collateral valuation complaints—including complaints that allege potential

Special Focus

discrimination. The evaluation will include how an institution handles complaints from various channels and sources, such as letters, phone calls, in person, from regulators, thirdparty service providers, emails, and social media.

Safety and Soundness Examination Principles

Examiners will also review an institution’s RRE collateral valuation program as a component of a safety and soundness examination. Consistent with an agency’s riskfocused examination approach, examiners will take a number of matters into consideration. In particular, examiners are to consider consumer compliance examination findings and will review other examination planning information to identify consumer complaints, litigation, and other matters related to valuation discrimination or bias. From a risk assessment perspective, examiners will consider the materiality of RRE lending in relation to the institution’s overall lending activities, size, complexity, and risk profile.

Examiners will also assess the institution’s policies, processes, staff organization and resources, control system, and management information systems for RRE collateral valuations. This assessment will also include the institution’s ability to identify and resolve incidences for potential valuation discrimination or bias. Examiners are to evaluate the institution’s practices for selecting, retaining, and overseeing independent, qualified, and competent individuals (and applicable valuation models) that have the ability to render unbiased and credible opinions of collateral value and will evaluate the institution’s oversight of valuation-related third parties. The evaluation will also include how an institution reviews how their third parties identify, monitor, and manage the risks related to valuation discrimination or bias.

Within a safety and soundness examination, examiners will also assess the institution’s valuation review function for identifying potentially discriminatory or biased valuation results, assess the institution’s credit risk review function for RRE loan portfolios for appropriate consideration of potentially discriminatory or biased valuations, and will assess the institution’s training program meant to provide staff with the knowledge and skills to identify and resolve valuation discrimination or bias.

Conclusion

Given the principles outlined in the FFIEC statement, financial institutions should use the stated principles as a checklist to review current valuation policies and procedures to identify whether there are gaps and to create a plan for incorporating any missing principles into applicable policy and procedures, in preparation for examiner scrutiny.

For example, an institution should be prepared to explain in a consumer compliance examination how its policies and procedures include a means to review collateral valuations to identify potential discriminatory valuation practices or results, how such review is completed, and how matters are resolved. When an institution conducts valuation training, identify the portion of the training intended to educate staff on valuation discrimination or bias, how to watch for, identify, and report such practices, and how to resolve valuation discrimination or bias. Tracking such training will allow the institution to report how it has educated staff on the topic when asked in examinations. If an institution is utilizing a third party for valuations, the institution should be prepared to demonstrate how it monitors the third party for identifying, monitoring, and managing against valuation discrimination or bias. Having such measurement incorporated into the institution’s management of its thirdparty valuation vendor(s) will help the institution demonstrate to examiners the institution is managing against risks involving valuation discrimination or bias.

The FFIEC interagency statement may be viewed at: https://files.consumerfinance.gov/f/ documents/cfpb_ffiec-statement-on-exam-principles_2024-02.pdf

February

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2024
29, Number
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Copyright ©2024 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.
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Special Focus

FRB Consumer Compliance Outlook Lists Top 2022 Compliance Examination Violations

In its recently released Fourth Issue 2023 Consumer Compliance Outlook,® the Board of Governors of the Federal Reserve System (FRB) identified top compliance violations from its 2022 compliance examination data. Violations of the Electronic Fund Transfer Act (Regulation E), Real Estate Settlement Procedures Act (Regulation X), Fair Credit Reporting Act (FCRA), and Equal Credit Opportunity Act (Regulation B) were among the most cited. The following is a summary of FRB’s findings.

Regulation E Violations

FRB reported that common violations of Regulation E included not promptly investigating, not providing provisional credit, and not conducting an adequate investigation. FRB examination data reflected that some financial institutions had not promptly initiated error resolution investigations after the consumer notified the institution of an error, in violation of §1005.11(c). FRB identified the errors typically occurred because bank staff did not recognize when consumers were making error resolution claims, did not know how to initiate investigations, or did not correctly identify all of the disputed transactions.

FRB also reported that examiners cited institutions for violating §1005.11(c)(2)(i) by not providing provisional credit for the amount of the alleged error within 10 business days of receiving an error notice when the institutions could not complete their investigation within 10 business days and took up to 45 days to investigate under §1005.11(c)(2). Examiners also cited institutions that provisionally credited accounts but failed to provide full access to and use of the funds during the investigation. FRB identified the errors occurred because the institutions lacked effective procedures, controls, monitoring, and/or training to ensure compliance with the regulation.

FRB compliance examination data also reflected that some institutions conducted inadequate investigations of error claims. Under Regulation E, an institution cannot deny a consumer’s claim of an error without conducting a reasonable investigation, unless it corrects the error as alleged by the consumer. FRB explains that a reasonable investigation includes reviewing relevant information within the institution’s records. If the review confirms the error, the claim cannot be denied. FRB further explained that when an alleged error is an unauthorized electronic fund transfer (EFT), the Electronic Fund Transfer Act places the burden of proof on the financial institution to establish the transaction was authorized. Therefore, if the institution cannot establish the disputed EFT transaction was authorized, FRB concluded the institution must credit the consumer’s account. FRB stated it believes these types of errors occurred because staff either did not review or research all the transactions the consumer disputed or denied claims because of prior disputed transactions with the same merchant. FRB further reported that examiners identified root causes as not providing effective policies and procedures and not conducting adequate training and monitoring. FRB cited institutions for not explaining the results of an investigation and not providing notice to the consumer of the right to request the documents the institution relied on in making its determination. FRB reported the errors occurred primarily because staff did not adhere to the institution’s policies and procedures.

Regulation X Violations

FRB’s Consumer Compliance Outlook also reported violations of escrow account rules under Regulation X. In particular, FRB reported that examiners found bank staff inaccurately computed and disclosed the initial and annual escrow analyses. FRB stated incorrect system settings and payment amount issues typically caused the errors. For the system settings, FRB examiners found bank staff erroneously used the payment due date rather than the anticipated disbursement date as the disbursement date for escrow items on the initial and annual escrow analyses. Using the payment due date rather than the anticipated disbursement date resulted in computation and disclosure errors on the initial and annual escrow account analyses.

For the payment amount issue, examiners identified that bank staff itemized the incorrect number of payments from the escrow account on the initial and annual escrow account analyses, resulting in inaccurate initial and annual escrow computations and projections.

FRB reported that examiners also observed errors related to bank staff conducting annual escrow account analyses beyond the 12-month computation year, without issuing short-year statements as required under Regulation X. In these cases, examiners found bank staff conducted annual escrow analyses for all loans during the same month. If a loan was

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Special Focus

originated outside of this month, an annual escrow account analysis was not prepared until the loan aligned with the bank’s escrow analysis schedule. The examination finding resulted in staff not conducting timely annual escrow account analyses, as §1024.17(c)(3) requires.

Fair Credit Reporting Act Violations

FRB also shared common examination violations under FCRA. In particular, FRB examiners cited violations for not providing an accurate or complete adverse action notice to affected applicants. FRB reported common violations included: (a) not including the range of possible credit scores under the scoring model used; (b) not providing an adverse action notice when taking adverse action based, in whole or in part, on information in a consumer report, and (c) taking adverse action based, in whole or in part, on a credit score, but not including the credit score disclosures specified in FCRA §609(f)(1) in the adverse action notice. As a reminder, the credit score does not have to the be primary reason adverse action is taken; the credit score disclosures are required whenever a score is used in the decision to take adverse action. FRB stated it believes the FCRA-related errors were due to inadequate training, controls, and procedures.

Regulation B Violations

The latest FRB Consumer Compliance Outlook also listed the most cited violations of ECOA under Regulation B. FRB examiners cited financial institutions that required individual, creditworthy applicants to obtain the signature of their spouse or another person as a condition of their loan in violation of the §1002.7(d).

Examiners also cited financial institutions for not appropriately providing applicants a copy of appraisals or valuations associated with a first-lien mortgage application in accordance with §1002.14(a). FRB also cited institutions for failing to mail or deliver a notice in writing of the applicant’s right to receive a copy of all written appraisals or valuations developed in connection with the application within the time periods required under Regulation B. FRB stated inadequate training and inadequate procedures were identified as the root causes for the violations cited under Regulation B.

Sound Practices

For the compliance examination violations identified in the article, FRB provided recommendations of what it considers are sound practices to help mitigate compliance risks. The identified practices are meant to help institutions limit the type of violations listed and should be considered if an institution seeks improvements in a particular compliance procedure. The Fourth Issue 2023 FRB Consumer Compliance Outlook may be viewed at: https://emma-assets.s3.amazonaws.com/ cky/ed16d88bfb810d65b1ad8d243b62c2bb/CCO_Issue_4_2023.pdf

Reporting HMDA Total Units and Cross-Collateralization

A version of this article previously appeared in the July 2022 edition of the WBA Compliance Journal. While there has been no new law and no new interpretations of existing law in this area, WBA and FIPCO continue to receive questions regarding the interplay of HMDA reporting for total units and cross-collateralization clauses within security agreements. As a result, this article has been updated for purposes clarity. In addition to the updated article, the final pages of this month’s Compliance Journal include a brand-new HMDA Total Units Worksheet designed to help banks understand, identify, and report total units for covered loans.

