Compliance Notes

between 08/01/2023, and 12/31/2023. The announcement may be viewed at: www.fhfa.gov//Media/PublicAffairs/Pages/ Statement-from-FHFA-Director-Sandra-Thompson-on-Upfront-Fees-Based-on-Certain-Borrowers-DTI-Ratio.aspx

The White House issued a National Cybersecurity Strategy meant to set forth goals to create a resilient digital ecosystem where it is costlier to attack systems than defend them, where sensitive and private information is secured and protected, and where neither incidents nor errors cascade into catastrophic, systemic consequences. The strategy sets forth a plan for how to further protect against cybersecurity threats. The strategy may be viewed at: www. whitehouse.gov/wp-content/uploads/2023/03/National-Cybersecurity-Strategy-2023.pdf

OCC and FDIC issued their schedules of CRA evaluations to be conducted in the second and third quarters of 2023. The schedules may be viewed at the following links, respectively: www.occ.gov/news-issuances/newsreleases/2023/nr-occ-2023-20.html; www.fdic.gov/resources/bankers/community-reinvestment-act/examinationschedule/q2cra23.html; and www.fdic.gov/resources/bankers/community-reinvestment-act/examination-schedule/ q3cra23.html

IRS issued a consumer alert to warn of new scams that urge people to use wage information on a tax return to claim false credits in hopes of receiving a big refund. One scheme, which is circulating on social media, encourages people to use tax software to manually fill out the Form W-2, Wage and Tax Statement, and include false income information. In the W-2 scheme, scam artists suggest people make up large income and withholding figures as well as the employer it is coming from. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund. Other variations involving people using the Form 7202 regarding credits for sick leave and family leave for certain self-employed individuals or the Schedule H, household employment taxes to try to claim credits when otherwise not earned. People who attempt such scams face a wide range of penalties. The alert may be viewed at: www.irs.gov/newsroom/irs-warns-taxpayers-of-new-filing-season-scams-involving-form-w-2-wages-those-filing-fakereturns-face-potential-penalties-investigation

CFPB issued a special edition of its Supervisory Highlights that reports on unlawful “junk fees” uncovered in deposit accounts and in multiple loan servicing markets, including in mortgage, student, and payday lending. The information was generated from information found during examinations between 07/01/2022 and 02/01/2023. The special edition may be viewed at: www.consumerfinance.gov/about-us/newsroom/cfpb-uncovers-illegal-junk-fees-onbank-accounts-mortgages-and-student-and-auto-loans/

CFPB also released a blog post regarding protecting homeowners from discriminatory home appraisals. The post outlines the Connolly & Mott v. Lanham et al court case and court filings by CFPB and DOJ in connection with the case and with fair and accurate appraisals in general. The blog post may be viewed at: www.consumerfinance.gov/about-us/ blog/protecting-homeowners-from-discriminatory-home-appraisals/

FDIC released FIL-09-2023 to announce amendments to Section 19 of the FDI Act as a result of the Fair Hiring in Banking Act. Section 19 prohibits a person from participating in the affairs of an FDIC-insured institution if he or she has been convicted of an offense involving dishonesty, breach of trust, or money laundering, or has entered into a pretrial diversion or similar program in connection with a prosecution for such an offense, without the prior written consent of FDIC. Notable changes to Section 19 include:

• Certain older offenses. The Act excludes certain offenses from the scope of Section 19 based on the amount of time that has passed since the offense occurred or since the individual was released from incarceration. The Act excludes certain offenses from the scope of Section 19 that were committed by individuals 21 or younger.

• Designated lesser offenses. The Act excludes certain “lesser offenses” from the scope of Section 19.

• Criminal offenses involving dishonesty. The Act excludes certain offenses from the definition of “criminal offense involving dishonesty.”

• Expunged, sealed, and dismissed offenses. The Act excludes certain offenses from the scope of Section 19 that have been expunged, sealed, or dismissed.

Compliance Notes

• Standards for FDIC review of Section 19 applications. The Act prescribes standards for FDIC’s review of applications submitted under Section 19. FDIC will process new and pending applications under the provisions of the amended law.

The release also outlines the actions FDIC will take during 2023 as a result of the changes. FDIC’s FIL-09-2023 may be viewed at: www.fdic.gov/news/financial-institution-letters/2023/fil23009.html

FRB announced a July launch for the FedNow Service. During the first week of April, FRB will begin the formal certification of participants for launch of the service. Early adopters will complete a customer testing and certification program, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system. Certification encompasses a comprehensive testing curriculum with defined expectations for operational readiness and network experience. In June, FRB and certified participants will conduct production validation activities to confirm readiness for the July launch. The announcement may be viewed at: www.federalreserve.gov/newsevents/ pressreleases/other20230315a.htm

FTC sent a report to Congress detailing the consumer issues that affect American Indian and Alaska Native (AI/ AN) populations, as well as FTC’s enforcement, outreach, and education work on the issues. The report reflects issues such as auto purchasing and financing, predatory lending, impersonation scams, tech support scams and romance scams, among others. FTC’s own consumer report data shows that government impersonation and prize, sweepstakes, and lottery scams were the most frequent scams reported to FTC from majority AI/AN ZIP codes. The report may be viewed at: www.ftc.gov/system/files/ftc_gov/pdf/p035201consumerissuesaffectingaianreport.pdf

CFPB published new findings on financial profiles of Buy Now, Pay Later borrowers. The report finds consumers using Buy Now, Pay Later were more likely to be using credit cards, payday loans, and other high-interest financial services. They are also more likely to exhibit measures of financial distress than non-users. The report may be viewed at: www.consumerfinance.gov/about-us/newsroom/cfpb-publishes-new-findings-on-financial-profiles-of-buy-now-paylater-borrowers/

CFPB also released a new Issue Spotlight examining how the financial products used to deliver public benefits, like Social Security and unemployment compensation, affect individuals’ ability to fully access the assistance provided through those programs. The Issue Spotlight outlines how governments often choose to deliver public benefits through financial products, particularly prepaid cards, which may subject recipients to fees and cut into the amount of funds the consumer receives. The release may be viewed at: www.consumerfinance.gov/data-research/research-reports/issuespotlight-public-benefits-delivery-consumer-protection/full-report/