On May 11, 2018, the beneficial ownership rule became fully effective.  While the rule was finalized on July 16, 2016, compliance was not mandatory until May 11, 2018.  The delay in implementation was to permit covered financial institutions to ready their BSA/AML compliance programs.

In accordance with the rule, a covered financial institution must verify,

house models and coinsOn April 3, 2018, the Department of Treasury released recommendations to “modernize” the Community Reinvestment Act of 1977 (“CRA”). Treasury’s recommendations include:

  • updating the definitions of geographic assessment areas to reflect the changing nature of banking arising from changing technology, customer behavior, and other factors;
  • increasing clarity and flexibility of CRA examinations to increase

payday loan pen and paperOn October 5, 2017, the Consumer Financial Protection Bureau (“CFPB”) released its nearly 1,700-page final rule for short-term loans (“Payday Lending Rule”). Notably, almost simultaneously with the CFPB’s announced Payday Lending Rule, the Office of the Comptroller of the Currency (“OCC”) rescinded its longstanding Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products (“DAP Guidance”), theoretically opening the door for banks to offer short-term credit products to customers with less regulatory burden.

When will the Payday Lending Rule become effective?

While certain provisions of the Payday Lending Rule relating to the registration of information systems will become effective 60 days after the Payday Lending Rule is published in the Federal Register, the rest of the Payday Lending Rule will become effective 21 months after publication in the Federal Register. Consequently, the Payday Lending Rule will not become effective until sometime during the summer of 2019. Given that the term of the current CFPB Director expires in mid-2018, and will presumably be replaced by a director less hostile to the payday loan industry, some industry commentators speculate that the Payday Lending Rule, at least in its present form, may never become effective.
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Here are our observations on the 2018 OCC Bank Supervision Operating Plan:

– Cybersecurity is a top priority.

– Credit underwriting, as always.

– BSA is frequently mentioned.

– Business model sustainability and change management are emphasizing the M in CAMELS.

– Fair lending is far down the list.

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