May 2024 Compliance Journal

Compliance Journal

May 2024

Special Focus

Agencies Release Third Party Risk Management: A Guide for Community Banks

Earlier this month, 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) released a Third Party Risk Management: Guide for Community Banks (Guide) to assist community banks with developing and implementing thirdparty risk-management practices.

The Guide is based upon the Agencies’ Interagency Guidance on Third-Party Relationships: Risk Management which was published in the Federal Register last June. The Agencies intend for the new Guide to be a resource for community banks to consider when managing the risk of third-party relationships. The Guide; however, is not a substitute for the Interagency Guidance.

The new Guide focuses on four areas which are summarized below. Included within the focused areas are helpful considerations and information sources for banks to review when managing risk of their third-party relationships. The Guide also provides an illustrative example for each of the main four areas.

Risk Management

The first area of focus is that of overall risk management of a third-party relationship. Certainly, not all third-party relationships present the same level of risk to a bank. As such, not all relationships require the same level of oversight. A bank is permitted to adjust and update its third-party risk-management practices commensurate with its size, complexity, and risk profile by periodically analyzing the risks associated with each third-party relationship. In taking this approach, bank management need involve those staff members with the requisite knowledge and skills in each stage of the riskmanagement life cycle.

In determining whether an activity is higher risk, and therefore involving more oversight of a third party performing any higher risk duties, banks may assess various factors, such as if the third party has access to sensitive data (including customer data), processes transactions, or provides essential technology and business services.

Characteristics of critical activities can include those activities that could cause a bank to face significant risk if the third party fails to meet expectations, have significant customer impacts, or have a significant impact on a bank’s financial condition or operations.

Third-Party Relationship Life Cycle

The Agencies set forth that effective third-party risk management generally follows a continuous life cycle for third-party relationships. The five stages of the life cycle, which include (1) planning, (2) due diligence and third-party selection, (3) contract negotiations, (4) ongoing monitoring, and (5) termination, are surrounded by the governance practices of oversight and accountability, independent reviews, and documentation and reporting.

For every stage, a bank’s level or type of oversight may vary, commensurate with its size, complexity, and risk profile as well as with the nature of the specific third-party relationship.

Special Focus

Planning

The first stage of effective third-party relationship risk management is planning. Careful planning enables a bank to consider potential risks in the proposed third-party relationship. Potential considerations include:

• What are the underlying activities to be performed, and what are the bank and third party’s prospective roles in the activities?

• What legal and compliance requirements will apply to the prospective third-party activities?

• What are the benefits of the relationship, and how would the relationship align with the bank’s strategic plan?

• What risk-management and governance practices (including internal controls) will be necessary to manage and mitigate the potential risks?

• What are the financial implications of entering into and maintaining the business arrangement?

• What are the direct contractual costs and indirect costs to augment or alter bank staffing, processes, and technology?

• Do the expected benefits of the relationship exceed the potential costs and risks?

• How will the bank integrate third-party technology with the bank’s existing systems and infrastructure?

• What changes would need to be made to the bank’s technology to ensure compatibility, and what would be the associated risks and costs?

• Does staff have the requisite skills to manage risks associated with integrating the third party’s technology into the bank’s environment (if not, how will the bank integrate the technology)?

• What physical and/or system access would the third party have to bank facilities, systems, and records, and what recordkeeping processes would the bank require the third party to implement?

• What interaction will the third party have with customers, and how would customer complaints be handled?

• What are the information security implications, and how will the third party access, process, and protect customers’ information?

• Has the bank considered how to exit the activity or transition the activity to an alternative third party or in-house?

While in the planning stage, banks should also identify potential sources of information. This can include a review of the bank’s:

• Strategic plan to assess the proposed activity’s alignment with the bank’s risk appetite, policies, and business objectives.

• Budget or cost-benefit analysis to assess the financial considerations of the relationship.

May 2024

Volume 29, Number 12

Wisconsin Bankers Association

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

Senior Writers

Heather MacKinnon

Scott Birrenkott

Editor

Ramon Morales

Layout

Christian Heo

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.

Special Focus

• Human resources staff to assess whether management and staff have the expertise and capacity to manage the relationship.

• Internal policies, processes, and controls to assess the impact to the bank of entering into and managing the proposed relationship.

• Bank’s inventory of existing third-party relationships to assess whether an existing relationship could support the new activity.

• Bank’s technology infrastructure and staff to assess how readily it could integrate with a third party to support the new activity.

• Subject matter experts’ perspectives, including those in information technology, legal, and compliance risk.

• Board policies, including risk limits, to assess alignment with the proposed third-party relationship.

The Guide includes an illustrative example of the Agencies’ expectations surrounding the planning efforts of a bank when first planning for the use of a third party.

Dule Diligence and Third-Party Selection

The second stage of effective third-party relationship risk management is due diligence and third-party selection. Due diligence is the process by which a bank assesses, before entering into a third-party relationship, a particular third party’s ability to perform the activity as expected, adhere to the bank’s policies, comply with all applicable laws and regulations, and conduct the activity in a safe and sound manner.

Conducting due diligence on third parties before selecting and entering into third-party relationships is an important part of sound risk management. It provides management with the information needed about potential third parties to determine if a relationship would help achieve a bank’s strategic and financial goals.

Potential considerations for this stage of third-party vendor risk management include:

• Has the third party demonstrated financial and operational capability to meet its obligations to the bank? If not, what alternative information is available?

• What resources and expertise are available at the third party to support the activity?

• What third-party policies, processes, and internal controls support performance of the service in alignment with the bank’s expectations and standards?

• Has the third party demonstrated an ability to comply with applicable laws and regulations, including anti-money laundering and countering the financing of terrorism (AML/CFT) as well as fair lending and consumer protection laws and regulations (as applicable)?

• Is the third party’s information security program consistent with the bank’s program and expectations related to protecting the confidentiality, integrity, and availability of information?

• Does the third party demonstrate the ability to effectively operate through and recover from both internal and external operational incidents or disruptions?

• How has the third party performed in the past during periods of economic or financial stress?

• Does the third party rely on subcontractors, and could that reliance pose additional or heightened risk to the bank?

• Does the third party use technologies that could introduce additional risk?

Special Focus

• Does the third party have a robust consumer complaint program?

• Is the third party involved in ongoing litigation or other public matters of concern?

• Can the third party demonstrate that it has successfully provided the prospective services for other banks or similar clients?

When weighing its considerations, potential sources of information for the bank to review include the third party’s:

• Audited financial statements and other financial information to assess the third party’s financial condition.

• Licenses and any other legal authority necessary to perform the activity.

• Relevant policies and procedures, including those related to AML/ CFT, to assess the effectiveness of its riskmanagement practices, control environment, and alignment with the bank’s expectations and standards and with applicable legal requirements.

• Independent reviews of the effectiveness of those policies and procedures, including AML/CFT.

• Strategic plan or other disclosures to assess whether the business strategy and its agreements with other entities pose new or increased risks.

• Staffing levels and qualifications to assess whether the third party’s resources can fulfill its obligations to the bank, including those of principals and other key personnel related to the activity.

• Training program to assess if its employees understand their duties and responsibilities, are knowledgeable about applicable laws and regulations, and have requisite certifications and licenses.

• Volume and nature of consumer complaints against the third party.

• Current insurance coverage to determine if sufficient for the activity.

• Audit reports to assess the third party’s risk management and internal controls.

In performing its due diligence review of a prospective third party vendor, a community bank should also review:

• The Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons list (SDN List) and all other sanctions lists to ensure the third party and its employees, contractors, or grantees are not sanctioned by the U.S. government.

• System and Organization Controls (SOC) reports, independent assessments, and industry certifications to assess the third party’s operational risk management and internal controls.

• References and feedback from peer institutions or clients that are currently using the third party’s service.

• Disclosures and information in the media or in any of the third party’s publications, including its website, to assess potential risks to the bank.

• Internet searches of the third party’s company name to determine whether it has been partnered with institutions subject to consent orders related to third-party transactions or conducts business with companies that misrepresent deposit insurance coverage.

The Guide provides an illustrative example of the Agencies’ expectations surrounding the bank’s due diligence when first deciding which third party vendor to engage with.

Special Focus

Contract Negotiations

As mentioned above, the third stage of effective third-party relationship risk management is contract negotiations. Before entering into a contractual relationship with a third party, a bank typically considers contract provisions that meet its business objectives, regulatory obligations, and risk-management policies and procedures. The community bank typically negotiates contract provisions that facilitate effective risk management and oversight, including terms that specify the expectations and obligations of both the community bank and the third party.

However, when a community bank has limited negotiating power, the Agencies believe it is important for bank management to understand any resulting limitations and consequent risks. Possible actions that bank management might take in such circumstances include determining whether the contract can still meet the community bank’s needs, whether the contract would result in increased risk to the community bank, and whether residual risks are acceptable.

At this stage of its risk management review, a bank could consider in its contract negotiations:

• To what extent does the contract specify the parties’ responsibilities and cover all aspects of the relationship (including costs, reimbursements, and other liabilities)?

• What provisions does the bank need to include regarding termination events (for example, default or force majeure), continuity planning, and associated costs and fees?

• What are the governance and escalation protocols regarding the third party’s performance and security measures or benchmarks?

• To what extent does the contract enable the bank to obtain timely information it needs to perform adequate ongoing monitoring, demonstrate compliance with applicable laws and regulations, and respond to regulatory requests? For example, will the bank have access to application and loan data, account opening and customer information, audit reports, suspicious activity monitoring information, and reports to identify safety and soundness and consumer compliance issues?

• What arrangements will be negotiated for sharing and using information, technology, and intellectual property?

• Does the contract specify limitations on the third party’s use and retention of data (including customer data) related to the activity, including its disclosure, storage, delivery to the bank, and destruction?

• Does the contract appropriately address the bank’s right to access its data at the third party and the process by which the bank will access its records and data (including customer data)?

• When and how will the third party notify the bank of a disruption, including degradation or interruptions in delivery, and how will the third party assist the bank with continuation of the activity?

• When and how will the third party notify the bank of strategic changes, such as mergers and acquisitions and leadership changes?

