COMPLIANCE MONTHLY

April 2016
Compliance Monthly is intended to keep you informed of regulatory changes in advance of their effective
date so your institution can have the necessary policies, procedures and processes in place to be compliant
at the time of enactment.

Finalized Rules:

Proposed Rules:

CFPB RULE BROADENS QM COVERAGE FOR

RURAL, UNDERSERVED AREAS

None

The CFPB issued an interim final rule to drastically

lower the requirements for meeting the key rural
or underserved criterion for small creditors (banks
that made no more than 2,000 first-lien covered
transactions and have less than $2 billion in assets).
Specifically, the rule allows small creditors to make
certain balloon payments, which are otherwise
not allowed under the QM rules. The CFPB acted
under the Helping Expand Lending Practices in Rural
Communities (HELP) Act, enacted in December
2015. Effective March 31, 2016, the interim final
rule will replace the current rural or underserved
test, which requires that more than half a creditors
first-lien covered transactions be made in rural or
underserved areas. The new requirement is that
the creditor made only one such loan in a rural or
underserved area in the previous calendar year.

CFPB RULE ALLOWS APPEAL FOR RURAL

DESIGNATION
The CFPB has announced an application process
for requests that areas not currently deemed rural
receive that designation. Under this process, those
now outside rural counties or census blocks can
apply to be designated as rural and may be eligible
for specific exemptions and provisions for certain
mortgage lenders. Applications will be accepted
starting March 31, 2016. Due to a two-year sunset on
the process included in the legislation, applications
must be received by the CFPB before April 8, 2017.

Other Compliance News:

AGENCIES ISSUE GUIDANCE ON CIP FOR

PREPAID
The FDIC, FRB, FinCEN, NCUA, and OCC issued
guidance clarifying the applicability of the Customer
Identification Program (CIP) rule to prepaid cards
issued by banks. The guidance applies to banks,
savings associations, credit unions, and U.S.
branches and agencies of foreign banks. While
the guidance does not change or add to existing
expectations, it clarifies that banks should apply
their CIPs to the cardholders of prepaid cards that
constitute accounts. Prepaid cards qualify as
accounts if they are reloadable or if they include
access to credit or overdraft features. The guidance
clarifies that a banks CIP should also apply to the
holders of such prepaid cards purchased under
arrangements with third-party program managers
that sell, distribute, promote or market the prepaid
cards on the banks behalf.

OCC BULLETIN ON BSA ENFORCEMENT

The OCC Issued Bulletin 2016-6 to delineate their
process for administrative enforcement actions
based on non-compliance with BSA compliance
program requirements or repeat or uncorrected
BSA compliance problems. The OCC is required
under the U.S. Code to issue a cease-and-desist
order when citing BSA compliance violations. When
potential non-compliance or an uncorrected issue
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April 2016

is identified, the OCC provides bank management

with written notice about the violation. The bank then
has 15 days to respond to the written notice before
the decision to issue a cease-and-desist order is
finalized. The OCC reviews the information submitted
by the bank before making a determination about
whether or not to pursue an enforcement action. This
bulletin supplements the 2007 Interagency Statement
on Enforcement of Bank Secrecy Act/Anti-Money
Laundering Requirements and it rescinds OCC
Bulletin 2005-45, Process for Taking Administrative
Enforcement Actions Against Banks Based on BSA
Violations, dated December 23, 2005.

OCC RELEASES NEW POLICY ON CIVIL MONEY

PENALTIES
The OCC issued new guidance on how the agency
will assess civil money penalties against national
banks, thrifts, service providers and institution-affiliated
parties.
The guidance includes a CMP matrix for financial
institutions describing 14 factors that weigh into
CMPs, such as intent, concealment, risk of loss
and harm to consumers, along with increasing
gradations of severity for each factor. Each matrix
score corresponds to suggested actions, ranging
from supervisory letters to reprimands to CMPs. The
document also includes guidance on using the matrix
for CMPs against institution-affiliated parties.

