Compliance Update with Amy K
by Amy Kleinschmit
Chief Compliance Officer
10/10/2019

New CTR Instruction.

The Financial Crimes Enforcement Network (FinCEN) has issued a new instruction for completing the Currency Transaction Report (CTR) Item 2 on Part I. Please note the form did not change, just the instructions. The CTR FAQs, specifically #16 was also updated to reflect this change.

Item 2 on Part I discusses the role the person involved in the transaction played. Whether they conducted the transaction on their own behalf; conducted the transaction for another; they were the person on whose behalf the transaction is conducted; or if they were a common carrier. This change impacts persons who are subject to multiple roles in Item 2 – for example they conducted a transaction for themselves but also deposited funds into someone else’s account.  Multiple Part I’s will be required.

The new instruction is as follows:

“Item 2: Select option 2a if the person recorded in Part I conducted the transaction(s) on his or her own behalf. Select option 2b if the person recorded in Part I conducted the transaction(s) on behalf of another person. Options 2a and 2b cannot be selected if box 4b‚ “If entity” is checked. Select option 2c if the transaction was conducted by another for the person recorded in Part I. If option 2d is selected because an armored car service under contract with the customer is involved in the transaction(s), the information on the armored car service, not the individual agent of that armored car service, will be recorded in Part I (see FIN-2013-R001). If box 2d is checked to indicate an armored car service under contract with the customer then box 4b, “If 2 entity” must be checked.

If more than one Item 2 option applies to a Part I person, a separate Part I section will be prepared on that person for each Item 2 option.

For example, if the Part I person conducted a $5,000 deposit into their personal account and a separate $7,000 deposit into the account of another person/entity, there will be one Part I on that person reporting option 2a on the personal deposit with that amount and account number in Item 21 “Cash in amount”. There will be a second Part I on that person reporting option 2b on the person/entity account transaction with that amount and account number in Item 21.”

 

FREE SBA Lending Webinar.

The National Credit Union Administration (NCUA) and SBA are hosting a free webinar on October 16 for credit unions to learn more about Small Business Administration loan programs.

Register for the webinar, “The Big Picture of SBA Lending for Credit Unions—Part 1” here

 

HMDA.

The Consumer Financial Protection Bureau (CFPB) has released the Filing Instructions Guide (FIG) for data collected in 2020. The FIG is a technical resource to help financial institutions file HMDA data collected in 2020 and reported in 2021.

The CFPB also announced the availability of a new resource, the Supplemental Guide for Quarterly Filers. This guide will help financial institutions required to file HMDA data quarterly beginning in 2020.

The FIG and the Supplemental Guide for Quarterly Filers can be accessed at https://ffiec.cfpb.gov under Help for Filers.

 

CU Policy Pro Updates. 

The third quarter updates to CU Policy Pro have been released. Several were made in response to regulatory changes from the NCUA, specifically Fidelity bond and Insurance coverage and real estate appraisals (effective date October 22, 2019). Please remember that these changes are only made to the model policies. The redlined version, which is found under resources, can be useful to track the changes as you manually incorporate the updates into your adopted policy. Alternatively, you also have the option to remove the adopted policy from your CU Policies Manual and bring in the updated policy in its entirety (usually if your CU Policies Manual version has little or no customization, or if our updates were very extensive and it would be easier to start with the updated content and re-customize for your credit union).

The updated policies are as follows:

Policy 1220 – Bond Insurance. This policy was updated to reflect the changes to the NCUA rules Part 713  that impact the requirements for fidelity bonds. (Recommended)

Policy 1300 – Audits. This policy was updated to reflect the changes to the NCUA rules Part 715 and the impact on Supervisory Audit requirements. (Recommended)

Policy 2110 - Bank Secrecy Act/Anti-Money Laundering Program. This policy was updated to reflect the SAR decision-making process.  Specifically, the documentation of the decision-making process, including the final decision for contemplating, but not filing a SAR. (Recommended)

Policy 2112 – BSA – Marijuana-Related and Hemp-Related Business Accounts. This policy was updated to reflect the recent NCUA Guidance on serving hemp-related businesses.  Additionally, the policy was amended to allow for the credit union to create their own definition of “marijuana-related business.” (Recommended)

Policy 2113 - BSA – Not Servicing Marijuana-Related Business Accounts. This policy was updated to reference hemp-related businesses.  (Recommended)

DELETED Policy 7217 – Payday Lending. This policy was very similar to Policy 7218. The content from this policy was moved to 7218 and this policy has been deleted from CU PolicyPro.

Policy 7218 – Payday Alternative Loans (PALs). Policy 7218 was updated to reflect the new loan alternative that was recently approved by the NCUA and becomes effective 60 days after publication in the Federal Register. Also, the content of Policy 7217 was added to this policy (7217 has been removed from CU PolicyPro). (Recommended)

Policy 7302 – Real Estate Appraisals. Policies 7302 and 7303 were both updated to reflect the NCUA’s recent changes to the appraisal rules in Part 722.  These provide for additional exemptions and also for additional definitions under the rules. (Recommended)

Policy 7303 - Real Estate Appraisals – Appendices. Policies 7302 and 7303 were both updated to reflect the NCUA’s recent changes to the appraisal rules in Part 722.  These provide for additional exemptions and also for additional definitions under the rules.  (Recommended)

Policy 9210 - Real Estate Settlement Procedures Act - HUD Regulation X. This policy was updated to remove the requirement to provide the Special Information Booklet for reverse mortgage transactions.  The requirement to provide this booklet now falls under Regulation Z for those related transactions, so wouldn’t be applicable under this policy.  (Recommended)

As always, CUAD members may contact Amy Kleinschmit with any compliance related questions.

 

 

 

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