1 / 31

Regulatory Compliance Update

Regulatory Compliance Update. Heather line Utah credit union association October 26, 2013. 2014 Will Be. A W i l d Ride. AGENDA. Changes in 2013 2014 Mortgage Rules Upcoming Changes BSA Update Fair Lending Update. 2013 Changes. Minor disclosure changes IRS reporting for NRAs

hamlet
Download Presentation

Regulatory Compliance Update

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Regulatory Compliance Update Heather line Utah credit union association October 26, 2013

  2. 2014 Will Be . . . . A Wild Ride

  3. AGENDA • Changes in 2013 • 2014 Mortgage Rules • Upcoming Changes • BSA Update • Fair Lending Update

  4. 2013 Changes • Minor disclosure changes • IRS reporting for NRAs • ATM fee notices • New BSA forms • Mandatory escrow accounts for HPMLs • Remittance transfer disclosures • Credit card access rule

  5. Disclosure Changes • Effective January 1, 2013 • List the CFPB as the contact regulator on certain disclosures, including: • Adverse action notices • Risk based pricing notices • Credit card applications • Open-end account opening disclosures

  6. IRS Reporting for NRAs • Effective January 1, 2013 • Requires the reporting of deposit interest to the IRS for nonresident aliens • Rules: • Financial institutions (including credit unions) must file IRS Form 1042-S for interest (of $10 or more) paid to a nonresident alien. • The rule specifically covers nonresident aliens who are residents of a country with which the U.S. has an information-sharing agreement

  7. New BSA Forms • Effective April 1, 2013 • Electronic filing of BSA forms required in June 2012 • Revised forms for CTRs and SARs required on effective date

  8. ATM Fee Disclosures • Effective March 26, 2013 • Big win for credit unions and banks • Eliminates external fee notices on ATMs • Screen notices still required • Reduces frivolous lawsuits

  9. Mandatory Escrow Accounts • Effective June 1, 2013 • Applies to Higher-Priced Mortgage Loans • Requires mandatory escrow accounts for the first five years

  10. Remittance Transfer Disclosures • Effective October 28, 2013 • Applies to foreign remittance transfers • Requires a remittance transfer provider to provide a consumer sender: • Awritten disclosure provided prior to the initiating a transaction that includes the actual exchange rate, fees and taxes, and the amount of currency to be received by the recipient • A written receipt that includes the prepayment disclosure, information about error resolution, provider and regulator contact information, and the availability of the funds upon receipt • Small providers are exempt

  11. Credit Card Access Rule • Effective November 4, 2013 • Eases “independent ability to repay” underwriting rules from the credit card act for consumers over 21 • Household income can be used to qualify for a credit card

  12. 2014 Mortgage Rules • Ability to Repay/Qualified Mortgage • Loan Servicing • HOEPA • Loan Originator Compensation • ECOA Valuations • HPML Appraisals

  13. Ability to Repay/Qualified Mortgage

  14. ATR/QM The Basics • Creditors must make a reasonable, good-faith determination that a consumer has a reasonable ability to repay a mortgage loan. • Presumption of compliance if creditor originates a QM.

  15. Ability to Repay Factors • Current or reasonably expected income or assets that the consumer will rely on to repay the loan • Current employment status • Monthly mortgage payment • Monthly payment on any simultaneous loans secured by the same property • Monthly payments for property taxes and insurance that you require the consumer to buy, and certain other costs related to the property such as homeowners association fees or ground rent • Debts, alimony, and childsupport obligations • Monthly debt-to-income ratio • Credit history

  16. Qualified Mortgage Features • Loan feature limitations • Loan term limits • Points and fee limits • Debt to income limits

  17. ATR/QM Considerations • Exceptions for small creditors and small creditors in rural and underserved areas. • Management must decide how many non-QMs the credit union will originate. • All mortgage loans must be underwritten using information that is verified by third party sources.

  18. Mortgage Servicing Rules

  19. Servicing Rules All Servicers Large Servicers Only • Error resolution and information requests • Forced placed hazard insurance • ARM disclosures • Prompt crediting • Payoff statements • Policies and procedures • Early intervention • Continuity of contact • Loss mitigation procedures • Periodic statements

  20. HOEPA

  21. HOEPA Rule Summary • Applies to High Cost Mortgage Loans • When you originate a high-cost mortgage, the creditor must: • Give additional disclosures • Avoid certain loan terms • Ensure the consumer receives additional protections, including homeownership counseling. • The updated rule: • Lowered the points and fees trigger • Expanded coverage • Added protections including homeownership counseling

  22. Loan Originator Compensation

  23. Loan Officer Compensation Summary • Prohibits a loan originator’s compensation from being based on the terms of a transaction. • Permits contributions to and benefits under designated tax-advantaged plans and certain bonuses and other compensation under non-deferred profits-based compensation plans based on mortgage-related business profits. • Prohibits loan originators in a transaction from being compensated by both a consumer and another person, such as a creditor.

  24. Other Rules Related to Loan Officer Compensation • Include NMLS ID on certain loan documents • Mandatory arbitration clauses in mortgage contracts are prohibited • Prohibition on financing credit insurance premiums (some monthly premiums are ok)

  25. ECOA Valuations

  26. ECOA Valuations • Within three days of application, notify the applicant of the right to receive a copy of appraisals/valuations • “Promptly” share copies of appraisals and other written valuations with the applicant. • Provide valuations upon completion or at least three days prior to closing (closed-end) or at account opening (open-end) • Applicant can waive right to received valuations prior to closing (still must must be delivered at closing)

  27. Higher-Priced Mortgage Loan Appraisals

  28. Higher-Priced Mortgage Loan Appraisals • Disclose to consumers within three business days after receiving the consumers’ applications that they are entitled to a free copy of any appraisal • Obtain a written appraisal performed by certified or licensed appraiser • Have the appraiser visit the interior of the property and provide a written report • Deliver copies of appraisals to applicants no later than three business days before consummation • Two appraisals required in “flipping” transactions

  29. Upcoming Changes • New TIL/RESPA disclosures • Privacy Notices • More Tinkering

  30. BSA Update • No new changes in regulation • Most common SARs: • Structuring/Money Laundering • Mortgage Loan Fraud • Check fraud • Unusual activity • New trends: • Elder abuse • Insider abuse

  31. Fair Lending Update • Increased focus from the NCUA • Separate fair lending exams scheduled • Targeting credit unions that submit HMDA data • Fair lending training for all employees • Examination of HMDA data to understand fair lending trends

More Related