SDBA eNews: November 5, 2015

In This Issue

Certified Community Banking Security Professional Course Begins Nov. 9

SBS Institute's Certified Community Banking Security Professional (CCBSP™) course begins Nov. 9, with registration open until Nov. 20. This self-paced course takes 10 weeks to complete.

The online CCBSP™ course is a management-level cybersecurity program designed to enhance your skill set and knowledge base in cybersecurity. It will provide a framework for an entire information security program and demonstrate how to manage each component of the information security program to ensure successful implementation.

Learn more and register.
OCC Updates Guidance on Credit Cards

The OCC yesterday updated its Comptroller’s Handbook guidance on credit card lending.

The revised booklet rescinds outdated guidance, updates guidance to include thrifts, provides guidance to examiners on assessing credit card risk management and addresses the CARD Act.

Download the booklet.

Question of the Week

What is the length of time to make a refund after closing? Length of time to make correction?

Answer: The bank (creditors) must refund excess charges to the consumer no later than 60 days after consummation. The bank must also deliver or place in the mail corrected disclosures that reflect such refund no later than 60 days after consummation. Found in 12 CFR 1026.19(f)(2)(v).

12 CFR 1026.19(f)(2)(iii) and (iv) states - If, during the 30-day period following consummation, an event in connection with the settlement of the transaction occurs that causes the disclosures to become inaccurate, and such inaccuracy results in a change to an amount actually paid by the consumer from that amount disclosed, the creditor shall deliver or place in the mail corrected disclosures not later than 30 days after receiving information sufficient to establish that such event has occurred. If the error is clerical in nature, the corrected disclosure must be provided not later than 60 days after consummation.

Learn more by attending one of our live demos:

Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call 888.353.3933 or email.

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

House Committee Approves Bill to Tailor Designation of SIFIs

By a bipartisan vote of 39 to 16, the House Financial Services Committee on Wednesday approved H.R. 1309, a bill strongly advocated by ABA that would eliminate the automatic designation of banks as systemically important based solely on asset size. Introduced by Rep. Blaine Luetkemeyer (R-Mo.), the bill recognizes that regulators should consider many different components of risk.

The committee also advanced -- by a 56-1 vote -- H.R. 2209, an ABA-backed measure that would further expand the ability of banks to count municipal securities as high-quality liquid assets under the Liquidity Coverage Ratio. Both bills are part of ABA’s Agenda for America’s Hometown Banks. Read more.

House Panel Advances ABA-Advocated Thrift Flexibility Bill

The House Financial Services Committee on Tuesday approved by a voice vote a bipartisan bill that would allow thrifts chartered under the Home Owners’ Loan Act to elect to receive the lending powers -- and compliance responsibilities -- of national banks without changing their HOLA charters. H.R. 1660 was introduced by Reps. Keith Rothfus (R-Pa.) and Jim Himes (D-Ct.) and is part of ABA’s Agenda for America’s Hometown Banks.

“Because the OCC already supervises both charters, it has the experience and the expertise necessary to ensure that a federal savings association exercising this flexibility operates safely and soundly,” ABA SVP Joseph Pigg commented. Read ABA’s memo on the bill.

FFIEC Warns of Increased Threat from Extortion-Related Cyber Attacks

The Federal Financial Institutions Examination Council on Tuesday alerted financial institutions about the increasing frequency and severity of cyberattacks involving extortion. These attacks employ tactics such as ransomware, denial of service and theft of sensitive business and customer information to extort payments or other concessions from victims.

In a statement summarizing existing guidance, the FFIEC agencies advised banks to ensure that their risk management processes and business continuity planning address the risks from these types of cyberattacks. Recommended steps included conducting ongoing risk assessments, including cyberattacks involving extortion in training programs and regularly testing and reviewing controls and processes. Read more.

FHFA: Freddie Mac Falls Short of Low-Income Housing Goals

The Federal Housing Finance Agency in its Annual Housing Report on Friday said that Freddie Mac failed to meet its affordable housing goals for low and very-low income buyers purchasing single-family homes in 2014.

The goal was for 23 percent of loans the GSEs buy to go to households with incomes under 80 percent of their area’s median income and 7 percent to go to households with incomes under 50 percent of AMI. According to the report, Freddie hit 21 percent for low-income households (those with incomes under 80 percent of AMI) and only 4.9 percent for very-low income households (those with incomes under 50 percent of AMI).

Fannie Mae achieved all of its single and multi-family goals, exceeding or equaling the market for mortgage purchases for both low and very-low income borrowers. Read the report.

Fed Proposes Loss-Absorbency Standard

The Federal Reserve on Friday proposed a new set of requirements for the eight U.S. global systemically important banks to increase their total loss absorbing capacity, or TLAC, by at least 60 percent. The proposal would accomplish this by requiring banks to issue supplemental instruments that can be called upon should the company fail and need to be wound down rapidly.

Under the proposal, G-SIBs would be required to have outstanding minimum levels of long-term debt, convertible to equity during resolution to recapitalize the firm’s critical operations. The proposed debt requirement would complement existing regulatory capital to meet the required level of TLAC.

A domestic G-SIB would be required to have outstanding long-term debt amounting to at least 6 percent of risk-weighted assets (plus its Basel Committee-designated G-SIB surcharge) or 4.5 percent of its total leverage exposure, whichever is greater. A G-SIB’s TLAC amount would be either 18 percent of risk-weighted assets or 9.5 percent of its total leverage exposure, whichever is greater.

The Fed also proposed limitations on certain financial arrangements by the G-SIBs parent holding companies to facilitate an orderly resolution. It proposed slightly different long-term debt requirements and TLAC levels for U.S. operations of foreign banks with at least $50 billion in U.S. assets. Comments on the proposal are due Feb. 1, 2016. Read more. For more information, contact ABA’s Hu Benton.

Scholarship Available for Graduate School of Banking at Colorado

The Graduate School of Banking at Colorado (GSBC) partners with the SDBA each year to offer the GSBC Future Leaders Scholarship. The scholarship is awarded to one banker per state, per year, and recipients must be first-year students.

Scholarship recipients receive $1,325 per year for three years to attend GSBC’s Annual School Session. The 66th Annual School Session will be held July 17-29, 2016, at the University of Colorado at Boulder.

GSBC’s Annual School Session is a 25-month, graduate school of banking that is hosted each July. Since 1950, banks have trusted the GSBC to prepare the next generation of community bank leaders. This legacy, combined with a cutting-edge curriculum, expert faculty and state-of-the-art facilities make GSBC’s banking school an ideal management training program for community banks nationwide.

The 2016 application deadline is March 1. Candidates will be notified by March 31, 2016, of selection decisions. Questions, contact the GSBC Office at 800.272.5138 or Deb Gates with the SDBA at 605.224.1653.