Banker's Compliance Consulting

Corporate Transparency Act Update: Legal Rollercoaster for Banks For bank compliance professionals, staying up to date on the Corporate Transparency Act (CTA) has felt like riding a legal rollercoaster—every time you think the dust has settled, there’s another twist. Most recently, the Fifth Circuit Court of Appeals made yet another pivotal decision, throwing the industry back into a state of uncertainty. Here’s where things stand, what it means for your compliance efforts, and what you should do moving forward. A “Redlight/Greenlight” Legal Battle On December 5, 2024, the Department of Justice (DOJ), representing the Department of the Treasury, filed an appeal to the Fifth Circuit Court of Appeals in response to a memorandum opinion and order issued by Judge Mazzant of the U.S. District Court for the Eastern District of Texas. This order had granted a nationwide preliminary injunction barring enforcement of the CTA and halting its implementation in its entirety. However, on December 23, 2024 the Fifth Circuit Court of Appeals granted a motion by the DOJ to stay that injunction pending an appeal. After the stay was granted, FinCEN issued guidance providing a short grace period and extending the reporting deadlines for entities. What initially seemed like progress for the DOJ took an unexpected turn on December 26, 2024, when a Fifth Circuit merits panel vacated the stay of the preliminary injunction that had been granted earlier by the motions panel. This means the nationwide injunction against enforcing the CTA is back in effect—for now. On December 27, 2024, the Fifth Circuit scheduled oral arguments for the appeal in late March 2025, effectively keeping the injunction active until at least then. Unless the en banc Fifth Circuit or the Supreme Court intervenes, banks and other entities remain in limbo. Key Highlights from FinCEN’s Response Following the Fifth Circuit’s December 26 decision, FinCEN issued updated guidance on December 27, concluding that: Reporting companies are not currently required to file beneficial ownership information (BOI) with FinCEN during the injunction. No penalties will be enforced for failing to submit BOI reports while the injunction is in place. Entities may voluntarily submit BOI reports if they choose. This leaves the compliance community once again grappling with uncertainty, as reporting entities are essentially paused, yet encouraged to stay prepared for quick action should the requirements change. Join the AML/CFT Group - https://lnkd.in/gmwCFYG5 #BSA #AML #CFT #banks #BOI #BenificialOwners

Kevin Edwards is on top of the changes! Thank you, Kevin, for leading the way! #AML #CFT #BSA #FinCEN #CTA

🚨 Important Update on the Corporate Transparency Act! 🚨 The recent nationwide stay on the CTA enforcement has been lifted, allowing FinCEN to require legal entities to register their beneficial owners. 🏢🔍 👉 Good news: The filing deadline is extended! (Read More) https://lnkd.in/gyytekJJ Stay proactive and prepare for compliance to avoid penalties. Join our AML/CFT Membership Group for expert guidance on navigating these changes. Learn more - https://lnkd.in/ggPZhpM5 Stay informed. Stay compliant. Stay ahead! 💼✨ #CorporateTransparencyAct #FinCEN #Compliance #RegulatoryUpdate #BankersCompliance Kevin Edwards https://hubs.li/Q030B0vZ0

Major litigation update. Rocket Mortgage in the crosshairs of the CFPB for alleged illegal kickback scheme in violation of RESPA Section 8. If you attended the RESPA Section 8 webinar with us at Banker's Compliance Consulting, we discussed illegal steering and kickback schemes just like those alleged in the complaint. Not the kind of Christmas Present anyone wants from the CFPB.

Section 1033 Final Rule In case you missed it, the Consumer Financial Protection Bureau issued a Final Rule on October 22nd to implement Section 1033 of The Dodd-Frank Act.  The Rule …requires data providers to make covered data regarding covered financial products and services available to consumers and authorized third parties in an electronic form, subject to a number of requirements. Depository institutions with more than $850 million in total assets will need to comply with the requirements to make data available in a standard format.  Any institution looking to access information as an authorized third party will be required to comply with certain authorization requirements …including certifying it will satisfy certain obligations regarding the collection, use, and retention of covered data. To become “authorized”, a third party must: (1) provide the consumer with an authorization disclosure containing certain key terms of the data access; (2) provide a statement to the consumer in the authorization disclosure certifying that the third party agrees to certain obligations set forth in the final rule; and, (3) obtain the consumer’s express informed consent to access covered data on behalf of the consumer by obtaining an authorization disclosure that is signed by the consumer electronically or in writing. The mandatory compliance date(s) will be tiered based on an institution’s asset size, with the first tier being April 1, 2026.  Ready to learn more?  JOIN US on January 29, 2025, for our webinar, “Section 1033 Personal Financial Data Rights”.   Register your team here - https://lnkd.in/guBJyJch Featured topics include: ·      What is it? Will it apply to you? When will it apply?  ·      Covered Data Providers, Products & Requests  ·      Third Parties & Data Aggregators  ·      Consumer and Developer Interfaces  ·      Disclosures, Notifications & Response Requirements  ·      Policy and Procedure Requirements  ·      Your Questions, Plain English Answers & Much More 