Subject to certain exemptions, the Home Mortgage Disclosures Act (HMDA) requires covered financial institutions (banks) to report data on covered transactions. HMDA reporting banks must report data for covered transactions. The data to be reported is outlined under Regulation C section 1003.4. Some of those data points are optional for banks which qualify for a partial exemption. For the purposes of this article, only one data point is discussed. That data point requires reporting of the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan (total units). This data point is required by Regulation C section 1003.4(a)(31). Total units is not a field subject to optional reporting. Thus, total units must be reported by all covered banks, including those who qualify for a partial exemption.

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Special Focus

The total units data point requires a reporting bank to enter, in numeral form, the number of individual dwelling units related to the property securing the covered loan. For example, if there are five (5) individual dwelling units, bank will enter 5 on the HMDA LAR. When a loan is secured by multiple properties, bank may need to consider each of those properties securing the loan to properly report this field. This includes property securing the loan by any means.

A loan could be secured by multiple properties as the result of future advance language or other cross-collateralization clauses. For example, the WBA 451 Business Note contains cross-collateralization language which provides broad coverage in support of the bank’s position as lender. This language provides in part that the note is secured by all existing and future security agreements and mortgages by the borrower, by any indorser or guarantor, and by any other person providing collateral security. Lenders must carefully consider this language, and its relationship with the borrower, including guarantors and other parties, in order to determine those properties which secure the loan. This type of broad cross-collateralization language is most common on business notes.

As a consumer example, when taking a loan secured by a WBA 428 Real Estate Mortgage, the mortgage document states that the mortgage will secure certain future advances. However, in general, most WBA consumer notes disclaim dwellings as collateral, unless the dwelling is specifically described in the note or agreement. So, a pre-existing mortgage on a dwelling does not secure a future consumer note or agreement unless the note or agreement specifically identifies the dwelling.1

Lenders need to review their notes and security agreements for these types of clauses, and similar language. While understanding the language within a bank’s notes and security agreements is important for a number of reasons, this article strictly discusses the significance of such language as it relates to reporting HMDA total units. To that extent, the question becomes: for a covered loan, what data must a bank report for total units when that loan is secured by multiple properties by virtue of cross-collateralization?

When reporting total units, HMDA provides an answer to this question within its commentary. Comment 1 to section 1003.4(a)(31) makes a cross-reference to section 1003.4(a)(9) comment 2 regarding transactions involving multiple properties with more than one property taken as security (comment 2). Various HMDA data points require a bank to report certain information on the property securing the covered loan. When a covered loan is secured by multiple properties, questions arise as to which property the bank is to report on. Comment 2 provides clarity regarding this question. Thus, comment 2 is critical to the understanding of how to report total units. Specifically, comment 2 draws distinctions between those data points which require reporting for a single property (selected by the lender), and those which must be considered for every property securing the loan (in addition to that single property selected by the lender). Another way to look at it is that some data points require bank to report information on multiple properties, while others only require bank to report on one property. Comment 2 provides a list of each data point which is reported for a single property, and those which are reported for every property securing the loan.

The data reported for total units is one of those which must be reported for every property securing the loan.2

Because the commentary includes total units as one of those categories for which information must be reported applicable to the covered loan, and not that which relates only to the single property identified under 1003.4(a)(9), then the lender must report total units based upon every property which secures the loan. As a result, lenders must consider whether the loan is secured by multiple properties. Lenders must review their language specifically to make this determination, but as a final point of distinction, note that the effect of cross-collateralization clauses is to secure the loan with multiple properties. When a loan is secured by multiple properties, bank must report total units as including every property securing the loan. Meaning bank must report all properties which are cross-collateralized.

While this is not a new rule, it is recommended that banks review the above HMDA sections as a refresher. From there, banks should review their contracts and HMDA reporting procedures to ensure that all applicable fields are being reported for all applicable properties. It may be that additional monitoring systems need to be put into place to account for multiple properties securing a loan, and part of that monitoring should include how bank will identify and report every

1 The reason this language is included is for purposes of flood rules. For further discussion on cross-collateralization as it relates to flood requirements, please review the WBA Compliance Journal from February, 2022.

2 Comment 2 provides in relevant part: “…for aspects of the entries that do not refer to the property identified in § 1003.4(a) (9) (i.e., § 1003.4(a)(1) through (4), (7), (8), (10) through (13), (15) through (28), (31) through (38)), Financial Institution A reports the information applicable to the covered loan or application and not information that relates only to the property identified in § 1003.4(a)(9).”

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property securing a HMDA covered loan for the total units data point. Banks should conduct this review in advance of any upcoming compliance exam and prepare accordingly.

In summary, if a loan is secured by multiple properties, those properties must be included for purposes of reporting total units. As a result, lenders must review their notes and security agreements to understand the extent of how their loans are secured. This is a contractual matter which can vary from note to note, and from one loan relationship to the next. As such, each loan relationship must be reviewed to determine HMDA reporting requirements. A HMDA Total Units Worksheet is included at the end of this Compliance Journal designed to help banks understand, identify, and report this sole data point. Lastly, as mentioned above, this article, and the included worksheet, is specific to the implications of cross-collateralization clauses in relation to reporting of total units for HMDA purposes only. However, crosscollateralization clauses are important to understand for reasons beyond HMDA reporting.

For any questions on this matter or others, please contact WBA’s legal team at wbalegal@wisbank.com or 608-441-1200.

Regulatory Spotlight

Agencies Publish Final CRA Rule and Trade Associations Sue Claiming Agencies Exceeded Statutory Authority.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) (collectively, the agencies) adopted final amendments to their regulations that implement the Community Reinvestment Act (CRA) to update how CRA activities qualify for consideration, where CRA activities are considered, and how CRA activities are evaluated. The final rule is effective 04/01/2024, except for amendment nos. 29, 52, and 75, which are effective 04/01/2024, through 01/01/2031. Amendment nos. 7, 11, 18, 20, 25, 35, 39, 43, 45, 49, 58, 62, 66, 68, and 72, are delayed indefinitely. The agencies will publish a document in the Federal Register announcing an effective date for the delayed amendments. Sections ll.12 through ll.15, ll.17 through ll.30, and ll.42(a); the data collection and maintenance requirements in ll.42(c) through (f); and appendices A through F of the common rule text as adopted by the agencies are applicable 01/01/2026. Section ll.42(b) and (g) through (i) and the reporting requirements in ll.42(c) through (f) of the common rule text as adopted by the agencies are applicable 01/01/2027. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-01/pdf/2023-25797. pdf. Federal Register, Vol. 89, No. 22, 02/01/2024, 6574-7222.

The American Bankers Association, U.S. Chamber of Commerce, Independent Community Bankers of America, Texas Bankers Association, Independent Bankers Association of Texas, Amarillo Chamber of Commerce, and Longview Chamber of Commerce filed a lawsuit in the Northern District of Texas against the Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) for exceeding their statutory authority and acting arbitrarily and capriciously with their recent amendments to the Community Reinvestment Act (CRA) Rules. The announcement may be viewed at: https://www.aba.com/about-us/pressroom/press-releases/cra-joint-trades-lawsuit

Agencies Adjust CMPs for Inflation.

The Bureau of Consumer Financial Protection (CFPB) issued a final rule to adjust for inflation the maximum amount of each civil penalty within CFPB’s jurisdiction. The adjustments are required by the Federal Civil Penalties Inflation Adjustment Act, as amended by the Debt Collection Improvement Act, and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act. The inflation adjustments mandated by the Inflation Adjustment Act serve to maintain the deterrent effect of civil penalties and to promote compliance with the law. See the final rule for the specific adjustments. The final rule is effective 01/15/2024. The final rule may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2024-01-11/pdf/2024-00456.pdf Federal Register, Vol. 89, No. 8, 01/11/2024, 1787-1789.

The Board of Governors of the Federal Reserve System (FRB) issued a final rule to amend its rules of practice and procedure to adjust the amount of each civil money penalty (CMP) provided by law within its jurisdiction to account for inflation as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act. See the final rule for the

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specific adjustments. The final rule is effective 01/12/2024. The final rule may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-01-12/pdf/2024-00650.pdf Federal Register, Vol. 89, No. 9, 01/12/2024, 2114-2116.

The Federal Deposit Insurance Corporation (FDIC) announced changes to the maximum amount of each civil money penalty (CMP) within its jurisdiction to administer to account for inflation under the Federal Civil Penalties Inflation Adjustment Act, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act. Under the Adjustment Act, as amended, federal agencies must make annual adjustments to the maximum amount of each CMP it administers. The Office of Management and Budget (OMB) is required to issue guidance to federal agencies no later than December 15 of each year providing an inflation-adjustment multiplier (i.e., the inflation-adjustment factor agencies must use) applicable to CMPs assessed in the following year. Agencies are required to publish their CMPs, adjusted under the multiplier provided by the OMB, by January 15 of the applicable year. See the notice for the specific adjustments. The adjusted maximum amounts of CMPs in the notice are applicable to penalties assessed after 01/15/2024, for conduct occurring on or after 11/02/2015. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-11/ pdf/2024-00409.pdf Federal Register, Vol. 89, No. 8, 01/11/2024, 1917-1919.

The Financial Crimes Enforcement Network (FinCEN) published a final rule to reflect inflation adjustments to its civil monetary penalties (CMPs) as mandated by the Federal Civil Penalties Inflation Adjustment Act, as amended. The final rule adjusts certain maximum CMPs within the jurisdiction of FinCEN to the amounts required by that Act. See the final rule for the specific adjustments. The final rule is effective 01/25/2024. The final rule may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-01-25/pdf/2024-01420.pdf Federal Register, Vol. 89, No. 17, 01/25/2024, 4820-4821.