• What continuity plans, processes, and controls will the third party maintain to ensure contract adherence, including recovery time and recovery point objectives?

• For higher-risk activities, including critical activities, what are likely scenarios for breach of contract, and has the bank considered the potential exposure and cost?

Banks have several potential sources of information to consider when working through contract negotiations, including:

• The bank’s risk assessment and due diligence findings to determine the provisions to include in the contract.

• The third party’s proposed service level agreements to set applicable performance and security metrics.

Special Focus

• Assessments from business units regarding their business needs and customer service objectives to determine performance and security measures to include in the contract.

• Contract provisions outlining the bank’s access to the third party’s audit, testing, and self-assessment reports for ongoing monitoring.

• Legal, compliance, and other stakeholders’ perspectives to advise bank management on the contract provisions to appropriately protect the bank’s interests.

The Guide also provides an illustrative example of a bank’s contract negotiation with a third party based upon challenges with a service provider.

Ongoing Monitoring

The fourth stage of effective third-party relationship risk management is ongoing monitoring. A bank’s ongoing monitoring of the third party’s performance enables bank management to determine if the third party is performing as required for the duration of the contract. The bank may also use information from ongoing monitoring to adapt and refine its risk-management practices.

Potential considerations for a community bank during this stage include:

• Is the third party performing its obligations under the contract?

• Has the third party’s financial condition changed, including declining revenues or increasing debt obligations?

• Has the third party complied with applicable laws, regulations, and service level agreements?

• Do audit and test results indicate the third party is managing risks and meeting contractual obligations and regulatory requirements effectively?

• Is the third party demonstrating an ability to maintain its systems within the bank’s availability requirements (e.g., latency, bandwidth, and uptime)?

• Is the third party demonstrating reliability throughout its relationship with the bank?

• How do the third party’s business continuity and disaster recovery plans and practices demonstrate its capability to respond and recover from service disruptions?

• Has the third party maintained the confidentiality, availability, and integrity of customer data (where applicable) and the bank’s systems, information, and data?

• Do reports from the third party align with the bank’s internal reports and observations?

• Has the third party’s performance changed due to mergers, acquisitions, or divestitures?

• Has the bank’s reliance on the third party to conduct bank activities changed over the life of the relationship?

• For third parties that interact with customers or access customer data, has the third party responded appropriately to the bank’s requests for its records and information?

• Have there been changes in the third party’s strategy, corporate culture, leadership, or risk exposure? If so, what is the impact on the relationship with the bank?

There are several potential sources of information for a bank to consider when performing its ongoing monitoring of a third party, including:

Special Focus

• Service level agreements and standards to assess the third party’s performance and to confirm that existing provisions continue to address risks and the bank’s expectations.

• Audited and other financial reports to confirm the third party’s financial condition remains sound and in compliance with contractual requirements.

• Audits and reports to confirm the third party’s compliance with all applicable laws and regulations.

• Internal reports to review changes in the bank’s risk assessment and supporting risk-management processes.

• The bank and third party’s contingency testing results to evaluate the ability to respond to and recover from service disruptions or degradations.

• Review and testing of control effectiveness to assess whether the third party’s control environment remains sound, including SOC reports and self-assessments to industry standards.

• Information security testing results to assess the third party’s ability to maintain the confidentiality, availability, and integrity of customer data (where applicable) and the bank’s systems, information, and data.

• Customer complaints to assess the volume and subject matter of complaints and the timeliness and appropriateness of the third party’s response to them.

• Communication with the third party to assess changes in key processes.

• The third party’s staffing and succession plans and organizational charts to assess changes in the third party’s key personnel involved in the activity and to determine whether key personnel have assumed responsibilities that may detract from their ability to perform under the third party’s agreement with the bank (e.g., affiliation with other entities).

• Training materials provided to the third party and bank staff for continued education.

• Public filings, news articles, social media, and customer feedback about experiences with the third party.

Similar to other sections, the Guide provides an illustrative example of ongoing monitoring by a bank of its relationship with a non-bank third party.

Termination

The final stage of effective third-party relationship risk management is termination. A community bank may choose to end its relationship with a third party for a variety of reasons and the bank typically considers the impact of a potential termination during the planning stage of the third-party life cycle. This consideration early on in the process of determining whether to utilize a third party’s services may help to mitigate costs and disruptions caused by termination, particularly for higher-risk activities, including critical activities.

Potential considerations for a community bank when terminating a third party relationship include:

• How will the termination affect the bank’s operations and its compliance with applicable laws and regulations?

• Will any higher-risk activities, including critical activities, be affected?

• What are the financial implications of terminating the relationship?

• What alternative third parties are available to which the bank can transition, or can the bank perform the activity inhouse?

• How ready are bank staff, systems, and control environments to move the outsourced activity in-house, if needed?

Special Focus

• How will the bank and the third party handle intellectual property?

• What access to bank systems or information has the third party been granted? How and when will the access be removed?

• If the third party has access to bank or customer data, when and how will the bank confirm that the data has been returned or destroyed?

• Will the bank have access to data to meet its AML/CFT requirements and other recordkeeping obligations?

• How will the bank manage risks associated with the termination or migration, including the impact on customers?

• What additional controls and processes will the bank put in place during the transition?

Several information sources are available to community banks when terminating a third party relationship, including the bank’s:

• Contract with the third party, to verify how parties may exit the relationship and the conditions under which fees or penalties will be imposed for early termination.

• Budget to assess the impact of costs and fees associated with termination.

• Outlines of steps or resources that the bank had previously developed to support its exit from the activity or to transition the activity to an alternative third party or in-house.

• Inventory of its or customers’ data at the third party to support risk management associated with data retention and destruction, information system connections and access control, or other control concerns.

• Assessments of its systems, processes, and human resources to determine whether the bank has the capability, resources, and time to transition the activity to another third party or bring the activity in-house with limited disruption to the bank’s operations.

• Third-party inventory to assess existing relationships with other third parties to transition the activity to them, if appropriate.

• Considerations for transitioning customer accounts with limited disruption to customers and the bank’s operations.

The termination-related example illustrates practices taken by a community bank when terminating a third-party relationship.

Governance

In managing risks of third-party relationships, community banks also consider oversight and accountability of the third party, independent reviews of the adequacy of the third party, and documentation as typical governance practices throughout a third-party relationship.

Potential considerations of the bank include:

• How do the bank’s policies and procedures promote effective third-party risk-management governance?

• How do documentation and reporting enable the bank’s board of directors to consistently oversee third-party risk management?

• How does the bank’s board of directors hold management accountable for third-party risk management?

Special Focus

• Do the bank’s governance structure and internal control environment effectively promote compliance with bank policies and procedures and applicable laws and regulations?

• Has the bank accurately assessed the resources required (including level and expertise of staffing) to manage thirdparty risks?

• Does the bank effectively document and maintain a current inventory of all third-party relationships that clearly identifies those relationships associated with higher-risk activities, including critical activities?

• Has the bank effectively evaluated the accuracy and timeliness of risk and performance reporting?

• Has the bank effectively conducted periodic independent reviews of the bank’s third-party risk management?

• When and how does the bank’s management inform its board of directors about third-party risks?

Potential sources of information for community banks in this area of third-party risk management efforts include:

• The bank’s strategic plan to verify that the bank’s third-party risk-management practices are aligned with its strategic objectives.

• Applicable policies and procedures to assess whether they address risks posed by third-party relationships.

• The bank’s contingency testing plans to understand how the bank maintains operations during disruptions.

• Audit reports to assess the bank’s risk management and pertinent internal controls.

• The bank management’s periodic reporting to the board of directors on third parties that support higher-risk activities, including critical activities.

• Documentation of the bank’s actions to remedy material third-party issues, including performance deterioration.

• Other internal reports regarding the bank’s third-party relationships.

Summary

The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency released a Third Party Risk Management: Guide for Community Banks to assist community banks with developing and implementing third-party risk-management practices. The guide is based upon the Interagency Guidance on Third-Party Relationships: Risk Management which was published in June 2023.

The guide provides helpful considerations, information sources, and illustrative examples for effective third-party relationship risk management. The guide may be viewed at: https://www.fdic.gov/resources/bankers/third-partyrelationships/third-party-risk-management-guide.pdf

Wisconsin Financial Exploitation of Vulnerable Adults

As was mentioned in last month’s WBA Compliance Journal, a new law was recently enacted which creates the concept of a List of Authorized Contacts. The concept was created to help financial service providers combat financial exploitation of certain customers. The law may be found in a new section of Wisconsin Statute Chapter 224 Miscellaneous Banking and Financial Institutions Provisions.

Created as Financial Exploitation of Vulnerable Adults, the following definitions and procedures were recently created under new Wis. Stat. § 224.45.

Special Focus

Definitions

“Account” means funds or assets held by a financial service provider, including a deposit account, savings account, share account, certificate of deposit, trust account, guardianship or conservatorship account, or retirement account, and also including an account associated with a loan or other extension of credit.

“Financial exploitation” has the meaning given in s. 46.90(1)(ed) which is the section of law which allows for financial institutions to voluntarily report financial exploitation to a County Elder-Adult-at-Risk Agency if a financial institution suspects financial exploitation of an elder adult at risk person. Section 46.90(1)(ed) defines “financial exploitation” to mean any of the following:

1. Obtaining an individual’s money or property by deceiving or enticing the individual, or by forcing, compelling, or coercing the individual to give, sell at less than fair market value, or in other ways convey money or property against their will without their informed consent.

2. Theft, as prohibited in Wis. Stat. § 943.20.

3. The substantial failure or neglect of a fiscal agent to fulfill his or her responsibilities.

4. Unauthorized use of an individual’s personal identifying information or documents, as prohibited in Wis. Stat. § 943.201.

5. Unauthorized use of an entity’s identifying information or documents, as prohibited in Wis. Stat. § 943.203.

6. Forgery, as prohibited in Wis. Stat. § 943.38.

7. Financial transaction card crimes, as prohibited in Wis. Stat. § 943.41.

“Financial institution” means a bank, savings bank, savings and loan association, trust company, or credit union chartered under the laws of Wisconsin.

