SDBA eNews: April 2, 2015

In This Issue

CFPB Issues Exam Procedures for TILA/RESPA Disclosures

The Consumer Financial Protection Bureau yesterday released examination procedures to help financial institutions know what to expect from exams after the TILA/RESPA integrated mortgage disclosures take effect Aug. 1.

State Regulators Target Nonbank Servicers

The Conference of State Bank Supervisors and the American Association of Residential Mortgage Servicers last week proposed a set of prudential regulatory standards for nonbank mortgage services.

The standards -- which cover capital, liquidity, risk management, data protection, cyber risk, corporate governance, servicing transfers and changes of control, as well as a set of enhanced standards for large and complex servicers -- are intended to improve consumer protection and regularize supervision across jurisdictions, CSBS President John Ryan said. Read more.

Upcoming Events

View all SDBA events

Sponsorship Opportunity

Learn more about sponsoring the SDBA eNews.


Contact Alisa DeMers, SDBA, at 800. 726.7322 or via email.

Reminder about Authorized Registrars for .bank Domains

fTLD Registry Services, the company co-founded by ABA as the exclusive operator of the new .bank domain, is reminding bankers in advance of the May 14 launch date that .bank domain names can only be registered via ICANN-accredited registrars that have been approved by fTLD. A list of fTLD-approved registrars is available by clicking here.

fTLD advises banks and banking-related organizations to verify the credentials of any company representing itself to be directly or indirectly associated with .bank. Should any member of the banking community have questions about the entities authorized to provide domain name registration services for .bank, they may email [email protected]. Learn more about .bank.

The audio recording and slides from the ABA webinar, “Are You Ready for .BANK?," have been posted to help bankers better understand the upcoming launch of the .BANK domain. Featuring ABA SVPs Doug Johnson and Sam Lisker, as well as Al Williams, EVP of Dollar Bank in Pittsburgh, the webinar covered what bankers need to know and do before .BANK launches on June 24 — including pre-registration activities, the registration process, pricing and the verification and security standards required for .BANK domains. Listen to the recording.

White House to Impose Sanctions on Foreign Cyber Criminals

President Obama yesterday issued an executive order that authorizes the Treasury Department to impose financial sanctions on foreign cyber attackers -- both individuals and corporate entities. The order encompasses attackers who seek to disrupt critical infrastructure and to steal information. Sanctions may include asset freezes and travel bans.

ABA President and CEO Frank Keating welcomed the order, noting that it “sends a strong signal to cybercriminals and foreign entities that America is committed to fighting this increasing threat. U.S. businesses are committed to working with the government to help protect our critical infrastructure and the economic security of our country.” Read more.

FFIEC Warnings Spotlight Malware, Compromised Credentials

The banking regulators on Monday issued warnings to financial institutions about two “increasing” cyber threats: destructive malware and cyber attacks that compromise customers’ online credentials. The statements from the Federal Financial Institutions Examination Council do not contain any new regulatory expectations, the council said.

For malware attacks, FFIEC outlined how bankers should prepare to ensure business continuity. “An institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption, and maintenance of the institution’s operations after a cyber attack involving destructive malware,” the warning said.

FFIEC also warned that cyber criminals are increasingly targeting customers’ online credentials and account login information, which may be stolen through a variety of means. “Financial institutions should design multiple layers of security controls to establish several lines of defense and ensure that their risk management processes also address the risk posed by compromised credentials,” the council said.

ABA Welcomes Proposed Rules for Small Creditors, Suggests Tweaks

ABA on Monday welcomed the Consumer Financial Protection Bureau’s proposed changes -- many previously advocated by ABA -- that will increase the number of banks able to benefit from the bureau’s small creditor and rural or underserved area exemptions in its mortgage rules.

The proposal would lift the origination limit to qualify for “small creditor” status from 500 loans annually to 2,000 loans annually -- a limit that would also exclude loans retained in portfolio, further increasing the relief provided. Under the mortgage rules, small creditors’ portfolio loans would have lower burdens in obtaining Qualified Mortgage status.

Small creditors operating in rural and underserved areas would also be able to originate QMs with balloon payments, which is not otherwise permitted. The proposal would clarify and expand the definition of rural areas to include any county or census block not designated as “urban” by the U.S. Census Bureau and provide a safe harbor for lenders who use the Census Bureau or CFPB websites to validate a locale’s rural or underserved status.

ABA asked for a few additional changes to better tailor the rules. Specifically, ABA sought a $10 billion asset limit, rather than $2 billion, for small creditor status; a longer transition period for balloon payment QM; a six-month grace period for creditors that exceed the small creditor limits in the preceding year; and explicit clarification of fair lending and ability-to-repay requirements. Read the letter. For more information, contact ABA’s Rod Alba.

ABA, CBA Warn Against 'One-Size-Fits-All' Campus Accounts

Colleges should be able to work with banks to offer a flexible array of deposit products to their students, ABA and the Consumer Bankers Association told the Consumer Financial Protection Bureau on Monday. The associations responded in a letter to the bureau’s draft “scorecard” for “safe” financial products to be offered on college campuses, such as deposit accounts.

“The proposed scorecard appears singularly focused on driving colleges and universities into limiting insured depository institutions to offering a particular type of deposit program with restricted features to students,” the groups said. “We simply do not believe that this one-size-fits-all approach will achieve the stated objectives of the Bureau to enable colleges and universities across the nation to evaluate fairly and adequately the variety of deposit products and services that prospective insured depository institutions could offer students.”

The bureau’s model “safe account” would impose no fees for basic services except a monthly maintenance fee and would permit neither overdraft fees nor non-sufficient funds fees. The account would be required to provide at least two free money orders or e-checks per month.

ABA and CBA noted that the format “will do little to enhance transparency among educational institutions and students” and that it is “laden with price control implications that are unnecessary, will limit choice, and are contrary to congressional intent.” Read the letter. For more information, contact ABA’s Nessa Feddis.

Curry Highlights Role of Banks in Stopping Elder Fraud

Banks play a critical role in identifying financial fraud and protecting their older customers against related losses, Comptroller of the Currency Thomas Curry said in a speech Friday in Washington, D.C. He noted that bankers are helping to flag elder fraud by filing Suspicious Activity Reports with the Financial Crimes Enforcement Network, as well as by enhancing training and improving marketing and education materials to raise awareness of fraud schemes.

Since 2011 -- when FinCEN issued guidance requesting SARs on elder fraud -- depository institutions have filed more than 27,000 SARs involving suspected elder abuse, Curry said. He urged banks to share SARs with state and federal law enforcement.

“In a recent report, FinCEN observed that the narratives that filers provided in SARs revealed that bankers were careful to assess suspicious transactions, often questioning an elderly customer if a transaction appeared out of character,” Curry said. “I am also pleased with FinCEN’s conclusion that many banks have incorporated elder financial exploitation guidance into their compliance monitoring programs.” Read the speech.