The Department of Treasury (Treasury) published a final rule to adjust its civil monetary penalties (CMPs) for inflation as mandated by the Federal Civil Penalties Inflation Adjustment Act, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act. See the final rule for the specific adjustments. The final rule is effective 01/25/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-25/pdf/2024-01409.pdf Federal Register, Vol. 89, No. 17, 01/25/2024, 4818-4920.

The Federal Housing Finance Agency (FHFA) adopted a final rule to amend its Rules of Practice and Procedure and other FHFA regulations to adjust each civil money penalty (CMP) within its jurisdiction to account for inflation, pursuant to the Federal Civil Penalties Inflation Adjustment Act, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act. See the final rule for the specific adjustments. The final rule is effective 01/18/2024, and applicable beginning 01/15/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-18/pdf/202400874.pdf Federal Register, Vol. 89, No. 12, 01/18/2024, 3331-3333.

The Farm Credit Administration (FCA) issued a final rule to implement inflation adjustments to civil money penalties (CMPs) that FCA may impose or enforce pursuant to the Farm Credit Act, as amended, and pursuant to the Flood Disaster Protection Act, as amended by the National Flood Insurance Reform Act, and further amended by the BiggertWaters Flood Insurance Reform Act. See the final rule for the specific adjustments. The final rule is effective 01/15/2024 The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-12/pdf/2024-00595.pdf Federal Register, Vol. 89, No. 9, 01/12/2024, 2116-2118.

The Commodity Futures Trading Commission (CFTC) has amended its rule that governs the maximum amount of civil monetary penalties (CMPs) imposed under the Commodity Exchange Act (CEA), to adjust for inflation. The final rule sets forth the maximum, inflation-adjusted dollar amount for CMPs assessable for violations of CEA and CFTC rules, regulations, and orders thereunder. The final rule, as amended, implements the Federal Civil Penalties Inflation Adjustment Act, as amended. See the final rule for the specific adjustments. The final rule is effective 01/24/2024, and is applicable to penalties assessed after 01/15/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-01-24/pdf/2024-01341.pdf Federal Register, Vol. 89, No. 16, 01/24/2024, 4542-4545.

The Securities and Exchange Commission (SEC) published a notice pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act. The Act requires all agencies to annually adjust for inflation the civil monetary penalties (CMPs) that can be imposed under the statutes administered by an agency and publish the adjusted amounts in the Federal Register. The notice sets forth the annual inflation adjustment of the maximum amount of CMPs administered by SEC under the Securities Act, Securities Exchange Act, Investment Company Act, Investment Advisers Act, and certain penalties under the Sarbanes-Oxley Act. See the notice for the specific adjustments. The amounts are effective beginning 01/15/2024, and will apply to all penalties imposed after that date for violations of the aforementioned

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Regulatory Spotlight

Regulatory Spotlight

statutes that occurred after 11/02/2015. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-202401-11/pdf/2024-00378.pdf Federal Register, Vol. 89, No. 8, 01/11/2024, 1970-1972.

The Federal Communications Commission (FCC) issued a final rule to adjust civil monetary penalties (CMPs) to reflect inflation. The Federal Civil Penalties Inflation Adjustment Act Improvements Act requires FCC to amend its forfeiture penalty rules to reflect annual adjustments for inflation in order to improve their effectiveness and maintain their deterrent effect. See the final rule for the specific adjustments. The final rule is effective 01/12/2024. The CMPs are applicable beginning 01/15/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-12/pdf/202400624.pdf Federal Register, Vol. 89, No. 9, 01/12/2024, 2148-2151.

The Department of Labor (DOL) published a final rule to adjust for inflation the civil monetary penalties (CMPs) assessed or enforced by DOL, pursuant to the Federal Civil Penalties Inflation Adjustment Act as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act. See the final rule for the specific adjustments. The final rule is effective 01/15/2024. As provided by the Inflation Adjustment Act, the increased penalty levels apply to any penalties assessed after 01/15/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-11/ pdf/2024-00253.pdf. Federal Register, Vol. 89, No. 8, 01/11/2024, 1810-1822.

Agencies Publish Semiannual Regulatory Agendas.

The Bureau of Consumer Financial Protection (CFPB) published its agenda as part of the Fall 2023 Unified Agenda of Federal Regulatory and Deregulatory Actions. CFPB reasonably anticipates having the regulatory matters identified in the agenda under consideration during the period from November 2023 to October 2024. The next agenda will be published in Spring 2024 and will update the agenda through Spring 2025. Publication of the agenda is in accordance with the Regulatory Flexibility Act. The information in the agenda is current as of 08/17/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-09/pdf/2024-00462.pdf Federal Register, Vol. 89, No. 28, 02/09/224, 9666-9667.

The Board of Governors of the Federal Reserve System (FRB) issued its agenda under the Regulatory Flexibility Act and its Statement of Policy Regarding Expanded Rulemaking Procedures. FRB anticipates having under consideration regulatory matters as indicated in the agenda during the period November 2023 through April 2024. The next agenda will be published in spring 2024. Comments may be submitted any time during the next 6 months. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-09/pdf/2024-00481.pdf Federal Register, Vol. 89, No. 28, 02/09/2024, 9718-9719.

The Department of the Treasury (Treasury) issued its semiannual regulatory agenda. Notice of the agenda is given pursuant to the requirements of the Regulatory Flexibility Act and Executive Order 12866, which require the publication by Treasury of a semiannual agenda of regulations. The notice may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-02-09/pdf/2024-00445.pdf Federal Register, Vol. 89, No. 28, 02/09/224, 9626-9630.

The Small Business Administration (SBA) issued its semiannual regulatory agenda which is a summary of current and projected rulemakings and completed actions of SBA. SBA seeks comments regarding any aspect of the agenda. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-09/pdf/2024-00460.pdf Federal Register, Vol. 89, No. 28, 02/09/2024, 9648-9650.

The Federal Communications Commission (FCC) published its semiannual regulatory report. In the Spring and Fall of each year, FCC publishes in the Federal Register a list in the Unified Agenda of the major items and other significant regulatory proceedings under development or review that pertain to the Regulatory Flexibility Act. The agenda also provides the Code of Federal Regulations citations and legal authorities that govern the proceedings. The complete agenda will be published on the internet in a searchable format at: www.reginfo.gov. The notice may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-02-09/pdf/2024-00466.pdf. Federal Register, Vol. 89, No. 28, 02/09/2024, 9674-9716.

The Securities and Exchange Commission (SEC) published the Chair’s agenda of rulemaking actions pursuant to the Regulatory Flexibility Act (RFA). The items listed in the agenda reflect only the priorities of the Chair, and do not necessarily reflect the views and priorities of any individual Commissioner. Information in the agenda was accurate on 08/22/2023. To the extent possible, rulemaking actions by SEC since that date have been reflected in the agenda. SEC

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seeks comment on the agenda and on the individual agenda entries. SEC printed in the Federal Register items for which an RFA analysis is required. SEC’s complete RFA agenda will be available online at: www.reginfo.gov. Comments are due 03/11/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-09/pdf/2024-00469.pdf. Federal Register, Vol. 89, No. 28, 02/09/2024, 9728-9735.

The Department of Labor (DOL) published its semiannual regulatory report. The internet has become the means for disseminating the entirety of DOL’s semiannual regulatory agenda. However, the Regulatory Flexibility Act requires publication of a regulatory flexibility agenda in the Federal Register. The notice may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-02-09/pdf/2024-00455.pdf Federal Register, Vol. 89, No. 28, 02/09/2024, 9606.

Agencies Seek Comment on Revised Call Report Forms.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) (collectively, the agencies) seeks comment regarding proposed revisions to the FFIEC 030 report that would incorporate new line items from the FR 2502q, Quarterly Report of Assets and Liabilities of Large Foreign Offices of U.S. Banks. The FFIEC 030 form is the Foreign Branch Report of Condition. The revisions are proposed to take effect as of the 06/30/2024, report date. There are currently no proposed revisions to the FFIEC 030S, Abbreviated Foreign Branch Report of Condition. Comments are due 03/19/2024. The notice may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2024-01-19/pdf/2024-00970.pdf Federal Register, Vol. 89, No. 13, 01/19/2024, 3708-3711.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) (collectively, the agencies) seeks comment regarding proposed revisions to the Consolidated Reports of Condition and Income (Call Report) (FFIEC 031, FFIEC 041, and FFIEC 051), the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework Form (FFIEC 101), and the Market Risk Regulatory Report for Institutions Subject to the Market Risk Capital Rule Form (FFIEC 102). The agencies seek comment on proposed revisions to the collections related to the agencies’ regulatory capital rule proposal that was published on 09/18/2023. The reporting revisions are proposed to be effective as of the 09/30/2025, report date. Comments are due 03/26/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-26/ pdf/2024-01532.pdf. Federal Register, Vol. 89, No. 18, 01/26/2024, 5297-5305.

Agencies Seek Comment on Regulatory Review of Identified Regulations.

The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) (collectively, the agencies) seek comment regarding regulations the agencies are reviewing pursuant to the Economic Growth and Regulatory Paperwork Reduction Act to identify outdated or otherwise unnecessary regulatory requirements on insured depository institutions and their holding companies. The agencies divided the regulations into twelve categories as outlined in a chart included in notice. Over the next two years, the agencies will publish four Federal Register documents requesting comment on multiple categories. The first Federal Register document requests comment on regulations concerning the following three categories: Applications and Reporting, Powers and Activities, and International Operations. Comments are due 05/06/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-06/pdf/2024-02016.pdf. Federal Register, Vol. 89, No. 25, 02/06/2024, 8084-8109.

