Disclosure and Delivery Requirements for Copies of Appraisals Under Reg B

A final rule revises Regulation B to implement an ECOA amendment concerning appraisals and other valuations that was enacted as part of the Dodd-Frank Act. In general, the revisions to Regulation B require creditors to provide to applicants free copies of all appraisals and other written valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling, and require creditors to notify applicants in writing that copies of appraisals will be provided to them promptly. More information may be found in the Appraisal, Copies section of The Equal Credit Opportunity Act (Reg B) chapter of The Gold Book. 

FinCEN Issues Armored Car Ruling

FinCEN issued an administrative ruling to provide an exception to CTR data collection and aggregation requirements for certain armored car transactions. See Currency Transaction Reports, Exceptions in The Gold Book for details.

Last Month's Q&A Answered

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

Q: We are making a loan to a buyer of a modular home who will place the home on a parcel of land that he does no own.  Rather, the home will be placed on land that the borrower will be renting from the landowner.  Our bank will not have a lien on the underlying property if we finance the purchase of the modular home.  Is this transaction covered by Regulation Z and RESPA?  

A: Yes as to Regulation Z and no as to RESPA.  A mobile or manufactured home placed on land that is not owned by the borrower, and which is not secured by the bank’s lien, is not a covered RESPA transaction.  Click here to see the latest HUD RESPA Frequently Asked Questions dated March 23, 2010 question # 5.

Last Month's Q&A Answered!

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

Q: Our customer has an account with us in New York and an account at another bank in New Jersey. He lives in New Jersey.  His agent presented us with a New Jersey POA to withdraw funds from his account with us.  Do we have to or should we accept a New Jersey POA? 

A:  The bank is only required under New York law to accept a statutory short form POA.  The law encourages entities to accept out of state POAs but does not require it.  If the bank lacks the ability to verify the validity of the New Jersey POA, then it may insist that the New Jersey resident execute a New York statutory short form POA in order for his agent to transact banking business here.

What's New? FinCEN Releases New CTR FAQs

FinCEN has recently issued frequently asked questions (FAQs) to assist financial institutions in their use of the FinCEN CTR, which, as of April 1, 2013, is the only acceptable format for submitting currency transaction reports to FinCEN. FinCEN will issue additional FAQs and guidance as needed. Go to FinCEN FAQs at http://www.fincen.gov/whatsnew/html/ctr_faqs.html, or click here to read more in The Gold Book.

What's New? Fair Housing Act - New Guidance

New guidance released on April 30, 2013, by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Justice,  reinforces the Fair Housing Act requirement that multifamily housing be designed and constructed so as to be accessible to persons with disabilities.

More information about Fair Housing Act may be found in The Gold Book. 

Last Month's Q&A: Answered!

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

Q: We were served with a restraining notice against a depositor's account for $17,000 to satisfy a judgment.  The depositor did not claim an exempt funds exemption.  We got a letter from the attorney for the plaintiff and an e-mail from the attorney for the defendant, our depositor, telling us to remove the restraint on the account as the matter had been settled.  Does the bank need a court order before it releases the hold?

A:  No.  Letters for both attorneys, and even a letter from plaintiff’s counsel would have been sufficient to release the hold.  Some banks may require an acknowledgment from the depositor but no court order or action is needed.  A court does not issue a restraining notice as this is part of the process for post judgment collection of assets, initiated usually by an attorney.  Keep the correspondence on this matter for the file on the account.

CFPB Issues Escrow Rule Compliance Guide

The Consumer Financial Protection Bureau released the latest in a series of compliance guides intended to help smaller institutions comply with the agency’s new mortgage rules. The most recent guide, released by the CFPB on April 19, 2013 addresses the escrow rule set to take effect in June. Click Here for Guide.

Redesigned $100 Note

A 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.

FinCEN E-Filing Reminder

Financial institutions are reminded that they must have begun to use the new FinCEN reports, which are available only electronically through the BSA E-Filing System, by April 1, 2013.

Please see The Gold Book, Bank Secrecy chapter for details.

What's New? Pension Chapter Reorganized

To make it easier to find information about IRAs and related distribution rules, parts of the Pension chapter have been reorganized. Please see Traditional IRA Distributions and Accounts of Deceased IRA Holders.

What's New: Force Place Flood Insurance Provisions

The Flood Disaster Protection Act of 1973 was recently amended by the Biggert-Waters Flood Insurance Act of 2012. Some provisions became effective upon enactment on July 6, 2012, while other provisions are not effective until regulations are issued. The Gold Book Flood Insurance chapter has been updated with the provisions that are presently in effect.

2010 Roth Conversions to be Reported on 2012 Returns

The Internal Revenue Service reminds taxpayers who converted amounts to a Roth IRA or designated Roth account in 2010 that in most cases they must report half of the resulting taxable income on their 2012 returns.