FDIC ADDRESSES CYBERSECURITY

The FDIC has posted the winter 2016 edition of its
quarterly FDIC Consumer News. The special edition,
A Bank Customers Guide to Cybersecurity, features
tips for preventing online fraud and theft. The FDIC
also announced the release of two new cybersecurity
brochures for consumers and business customers
of financial institutions to educate them about
appropriate steps they can take to help avoid fraud
and other cyber threats when banking online or on
their mobile devices.

FINCEN ISSUES AML GUIDANCE TO MSBS

FinCEN issued guidance to principals of money
services businesses (MSBs) regarding their antimoney laundering (AML) program obligations and
monitoring the activities of their agents. The guidance
complements recent guidance from states addressing
MSB principal-agent relationships, and is consistent
with the goal of the Money Remittances Improvement
Act to encourage coordination between Federal and
state regulators on such issues.

FINCEN UPDATES LIST OF AML/CFT

JURISDICTIONS
FinCEN released a revised list of the jurisdictions
that are subject to countermeasures or enhanced
due diligence due to anti-money laundering and
counter-terrorist financing deficiencies (Section I), as
well as jurisdictions with AML/CFT deficiencies that
are working to correct them (Section II). Myanmar
was moved off the list for enhanced due diligence
in recognition of progress made and added to the
Section II list. Algeria, Angola and Panama were
removed from the Section II list in recognition of their
progress in remedying AML/CFT deficiencies.

CFPB ISSUES ADVISORY ON PREVENTING ELDER

ABUSE
The CFPB issued an advisory and a report with
recommendations for banks on how to prevent,
recognize, report and respond to financial exploitation
of older Americans. Financial exploitation, the illegal
or improper use of a persons funds, property or
assets, is the most common form of elder abuse and
costs seniors billions of dollars per year. The CFPB Blog
also featured an article with tips for consumers on
how to work with their financial institutions to protect
themselves from financial abuse.

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April 2016

FINCEN ISSUES PREPAID CARD FAQS

FinCEN issued guidance (FIN-2016-G002, Frequently
Asked Questions regarding Prepaid Access,) on
highlighting the regulatory expectations for non-bank
sellers of prepaid cards. The guidance addresses
frequently asked questions related to non-bank
prepaid card offerings and supplements previous
guidance issued by FinCEN in 2011.

Copyright 2016 Accume Partners, All rights reserved.

Information contained in Compliance Monthly is not intended to
provide specific advice and guidance. You should consult your own
professional services provider in connection with matters affecting
your own interests.

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Compliance Monthly
April 2016

ABOUT ACCUME PARTNERS

Accume Partners provides the financial industry with regulatory compliance, internal audit, technology
and enterprise risk management services. Through these key areas of focus, Accume is able to remain at
the forefront of changing needs and regulations of its clients, bring balanced perspectives and the specialized
knowledge necessary to serve todays banks and financial institutions.
To learn more, please visit our website at accumepartners.com.
For more information, please call or e-mail any of these Accume Partners contacts:

David Smith
Director, Compliance
570.606.7423
dlsmith@accumepartners.com

Mark Lindig
Chief Executive Officer
646.476.1961
mlindig@accumepartners.com

Paul Nobbs
Managing Director, NJ Banking
and Financial Services
609.332.7132
pnobbs@accumepartners.com

Nicole Lloyd
Managing Director, Mid-Atlantic
717.903.3142
nlloyd@accumepartners.com

Glenn Hoffman
Managing Director, Technology
Risk Management
203.803.7345
ghoffman@accumepartners.com

K.D. Mehra
Managing Director, NY Banking
347.576.5652
kmehra@accumepartners.com
Michael Barrack
Managing Director, Risk Director
and Cybersecurity Services
702.461.8682
mbarrack@accumepartners.com

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