“Financial service provider” means any of the following engaged in or transacting business in Wisconsin:

1. A financial institution.

2. A mortgage banker, mortgage broker, or mortgage loan originator, as defined in Wis. Stat. §§ 224.71(3), (4), or (6).

3. A seller of checks, as defined in Wis. Stat. § 217.02(9).

4. A community currency exchange, as defined in Wis. Stat. § 218.05(1)(b).

5. A payday loan licensee under Wis. Stat. § 138.14.

6. A title loan licensee under Wis. Stat. § 138.16.

7. A lender licensed under Wis. Stat. § 138.09.

8. An insurance premium finance company, as defined in Wis. Stat. § 138.12(1)(b).

9. A sales finance company, as defined in Wis. Stat. § 218.0101(34).

“Vulnerable adult” means an adult at risk, as defined in Wis. Stat. § 55.01(1e), or an individual who is at least 65 years of age. Wisconsin Statute Chapter 55 is titled, Protected Service System. Under s. 55.01(1e), “adult at risk” means any adult who has a physical or mental condition that substantially impairs their ability to care for their needs and who has experienced, is currently experiencing, or is at risk of experiencing abuse, neglect, self−neglect, or financial exploitation.

It is important to note that the age is different under this new law than under the longstanding state law regarding the voluntary reporting of suspected financial exploitation of an elder adult at risk to a County Elder-Adult-at-Risk Agency

Special Focus

under procedures established under Wis. Stat. § 46.90. An elder adult at risk under s. 46.90 is defined as a person age 60 or older. It is also important to note that the new law regarding financial exploitation of vulnerable adults does not change existing law under s. 46.90. Procedures for voluntarily reporting suspected financial exploitation of an elder adult at risk to a County Elder-Adult-at-Risk Agency are unaffected by the new law under s. 224.45.

List of Authorized Contacts

A financial service provider may offer to a vulnerable adult the opportunity to submit and periodically update a list of persons that the vulnerable adult authorizes the financial service provider to contact when the financial service provider has reasonable cause to suspect that the vulnerable adult is a victim or a target of financial exploitation. The financial service provider may rely on information provided by the customer in compiling a list of contact persons.

A financial service provider, or an officer or employee of the financial service provider, that has reasonable cause to suspect that a vulnerable adult is the victim or target of financial exploitation may convey the suspicion to any of the following if the person is not the suspected perpetrator:

1. Any person on the List of Authorized Contacts, if a list has been provided by the vulnerable adult.

2. Any co−owner, additional authorized signatory, or beneficiary on the account of the vulnerable adult.

3. Any person known by the financial service provider to be a family member, including a parent, spouse, adult child, or sibling.

When the financial institution provides information to a person as permitted under the new law, the financial service provider may limit the information and disclose only that the financial service provider has reasonable cause to suspect that the vulnerable adult may be a victim or target of financial exploitation without disclosing any other details or confidential personal information regarding the financial affairs of the vulnerable adult.

The financial service provider may choose not to contact any person on the list if the financial service provider suspects that the person is engaged in financial exploitation. Financial institutions should keep in mind however, that while the financial institution may not be required to act under this state law, facts and circumstances may be such that the institution need report activity under its responsibilities of the suspicious activity reporting (SARs) under Bank Secrecy Act (BSA) rules.

The new law also provides that a financial service provider, or an employee of a financial service provider, acting in good faith is immune from all criminal, civil, and administrative liability for contacting a person or electing not to contact a person under the new rule and for actions taken in furtherance of that determination if the determination was made based on reasonable suspicion.

Summary

Financial service providers in Wisconsin have a new tool to help combat financial exploitation of vulnerable adults. Under the new law, a financial service provider, or an officer or employee of the financial service provider, that has reasonable cause to suspect that a vulnerable adult is the victim or target of financial exploitation may convey the suspicion to certain persons if the person is not the suspected perpetrator. Financial service providers may reach out to any person on a List of Authorized Contacts provided to the financial service provider by the vulnerable adult, any co−owner, additional authorized signatory, or beneficiary on the account of the vulnerable adult, or any person known by the financial service provider to be a family member, including a parent, spouse, adult child, or sibling.

Financial service providers should consider whether any existing procedures need be modified given the new law, including to determine if and when a list of authorized contacts is to be used, when such list should be updated by customers, identify how to monitor or recognize that an account has a list on file, and to establish what steps frontline staff should take to alert management, the BSA officer, or other staff of a particular situation for further review and determination of next steps.

The new law, Wisconsin Financial Exploitation of Vulnerable Adults, 2013 Wisconsin Act 132 may be found at: https:// docs.legis.wisconsin.gov/2023/related/acts/132.pdf

Regulatory Spotlight

FFIEC Seeks Comments on Reporting Information for AMC Registry.

The Federal Financial Institutions Examination Council (FFIEC) Appraisal Subcommittee (ASC) seeks comment regarding reporting information for the National Registry of Appraisal Management Companies (AMC Registry). The Dodd-Frank Act requires ASC to maintain the AMC Registry of the AMCs that are either registered with and subject to supervision by a State that has elected to register and supervise AMCs or are Federally-regulated AMCs. The registry is used to collect required information from an AMC, as applicable. Comments are due 05/20/2024. The notice may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08377.pdf Federal Register, Vol. 89, No. 77, 04/19/2024, 28783-28784.

CFPB Issues Procedures for Supervisory Designation Proceedings.

The Bureau of Consumer Financial Protection (CFPB) issued a final rule to update procedures for designating nonbank covered persons for supervision, to conform to a recent organizational change and to further ensure that proceedings are fair, effective, and efficient for all parties. The final rule is effective 04/23/2024. Comments are due 05/23/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-23/pdf/2024-08430.pdf. Federal Register, Vol. 89, No. 79, 04/23/2024, 30259-30268.

CFPB Publishes Circulars and Supervisory Highlights.

CFPB published its Circular 2024-02 titled, Deceptive Marketing Practices About the Speed or Cost of Sending a Remittance Transfer in the Federal Register. In the circular, CFPB responds to the question: When do remittance transfer providers violate the prohibition on deceptive acts or practices in the Consumer Financial Protection Act in their marketing about the speed and cost of sending a remittance transfer? CFPB released the circular on its website 03/27/2024. The circular may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-17/pdf/2024-08007.pdf. Federal Register, Vol. 89, No. 75, 04/17/2024, 27357-27361.

CFPB published its Circular 2023-03 titled, Adverse Action Notification Requirements and Proper Use of Sample Forms in the Federal Register. In the circular, CFPB responds to the question: When using artificial intelligence or complex credit models, may creditors rely on the checklist of reasons provided in CFPB sample forms for adverse action notices even when those sample reasons do not accurately or specifically identify the reasons for the adverse action? CFPB released the circular on its website 09/19/2023. The circular may be viewed at: https://www.govinfo.gov/content/pkg/FR-202404-17/pdf/2024-08003.pdf. Federal Register, Vol. 89, No. 75, 04/17/2024, 27361-27363.

CFPB published its Supervisory Highlights, Issue 32, Spring 24 in the Federal Register. The findings in the report cover select examinations in connection with credit reporting and furnishing that were completed from 04/01/2023, through 12/31/2023. The publication may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-03/pdf/2024-09712. pdf. Federal Register, Vol. 89, No. 87, 05/03/2024, 36775-36779.

CFPB published its Supervisory Highlights, Issue 33, Spring 24 in the Federal Register. The findings in the report cover select examinations regarding mortgage servicing that were completed from 04/01/2023, through 12/31/2023. The publication may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-03/pdf/2024-09713.pdf. Federal Register, Vol. 89, No. 87, 05/03/2024, 36779-36781.

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, Market Risk Capital Rule. The market risk rule is a component of FRB’s regulatory capital framework, Regulation Q Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks. The rule includes information collections that permit FRB to monitor the market risk profile of FRB-regulated banking organizations that have significant market risk. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-26/pdf/202409020.pdf. Federal Register, Vol. 89, No. 82, 04/26/2024, 32429-32430.

FRB announced final approval of an information collection titled, Reporting, Recordkeeping, and Disclosure Requirements Associated with Regulation WW. FRB and the other federal banking agencies implemented a liquidity coverage ratio

Regulatory Spotlight

(LCR) requirement and a net stable funding ratio (NSFR) requirement, consistent with the international liquidity standards published by the Basel Committee on Banking Supervision, for large and internationally active banking organizations. The reporting, recordkeeping, and disclosure requirements contained in Regulation WW and the information collection are used to monitor covered companies’ compliance with the LCR and NSFR. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-04-26/pdf/2024-09018.pdf. Federal Register, Vol. 89, No. 82, 04/26/2024, 32430-32431.

FRB announced final approval of an information collection titled, Recordkeeping and Disclosure Requirements and Provisions Associated with Real Estate Appraisal Standards. Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) requires that, for federally related transactions, regulated institutions obtain real estate appraisals performed by certified or licensed appraisers in conformance with uniform appraisal standards. FRB and other supervisory agencies also have issued Interagency Appraisal and Evaluation Guidelines that convey supervisory expectations relating to real estate appraisals and evaluations used to support real estate-related financial transactions. The information collection is used in connection with the guidelines. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-29/ pdf/2024-09116.pdf. Federal Register, Vol. 89, No. 83, 04/29/2024, 33347-33348.

FRB Seeks Comment on Information Collections.

FRB seeks comment regarding an information collection titled, International Applications and Prior Notifications under Subparts A and C of Regulation K. Subpart A of Regulation K, International Banking Operations, governs the foreign investments and activities of member banks, Edge and agreement corporations, bank holding companies, and certain investments by foreign organizations. Subpart C of Regulation K, Export Trading Companies, governs investments in export trading companies by eligible investors. The information collection comprises a reporting forms for reporting and recordkeeping requirements contained in the subparts of the regulation. FRB uses the information collected for regulatory and supervisory purposes and to allow FRB to fulfill its statutory obligations under the Federal Reserve Act and the Bank Holding Company Act. Comments are due 06/28/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-04-29/pdf/2024-09115.pdf. Federal Register, Vol. 89, No. 83, 04/29/2024, 33348-33349.