CFPB Publishes Advisory Opinions in Federal Register.

The Bureau of Consumer Financial Protection (CFPB) published an advisory opinion to address certain obligations that consumer reporting agencies (CRAs) have under section 609(a) of the Fair Credit Reporting Act (FCRA). The advisory opinion underscores that, to trigger a CRA’s file disclosure requirement under FCRA section 609(a), a consumer does not need to use specific language, such as “complete file” or “file.” The advisory opinion also highlights the requirements regarding the information that must be disclosed to a consumer under FCRA section 609(a). In addition, the advisory opinion affirms that CRAs must disclose to a consumer both the original source and any intermediary or vendor source (or sources) that provide the item of information to the CRA under FCRA section 609(a). The advisory opinion is effective 01/23/2024. The advisory opinion may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-23/pdf/202400786.pdf. Federal Register, Vol. 89, No. 15, 01/23/2024, 4167-4171.

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CFPB published an advisory opinion to affirm that, when preparing consumer reports, a consumer reporting agency that reports public record information is not using reasonable procedures to assure maximum possible accuracy under section 607(b) of the Fair Credit Reporting Act (FCRA) if it does not have certain procedures in place. For example, it must have procedures that prevent reporting of information that is duplicative or that has been expunged, sealed, or otherwise legally restricted from public access. The advisory opinion also highlights certain aspects of the reporting period for adverse items under FCRA section 605(a)(5). The advisory opinion is effective 01/23/2024. The advisory opinion may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-23/pdf/2024-00788.pdf Federal Register, Vol. 89, No. 15, 01/23/2024, 4171-4176.

CFPB Issues Proposed Rule to Prohibit Fees for Instantaneously Declined Transactions.

CFPB issued a proposed rule to prohibit covered financial institutions from charging fees, such as nonsufficient funds fees, when consumers initiate payment transactions that are instantaneously declined. Charging such fees would constitute an abusive practice under the Consumer Financial Protection Act’s prohibition on unfair, deceptive, or abusive acts or practices. Comments are due 03/25/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2024-01-31/pdf/2024-01688.pdf. Federal Register, Vol. 89, No. 21, 01/31/2024, 6031-6051.

CFPB Seeks Comment on Auto Finance Data Project Collection.

CFPB seeks comment regarding an information collection titled, Auto Finance Data Project. The Dodd-Frank Act charges CFPB with monitoring for risks to consumers in the offering or provision of consumer financial products or services, including developments in markets for such products or services. CFPB has previously researched and documented significant gaps in available auto finance data which culminated in the initial Auto Finance Data Pilot project launched in February 2023. The data collected as part of the Auto Finance Data Pilot project both confirmed the benefit of additional data collection and to inform the way CFPB would propose to collect data in the future. CFPB proposes to collect data in two separate processes, as explained in the notice. Comments are due 03/25/2024. The notice may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2024-01-23/pdf/2024-01230.pdf Federal Register, Vol. 89, No. 15, 01/23/2024, 4281-4282.

FFIEC Seeks Comment on Reporting Information for AMC Registry.

The Federal Financial Institutions Examination Council (FFIEC) seeks comment regarding an information collection titled, Reporting Information for the AMC Registry. The Dodd-Frank Act requires the Appraisal Subcommittee of FFIEC (ASC) to maintain the National Registry of Appraisal Management Companies (AMC Registry) of those AMCs that are either: (1) registered with and subject to supervision by a State that has elected to register and supervise AMCs; or (2) are Federally-regulated AMCs. In order for a State to enter an AMC on the AMC Registry, certain information need be collected as listed in the notice. Comments are due 04/05/2024. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-02-05/pdf/2024-02184.pdf Federal Register, Vol. 89, No. 24, 02/05/2024, 7707-7708.

FRB Announces Final Approval of Information Collections.

The Board of Governors of the Federal Reserve System (FRB) announced final approval of an information collection titled, Recordkeeping Requirements Associated with Regulation H (Real Estate Lending Standards Regulation for State Member Banks). The information collection includes a recordkeeping requirement associated with Regulation H, which implements section 304 of the Federal Deposit Insurance Corporation Improvement Act. The information collection also includes voluntary recordkeeping provisions in the Interagency Guidelines for Real Estate Lending Policies. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-29/pdf/2024-01644.pdf Federal Register, Vol. 89, No. 19, 01/29/2024, 5540.

FRB announced final approval of an information collection titled, Recordkeeping and Disclosure Requirements Associated with Regulation R. Regulation R, Exceptions for Banks from the Definition of Broker in the Securities Exchange Act, implements certain exceptions for banks from the definition of broker under section 3(a)(4) of the Securities Exchange Act. Sections 701, 723, and 741 of Regulation R contain recordkeeping provisions for banks that utilize the exceptions in the Exchange Act and customer and counterparty disclosure requirements. The notice may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-01-29/pdf/2024-01643.pdf. Federal Register, Vol. 89, No. 19, 01/29/2024, 5543.

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FRB announced final approval of an information collection titled, Recordkeeping and Disclosure Requirements Associated with Regulation H (Securities Transactions by State Member Banks). Section 15C of the Securities Exchange Act establishes federal regulation of brokers and dealers of government securities, including banks and other financial institutions, and directs those brokers and dealers to keep certain records. Regulation H requires that non-exempt SMBs effecting securities transactions for customers establish and maintain a system of records of the transactions, furnish confirmations of transactions to customers that disclose certain information, and establish written policies and procedures relating to securities trading. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-202401-29/pdf/2024-01630.pdf Federal Register, Vol. 89, No. 19, 01/29/2024, 5543-5544.

FRB Extends Comment Period for Debit Card Interchange Fees and Routing Proposal.

On 11/14/2023, FRB published in the Federal Register a proposal that would update all three components of Regulation II’s interchange fee cap based on the latest data reported to FRB by large debit card issuers, update the interchange fee cap every other year going forward by directly linking the interchange fee cap to data from FRB’s biennial survey of large debit card issuers, and implement a set of technical revisions to the regulation. The proposal provided for a comment period ending on 02/12/2024. FRB has extended the comment period for 90 days, until 05/12/2024. Further, additional data concerning the proposed new methodology for determining the base component of the interchange fee cap are being made available on FRB’s website. Comments are due 05/12/2024. The notice may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-01-29/pdf/2024-01612.pdf Federal Register, Vol. 89, No. 19, 01/29/2024, 5438.

FRB Seeks Comment on Information Collections.

FRB seeks comment regarding an information collection titled, Government Securities Dealers Reports. The Federal Reserve Bank of New York collects data from primary dealers in the U.S. government securities market. A new type of repo financing called “sponsored general collateral repo” has gained significant popularity among clients of primary dealers. Such type of financing is not separately listed in the current information collection. FRB proposes to revise the collection for each asset category to separately capture sponsored general collateral Triparty Repo financing by maturity tenors. Comments are due 03/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-0129/pdf/2024-01631.pdf. Federal Register, Vol. 89, No. 19, 01/29/2024, 5539-5540.

FRB seeks comment regarding three information collections. The first, Interagency Notice of Change in Control, is used in connection with the acquisition or, in certain circumstances, the retention of control of a state member bank (SMB), savings and loan holding company (SLHC), or bank holding company (BHC) by an individual, a group of individuals, a company, or a group of companies that would not be BHCs or SLHCs after consummation of the proposed transaction. The second information collection in the notice is titled, Interagency Notice of Change in Director or Senior Executive Officer. The collection is used to notify the appropriate Reserve Bank of a proposed change to an institution’s board of directors or senior executive officers. The third collection is titled, Interagency Biographical and Financial Report, which is used by certain shareholders, directors, and executive officers in connection with the Notice of Change in Director or Senior Executive Officer mentioned above. Comments are due 03/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2024-01-29/pdf/2024-01645.pdf Federal Register, Vol. 89, No. 19, 01/29/2024, 5540-5542.

FRB seeks comment regarding an information collection titled, Interagency Bank Merger Act Application. FRB, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency each use the application to collect information on depository institution merger proposals that require prior approval under the Bank Merger Act. FRB collects the information to meet its statutory obligations with respect to each merger proposal in which the acquiring, assuming, or resulting bank would be a state member bank. Comments are due 03/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-29/pdf/2024-01647.pdf Federal Register, Vol. 89, No. 19, 01/29/2024, 5542-5543.

FDIC Amends Official Signs and Advertising Requirements.

The Federal Deposit Insurance Corporation (FDIC) issued a final rule which amends the regulations governing use of the official FDIC sign and insured depository institutions’ (IDIs) advertising statements to reflect how depositors conduct business with IDIs, including through digital and mobile channels. The final rule also clarifies FDIC’s regulations regarding misrepresentations of deposit insurance coverage by addressing specific scenarios where consumers may be misled as to

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whether they are conducting business with an IDI and whether funds are protected by federal deposit insurance. The final rule is effective 04/01/2024. Compliance is required by 01/01/2025. The final rule may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-01-18/pdf/2023-28629.pdf. Federal Register, Vol. 89, No. 12, 01/18/2024, 3504-3532.

FDIC Announces Termination of Receiverships.

