What's New? NYS MLO Requirements

The Department of Financial Services published a notice of Emergency Rulemaking to implement license, financial responsibility, education and test requirements for mortgage loan originators (MLOs) to comply with Article 12-E of the Banking Law, amended in order to conform the regulation of MLOs in New York to federal legislation.

The rule requires that individuals engaging in mortgage loan origination must be licensed by the Superintendent of Financial Services and that MLOs, including those already engaged in the business of originating mortgage loans, must complete new education, testing and bonding requirements for licensure.

The new regulation is substantially similar to the prior rule on the same matter. This rule will expire on February 12, 2014.

See also the SAFE Act information in The Gold Book. 

What's New? Reg Z & M Threshold Exemptions for Consumer Credit and Lease Transactions

The Federal Reserve Board and the Consumer Financial Protection Bureau (CFPB) announced increases tothe dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) for exempt consumer credit and lease transactions. Transactions at or below the thresholds are subject to the protections of the regulations.

The adjustments to the thresholds reflect the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers as of June 1, 2013 and will take effect on January 1, 2014. These increases are consistent with amendments to the Truth in Lending and Consumer Leasing laws made by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

See The Gold Book for more information.

What's New? Military Powers of Attorney

The Gold Book has been updated to include information regarding the requirement of financial institutions to accept military powers of attorney. See Power of Attorney and Military Powers of Attorney in The Gold Book. 

2014 Standard Mileage Rates

The Internal Revenue Service has issued the 2014 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 56 cents per mile for business miles driven
• 23.5 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

The business, medical, and moving expense rates decrease one-half cent from the 2013 rates.  The charitable rate is based on statute.

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51 and  Notice 2013-80.

What's New? New Law - NYS Unsolicited Loan Checks

On November 13, 2013, Governor Cuomo signed A.3601/S43012, which became Chapter 467 of the Laws of 2013.  The law adds a new section 520-d to the General Business Law to aid in consumer protection.  The new law is effective as of the signing date.

The new law removes liability on the part of the payee unless the payee has accepted the check or the account against which the check is issued. 

See Unsolicited Mail Loan Checks in The Gold Book for additional information.

What's New? New ATR/QM Rules for Mortgage Lenders

The CFPB recently issued new Ability-to-Repay (ATR) and Qualified Mortgage (QM) rules for financial institutions that originate closed-end residential mortgage loans.

See the new section in The Gold Book, Ability-to-Repay and Qualified Mortgage Rule in the Truth in Lending (Regulation Z) section for details. 

For a guide to help financial institutions determine compliance oblications for mortgage loans, click here.

Last Month's Q&A: Answered!

The following question appeared in the Q&A section of Banking Spectrum's September 2013 Report Bulletin.

Compare your answer to the correct answer provided below.

Q: What is the rule for the exercise of powers by trustees and other fiduciaries in wills, trusts or other similar documents?  And where can I find the authority for such conduct?

A: The bank should adhere to the language in the trust or will that may recite who and how many shall act.  If the document is silent as to the exercise of fiduciary powers, the general rule is that if there are two fiduciaries, they must act together.  If three or more, then a majority of the fiduciaries are empowered to act.  For example, if there are three trustees, a majority must act and if one dies and two are left, then the two surviving trustees must act together, unless the instrument states otherwise.  Look at the NYS Estates Powers and Trusts Law (“EPTL”) section 10-10.7.

What's New? 2014 Reserve Requirements

The Federal Reserve Board announced the annual indexing of the amounts used in determining reserve requirements of depository institutions effective 2014. See Reserve Requirements for details.

Diversity Standards Policies Proposal Underway

Six federal financial regulatory agencies are proposing joint standards for assessing the diversity policies and practices for the institutions they regulate. The proposed standards are intended to promote transparency and awareness of diversity policies and practices within the institutions. Once published in the Federal Register, the proposed policy statement will be available for public comment for 60 days

Definition of Insured Deposit

On September 12, 2013, the FDIC Board of Directors adopted the attached Final Rule to clarify that deposits in foreign branches of U.S. banks are not eligible for deposit insurance, although they may qualify as deposits for the purpose of national depositor preference. The Final Rule will be effective October 15, 2013.