Normally, Roth conversions are taxable in the year the conversion occurs. For example, the taxable amount from a 2012 conversion must be included in full on a 2012 return. But under a special rule that applied only to 2010 conversions, taxpayers generally include half the taxable amount in their income for 2011 and half for 2012, unless they chose to include all of it in income on their 2010 return.

Worksheets and examples can be found in Publication 590 for Roth IRA conversions and Publication 575 for conversions to designated Roth accounts. Taxpayers who made Roth conversions in 2012 or are planning to do so in 2013 or later years must file Form 8606 to report the conversion.

As in 2010 and 2011, income limits no longer apply to Roth IRA conversions.

Please see The Gold Book, Roth IRAs for additional information and rules.

What's New? Wage Theft Prevention Act Notice

The NYS Wage Theft Prevention Act (WTPA) requires employers to provide an annual notice to all employees by February 1. The NYS Department of Labor provides a Fact Sheet on the WTPA that will be helpful.  Also see The Gold Book for more details on the WTPA.  

FFIEC Proposes Guidance on Social Media

The Federal Financial Institutions Examination Council (FFIEC) released proposed guidance on the of the consumer protection, compliance and privacy laws to social media usage by banks, credit unions, and other covered financial institutions.

The FFIEC is responding to requests for guidance in this area from various industry and consumer interests. The guidance is intended to help financial institutions understand potential consumer compliance, legal, reputation, and operational risks associated with the use of social media, along with expectations for managing those risks. Although the guidance does not impose additional obligations on financial institutions, the FFIEC expects financial institutions to take steps to manage potential risks associated with social media, as they would with any new process or product channel.

The FFIEC invites comments on any aspect of the proposed guidance. It is specifically seeking comments on the following questions:

1. Are there other types of social media, or ways in which financial institutions are using social media, that are not included in the proposed guidance but that should be included?
2. Are there other consumer protection laws, regulations, policies or concerns that may be implicated by financial institutions’ use of social media that are not discussed in the proposed guidance but that should be discussed?
3. Are there any technological or other impediments to financial institutions’ compliance with applicable laws, regulations, and policies when using social media of which the Agencies should be aware?

The proposed guidance may be found here. Comments must be received 60 days from publication in the Federal Register. All comments received will be posted generally without change to http://www.regulations.gov, including any personal information provided.

IRS Issues Guidance on Transit Benefit Exclusion

The IRS recently issued Notice 2013-8 to provide guidance for employers regarding the increased monthly transit benefit exclusion included in the American Taxpayer Relief Act (ATRA) enacted on January 2, 2013. The IRS has provided special administrative procedures for employers to use in filing Form 941 for the fourth quarter and Forms W-2 to account for this change.

Qualified transportation fringe benefits are excluded from gross income and include the following employer-provided benefits:
1.    Transportation in a commuter highway vehicle between home and work,
2.    Any transit pass, or
3.    Qualified parking

The ATRA retroactively increased the monthly transit benefit exclusion from $125 to $240 per participating employee for the 2012 calendar year.

Employers are permitted to make adjustments on Form 941 for the Fourth Quarter of 2012. Further details can be found in IRS Notice 2013-8 located on the IRS website.

What's New? FICA tax updated for 2013

Please see the Federal Insurance Contributions Act in the Human Resources section for updated tax information.

What's New? New Gold Book Section on Lending Discrimination

The Gold Book Compliance Chapter now contains a section on Lending Discrimination Laws and Regulations.  A federal Interagency Policy Statement on Fair Lending serves as guidance for the Consumer Financial Protection Bureau, and is a benchmark for use in fair lending examination procedures. Read federal rules here and NYS rules here.

What's New? CRA Asset-Size Threshold Adjustments for 2013

The federal bank regulatory agencies announced the annual adjustment to the asset-size thresholds used to define small bank, small savings association, intermediate small bank, and intermediate small savings association under the Community Reinvestment Act (CRA) regulations. The annual adjustments are required by the CRA rules and are effective January 1, 2013.

More details in The Gold Book.

FDIC Regulatory Calendar

As part of its FDIC Community Banking Initiatives, the FDIC launched a draft online regulatory calendar to help community banks stay up-to-date on changes in federal banking laws, regulations, and supervisory guidance. 

The calendar includes notices of proposed, interim, and final rulemakings; supervisory guidance to financial institutions issued by the FDIC and FFIEC; and joint issuances with other regulators that do not fall under the auspices of the FFIEC. It also includes selected items from other regulators relevant to the FDIC's supervisory examination programs.

The calendar is available athttp://www.fdic.gov/regulations/resources/cbi/calendar.html.