FDIC, as Receiver, for the insured depository institutions listed in the notice, was charged with the duty of winding up the affairs of the former institutions and liquidating all related assets. The Receiver has fulfilled its obligations and made all dividend distributions required by law. The Receiver has further irrevocably authorized and appointed FDIC-Corporate as its attorney-in-fact to execute and file any and all documents that may be required to be executed by the Receiver which FDIC-Corporate, in its sole discretion, deems necessary, including but not limited to releases, discharges, satisfactions, endorsements, assignments, and deeds. Effective on the termination dates listed in the notice, the Receiverships have been terminated, the Receiver has been discharged, and the Receiverships have ceased to exist as legal entities. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-07/pdf/2024-02456.pdf Federal Register, Vol. 89, No. 26, 02/07/2024, 8427-8428.

FDIC Seeks Comment on Information Collections.

FDIC seeks comment regarding three information collections. The first collection titled, Interagency Biographical and Financial Report, is used in connection with an application for a merger, consolidation, or other combining transaction between nonaffiliated parties as well as to affect a corporate reorganization between affiliated parties. The second information collection is titled, Foreign Banks. The collection is used in connection with applications involving a branch of a foreign bank. The third information collection is titled, Liquidity Coverage Ratio: Liquidity Risk Measurement, Standards, and Monitoring (LCR). The information collection is designed to promote the short-term resilience of the liquidity risk profile of large and internationally active banking organizations, thereby improving the banking sector’s ability to absorb shocks arising from financial and economic stress, and to further improve the measurement and management of liquidity risk. Comments are due 03/18/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-0117/pdf/2024-00706.pdf Federal Register, Vol. 89, No. 11, 01/17/2024, 2949-2951.

FDIC seeks comment on three information collections. The first information collection is titled, Recordkeeping and Disclosure Requirements in Connection with Regulation B, Equal Credit Opportunity Act (ECOA). The information collection is being revised to include ten new information collection requirements created by subpart B, sections 1002.101-1002.114, regarding Section 1071 Small Business Lending Under ECOA. The second collection is titled, Affiliate Marketing, Consumer Opt-out Notices. Section 214 of the FACT Act requires financial institutions that wish to share information about consumers with their affiliates, to inform such consumers that they have the opportunity to opt out of such marketing solicitations. The disclosure notices and consumer responses thereto comprise the elements of the information collection. The third information collection is titled, Covered Financial Company Asset Purchaser Eligibility Certification. The information collection is a self-certification by a prospective purchaser that it does not fall into any of the categories of individuals or entities that are prohibited by statute or regulation from purchasing assets of a covered financial company. Comments are due 02/21/2024. The noticed may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-01-22/pdf/2024-01092.pdf Federal Register, Vol. 89, No. 14, 01/22/2024, 3923-3925.

FDIC seeks comment regarding an information collection titled, Application for Waiver of Prohibition on Acceptance on Brokered Deposits. Section 29 of the Federal Deposit Insurance Act prohibits undercapitalized insured depository institutions from accepting, renewing, or rolling over any brokered deposits. Adequately capitalized institutions may do so with a waiver from FDIC, while well-capitalized institutions may accept, renew, or roll over brokered deposits without restriction. The information collection captures the burden associated with preparing and filing an application for a waiver of the prohibition on the acceptance of brokered deposits. Comments are due 04/08/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-07/pdf/2024-02453.pdf. Federal Register, Vol. 89, No. 26, 02/07/224, 8428-8429.

OCC Seeks Comment on Examination Survey.

The Office of the Comptroller of the Currency (OCC) seeks comment regarding an information collection titled, Examination Survey. OCC provides each national bank, federal savings association, and federal branch or agency with an

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Examination Survey at the end of its supervisory cycle. The information collection permits banks to assess OCC’s bank supervisory activities. The information collection continues to be an important tool for OCC to measure OCC examination performance, design more efficient and effective examinations, and target examiner training. Comments are due 03/25/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-24/pdf/2024-01333.pdf. Federal Register, Vol. 89, No. 165, 01/24/2024, 4657-4658.

OCC Seeks Comment on Disclosure Requirements Information Collection.

OCC seeks comment regarding an information collection titled, Record and Disclosure Requirements, Consumer Financial Protection Bureau Regulations B, E, M, Z, and DD and Board of Governors of the Federal Reserve System Regulation CC. Each regulation is further outlined in the notice. Comments are due 04/01/2024. The notice may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2024-02-01/pdf/2024-02014.pdf Federal Register, Vol. 89, No. 22, 02/01/2024, 6566-6568.

HUD Changes Branch Office Registration Requirements.

The Department of Housing and Urban Development (HUD) issued a final rule to amend the requirement for branch office registration. The final rule removes the requirement that lenders and mortgagees register each branch office where they conduct Federal Housing Administration (FHA) business with HUD. After considering comments received in response to the proposed rule HUD published in March, HUD adopted the proposed rule without change. The final rule is effective 03/04/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-02/pdf/202402023.pdf Federal Register, Vol. 89, No. 23, 02/02/2024, 7274-7277.

HUD Updates List of Federally-Mandated Exclusions from Income.

HUD periodically publishes in the Federal Register a notice that lists sources of income specifically excluded by any Federal statute from consideration as income for purposes of determining eligibility or benefits in a HUD program. HUD last published a notice that listed federally mandated exclusions from consideration of income 05/20/2014. The notice replaces the previously published version, adds new exclusions, and removes exclusions that are now codified in HUD regulations. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-31/pdf/2024-01873.pdf. Federal Register, Vol. 89, No. 21, 01/31/2024, 6126-6129.

HUD Implements Expedited Waiver Process During Presidentially Declared Disaster.

HUD announced the establishment of an expedited waiver process for requests to waive HUD regulatory and/or administrative requirements for public housing agencies (PHAs) during Presidentially Declared Disasters (PDDs). PHAs located in areas that are included in PDD areas may request waivers of certain HUD Public Housing and Section 8 requirements and receive expedited review of such requests to utilize the administrative flexibilities and expedited waiver process set forth in the notice. Waivers and administrative flexibilities set forth in the notice are effective from 01/01/2024, until 12/31/2025. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-05/ pdf/2024-02094.pdf Federal Register, Vol. 89, No. 24, 02/05/2024, 7612-7617.

HUD Seeks Comment on Compliance Inspection Report and Mortgagee’s Assurance of Completion.

HUD seeks comment regarding an information collection titled, Compliance Inspection Report and Mortgagee’s Assurance of Completion. Accurate and thorough property information is critical to the accuracy of underwriting for the mortgage insurance process. The information collection is needed to ensure newly built homes financed with Federal Housing Administration (FHA) insured mortgages are constructed in accordance with acceptable building standards and that any deficiencies found in newly constructed and existing dwellings are corrected. Comments are due 02/20/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-19/pdf/2024-01003.pdf Federal Register, Vol. 89, No. 13, 01/19/2024, 3683-3684.

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HUD Seeks Comment on FHA-Insured Mortgage Loan Servicing Activities.

HUD seeks comment regarding an information collection titled, FHA-Insured Mortgage Loan Servicing for Performing Loans; MIP Processing, Escrow Administration, Customer Services, Servicing Fees, and 235 Loans. The information collection is a comprehensive collection for Federal Housing Administration (FHA) approved mortgagees that service FHA-insured mortgages and the mortgagors who are involved with collection and payment of mortgage insurance premiums (MIPs), payment processing, escrow account administration, Section 235, and assumptions. The information is used by HUD to administer MIP premium remittances, analyze mortgagees servicing performance, and to update HUD’s loan records with any changes in borrower or loan data. Comments are due 02/20/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-19/pdf/2024-01000.pdf Federal Register, Vol. 89, No. 13, 01/19/2024, 3684-3685.

FEMA Adjusts Statewide Per Capita Indicator for Recommended Cost Share Adjustments.

The Federal Emergency Management Agency (FEMA) announced that the statewide per capita indicator for recommending cost share adjustments for major disasters declared on or after 01/01/2024, through 12/31/2024, is $179. The notice applies to major disasters declared on or after 01/01/2024. The notice may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-02-06/pdf/2024-02365.pdf Federal Register, Vol. 89, No. 25, 02/06/2024, 8226.

FEMA Issues Final Flood Hazard Determinations.

FEMA issued a notice which identifies communities in the state of Iowa, 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 05/22/2024, has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-01-11/pdf/2024-00477.pdf Federal Register, Vol. 89, No. 8, 01/11/2024, 1935-1936.

FEMA issued a notice which identifies communities in the state of Michigan, 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 06/06/2024, has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-01-29/pdf/2024-01627.pdf. Federal Register, Vol. 89, No. 19, 01/29/2024, 5551-5553.

FEMA Issues Notices of Changes in Flood Hazard Determinations.

FEMA issued a notice which lists communities in the states of Illinois, Indiana, Michigan, Minnesota, Ohio, and 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

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viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-22/pdf/2024-01103.pdf Federal Register, Vol. 89, No. 14, 01/22/2024, 3934-3938.

FEMA Issues Proposed Flood Hazard Determinations.

FEMA seeks comment regarding proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for communities in the state of Illinois, 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 04/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-29/ pdf/2024-01625.pdf Federal Register, Vol. 89, No. 19, 01/29/2024, 5554-5555.

FEMA Proposes to Revise Standard Flood Insurance Policy to Add Homeowner Flood Form.