FRB seeks comment regarding an information collection titled, Application for a Foreign Organization to Acquire a U.S. Bank or Bank Holding Company. Under the Bank Holding Company Act, any company, including a company organized under the laws of a foreign country, that seeks to acquire a U.S. bank or bank holding company must receive FRB approval. FRB uses the information collected to determine whether to approve an application for prior approval and, subsequently, to carry out its supervisory responsibilities with respect to the foreign banking organization’s operations in the United States. Comments are due 07/01/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-30/pdf/2024-09268. pdf Federal Register, Vol. 89, No. 84, 04/30/2024, 34245-34246.

FRB seeks comment regarding an information collection titled, Bank Holding Company Applications and Notifications. The filings collect information on proposals by bank holding companies involving formations, acquisitions, mergers, and nonbanking activities. FRB requires the submission of the filings for regulatory and supervisory purposes and to allow FRB to fulfill its statutory obligations under the Bank Holding Company Act. FRB uses the information to evaluate each individual transaction with respect to financial and managerial factors, permissibility, competitive effects, financial stability, net public benefits, and impact on the convenience and needs of affected communities. Comments are due 07/01/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-30/pdf/2024-09274.pdf. Federal Register, Vol. 89, No. 84, 04/30/2024, 34246-34247.

FRB Seeks Comment on Expanding Fedwire and NSS Operating Hours.

FRB seeks comment on the expansion of the operating hours of the Fedwire® Funds Service and the National Settlement Service (NSS). FRB seeks to expand the operating hours of the Fedwire Funds Service to 22 hours per day, 7 days per week, every day of the year and to correspondingly expand the operating hours of NSS, with NSS closing 30 minutes earlier than the Fedwire Funds Service. At this time, FRB is not considering expanding operating hours for the Fedwire Securities Service. FRB seeks comment on the potential benefits, risks, and implementation considerations of the proposal. Comments are due 07/08/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-09/pdf/2024-10117. pdf. Federal Register, Vol. 89, No. 90, 05/09/2024, 39613-39621.

Regulatory Spotlight

FDIC Issues Notice of Intent to Terminate Receiverships.

The Federal Deposit Insurance Corporation (FDIC or Receiver) as Receiver for the institutions listed in the notice, has given notice it intends to terminate its receivership for said institutions. The liquidation of the assets for each receivership has been completed. To the extent permitted by available funds and in accordance with law, the Receiver will be making a final dividend payment to proven creditors. Based upon the foregoing, the Receiver has determined that the continued existence of the receiverships will serve no useful purpose. Consequently, notice is given that the receiverships shall be terminated, to be effective no sooner than thirty days after the date of the notice. If any person wishes to comment concerning the termination of any of the receiverships, such comment must be made in writing, identify the receivership to which the comment pertains, and be sent within thirty days of the date of the notice to: Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Section, 600 North Pearl, Suite 700, Dallas, TX 75201. No comments will be considered not sent within this timeframe. The notice may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-04-16/pdf/2024-08035.pdf. Federal Register, Vol. 89, No. 74, 04/16/2024, 26881.

FDIC Updates Listing of Financial Institutions in Liquidation.

FDIC announced it has been appointed the sole receiver for the financial institution listed in the notice. The appointment is effective as of the “date closed” indicated in the listing. The list (as updated from time to time in the Federal Register) may be relied upon as “of record” notice that FDIC has been appointed receiver for purposes of the statement of policy published in the 07/02/1992 issue of the Federal Register. For further information concerning the identification of any institution which have been placed in liquidation, please visit FDIC’s website at: www.fdic.gov/bank/individual/failed/banklist.html, or contact the Chief, Receivership Oversight at the address provided in the notice. The notice may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-05-07/pdf/2024-09840.pdf. Federal Register, Vol. 89, No. 89, 05/07/2024, 38143.

FDIC Seeks Comment on Proposed Bank Merger Policy Statement.

FDIC seeks comment regarding a proposed Statement of Policy (SOP) on Bank Merger Transactions (Proposed SOP) that is relevant to all insured depository institutions. The Proposed SOP would replace FDIC’s current SOP on Bank Merger Transactions and proposes a principles-based overview that describes FDIC’s administration of its responsibilities under the Bank Merger Act (BMA). The Proposed SOP focuses on the scope of transactions subject to FDIC approval, FDIC’s process for evaluating merger applications, and the principles that guide FDIC’s consideration of the applicable statutory factors as set forth in BMA. The Supplementary Information section of the notice contains explanatory content, including historical data, to provide additional context for the Proposed SOP. Comments are due 06/18/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08020.pdf. Federal Register, Vol. 89, No. 77, 04/19/2024, 29222-29244.

FDIC Seeks Comment on Information Collections.

FDIC seeks comment regarding an information collection titled, Application Pursuant to Section 19 of the Federal Deposit Insurance Act (FDI). Section 19 of FDI requires FDIC’s consent prior to any participation in the affairs of an insured depository institution (IDI) by an individual who has been convicted of crimes involving dishonesty or breach of trust, including drug-related convictions. To obtain that consent, certain individuals and IDIs must submit the application to FDIC for approval. Comments are due 06/17/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-202404-18/pdf/2024-08256.pdf. Federal Register, Vol. 89, No. 76, 04/18/2024, 27763.

FDIC seeks comment regarding an information collection titled, Industrial Banks and Industrial Loan Companies. Part 354 of FDIC regulations establishes filing requirements for industrial banks or industrial loan companies (ILCs) and companies that are not subject to Federal consolidated supervision by the Board of Governors of the Federal Reserve System but control an industrial bank or an ILC (covered company). Specifically, part 354 requires any covered company and industrial bank or ILC subsidiary of a covered company to enter into one or more written agreements with FDIC. The requirements under part 354 give rise to the information collection. Comments are due 05/20/2024. The notice may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-04-18/pdf/2024-08255.pdf. Federal Register, Vol. 89, No. 76, 04/18/2024, 27763-27764.

FDIC seeks comment regarding an information collection titled, Interagency Bank Merger Application. Section 18(c) of the Federal Deposit Insurance Act (FDI Act) requires an insured depository institution (IDI) that wishes to merge or consolidate

Regulatory Spotlight

with any other IDI or, either directly or indirectly, acquire the assets of, or assume liability to pay any deposits made in, any other IDI, to apply for the prior written approval of the responsible agency. Section 18(c) further requires FDIC approval in connection with any merger transaction involving an IDI and a non-insured entity. The information collection is used to obtain FDIC approval. Comments are due 06/18/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-04-19/pdf/2024-08021.pdf. Federal Register, Vol. 89, No. 77, 04/19/2024, 29245-29246.

FDIC seeks comment regarding an information collection titled, Interagency Notice of Change in Control. Section 7(j) of the Federal Deposit Insurance Act and sections 303.80-88 of FDIC Rules and Regulations require that any person proposing to acquire control of an insured depository institution and certain parent companies thereof provide 60 days prior written notice of the proposed acquisition to the appropriate federal banking agency. Such written notice which pertains to the acquisition of control of a FDIC-supervised institution and certain parent companies thereof is filed with the regional director of the FDIC region in which the bank is located. FDIC uses the information reported to determine the impact of the change in control. Comments are due 07/01/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-0501/pdf/2024-09374.pdf. Federal Register, Vol. 89, No. 85, 05/01/2024, 35095.

FDIC seeks comment regarding an information collection titled, Recordkeeping, Disclosure and Reporting Requirements in Connection with Regulation Z, and Account Based Disclosures in Connection with Consumer Financial Protection Bureau Regulations E and DD and Federal Reserve Regulation CC. Each collection of records is included in the notice. Comments are due 07/08/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-07/pdf/2024-09856. pdf. Federal Register, Vol. 89, No. 89, 05/07/2024, 38136-38143.

OCC Extends Comment Period for Business Combination Proposal.

The Office of the Comptroller of the Currency (OCC) announced an extension of the comment period for its proposed rule titled, Business Combinations under the Bank Merger Act. The proposed rule was published in the Federal Register on 02/14/2024. OCC proposed to increase the transparency of the standards that apply to its review of business combinations involving national banks and Federal savings associations. Comments are now due 06/15/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-15/pdf/2024-07876.pdf. Federal Register, Vol. 89, No. 73, 04/15/2024, 26106.

OCC Seeks Comment on Information Collections.

OCC seeks comment regarding an information collection titled, Reporting and Recordkeeping Requirements Associated with Liquidity Coverage Ratio: Liquidity Risk Measurement, Standards, and Monitoring. OCC and the other federal banking regulators have implemented a quantitative liquidity requirement, known as the liquidity coverage ratio (LCR), and a stable funding requirement, known as the net stable funding ratio (NSFR), that apply to certain large banking organizations. The LCR is designed to promote the short-term resilience of the liquidity risk profile of covered banking organizations and promote improvements in the measurement and management of liquidity risk. The reporting and recordkeeping requirements contained in the collection are used to monitor covered banks’ compliance with the LCR and NSFR. Comments are due 06/17/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-16/pdf/2024-07950. pdf. Federal Register, Vol. 89, No. 74, 04/16/2024, 27001-27003.

OCC seeks comment regarding an information collection titled, Record and Disclosure Requirements of Consumer Financial Protection Bureau Regulations B, E, M, Z, and DD and Board of Governors of the Federal Reserve System Regulation CC. The collection applies to record keeping and disclosure requirements of each named regulation as further discussed in the notice. Comments are due 05/29/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-0429/pdf/2024-09099.pdf. Federal Register, Vol. 89, No. 83, 04/29/2024, 33466-33467.

OCC seeks comment regarding an information collection titled, Uniform Interagency Transfer Agent Registration and Deregistration Forms. The information collection is used for registration requirements under Section 17(A)C of the Securities Exchange Act for transfer agents as further explained in the notice. Comments are due 05/30/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-30/pdf/2024-09210.pdf. Federal Register, Vol. 89, No. 84, 04/30/2024, 34318-34319.

Regulatory Spotlight

HUD Revises Investing Requirements to Gain or Maintain FHA-Approved Status.

