Compliance Update with Amy K
by Amy Kleinschmit
Chief Compliance Officer
8/28/2020

NCUA – PEP

As promised in the NCUA’s Supervisory Priorities and in the following update, the NCUA has recently published guidance regarding politically exposed persons (PEP). This joint statement on Bank Secrecy Act Due Diligence Requirements for customers who may be considered PEPs can be found here.

PEPs generally refer to foreign individuals who are or have been entrusted with a prominent public function, as well as their immediate family members and close associates. By virtue of this public position or relationship, these individuals may present a higher risk that their funds may be the proceeds of corruption or other illicit activity. 

This joint statement provides that “the CDD rule does not create a regulatory requirement, and there is no supervisory expectation, for banks to have unique, additional due diligence steps for customers who are considered PEPs. Instead, the level and type of CDD should be appropriate for the customer risk.” However, the statement reminds credit unions that CDD applies to all members/customers, including PEPs. Credit unions are to adopt appropriate risk-based procedures for conducting CDD that, among other things, enable credit unions to: (i) understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile, and (ii) conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.

Therefore, the credit union may choose to determine whether a customer is a PEP at account opening, if the credit union determines the information is necessary for the development of a customer risk profile. Further, the credit union may conduct periodic reviews with respect to PEPs, as part of or in addition to the required ongoing risk-based monitoring to maintain and update customer information.

 

CFPB – HMDA

The CFPB has released the Filing Instructions Guide (FIG) for Home Mortgage Disclosure Act (HMDA) data collected in 2021. Also released was a Supplemental Guide for Quarterly Filers for 2021, which includes 2021 calendar year deadlines.

The 2021 FIG and the Supplemental Guide for Quarterly Filers can be accessed at https://ffiec.cfpb.gov under Help for Filers.

 

FREE Webinar

NCUA is hosting a free webinar for credit unions to learn more about potential collaboration with NeighborWorks America. The webinar is scheduled for Sept. 15, beginning at 1 p.m. CT and registration is open here.

NeighborWorks America is a leading national housing and community development organization with a nation-wide network of nearly 240 local nonprofits. The webinar will include presentations from:

  • Roger Nadrchal, CEO of NeighborWorks Northeast Nebraska;
  • Brian Christiansen, president and CEO of Columbus United Federal Credit Union and president of NeighborWorks Northeast Nebraska’s board of directors;
  • Patricia Garcia-Duarte, president and CEO of Trellis, a housing and community development non-profit; and
  • Robin Romano, CEO of MariSol Federal Credit Union.

CFPB – CARD Act

The CFPB has issued a Request for Information (RFI) to assess the impact of the Credit Card Accountability Responsibility and Disclosure Act (CARD Act). This RFI can be found here and comments must be submitted within 60 days.

The CFPB is seeking comment on the economic impact of the CARD Act Rules on small entities so that it can determine whether the rules should be continued without change, or should be amended or rescinded, consistent with the stated objectives of applicable statutes, to minimize any significant economic impact of the rules upon a substantial number of such small entities.  Second, the CFPB is conducting a review of the consumer credit card market, within the limits of its existing resources available for reporting purposes.

For both requests, the CFPB includes a number of questions that commenters can respond to. With regard the review of the consumer credit card market, these questions cover several areas – with each area including additional questions. The areas these questions relate to include:

(1) The terms of credit card agreements and the practices of credit card issuers.

(2) The effectiveness of disclosure of terms, fees, and other expenses of credit card plans.

(3) The adequacy of protections against unfair or deceptive acts or practices relating to credit card plans.

(4) The cost and availability of consumer credit cards.

(5) The safety and soundness of credit card issuers.

6) The use of risk-based pricing for consumer credit cards.

(7) Consumer credit card product innovation.

 

Ask the Regulators Webinar Rescheduled

Due to unforeseen circumstances, the Ask the Regulators webinar, “Basics of PPP Loan Forgiveness and the SBA PPP Loan Forgiveness Platform,” that was originally planned for August 27 has been rescheduled. The new date and time for the session is Thursday, Sept. 3 at 2 p.m. CT. If you are unable to attend the live session, a recording will be available on Friday Sept. 4.

Register for the session here.

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To close with a quote from the movie I watched for the first time last weekend with my family – “Be excellent to each other. ... PARTY ON, DUDES!” Have a great weekend, and as always, don’t hesitate to contact me with any compliance related questions.

 

 

 

 

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