FEMA issued a proposed rule to revise the Standard Flood Insurance Policy. The National Flood Insurance Program (NFIP), established pursuant to the National Flood Insurance Act, is a voluntary program in which participating communities adopt and enforce a set of minimum floodplain management requirements to reduce future flood damages. Property owners within participating communities are eligible to purchase NFIP flood insurance. The proposed rule would revise the Standard Flood Insurance Policy by adding a new Homeowner Flood Form and five accompanying endorsements. The new Homeowner Flood Form would replace the Dwelling Form as a source of coverage for homeowners of one-to-four family residences. Together, the new Homeowner Flood Form and endorsements would more closely align with property and casualty homeowners’ insurance and provide increased options and coverage in a more user-friendly and comprehensible format. Comments are due 04/08/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-06/pdf/2024-02204.pdf Federal Register, Vol. 89, No. 25, 02/06/2024, 8282-8327.

FEMA Seeks Comment on Revision to NFIP Map Information Collection.

FEMA seeks comment regarding an information collection titled, Revision to National Flood Insurance Program Maps: Application Forms for LOMRs and CLOMRs. The forms in the information collection are used to determine if the collected data will result in the modification of Base Flood Elevations (BFEs), Special Flood Hazard Area (SFHA), or floodway.

Once the information is collected, it is submitted to FEMA for review and is subsequently included on the National Flood Insurance Program (NFIP) maps. The maps will be used for flood insurance determinations and for floodplain management purposes. Comments are due 02/26/2024. The notice may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2024-01-26/pdf/2024-01583.pdf. Federal Register, Vol. 89, No. 18, 01/26/2024, 5252-5253.

FinCEN Seeks Comment on BOI Request Information Collection.

The Financial Crimes Enforcement Network (FinCEN) seeks comment regarding an information collection titled, Beneficial Ownership Information (BOI) Requests. FinCEN’s BOI access rule requires State, local, and Tribal agencies, and financial institutions that access BOI to satisfy certain security and confidentiality requirements, including establishing certain standards and procedures, and developing and implementing safeguards. As a prerequisite for access to BOI, the rule also requires State, local, and Tribal agencies, and financial institutions to provide a certification for each BOI request. Along with the certification, State, local, and Tribal agencies, and financial institutions will also provide information for each BOI request. Some data fields will be optional, others will be required. As previewed in the BOI access rule, FinCEN seeks comment on the burden for the information collection associated with BOI requests. Comments are due 04/01/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-30/pdf/2024-01828.pdf. Federal Register, Vol. 89, No. 20, 01/30/2024, 5995-6000.

FinCEN Seeks Comment on CTR Information Collection.

FinCEN seeks comment regarding an information collection titled, Reports of Transactions in Currency by Financial Institutions (31 CFR 1010.310 through 1010.314, 31 CFR 1021.311, and 31 CFR 1021.313). Under Bank Secrecy Act

February 2024 | Page 15

regulations, financial institutions are required to report transactions in currency of more than $10,000 using FinCEN Form 112 (the currency transaction report, or CTR). Comments are due 04/05/2024. The notice may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-02-05/pdf/2024-02186.pdf. Federal Register, Vol. 89, No. 24, 02/05/2024, 7767-7769.

IRS Issues Corporate Bond Yield Curve for Determining Present Value Under Defined Benefit Plans.

The Internal Revenue Service (IRS) issued a final rule to specify the methodology for constructing the corporate bond yield curve that is used to derive the interest rates used in calculating present value and making other calculations under a defined benefit plan, as well as for discounting unpaid losses and estimated salvage recoverable of insurance companies. Section 430 specifies the minimum funding requirements that apply to defined benefit plans that are not multiemployer plans. Section 430(h)(2) provides rules regarding the interest rates to be used under section 430. Section 430(h)(2)(B) provides that a plan’s funding target and target normal cost for a plan year are determined using three interest rates all of which are determined by a calculation on the basis of the corporate bond yield rate as further described in the final rule. The final rule is effective 01/12/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-202401-12/pdf/2024-00552.pdf Federal Register, Vol. 89, No. 9, 01/12/2024, 2027-2132.

IRS Updates Minimum Present Value Requirements for Defined Benefit Plan Distributions.

IRS issued a final rule regarding minimum present value requirements applicable to certain defined benefit pension plans. The final rule provides guidance on changes made by the Pension Protection Act to the prescribed interest rate and mortality table and other guidance, including rules regarding the treatment of preretirement mortality discounts and Social Security level income options. The final rule is effective 01/19/2024. The final rule applies to distributions with annuity starting dates that occur on or after 10/01/2024. The final rule may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-01-19/pdf/2024-00978.pdf. Federal Register, Vol. 89, No. 13, 01/19/2024, 3552-3562.

IRS Seeks Comment on Reporting and Disclosure Requirements of Retirement Plans.

IRS seeks comment regarding the effectiveness of reporting and disclosure requirements of certain retirement plans. IRS, together with the Employee Benefits Security Administration (EBSA) and Pension Benefit Guaranty Corporation (PBGC) (collectively, the agencies), are required to review existing reporting and disclosure requirements for certain retirement plans under the Employee Retirement Income Security Act, as amended (ERISA) and the Internal Revenue Code (Code) that are applicable to each agency. Following the review, the agencies are to report to Congress, no later than 12/29/2025, concerning the effectiveness of the reporting and disclosure requirements. IRS seeks comment on the overall effectiveness of the reporting and disclosure frameworks in ERISA and the Code. Comments are due 04/22/2024 The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-23/pdf/2024-01077.pdf Federal Register, Vol. 89, No. 15, 01/23/2024, 4215-4221.

IRS Seeks Comment on Election Out of GST Deemed Allocations Collection.

IRS seeks comment regarding an information collection titled, Election Out of Generation-Skipping Transfer (GST) Deemed Allocations. The information collected is required by IRS for taxpayers who elect to have the automatic allocation rules not apply to the current transfer and/or to future transfers to the trust or to terminate such election. The information is also required by IRS for taxpayers who elect to treat trusts described in section 2632(c)(3)(B)(i) through (vi) as GST trusts or to terminate such election. The information is used to identify the trusts to which the election or termination of election will apply. Comments are due 04/05/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-02-05/pdf/2024-02185.pdf Federal Register, Vol. 89, No. 24, 02/05/2024, 7769.

FHFA Finalizes Prudential Management and Operations Standards.

The Federal Housing Finance Agency (FHFA) issued a final rule to amend its prudential management and operations standards rule to clarify that procedural requirements for corrective plans apply to prudential management and operations standards (Standards) established as regulations as well as guidelines, and to make the Office of Finance of the Federal Home Loan Bank System subject to the rule and some of the existing Standards in the appendix to the final rule. The final rule is effective 02/20/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-19/ pdf/2024-00731.pdf. Federal Register, Vol. 89, No. 13, 01/19/2024, 3537-3542.

Page 16 | February 2024
Regulatory Spotlight

Regulatory Spotlight

FHFA Announces Cap on Average Total Assets that Defines Community Financial Institution.

FHFA announced the adjusted cap on average total assets that is used in determining whether a Federal Home Loan Bank (Bank) member qualifies as a “community financial institution” (CFI). The Federal Home Loan Bank Act (Bank Act) confers upon insured depository institutions that meet the statutory definition of a CFI certain advantages over non-CFI insured depository institutions in qualifying for Bank membership, and in the purposes for which they may receive longterm advances and the collateral they may pledge to secure advances. Section 2(10)(A) of the Bank Act and section 1263.1 of FHFA’s regulations define a CFI as any Bank member the deposits of which are insured by the Federal Deposit Insurance Corporation and that has average total assets below the statutory cap. The Bank Act was amended in 2008 to set the statutory cap at $1 billion and to require FHFA to adjust the cap annually to reflect the percentage increase in the CPI-U, as published by the Department of Labor (DOL). The adjusted cap amount is $1,461,000,000, based on the annual percentage increase CPI-U, as published by DOL. The changes are effective as of 01/01/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-12/pdf/2024-00491.pdf. Federal Register, Vol. 89, No. 9, 01/12/2024, 2225-2226.

SBA Issues Technical Amendments and Clarifications to SBIC Investment Diversification and Growth Rule.

The Small Business Administration (SBA) issued a final rule to clarify and provide technical updates to the Small Business Investment Company Investment Diversification and Growth final rule implemented on 08/17/2023 (SBIC IDG Final Rule). In the SBIC IDG Final Rule, SBA introduced a new class of SBICs (Accrual SBICs) to unlock more patient capital financing for small businesses through the SBIC program and to implement changes to lower financial barriers to program participation for new fund managers. The direct final rule will help SBA implement Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, by reducing financial and administrative barriers to participate in the SBIC program and modernizing the program’s license offerings to align with a more diversified set of private funds investing in underserved small businesses. The final rule is effective 03/04/2024, without further action, unless significant comment is received by 02/20/2024. If significant adverse comment is received, SBA will publish a timely withdrawal of the rule in the Federal Register. The final rule may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-01-19/pdf/2024-00559.pdf Federal Register, Vol. 89, No. 13, 01/19/2024, 3542-3549.

SBA Seeks Comment on Section 504 First Mortgage Loan Pool Program Collection.

