Compliance Update with Amy K
by Amy Kleinschmit
Chief Compliance Officer


The Consumer Financial Protection Bureau (CFPB) recently posted five FAQs on the topic of “providing loan estimates to consumers.” Find these and all TRID FAQs here.

Fraud – all ages impacted.

A little dated, but still interesting, I found this FTC article on the “Top Frauds of 2018” recently. The FTC collected more than 1.4 million fraud reports – in 25% of those reports people lost money. Consumers reported losing $1.48 BILLION to fraud in 2018 – an increase of 38% over 2017! Per the FTC, the top reports in 2018 were imposter scams, debt collection, and identity theft.

An interesting finding in the FTC article, younger people reported losing money to fraud more often than older people. In 2018 - 43% of people in their 20s reported a loss to fraud, while only 15% of people in their 70s did. However, the amount of loss was typically higher for older people. The median loss for people in their 20s was $400 compared to $750 for those in their 70s. The median loss jumped significantly for people 80 and above to $1,700.

The article also links to a number of data and tables to look at fraud reports by state. For the first two quarters of 2019, the FTC has received 1,093 reports of fraud in South Dakota. 422 of those were imposter scams which was the number one type of fraud reported. The median loss was $240. In North Dakota for the same timeframe, there have been 1,009 reports of fraud. 390 of those were imposter scams – also the number one type of fraud reported. In North Dakota, the median loss was $399.

Remember - education regarding fraud prevention for all ages is very important!

Tax Scam Alert.

In a recent press release, the IRS warns of the surge of phishing emails and telephone scams. There are new versions of two tax-related scams that taxpayers need to watch out for.

As explained in the IRS notice, the latest twist on the SSN scheme includes scammers claiming to be able to suspend or cancel the victim’s Social Security number. This scam is similar to and often associated with the IRS impersonation scam.

The other scam references a fake agency called the “Bureau of Tax Enforcement.” There is no such agency. The lien or levy is based on bogus overdue taxes owed to a non-existent agency. The lien notification scam likely references the IRS to confuse potential victims into thinking the letter is from a legitimate agency.

Help your members stay on top of these tax scams to avoid being taken advantage of.

Updated Advisory on Reporting Elder Abuse.

The Consumer Financial Protection Bureau (CFPB) recently issued an updated advisory on reporting suspected elder financial exploitation to the appropriate authorities. This advisory can be found here.

Originally issued in 2016, the CFPB had provided guidance regarding “Recommendations and report for financial institutions on preventing and responding to elder financial exploitation.” The CFPB notes the 2016 recommendations remain “vital” today. This recent update relates to one of the six recommendations, specifically, reporting of suspected elder financial exploitation to appropriate local, state or federal first responders.

The advisory discusses the Senior Safe Act, which provides immunity for reporting suspected elder financial exploitation provided the employee received appropriate training. Remember – free training is available from AARP’s BankSafe training which combines industry knowledge and experience with a state-of-the-art, online learning experience. AARP worked with more than 2,000 financial industry professionals to develop the training platform’s content and interactive scenarios. The platform is one of few designed specifically for frontline staff, supervisors and compliance officers. Find the platform here.

After training there are also a number of tools and support resources. AARP BankSafe updates and maintains a network of tip sheets, reference materials, and state-specific resources.

Finally, the advisory also discusses the requirements to file Suspicious Activity Reports (SARs) and compliance with documentation requests from law enforcement or other investigatory agencies.

Have you Registered Yet?

Be sure to get your registration in soon for the upcoming Credit Union Professional Roundtable scheduled for Bismarck, North Dakota, on August 28 and 29.

Each year credit union professionals from North Dakota and South Dakota gather to discuss and learn from each other on a variety of topics. This event is open to all credit union professionals, the only requirement is a willingness to ask questions and engage in conversation with others.

Topics submitted for discussion so far include: attracting new employees and retention; latest compliance regulations; incentives for MSB; call center operations; facilitating direct consumer loan growth; Regulation CC; collections; member education ideas; group insurances; vendors/products; marketing; staff training; member onboarding; and universal tellers.

We are looking forward to another great event in Bismarck this year. This event is the perfect, casual setting to gain an understanding of the pressing topics and opportunities your credit union faces and issues relevant to your credit union.

You can register right now here for this great event. I hope to see you there.

CUAD members may contact Amy Kleinschmit for any compliance related questions.


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