The complete financial institution letter may be found here: http://www.fdic.gov/news/news/financial/2013/fil13040.html

Last Month's Q & A Answered!

The following question appeared in the Q&A section of Banking Spectrum's August 2013 Report Bulletin.

Compare your answer to the correct answer provided below.

Q: We are willing to cash checks for non-customers provided they agree to give us a set of fingerprints.  Is it ok to require this?

A: A bank may ask for any identifier it needs in order to prevent fraud or other dishonest acts.  While the law often does not allow fingerprinting for certain activities it does permit for others, see the NYS Labor Laws.  If the bank wants to obtain fingerprints from non-customers for whom checks are cashed they should prepare a consent form for the non-customer to sign indicating that the giving of fingerprints for this specific purpose is with consent.

What's New? Foreign Remittance Rules

The CFPB recently issued version 2.0 of its compliance guide to revise several requirements relating to the disclosure of institution fees and error resolution. All remittance transfer providers must comply with the new rules by October 28, 2013. The guide may be found here: http://files.consumerfinance.gov/f/201308_cfpb_intl-money-transfer-entity-compliance-guide.pdf. Also see The Gold Book section, Foreign Remittances for details.

What's New? Payroll Card Accounts

The Consumer Financial Protection Bureau (CFPB) recently issued information regarding payroll card accounts. See Payroll Cards for details. 

What's New? Employer Notices Required by October 1, 2013

The Patient Protection and Affordable Care Act (PPACA) requires most individuals (including children and other dependents) to carry health insurance beginning January 1, 2014.  The law also requires that employers provide notices to employees by October 1, 2013. See The Gold Book for more details.

New Posters for Family and Medical Leave Act (FMLA)

The Family and Medical Leave Act (FMLA) was amended earlier this year and the new mandatory poster that outlines these changes is now available at: http://www.dol.gov/whd/regs/compliance/posters/fmla.htm

Are you ready for the redesigned $100 note?

The Federal Reserve Board announced that the redesigned $100 note will begin circulating on October 8, 2013.  This note, which incorporates new security features such as a blue, 3-D security ribbon, will be easier for the public to authenticate but more difficult for counterfeiters to replicate. 

The new design for the $100 note was unveiled in 2010, but its introduction was postponed following an unexpected production delay.  To ensure a smooth transition to the redesigned note when it begins circulating in October, the U.S. Currency Education Program is reaching out to businesses and consumers around the world to raise awareness about the new design and inform them about how to use its security features.  More information about the new design $100 note, as well as training and educational materials, can be found at www.newmoney.gov.

Last Month's Q&A: Answered!

The following question appeared in the Q&A section of Banking Spectrum's July 2013 Report Bulletin. Compare your answer to the correct answer provided below.

Q: A trustee of a living trust has come to us and wants to open a living trust account.  The grantor is dead.  Can we do this?

A:  Yes.  The trust was created before the grantor’s death, it is now irrevocable and is a separate entity that can be opened by the trustee for the purpose of implementing the trust provisions.

New Remittance Rules

The Consumer Financial Protection Bureau has released new rules pertaining to the Remittance Rule under Regulation E, scheduled to take effect on October 28, 2013. For more information click here to see the International Fund Transfers Small Entity Compliance Guide v2.0 issued on August 8. 2013.

Fewer NY ATM Disclosure Requirements

New York Gov. Andrew Cuomo last week signed legislation eliminating the requirement of physical fee disclosures on ATMs. While ATM operators are required to disclose fees on their computer screens or on a paper notice once the transaction has been initiated, elimination of this disclosure requirement brings state law into conformity with the federal law signed last December by President Barack Obama. This measure is effective immediately.  See NY disclosure requirements and federal disclosure requirements in The Gold Book. 

Spousal IRAs Renamed

President Obama signed into law on July 25, 2013 a bill to rename a provision in the tax code that allows nonworking spouses to make equal contributions to their IRAs after its sponsor. Former Sen. Hutchinson (R-TX) sponsored the original spousal IRA legislation with Sen. Barbara Mikulski (D-MD), as part of the Small Business Job Protection Act of 1996 (P.L. 104-188). Click here to read about Spousal IRAs.