SBA seeks comment regarding an information collection titled, Secondary Market for Section 504 First Mortgage Loan Pool Program. The information collection captures the terms and conditions of SBA’s Secondary Market for Section 504 First Mortgage Loan Pool Program. SBA seeks information to identify program participants, terms of financial transactions involving federal government guaranties, and reporting on program efficiency. Comments are due 03/06/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-05/pdf/2024-02233.pdf Federal Register, Vol. 89, No. 24, 02/05/2024, 7765-7766.

FCA Announces Effective Date for Conservators and Receivers Final Rule.

The Farm Credit Administration (FCA) issued a final rule that amended its conservators and receiver regulations for Farm Credit System banks, associations, service corporations, and the Federal Farm Credit Banks Funding Corporation. In accordance with 12 U.S.C. 2252(c)(1), the effective date of the rule is no earlier than 30 days from the date of publication in the Federal Register during which either or both Houses of Congress are in session. Based on the records of the sessions of Congress, the effective date of the final rule published in the Federal Register on 11/24/2023, is effective 01/17/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-30/pdf/2024-01738.pdf Federal Register, Vol. 89, No. 20, 01/30/2024, 5760.

CFTC Proposes Operational Resilience Framework for Futures Commission Merchants, Swap Dealers, and Major Swap Participants.

The Commodity Futures Trading Commission (CFTC) proposes to require that futures commission merchants, swap dealers, and major swap participants establish, document, implement, and maintain an Operational Resilience Framework

February 2024 | Page 17

designed to identify, monitor, manage, and assess risks relating to information and technology security, third-party relationships, and emergencies or other significant disruptions to normal business operations. The framework would include three components, an information and technology security program, a third-party relationship program, and a business continuity and disaster recovery plan supported by broad requirements relating to governance, training, testing, and recordkeeping. The proposed rule would also require certain notifications to CFTC and customers or counterparties. CFTC further proposed guidance relating to the management of risks stemming from third-party relationships. Comments are due 03/02/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-24/ pdf/2023-28745.pdf. Federal Register, Vol. 89, No. 16, 01/24/2024, 4703-4768.

CFTC Proposes to Update Privacy Act Regulations.

CFTC proposes to update its regulations regarding exemptions for certain systems of records from one or more provisions of the Privacy Act. CFTC proposes to revise the regulations to specifically identify the systems of records currently included in the regulation that CFTC is exempting, additional systems of records that CFTC intends to exempt, and the sections of the Privacy Act from which CFTC is exempting each system of records, and the reasons therefor, in order to better conform to the requirements of the Privacy Act and the guidance contained in Office of Management and Budget (OMB) Circular A-108, Federal Agency Responsibilities for Review, Reporting, and Publication Under the Privacy Act. CFTC also proposes to reorganize the regulations for ease of reference. Comments are due 03/04/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-02/pdf/2024-01684.pdf Federal Register, Vol. 89, No. 23, 02/02/2024, 7307-7315.

CFTC Extends Comment Period for Proposal to Protect Clearing Member Funds Held by DCOs.

CFTC announced an extension of the comment period for its proposal to protect clearing member funds held by derivatives clearing organizations (DCOs). On 01/03/2024, CFTC published a proposed rule titled, Protection of Clearing Member Funds Held by Derivatives Clearing Organizations, in the Federal Register. CFTC has extended the comment period of the proposal from 02/16/2024, to 03/18/2024. The notice may be viewed at: https://www.govinfo.gov/content/ pkg/FR-2024-02-06/pdf/2024-02234.pdf Federal Register, Vol. 89, No. 25, 02/06/2024, 8111-8112.

CFTC Seeks Comment on Gross Collection of Exchange-Set Margins for Omnibus Accounts.

CFTC seeks comment regarding an information collection titled, Gross Collection of Exchange-Set Margins for Omnibus Accounts. CFTC Regulation 1.58 requires futures commission merchants (FCM) to collect exchange-set margins for omnibus accounts on a gross, rather than a net, basis. The regulation provides that the carrying FCM need not collect margin for positions traded by a person through an omnibus account in excess of the amount that would be required if the same person, instead of trading through an omnibus account, maintained its own account with the carrying FCM. To prevent abuse of the exception to the regulation, a carrying FCM must maintain a written representation from the originating FCM or foreign broker that the particular positions held in the omnibus account are part of a hedge or spread transaction. The collection of information is necessary in order to provide documentation that can be inspected with regard to questions of proper compliance with gross margining requirements. Comments are due 02/26/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-26/pdf/2024-01600.pdf Federal Register, Vol. 89, No. 18, 01/26/2024, 5214-5215.

CFTC Seeks Comment on Whistleblower Information Collection.

CFTC seeks comment regarding an information collection titled, The Whistleblower Provision of Section 23 of the Commodity Exchange Act. 17 CFR 165.3(a) requires the submission of information to CFTC on Form TCR. Form TCR is designed to capture basic identifying information about a complainant and elicit sufficient information to determine whether the conduct alleged suggests a violation of the Commodity Exchange Act. 17 CFR 165.7(b)(1) requires the submission of information to CFTC on Form WB-APP, Application for Award for Original Information Provided Pursuant to Section 23 of the Commodity Exchange Act. The form is designed to elicit sufficient information to determine whether and to what extent a claimant qualifies for a whistleblower award. Comments are due 03/04/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-01/pdf/2024-01973.pdf. Federal Register, Vol. 89, No. 22, 02/01/2024, 6509-6510.

Page 18 | February 2024
Regulatory Spotlight

SEC Issues Standards for Covered Clearing Agencies for Treasury Securities.

The Securities and Exchange Commission (SEC) adopted a final rule under the Securities Exchange Act to amend the standards applicable to covered clearing agencies for U.S. Treasury securities to require that such covered clearing agencies have written policies and procedures reasonably designed to require that every direct participant of the covered clearing agency submit for clearance and settlement all eligible secondary market transactions in U.S. Treasury securities to which it is a counterparty. In addition, SEC adopted additional amendments to the Covered Clearing Agency Standards with respect to risk management. The requirements are designed to protect investors, reduce risk, and increase operational efficiency. Finally, SEC amended the broker-dealer customer protection rule to permit margin required and on deposit with covered clearing agencies for U.S. Treasury securities to be included as a debit in the reserve formulas for accounts of customers and proprietary accounts of broker-dealers, subject to certain conditions. The final rule is effective 03/18/2024. The applicable compliance dates are discussed in Part III of the final rule. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-16/pdf/2023-27860.pdf Federal Register, Vol. 89, No. 10, 01/16/2024, 2714-2830.

SEC Updates EDGAR Filer Manual.

SEC issued a final rule to amend Volume II of the Electronic Data Gathering, Analysis, and Retrieval System Filer Manual (EDGAR Filer Manual) and related rules and forms. The Filer Manual contains information needed for filers to make submissions on EDGAR. Filers must comply with the applicable provisions of the Filer Manual in order to assure the timely acceptance and processing of filings made in electronic format. Filers must consult the Filer Manual in conjunction with SEC rules governing mandated electronic filings when preparing documents for electronic submission. See the final rule for an explanation of adopted amendments. The EDGAR Release 23.4 will be deployed in the EDGAR system on 12/18/2023. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-01-24/pdf/2024-01314. pdf Federal Register, Vol. 89, No. 16, 01/24/2024, 4545-4547.

FTC Proposes Amendments to COPPA Rule.

The Federal Trade Commission (FTC) issued a proposed rule to amend the Children’s Online Privacy Protection Rule, consistent with the requirements of the Children’s Online Privacy Protection Act (COPPA). The proposed modifications are intended to respond to changes in technology and online practices, and where appropriate, to clarify and streamline the rule. The proposed modifications are intended to clarify the scope of the rule and/or strengthen its protection of personal information collected from children. Comments are due 03/11/2024. The proposed rule may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-01-11/pdf/2023-28569.pdf Federal Register, Vol. 89, No. 8, 01/11/2024, 2034-2076.

VA Seeks Comment on Servicer Appraisal Reviewer Application.

The Department of Veterans Affairs (VA) seeks comment regarding an information collection titled, Servicer’s Staff Appraisal Reviewer Application. Title 38 U.S.C. 3702(d) authorizes VA to establish standards for servicers making automatically guaranteed loans and 38 U.S.C. 3731(f) authorizes VA to establish, in regulation, standards and procedures to authorize a lender to determine the reasonable value of property. VA has implemented the authority through its Servicer Appraisal Processing Program, codified in 38 CFR 36.4348. Comments are due 04/09/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-09/pdf/2024-02661.pdf. Federal Register, Vol. 89, No. 28, 02/09/2024, 9289.

NCUA Seeks Comment on FCRA Information Collection.

The National Credit Union Administration (NCUA) seeks comment regarding an information collection titled, Fair Credit Reporting Act (FCRA), Regulation V and 12 CFR 717. FCRA sets standards for the collection, communication, and use of information bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. The collection of information is triggered by specific events and disclosures and must be provided to consumers within the time periods established under the regulation. Regulation V includes model notices and/or model forms that can be used to comply with the disclosure requirements of FCRA. Comments are due 04/08/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-02-07/pdf/2024-02457. pdf. Federal Register, Vol. 89, No. 26, 02/07/2024, 8454-8455.