The Department of the Housing and Urban Development (HUD) issued a final rule which amends the requirements for investing lenders and investing mortgagees to gain or maintain their status as a Federal Housing Administration (FHA) approved lender or mortgagee. The revisions make FHA’s approval requirements consistent with investing mortgagees’ and investing lenders’ risk, reduce barriers to FHA approval for new investing mortgagees and investing lenders, and increase access to capital for all FHA-approved mortgagees and lenders. HUD clarified that the general annual certification requirement for lenders and mortgagees is applicable to investing lenders and investing mortgagees. HUD also defined Government-Sponsored Enterprises (GSEs) separately from other governmental-type entities to ensure that FHA requirements specific to loan origination do not apply to GSEs. Finally, HUD eliminated obsolete language related to lender and mortgagee net worth requirements. The final rule is effective 05/23/2024. The final rule may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-04-23/pdf/2024-08648.pdf. Federal Register, Vol. 89, No. 79, 04/23/2024, 30272-30277.

HUD Revises Floodplain Management and Minimum Property Standards Exposure.

HUD issued a final rule to revise regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS). The revisions will improve the resilience of HUDassisted or financed projects to the effects of climate change and natural disasters and provide for greater flexibility in the use of HUD assistance in floodways under certain circumstances. The final rule also revises HUD’s floodplain and wetland regulations to streamline, improve overall clarity, and modernize standards. Also, the final rule revises HUD’s Minimum Property Standards for one-to-four-unit housing under HUD’s mortgage insurance and low-rent public housing programs to require that the lowest floor in newly constructed structures located within the 100-year floodplain be built at least 2 feet above the base flood elevation. The final rule also revises a categorical exclusion when HUD performs environmental reviews and updates various HUD environmental regulations to permit online posting of notices. The final rule is effective 05/23/2024. See the final rule for mandatory compliance dates. The final rule may be viewed at: https:// www.govinfo.gov/content/pkg/FR-2024-04-23/pdf/2024-06246.pdf. Federal Register, Vol. 89, No. 79, 04/23/2024, 30850-30914.

HUD Corrects Indexing Methodology Title I Manufactured Home Loan Limits.

HUD issued a correcting amendment for the final rule which set forth the indexing methodology for Title 1 Manufactured Home Loan Limits. HUD identified inadvertent errors in amendatory instruction 3 of the final rule published in the Federal Register on 02/28/2024. See the correcting amendment for the corrections. The correcting amendment is effective 04/15/2024. The correcting amendment may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-15/ pdf/2024-07880.pdf. Federal Register, Vol. 89, No. 73, 04/15/2024, 26105.

HUD Publishes Regulatory Waiver Requests Granted for Q3 2023.

HUD published regulatory waiver requests granted for third quarter calendar year 2023. Section 106 of the Department of Housing and Urban Development Reform Act requires HUD to publish quarterly Federal Register notices of all regulatory waivers that HUD has approved. Each notice covers the quarterly period since the previous Federal Register notice. The notice contains a list of regulatory waivers granted by HUD during the period beginning on 07/01/2023, and ending on 09/30/2023. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-17/pdf/202407956.pdf. Federal Register, Vol. 89, No. 75, 04/17/2024, 27620-27646.

HUD Removes Provisions from Single-Family Housing Policy Handbook.

On 10/24/2023, HUD published a notice in the Federal Register to announce and request comment on changes to the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage (HECM) for Purchase Program-Acceptable Monetary Investment Funding Sources and Interested Party Contributions requirements. The proposed changes were included in an update to HUD’s Single Family Housing Policy Handbook, which was published 10/31/2023, and became effective 04/29/2024. After consideration of the comments received, FHA decided not to implement some of the changes proposed in the October notice. HUD will publish a Mortgagee Letter or update the Single Family Housing Policy Handbook to align HUD’s policy with this Federal Register notice. All other changes previously included in the Handbook

Regulatory Spotlight

will go into effect 04/29/2024, as planned. See the notice for the specific section within Handbook Section 4000.1 that will be removed. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-26/pdf/2024-08819. pdf. Federal Register, Vol. 89, No. 82, 04/26/2024, 32455-32456.

FEMA Issues Final Flood Hazard Determinations.

The Federal Emergency Management Agency (FEMA) issued a notice which identifies communities in the state of Wisconsin, where flood hazard determinations, which may include additions or modifications of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where applicable, in the supporting Flood Insurance Study (FIS) reports have been made final. The FIRM and FIS report are the basis of the floodplain management measures that a community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in FEMA’s National Flood Insurance Program (NFIP). The date of 08/28/2024, has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-22/pdf/2024-08521.pdf. Federal Register, Vol. 89, No. 78, 04/22/2024, 29347-29348.

FEMA issued a notice which identifies communities in the state of Indiana, 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 08/14/2024, has been established for the FIRM and, where applicable, the supporting FIS report showing the new or modified flood hazard information for each community. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-04-22/pdf/2024-08523.pdf. Federal Register, Vol. 89, No. 78, 04/22/2024, 29352-29354.

FEMA Issues Notices of Changes in Flood Hazard Determinations.

FEMA issued a notice which lists communities in the states of Illinois, Indiana, and Ohio, where the addition or modification of Base Flood , Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or the regulatory floodway (hereinafter referred to as flood hazard determinations), as shown on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports, prepared by FEMA for each community, is appropriate because of new scientific or technical data. The FIRM, and where applicable, portions of the FIS report, have been revised to reflect the flood hazard determinations through issuance of a Letter of Map Revision (LOMR), in accordance with federal regulations. The flood hazard determinations will be finalized on the dates listed in the table in the notice and revise the FIRM panels and FIS report in effect prior to the determination for the listed communities. From the date of the second publication of notification of the changes in a newspaper of local circulation, any person has 90 days in which to request through the community that the Deputy Associate Administrator for Insurance and Mitigation reconsider the changes. The flood hazard determination information may be changed during the 90-day period. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-22/pdf/2024-08525. pdf. Federal Register, Vol. 89, No. 78, 04/22/2024, 29355-29358.

FEMA Issues Proposed Flood Hazard Determinations.

Comments are requested on 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 the communities in the state of Iowa, 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 07/17/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-18/ pdf/2024-08296.pdf. Federal Register, Vol. 89, No. 76, 04/18/2024, 27776-27777.

Regulatory Spotlight

Comments are requested on 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 the communities in the state of Minnesota, 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 07/17/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-0418/pdf/2024-08298.pdf. Federal Register, Vol. 89, No. 76, 04/18/2024, 27778-27779.

FEMA Seeks Comment on Information Collections.

FEMA seeks comment regarding an information collection titled, National Flood Insurance Program (NFIP) Policy Forms. Flood insurance policies are marketed through the facilities of licensed insurance agents or brokers in the various states, or property owners can apply for quotes online. Applications and quote requests are forwarded to a servicing company designated as fiscal agent by the Federal Insurance Administration. Upon receipt and examination of the application and required premium, the servicing company issues the appropriate Federal flood insurance policy. The information collected is used for the selling and servicing of NFIP policies by FEMA’s direct servicing agent, NFIP Direct. Comments are due 06/10/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-11/pdf/2024-07655.pdf. Federal Register, Vol. 89, No. 71, 04/11/2024, 25642.

FEMA seeks comment regarding an information collection titled, Generic Clearance for Information Sharing Agreements Involving Personal Identifiable Information and Sensitive Personal Identifiable Information. FEMA must collect information for points of contact within state, local, territorial, and Tribal governments, as well as the purpose, need, and authority for the personally identifiable information, to initiate legal agreements. Once finalized, the legal agreements permit sharing of disaster survivors’ and insurance policyholders’ data for response and mitigation efforts. Comments are due 06/10/2024 The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-11/pdf/2024-07659.pdf. Federal Register, Vol. 89, No. 71, 04/11/2024, 25641.

FEMA seeks comment regarding an information collection titled, Residential Basement Floodproofing Certificate. The certificate is required to certify that floodproofing of a structure in communities approved for Residential Basement floodproofing meets at least minimal floodproofing specifications. Residential structures that receive the certification are granted a discount on flood insurance premiums. Comments are due 06/03/2024. The notice may be viewed at: https://www. govinfo.gov/content/pkg/FR-2024-05-02/pdf/2024-09539.pdf. Federal Register, Vol. 89, No. 86, 05/02/2024, 35844-35845.

FinCEN Seeks Comment on BSA-Related Information Collection.

The Financial Crimes Enforcement Network (FinCEN) seeks comment regarding an information collection titled, AML Program Requirements for Banks Lacking a Federal Functional Regulator, MSBs, Mutual Funds, Insurance Companies, Dealers in Precious Metals, Precious Stones, or Jewels, Operators of Credit Card Systems, and Loan or Finance Companies. The information collection requirements relate to Bank Secrecy Act (BSA) regulations that the listed industries to develop and implement written anti-money laundering (AML) programs. Comments are due 06/21/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-22/pdf/2024-08529.pdf. Federal Register, Vol. 89, No. 78, 04/22/2024, 29427-29432.

IRS Issues Final Rule on Definition of Domestically Controlled Qualified Investment Entities.

The Internal Revenue Service (IRS) issued a final rule to address the determination of whether a qualified investment entity is domestically controlled, including the treatment of qualified foreign pension funds for this purpose. In particular, the final rule provides guidance as to when foreign persons are considered to hold directly or indirectly stock in a qualified investment entity. The final rule is effective 04/25/2024. See the final rule to dates of applicability. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-25/pdf/2024-08267.pdf. Federal Register, Vol. 89, No. 81, 04/25/2024, 31618-31632.

Regulatory Spotlight

IRS Issues Final Rule on Transfer of Certain Credits.

IRS issued a final rule concerning the election under the Inflation Reduction Act to transfer certain tax credits. The final rule describes rules for the election to transfer eligible credits in a taxable year, including definitions and special rules applicable to partnerships and S-corporations and regarding excessive credit transfer or recapture events. In addition, the final rule describes rules related to a required IRS pre-filing registration process. The final rule is effective 07/01/2024. See the final rule for applicability dates. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-30/pdf/202408926.pdf. Federal Register, Vol. 89, No. 84, 04/30/2024, 34770-34816.