Advertising: Closed-End Credit Triggering Terms If you advertise closed-end credit, there are several “triggering” terms you need to be aware of. Specifically, if you mention any of the following in an advertisement: 1. The amount or percentage of down payment; 2. The number of payments or period of repayment; 3. The amount of any payment; and, 4. The amount of any finance charge. You are required to provide the following additional information within the advertisement: 1. The amount or percentage of the down payment; 2. The terms of repayment, which reflect the repayment obligations over the full term of the loan, including any balloon payment; 3. The “annual percentage rate”, or “APR”, using one of these terms; and, 4. If the rate may be increased after consummation of the loan, that fact. While this may seem pretty straightforward, there are some additional things to consider. David Dickinson explains more in the video. Ready to learn more? JOIN US on January 30, 2025, for our webinar, “Advertising”. Register your team here - https://lnkd.in/gigBpGkN Featured topics include: • Truth in Lending Act • FDIC Signage & Rules • Fair Housing Act • Truth in Savings Act (including Bonuses) • Non-Deposit Investment Products • UDAAP • Website Compliance (relevant to the referenced items above) • Lobby Disclosures, Rate Sheets & Much More! https://hubs.li/Q02_PgLT0

Mortgage Life Cycle: Requiring Signatures Regulation B states …a creditor shall not require the signature of an applicant's spouse or other person, other than a joint applicant, on any credit instrument if the applicant qualifies under the creditor's standards of creditworthiness for the amount and terms of the credit requested. In other words, a financial institution cannot make/require anyone to be liable for a debt (i.e., sign the note, guarantee, etc.) There are, of course, some exemptions when it comes to requiring a guarantee from directors, officers, shareholders, etc. of closely held corporations but, for the most part, liability must be voluntary. If husband and wife apply together, as joint applicants, there is no issue. If husband applies individually, regardless of whether he qualifies or not, you cannot require his spouse (or anyone for that matter) to be obligated on the loan. If needed, you can ask for a qualified co-signer but cannot name one. You could, however, require the spouse to sign any security documents needed to release the collateral. Jerod Moyer explains more in the video. Ready to learn more? JOIN US beginning February 6, 2025, for a five-part webinar series on “The Mortgage Life Cycle”. Register your team here - https://lnkd.in/gRk5AYKc These ten hours of training will unlock the compliance challenges surrounding: • Prequalifications / Preapprovals • Applications • Denials • Shopping Disclosures • Underwriting • Pre-Closing / Closing / Post-Closing • Loan Servicing • Prohibitions & Much, Much More! #CreditRights #RegulationB #FinancialFreedom https://hubs.li/Q02_Pnm80

Addressing complaints is the most important aspect of a complaint management program. If a customer makes a complaint and you are at fault, you should do what you can to make all affected customers whole, or like the error never happened. But you must also consider more than just correcting the error at hand. You must also look to any resulting impact. For example, if a payment didn’t get posted correctly, late fees may need reversed, and information reported to consumer reporting agencies may need corrected. In addition, monitoring complaints and looking for the root cause is essential. A recent edition of the Federal Reserve’s Consumer Compliance Outlook stated: Without investigating and addressing the root cause, resolving the complaint is merely treating a symptom; addressing the root cause systemically will help identify similarly situated individuals who were also harmed and prevent harm to other customers. Fully addressing a complaint includes proactively correcting the harm incurred by consumers who have not yet complained. Because only a small number of impacted consumers are likely to complain, even an individual complaint can indicate a significant compliance weakness. Jerod Moyer explains more in the video. Be sure to JOIN US on January 9, 2025, for our webinar, “Complaints, Complaint Programs & Compliance”. https://lnkd.in/gETaxf2n #CustomerCare #ComplaintManagement #BusinessExcellence https://hubs.li/Q02_gFj50

The Federal Deposit Insurance Corporation (FDIC) advertising changes found in Part 328 (Subpart A) – FDIC Official Signs and Advertisement of Membership are set to take effect on May 1, 2025. One of the requirements is that you will be required to display a new “official digital sign” on any of your digital deposit taking channels. This includes websites, apps, etc. While that may seem simple enough, you will need to work with your IT department as there are very specific color, sign and font requirements for the official digital sign. Additionally, the official digital sign must appear in specific areas. For example, near the top of the page or screen, be close to the institution’s name, be clearly legible, etc. Jerod Moyer explains more in the video. Be sure to JOIN US on January 8, 2025, for our webinar, “FDIC Signs & Advertisement of Membership”. Register your team here - https://lnkd.in/gUBgzjKU 📽️ #FDIC #DigitalSign #BankingUpdate https://hubs.li/Q02_gCXM0

Providing a Closing Disclosure Too Soon The Closing Disclosure (CD) must be received by the applicant no later than three business days before loan closing. This means you must make a good faith effort to get the final costs included on that disclosure. If third parties, like title companies, etc., don’t get you the information, you can give an estimate, but only after you’ve made a good faith effort to get the actual costs. Further, if an estimate is used, an updated CD will likely need to be provided at or before closing. We see institutions run into problems when they issue the CD earlier than required. Final numbers likely aren’t ready at that point and so they issue the CD using estimated costs when, if they had waited, they might have final numbers. Issuing the CD too early often times doesn’t meet the good faith requirement. Jerod Moyer explains more in the video. Ready to learn more? JOIN US on January 28, 2025, for our webinar, “TRID for Beginners”. Register you and your team here - https://lnkd.in/gMN9TyC5 Featured topics include: • Covered Transactions • What is a “TRID” Loan Application? • The “Good Faith” & “Due Diligence” Expectations • The Tolerance Buckets • The Loan Estimate & Closing Disclosure Concepts • An Introduction to Changed Circumstances • Responsibilities & Much More! #closingdisclosure #trid #lenders https://hubs.li/Q02_9s0h0