February 2024 | Page 19
Regulatory Spotlight

Compliance Notes

SBA announced the deadline for small business borrowers who still need to apply for PPP forgiveness through their lender or directly with SBA is March 3. At the beginning of March, SBA will begin to refer PPP loans of $100,000 or less that have not been forgiven or are not in repayment to the U.S. Treasury for collection. SBA is encouraging PPP borrowers to work with the SBA PPP Center to get their loan forgiven or into repayment. Borrowers can submit forgiveness applications either through the SBA or directly through their lender. For assistance with the Direct Forgiveness Portal, contact SBA at 877-552-2692. The SBA PPP Direct Forgiveness Portal may be viewed at: https:// directforgiveness.sba.gov/requests/borrower/login/?next=/

FRB announced the Bank Term Funding Program (BTFP) will cease making new loans as scheduled on March 11. The program will continue to make loans until that time and is available as an additional source of liquidity for eligible institutions. FRB also announced that as the program ends, the interest rate applicable to new BTFP loans has been adjusted such that the rate on new loans extended from now through program expiration will be no lower than the interest rate on reserve balances in effect on the day the loan is made. The rate adjustment ensures that the BTFP continues to support the goals of the program in the current interest rate environment. The change is effective immediately. All other terms of the program are unchanged. The announcement may be viewed at: https://www. federalreserve.gov/newsevents/pressreleases/monetary20240124a.htm

FinCEN released a Fact Sheet which summarizes the efforts by Treasury to enhance financial transparency and combat illicit finance. The summary and additional statistics may be viewed at: https://home.treasury.gov/news/pressreleases/jy2097

FinCEN also released a Financial Trend Analysis (FTA) which reflects an increase in BSA reporting associated with the use of convertible virtual currency (CVC) and online child sexual exploitation and human trafficking. The FTA is based on BSA reporting filed between January 2020 and December 2021. The FTA may be viewed at: https://www.fincen.gov/ news/news-releases/fincen-sees-increase-bsa-reporting-involving-use-convertible-virtual-currency

OCC announced that registration is now open for its 2024 schedule of in-person workshops for board of directors and senior management of national community banks and federal savings associations. OCC offers five daylong workshops: (1) Building Blocks: Developing Strong Management; (2) Risk Governance: Improving Effectiveness; (3) Compliance Risk: Understanding the Rules; (4) Credit Risk: Recognizing and Responding to Risk; and (5) Operational Risk: Navigating Rapid Changes. OCC is also offering a half-day workshop regarding Capital Markets: Keeping Current. The half-day workshop covers balance sheet management risks, as well as hot topics and risk themes for bankers and regulators in the capital markets area. Information regarding the workshops may be viewed at: https://www.occ.gov/ news-issuances/news-releases/2024/nr-occ-2024-13.html

FRB released its latest Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS). The SLOOS addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the fourth quarter of 2023. Regarding loans to businesses, survey respondents, on balance, reported tighter standards and weaker demand for C&I loans to firms of all sizes over the fourth quarter. Furthermore, banks reported tighter standards and weaker demand for all CRE loan categories.

For loans to households, banks, on balance, reported that lending standards tightened across all categories of RRE loans other than government residential mortgages and GSE-eligible residential mortgages, for which standards remained basically unchanged. Meanwhile, demand weakened for all RRE loan categories. In addition, banks reported tighter standards and weaker demand for HELOCs. Moreover, for credit card, auto, and other consumer loans, standards reportedly tightened, and demand weakened on balance.

While banks, on balance, reported having tightened lending standards further for most loan categories in the fourth quarter, lower net shares of banks reported tightening lending standards than in the third quarter across all loan categories. The SLOOS also included a set of special questions inquiring about banks’ expectations for changes in lending standards, borrower demand, and loan performance over 2024. Banks, on balance, reported expecting lending standards to remain basically unchanged for C&I and RRE loans, but to tighten further for CRE, credit card, and auto loans. In addition, banks reported expecting loan demand to strengthen across all loan categories, and loan quality to deteriorate across most loan types. The latest SLOOS may be viewed at: https://www.federalreserve.gov/data/sloos/sloos-202401.htm

Page 20 | February 2024

The Conference of Banking Supervisors (CSBS) announced the launch of an updated NMLS Modernization webpage designed to improve user experience of the NMLS. More information about the updated webpage may be viewed at: https://www.csbs.org/nmls-modernization

February 2024 | Page 21
Compliance Notes
Visit the WBA Compliance Resources Page www.wisbank.com/resources/compliance With all the changing regulations bankers face today, the Wisconsin Bankers Association offers a variety of resources to help you perform your job at the highest level:
Recent WBA Compliance Journals
WBA Compliance Corner videos
Frequently Asked Questions to the WBA Legal Call Program
Guides and Toolkits
Information About Compliance Services and Training Are you a WBA memeber with a legal question? Contact the WBA Legal Call Program
| 608-441-1200 | wisbank.com/resources/compliance This WBA member-exclusive program provides information in response to compliance questions.
wbalegal@wisbank.com

HMDA Unit Worksheet

Lender, Credit Analyst, or Other Personnel who help identify number of units for multiple loans for one borrower for HMDA LAR reporting

(NOTE: ONE MUST KNOW THE LANGUAGE OF LOAN DOCUMENTS TO UNDERSTAND HOW LOAN(S) MAY BE INTERCONNECTED FOR PURPOSES OF COLLATERAL AND THEREFORE POTENTIAL HMDA REPORTING)

Purpose of the chart is solely to help identity number of units for HMDA LAR reporting under Reg C 1003.4(a)(9).

The chart does not address other HMDA LAR reporting requirements. See the corresponding HMDA article.

Is the loan subject to HMDA reporting?

Yes

No

Address of dwelling taken as collateral:

Is the loan secured by multiple dwellings?

Yes. See Reg C 1003.4(a)(9) – comment 2 regarding multiple properties with more than one property taken as security. Identity which property to report single property data:

Does cross-collateralization language affect this loan?

If so, what other relationships and loans need be identified to determine number of dwelling units for HMDA reporting?

No, no further analysis for HMDA, report number of units in dwelling that secures the loan

No

Yes. Identify which relationships:

Makers:

Guarantors:

Others:

Identify which loans or file numbers:

Loan or File Number#

Number of Units:

Loan or File Number #

Number of Units:

Loan or File Number #

Number of Units:

Page 22 | February 2024

HMDA Unit Worksheet

Does future advance language affect this loan?

If so, what other relationships and loans need be identified to determine number of dwelling units for HMDA reporting?

No

Yes. Identify which relationships:

See Reg C 1003.4(a)(9) – comment 2 regarding transactions involving multiple properties.

HMDA LAR data point “total units” requires bank to report total units based upon every property which secures the loan.

Same information as above

Makers:

Guarantors:

Others:

Identify which loans or file numbers:

Loan or File Number#

Number of Units:

Loan or File Number #

Number of Units:

Loan or File Number #

Number of Units:

Other notes for the file

February 2024 | Page 23
Total Number of Units for HMDA LAR Reporting:

March

1 CRA Workshop

Wisconsin Dells or virtual – $245/attendee

5 Advanced IRA Workshop

Madison or virtual – $245/attendee

6 Health Savings Account Workshop

Madison or virtual – $245/attendee

6-7 FIPCO Software & Compliance Forum: Deposits

Virtual half days – $250/attendee

7 Branch Manager Boot Camp: Session II

Four-part series, virtual half days – $800/attendee

11-15 Loan Compliance School

Madison or virtual – $1,295/attendee

13-15 Real Estate Compliance School

Madison or virtual – $795/attendee

14-15 Call Report Workshop

Virtual half days – $245/attendee

18-20 WBA/ABA Washington Summit

Washington, D.C.

20 Security Officer Workshop

Wisconsin Dells or virtual – $245/attendee

25-28 Residential Mortgage Lending School

Madison – $1,045/attendee

27 Online Workshop: Fundamentals of Comm. Lending 201: Analyzing Repayment Sources

28

Virtual full day – $250/attendee

Branch Manager Boot Camp: Session III

Four-part series, virtual half days – $800/attendee

April

2, 9, 16

& 30

10

11-12

15-20

15

16-18

WBA Loan Documentation Webinar Series

Four-part webinar series – $995/attendee

Wisconsin Economic Forecast Luncheon

Madison

Agricultural Bankers Conference

Wisconsin Dells - $300/ag section member; $350/nonsection member banker attendee

Power of Community Week

www.wisbank.com/BanksPowerWI

FinTech Showcase

Wisconsin Dells – team pricing available

Introduction to Commercial Lending School

Madison – $895/attendee

www.wisbank.com

April

17 Women in Banking Conference

Wisconsin Dells or virtual – team pricing available

22-26 School of Bank Management

Madison – $1,395/attendee

23 Community Bankers for Compliance (CBC) –Session II

Virtual half-day – annual membership/pricing varies

25 Branch Manager Boot Camp: Session IV

Four-part series, virtual half days – $800/attendee

4/285/1 WBA/ICBA Capital Summit

Washington, D.C.

4/305/23 Understanding Bank Performance Virtual Series

Eight-part webinar series – $1,000/attendee

May

2 Human Resources Conference

Wisconsin Dells – $245/attendee

7 CFO Conference

Madison – $245/attendee

8-9 Personal Banker School

Wausau – $495/attendee

9 FDIC Bank Directors College

Madison – $225/attendee

14-15 BSA/AML Compliance Conference

Wisconsin Dells – $450/attendee

15-16 Principles of Banking

Mineral Point – $550/attendee

22-23 Principles of Banking

Wausau – $550/attendee

23 Trust Conference

Madison – $245/attendee

KEY: Color-Coded Event Descriptions

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

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

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

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

• Other Events

Page 24 | February 2024
| 608-441-1252 | wbaeducation@wisbank.com

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