IRS Issues Proposed Rules on Excise Tax on Repurchase of Corporation Stock.

IRS issued a proposed rule regarding guidance for the procedure and administration of the reporting and payment of the new excise tax on repurchases of corporate stock made after 12/31/2022. The proposed rule affects certain publicly traded corporations that repurchase their stock or whose stock is acquired by certain specified affiliates. The proposed rule would be added as subpart B of new 26 CFR part 58 (Stock Repurchase Excise Tax Regulations), which is proposed to be added to subchapter D of 26 CFR chapter I (Miscellaneous Excise Taxes). Comments are due 05/13/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-12/pdf/2024-07118.pdf. Federal Register, Vol. 89, No. 72, 04/12/2024, 25829-25834.

IRS issued a second proposed rule to provide guidance regarding the application of the new excise tax on repurchases of corporate stock made after 12/31/2022. The proposed rule affects certain publicly traded corporations that repurchase their stock or whose stock is acquired by certain specified affiliates. The proposed rule would be added as subpart A of new 26 CFR part 58 (Stock Repurchase Excise Tax Regulations), which is proposed to be added to subchapter D of 26 CFR chapter I (Miscellaneous Excise Taxes). Comments are due 06/11/2024. The proposed rule may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-04-12/pdf/2024-07117.pdf. Federal Register, Vol. 89, No. 72, 04/12/2024, 25980-26067.

IRS Issues Proposed Rule on Transactions with Foreign Trusts.

IRS issued a proposed rule to provide guidance regarding information reporting of transactions with foreign trusts and receipt of large foreign gifts and regarding loans from, and uses of property of, foreign trusts. The proposed rule would amend the regulations relating to foreign trusts having one or more United States beneficiaries. Comments are due 07/08/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-08/pdf/2024-09434.pdf. Federal Register, Vol. 89, No. 90, 05/08/2024, 39440-39485.

IRS Seeks Comment on Digital Assets Proceeds Collection.

IRS seeks comment regarding an information collection titled, Digital Asset Proceeds from Broker Transactions. The collection is used by brokers to report proceeds from (and in some cases, basis for) digital asset dispositions to taxpayers and to IRS. Taxpayers may be required to recognize gain from the dispositions of digital assets. Reporting is also required when brokers know or have reason to know that a corporation in which a taxpayer owns digital assets, that is also stock, has had a reportable change in control or capital structure. Taxpayers may be required to recognize gain from the receipt of cash, services, digital assets, or other property that was exchanged for a digital asset that is also the corporation’s stock. Comments are due 06/21/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-22/ pdf/2024-08528.pdf. Federal Register, Vol. 89, No. 78, 04/22/2024, 29433.

FHFA Seeks Comment on Freddie Mac Proposal to Purchase Second Mortgages.

The Federal Housing Finance Agency (FHFA) seeks comment regarding a proposal by the Federal Home Loan Mortgage Corporation (Freddie Mac) to purchase certain single-family closed-end second mortgages as a new product. Comments are due 05/22/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-22/pdf/2024-08479.pdf. Federal Register, Vol. 89, No. 78, 04/22/2024, 29329-29333.

Regulatory Spotlight

SBA Amends Criminal Background Review of Business Loan Programs.

The Small Business Administration (SBA) issued a final rule to amend criminal justice reviews for SBA Business Loan Programs, Disaster Loan Programs, and Surety Bond Guaranty Program. On 09/15/2023, SBA issued a proposed rule to amend regulations governing its business loan programs (7(a) Loan Program, 504 Loan Program, Microloan Program, Intermediary Lending Pilot Program (ILP), Surety Bond Guarantee Program, and the Disaster Loan Program (except for the COVID-19 Economic Injury Disaster Loan (EIDL) Program)) for criminal background reviews. The proposed rule introduced amendments to improve equitable access based on criminal background review of applicants seeking to participate in one or more of the programs. The final rule implements the proposed regulatory changes and addresses comments SBA received. The final rule is effective 05/30/2024. The final rule may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-04-30/pdf/2024-09009.pdf. Federal Register, Vol. 89, No. 84, 04/30/2024, 34094-34102.

SBA Increases Borrowing and Expands Eligibility for Microloan Program.

SBA issued a final rule to amend its Microloan Program regulations to reflect statutory changes to the Microloan Program contained in the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. The changes increase the total amount an Intermediary may borrow under the Microloan Program per year and in aggregate, expand eligibility for Intermediaries to receive a bonus grant and add the necessary definitions, and revise the eligible base grant award amount for Intermediaries under certain circumstances. The final rule is effective 06/17/2024, without further action, unless significant adverse comment is received by 06/03/2024. 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-2024-05-02/pdf/2024-09520.pdf. Federal Register, Vol. 89, No. 86, 05/02/2024, 35688-35690.

SBA Seeks Comment on Financial Statement of

Debtor Collection.

SBA seeks comment regarding an information collection titled, Financial Statement of Debtor. The primary purpose for collecting the information is to evaluate the debtor’s financial capacity to repay the debt owed to SBA and determine to what extent SBA may compromise the debt, maximize recovery, and protect the interests of SBA. Forms are to be completed and signed by the obligor and then submitted to the lender or forms are to be completed and signed by the Borrower/Obligor and then submitted to the SBA Disaster Loan Servicing Center handling the account. Comments are due 06/14/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-15/pdf/2024-07886. pdf. Federal Register, Vol. 89, No. 73, 04/15/2024, 26202-26203.

Agencies Remove DUNS Reference in Regulations.

The Rural Business-Cooperative Service (RBC), Rural Housing Service (RHS), and Rural Utilities Services (RUS), (collectively, the agencies) issued a final rule to update Rural Development (RD) program regulations by removing references to the Data Universal Numbering System (DUNS) numbers and replacing them with the new Unique Entity Identifier (UEI) as the primary means of identifying entities registered for Federal awards government-wide in the System for Award Management (SAM). The final rule makes it clear that the UEI will be required, unless exempt, when applying for Federal awards from RD. The final rule includes a summary, by regulation, of the changes made. The final rule is effective 05/01/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-01/pdf/202409447.pdf. Federal Register, Vol. 89, No. 85, 05/01/2024, 34955-34959.

Agencies Update Allocation Methodology and Formulas for Loan and Grant Program Funds.

The Rural Business-Cooperative Service (RBC), Rural Housing Service (RHS), and Rural Utilities Service (RUS) (collectively, the agencies) issued a final rule to update the data used to determine a state’s percentage of national nonmetropolitan unemployment income. The agencies receive funding through the annual appropriations process. Several programs apply a formula to determine how much each state should receive in a funding allocation for a given fiscal year. Where applicable, the formulas have multiple components that include a state’s percentage of the national nonmetropolitan unemployment income figure. The regulations had cited the Bureau of Labor Statistics (BLS) as the source for the national nonmetropolitan unemployment information, but the data is not publicly available. The agencies have changed the cited data source to the Census Bureau’s American Community Survey (ACS). The amendments do not change current process or procedure. The final rule is effective 05/01/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-01/

pdf/2024-09446.pdf. Federal Register, Vol. 89, No. 85, 05/01/2024, 34959-34961.

RHS Seek Comment in Supervised Bank Account Collection.

The Rural Housing Service (RHS) seeks comment regarding an information collection titled, Supervised Bank Accounts. As further explained in the notice, RHS uses supervised bank accounts (SBA) as a mechanism to ensure correct disbursement and expenditure of funds designated for a project, help a borrower properly manage its financial affairs, and ensure that RHS’ security is protected adequately from fraud, waste, and abuse. SBAs are mandatory for certain RHS programs. Comments are due 06/11/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-12/ pdf/2024-07782.pdf. Federal Register, Vol. 89, No. 72, 04/12/2024, 25862-25863.

RHS Issues NOSA for Section 514 and 516 Off-Farm Labor Housing Programs.

RHS issued a notice of solicitations of applications (NOSA) for section 514 off-farm labor housing loans and section 516 off-farm housing grants for the construction of new off-farm labor housing loan units for domestic farm laborers, retired domestic farm laborers, or disabled domestic farm laborers. See the NOSA for application details and deadlines. The NOSA may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08155.pdf. Federal Register, Vol. 89, No. 77, 04/19/2024, 28717-28732.

Agencies Seek Comment on Filing Financial Statement Collection.

The Commodity Credit Corporation (CCC) and Farm Service Agency (FSA) (collective, the agencies) seek comment regarding an information collection titled, Representations for Commodity Credit Corporation or Farm Service Agency Loans and Authorization to File a Financing Statement and Related Documents. The information collection is necessary to gather data regarding the applicant, which is required on a financing statement, and to obtain the applicant’s permission to file a financing statement prior to the execution of a security agreement. Comments are due 06/17/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-16/pdf/2024-08017.pdf. Federal Register, Vol. 89, No. 74, 04/16/2024, 26856-26857.

CFTC Issues Final Rule to Amend SEF Regulations.

The Commodity Futures Trading Commission (CFTC) issued a final rule to amend its swap execution facility (SEF) regulations related to uncleared swap confirmations. The final rule also makes associated technical and conforming changes. The Dodd-Frank Act amended the Commodity Exchange Act (CEA) by adding section 5h, which establishes registration requirements and core principles for SEFs. CFTC implemented CEA section 5h by adopting part 37 of its regulations, which, among other things, sets forth operational requirements for SEFs and establishes various requirements for the trading of swaps on SEFs. During the implementation of part 37, SEFs informed CFTC that the confirmation requirement for uncleared swaps under §37.6(b) was operationally and technologically difficult and impractical to implement. The final rule attempts to help improve the operational impact of Part 37 rules. The final rule is effective 05/31/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-01/pdf/2024-09368.pdf. Federal Register, Vol. 89, No. 85, 05/01/2024, 34991-35004.

SEC Delays Effective Date of Climate-Related Disclosure Rule.

The Securities and Exchange Commission (SEC) issued a final rule to delay the effective date of the final rule which requires climate-related information in registration statement and annual reports. On 03/28/2024, SEC published a final rule in the Federal Register titled, Enhancement and Standardization of Climate-Related Disclosures for Investors. The final rule amended SEC rules under the Securities Act and Securities Exchange Act to require registrants to provide certain climaterelated information in their registration statements and annual reports. The final rule was to become effective 05/28/2024 SEC has delayed the effective date of the final rule pending the completion of judicial review in consolidated proceedings in the Eighth Circuit. As of 04/12/2024, the effective date of the final rule is delayed indefinitely. SEC will publish a subsequent notification in the Federal Register to announce the effective date of the final rules following the completion of judicial review of the consolidated Eighth Circuit petitions. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/ FR-2024-04-12/pdf/2024-07648.pdf. Federal Register, Vol. 89, No. 72, 04/12/2024, 25804-25805.

Regulatory Spotlight

SEC Issues Disclosure of Order Execution Information Rule.

SEC issued a final rule to adopt amendments to a rule under the Securities Exchange Act that requires disclosures for order executions in national market system stocks. First, the amendments expand the scope of reporting entities subject to the preexisting rule that requires market centers to make available monthly execution quality reports. Next, the amendments modify the definition of “covered order” to include certain orders submitted outside of regular trading hours and certain orders submitted with stop prices. In addition, the amendments modify the information required to be reported under the rule. The amendments modify time-to-execution categories and require average time to execution to be measured in increments of a millisecond or finer and calculated on a share-weighted basis for all orders. The amendments require that the time of order receipt and time of order execution be measured in increments of a millisecond or finer, and that realized spread be calculated at multiple time intervals. Finally, the amendments require all reporting entities to make a summary report available. The final rule is effective 06/14/2024. See section VII for mandatory compliance date information on transitioning to the final rule. The final rule may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-04-15/pdf/2024-05556.pdf. Federal Register, Vol. 89, No. 73, 04/15/2024, 26428-26617.

SEC Adopts Updated EDGAR Filer Manual.

SEC issued a final rule to adopt amendments to Volume II of the Electronic Data Gathering, Analysis, and Retrieval System Filer Manual (EDGAR Filer Manual) and related rules and forms. See the final rule for the list of changes made. The EDGAR Release 24.1 will be deployed in the EDGAR system on 03/18/2024. The final rule is effective 04/19/2024 The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08091.pdf. Federal Register, Vol. 89, No. 77, 04/19/2024, 28606-28608.

SEC Adjusts 2024 Transaction Fee Rates.

SEC issued an order to make fiscal year 2024 annual adjustments to transaction fee rates. SEC is required to publish notice of the new fee rates under Section 31 of the Securities Exchange Act. Each national securities exchange and national securities association is required to pay transaction fees to SEC based on the aggregate dollar amount of covered sales transacted by or through any member of the association other than on an exchange. See the order for the list of adjusted transaction fee rates. The order may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-22/ pdf/2024-08512.pdf. Federal Register, Vol. 89, No. 78, 04/22/2024, 29402-29408.

FTC Issues Final and Proposed Telemarketing Sales Rules.

The Federal Trade Commission (FTC) issued a final rule to adopt amendments to the Telemarketing Sales Rule (TSR) that, among other things, require telemarketers and sellers to maintain additional records of their telemarketing transactions, prohibit material misrepresentations and false or misleading statements in business to business (B2B) telemarketing calls, and add a new definition for the term “previous donor.” The amendments are necessary to address technological advances and to continue protecting consumers, including small businesses, from deceptive or abusive telemarketing practices. The amendments are effective 05/16/2024. See the final rule for mandatory compliance dates. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-16/pdf/2024-07180.pdf. Federal Register, Vol. 89, No. 74, 04/16/2024, 26760-26786.

FTC issued a proposed rule to amend the Telemarketing Sales Rule to extend its coverage to inbound telemarketing calls by consumers to technical support services, in particular calls that consumers make in response to an advertisement through any medium or to a direct mail solicitation. The proposed amendment is necessary in light of the widespread deception and consumer injury caused by tech support scams. The amendment would provide FTC with the ability to obtain stronger relief in cases involving tech support scams, including civil penalties and consumer redress. Comments are due 06/17/2024. The proposed rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-16/ pdf/2024-07182.pdf. Federal Register, Vol. 89, No. 74, 04/16/2024, 26798-26807.

FTC Issues Final Non-Compete Clause Rule.

FTC issued a final rule that provides that it is an unfair method of competition for persons to, among other things, enter into non-compete clauses (noncompetes) with workers on or after the final rule’s effective date. With respect to existing

Regulatory Spotlight

non-competes (i.e., noncompetes entered into before the effective date) the final rule adopts a different approach for senior executives than for other workers. For senior executives, existing non-competes can remain in force, while existing noncompetes with other workers are not enforceable after the effective date. The final rule is effective 09/04/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-07/pdf/2024-09171.pdf. Federal Register, Vol. 89, No. 89, 05/07/2024, 38342-38506.

NCUA Issues ANPR on Records Preservation Program.

The National Credit Union Administration (NCUA) issued an advance notice of proposed rulemaking (ANPR) to seek comments on ways NCUA can improve and update its records preservation program regulation and accompanying guidelines. NCUA is particularly interested in obtaining input on the content of the regulation, which has not been updated in 15 years and may be outdated or at odds with current best practices. NCUA is also interested in feedback on the structure of the part which may be confusing as it currently contains a combination of regulatory requirements and guidance. Comments are due 06/24/2024. The ANPR may be viewed at: https://www.govinfo.gov/content/pkg/FR-202404-24/pdf/2024-08680.pdf. Federal Register, Vol. 89, No. 80, 04/24/2024, 31117-31119.

VA Seeks Comment on Information Collections.

The Department of Veterans Affairs (VA) seeks comment regarding an information collection titled, Lender’s Staff Appraisal Reviewer Application. Title 38 U.S.C. 3702(d) authorizes VA to establish standards for lenders 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 implemented the authority through its Lender Appraisal Processing Program. Comments are due within 30 days of publication of the notice. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-15/pdf/2024-07855.pdf. Federal Register, Vol. 89, No. 73, 04/15/2024, 26215.

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 implemented the authority through its Servicer Appraisal Processing Program. Comments are due within 30 days of publication of the notice. The notice may be viewed at: https://www.govinfo.gov/ content/pkg/FR-2024-04-22/pdf/2024-08526.pdf. Federal Register, Vol. 89, No. 78, 04/22/2024, 29436-29437.

VA seeks comment regarding an information collection titled, Financial Counseling Statement, VA Form 26-8844. VA Form 26-8844 provides for recording comprehensive financial information concerning the borrower’s net income, total expenditures, net worth, suggested areas for which expenses can be reduced or income increased, the arrangement of a family budget, and recommendations for the terms of any repayment agreement on the defaulted loan. Comments are due 07/08/2024. The notice may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-05-07/pdf/2024-09861. pdf. Federal Register, Vol. 89, No. 89, 05/07/2024, 38222.

EEOC Issues Pregnant Workers Fairness Act Final Rule and Interpretive Guidance.

The Equal Employment Opportunity Commission (EEOC) issued a final rule and interpretive guidance to implement the Pregnant Workers Fairness Act. The Act requires a covered entity to provide reasonable accommodations to a qualified employee’s or applicant’s known limitations related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless the accommodation will cause an undue hardship on the operation of the business of the covered entity. The final rule and interpretive guidance is effective 06/18/2024. The final rule and interpretive guidance may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-07527.pdf. Federal Register, Vol. 89, No. 77, 04/19/2024, 29096-29220.

Regulatory Spotlight

DOL Issues Final Rule and Exemptions to Investment Advice Fiduciary Definition.

The Department of Labor (Department) issued a final rule to define when a person renders “investment advice for a fee or other compensation, direct or indirect” with respect to any moneys or other property of an employee benefit plan, for purposes of the definition of a “fiduciary” in the Employee Retirement Income Security Act (Title I of ERISA). The final rule also applies for purposes of Title II of ERISA to the definition of a fiduciary of a plan defined in Internal Revenue Code (Code), including an individual retirement account or other plan identified in the Code. DOL has also published prohibited transaction exemption amendments as outlined in the following paragraphs. The final rule is effective 09/23/2024. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-25/pdf/2024-08065.pdf. Federal Register, Vol. 89, No. 81, 04/25/2024, 32122-32258.

DOL announced an amendment to class Prohibited Transaction Exemption (PTE) 2020-02, which provides relief for investment advice fiduciaries to receive certain compensation that otherwise would be prohibited. The amendment affects participants and beneficiaries of employee benefit plans, individual retirement account (IRA) owners, and fiduciaries with respect to such plans and IRAs. The amendment is effective 09/23/2024. The transaction exemption may be viewed at: https://www.govinfo. gov/content/pkg/FR-2024-04-25/pdf/2024-08066.pdf. Federal Register, Vol. 89, No. 81, 04/25/2024, 32260-32299.

DOL announced an amendment to class Prohibited Transaction Exemption (PTE) 84-24, an exemption from certain prohibited transaction provisions of the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (the Code). DOL has amended PTE 84-24 to exclude sales and compensation received as a result of providing investment advice within the meaning of ERISA and the Code. The amendment affects participants and beneficiaries of plans, individual retirement account (IRA) owners, and certain fiduciaries of plans and IRAs. The amendment is effective 09/23/2024. The transaction exemption may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-25/pdf/2024-08067.pdf. Federal Register, Vol. 89, No. 81, 04/25/2024, 32302-32344.

DOL announced amendments to Prohibited Transaction Exemptions (PTEs) 75-1, 77-4, 80-83, 83-1, and 86-128, which are class exemptions from certain prohibited transaction provisions of the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (the Code). As described in the exemption, DOL has amended PTE 75-1 by expanding the extension of credit provision in Part V and adding a definition of the term “IRA” in Part V. DOL also amended PTE 86-128 by revising the exemption’s “Recapture of Profits” exception, and making certain technical corrections and editorial changes. The amendments (collectively, the Mass Amendment) affect participants and beneficiaries of plans, individual retirement account (IRA) owners, and certain fiduciaries of plans and IRAs. The Mass Amendment is effective 09/23/2024. The transaction exemption may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-25/ pdf/2024-08068.pdf. Federal Register, Vol. 89, No. 81, 04/25/2024, 32346-32359.

DOL Updates FLSA Overtime Pay Regulations.

DOL issued a final rule to update and revise the regulations issued under the Fair Labor Standards Act (FLSA) to implement the exemptions from minimum wage and overtime pay requirements for executive, administrative, professional, outside sales, and computer employees. Significant revisions include increasing the standard salary level, increasing the highly compensated employee total annual compensation threshold, and adding to the regulations a mechanism that will allow for the timely and efficient updating of the salary and compensation thresholds, including an initial update on 07/01/2024, to reflect earnings growth. The final rule is effective 07/01/2024; sections 541.600(a)(2) and 541.601(a)(2) are applicable beginning 01/01/2025. The final rule may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-26/pdf/202408038.pdf. Federal Register, Vol. 89, No. 82, 04/26/2024, 32842-32973.

CDFI Issues NOFA for Bank Enterprise Award Program.

The Community Development Financial Institutions Fund (CDFI) issued a notice of funding availability (NOFA) seeking applications for the fiscal year 2024 Bank Enterprise Award Program (BEA Program). Through the BEA Program, CDFI awards formula-based grants to depository institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) for increasing levels of loans, investments, service activities, and technical assistance to residents and businesses in the most economically distressed communities. See the NOFA for application and deadline requirements. The NOFA may be viewed at: https://www.govinfo.gov/content/pkg/FR-2024-04-29/pdf/2024-09124.pdf. Federal Register, Vol. 89, No. 83, 04/29/2024, 33451-33466.

Compliance Notes

DFI’s College Savings Program announced an Edvest deposit incentive to celebrate the end of the school year, and to coincide with National 529 Day. Edvest 529, Wisconsin’s only direct-sold 529 college savings plan, has a special incentive to jumpstart college savings with a match deposit offer. Under DFI’s Edvest 529 $50 or $100 Deposit Incentive, individuals who open a new Edvest 529 account between 05/20/2024 and 05/31/2024, will be eligible for the $50 or $100 bonus incentive. For program details and requirements, see the announcement: https://www.edvest.com/news/celebratesummer-051524/

FDIC will host four seminars regarding the final rule governing use of FDIC’s Official Signs and Advertising Statement, Misrepresentations of Insured Status, and Misuse of FDIC’s Name or Logo for bank staff, bank officers, and other stakeholders. During the presentation, FDIC staff will cover: (a) requirements for all FDIC-insured institutions’ use of FDIC official signs, including the new FDIC official digital sign for bank websites, apps, and ATMs, as well as updates to the advertising statement; and (b) clarifications on the prohibitions against misrepresentations of deposit insurance coverage and misuse of FDIC’s name and logo, which apply to any person, including banks. FDIC will also discuss some of the questions that have been raised by bankers, trade associations, technology companies, vendors, and others. The first seminar will be held via Microsoft (MS) Teams on 05/30/2024. The dates for the remaining three seminars will be announced at a later date. Each seminar will last approximately 90 minutes and all seminars will be held from 2:003:30pm ET. To join the May 30th Seminar MS Teams Live Event, click on the MS Teams Live Event link in FDIC’s seminar announcement which may be viewed at: https://www.fdic.gov/resources/deposit-insurance/banker-webinar/index.html

FHFA announced that Fannie Mae and Freddie Mac published new Reconsideration of Value (ROV) policies. An ROV is a request to an appraiser to re-assess the appraised value of a property due to potential appraisal reporting deficiencies or inappropriate selection of comparable properties, based upon additional information the appraiser should consider. The new ROV policies require lenders to disclose and outline the ROV process for consumers, standardize communication to appraisers, and establish ROV response expectations. Lenders will also be required to refer appraisers to local, state, and federal agencies for violations of anti-discrimination laws. The ROV policies may be viewed at: https://singlefamily.fanniemae.com/news-events/announcement-sel-2024-03-selling-guide-updates https://guide.freddiemac.com/app/guide/bulletin/2024-6 https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee

FDIC announced updates to its Risk Management Manual of Examination Policies (RMS Manual). The updates affect Section 6.1, Liquidity and Funds Management and Section 22.1, Examination Documentation Modules. Section 6.1 was updated to reflect regulatory changes related to brokered deposits and to provide additional guidance regarding uninsured deposits, Federal Home Loan Bank advances, and public funds. New sections were also added regarding evaluating asset encumbrances and intraday liquidity monitoring. Section 22.1 was updated to accommodate new Supplemental Modules for ACH and wire transfers. The updated manual may be viewed at: https://www.fdic.gov/resources/supervision-andexaminations/examination-policies-manual/index.html

FRB has released its Consumer Compliance Outlook, First Issue 2024. The current issue includes: an overview of private flood insurance compliance requirements, consumer compliance requirements for commercial products and services, a compliance spotlight on resources to combat increased check fraud, and recent supervisory data. The latest edition may be viewed at: https://www.consumercomplianceoutlook.org/

HUD released two guidance documents addressing the application of the Fair Housing Act to two areas in which the use of artificial intelligence poses particular concerns: (a) tenant screening process; and (b) advertising of housing opportunities through online platforms that use targeted ads. The guidance may be found at the following links, respectively: https://www.hud.gov/sites/dfiles/FHEO/documents/FHEO_Guidance_on_Screening_of_Applicants_for_ Rental_Housing.pdf

https://www.hud.gov/sites/dfiles/FHEO/documents/FHEO_Guidance_on_Advertising_through_Digital_Platforms.pdf

Compliance Notes

FDIC released its first semiannual update of 2024 on the Restoration Plan for its Deposit Insurance Fund (DIF). FDIC projects that the reserve ratio remains on track to reach the statutory minimum of 1.35 percent ahead of the 09/30/2028 deadline. The statement may be viewed at: https://www.fdic.gov/news/press-releases/fdic-board-directors-releasessemiannual-update-restoration-plan

AsktheFed® announced several new webinars:

• May 23, 2024: Residential Real Estate Series, National Update. At the beginning of the year, there was growing optimism around improving housing demand. Inflation was trending downward, job growth remained persistent, home price growth had moderated, and mortgage rates had come down from recent peaks. However, midway through the peak of the 2024 home selling season, declining home ownership affordability has reemerged as a significant challenge facing the market. As both home prices and mortgage rates trend upward, buyers today are adjusting to the new reality of the cost of homeownership. In the months ahead, lenders, builders, and other market participants will continue to face challenges as they struggle to navigate the ever-changing housing market landscape. Domonic Purviance, from the Federal Reserve Bank of Atlanta, will host the webinar, which addresses current housing market conditions and future risks and expectations over the next year.

• May 29, 2024: 2024 CRE: Turbulence Ahead? Will 2024 Commercial Real Estate (CRE) weather the storm, or is it just under the weather? CRE continues to benefit from a healthy economy, including robust job growth, strong consumer spending, and available credit. But the industry is also beset by a challenging interest rate climate, appraisal issues, oversupply, falling rental rates, and increasing expenses. Additionally, increasing CRE delinquency rates and loan losses are presenting challenges to some financial institutions. Brian Bailey CRE, CCIM, will discuss trends and emerging risks in the CRE and CRE finance industries.

• June 4, 2024: FedNow® Services Update: Erik VanBramer, Vice President FRFS Customer Relations, will provide an update on the industry progress with the FedNow Service. The conversation will provide progress updates, hear interesting use cases that are developing in the market as well as a roadmap towards the future of instant payments.

Webinar registration is open at www.askthefed.org under the “All Calls” tab.

OFAC announced a new OFAC Sanctions List Service (SLS). The SLS will be the primary application OFAC will use to deliver sanctions lists file and data. The SLS includes support for all OFAC legacy and modern sanctions lists data files. The announcement may be viewed at: https://content.govdelivery.com/accounts/USTREAS/bulletins/39ad6c2

CFPB released a Data Spotlight Report which reflects overdraft/NSF revenue from 2023 as compared to reported 2022 data. The data spotlight may be viewed at: https://www.consumerfinance.gov/data-research/research-reports/dataspotlight-overdraft-nsf-revenue-in-2023-down-more-than-50-versus-pre-pandemic-levels-saving-consumers-over-6billion-annually/

wbalegal@wisbank.com |

| wisbank.com/resources/compliance

•

•

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 – FULL

Madison – $225/attendee

14-15 BSA/AML Compliance Conference

Wisconsin Dells – $450/attendee

15-16 Principles of Banking – FULL

Mineral Point – $550/attendee

22-23 Principles of Banking

Wausau – $550/attendee

23 Trust Conference

Madison – $245/attendee

23 Branch Manager Boot Camp: Session I

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

June

13-14 BOLT Summer Leadership Summit

Wisconsin Dells – $250/attendee

25 Compliance Forum: Session I

Wisconsin Dells – annual membership/pricing varies

27 Branch Manager Boot Camp: Session II

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

July

7/98/1 Understanding Bank Performance Virtual Series

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

23 Community Bankers for Compliance (CBC) –Session III

Virtual half-day – annual membership/pricing varies

25 Branch Manager Boot Camp: Session III

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

7/308/1 Agricultural Lending School

Madison – $895/attendee; optionalpre-school workshopon7/29–$200/attendee

August

15 Chair’s Member Appreciation Golf Outing

29

Wisconsin Dells

Branch Manager Boot Camp: Session IV

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

September

9-10 ICBA LEAD FWD Summit

Milwaukee

10–11 Secur-I T Conference

Wisconsin Dells – team pricing available

12 Wisconsin Bankers Foundation Gala

Madison

17 IRA Essentials Workshop

Madison or Virtual - $245/attendee

18 Advanced IRA Workshop

Madison or Virtual - $245/attendee

18 FIPCO Software & Compliance Forum: Loan & Mortgage

Wisconsin Dells or virtual 23-24 Management Conference

Green Bay – team pricing available

9/3010/1 Personal Banker School

Madison – $495/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

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

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

Other Events

www.wisbank.com | 608-441-1252 | wbaeducation@wisbank.com