2017 Compliance Update Reminders

By: James M. Moore, CRCM

One more year has passed, and we are faced with the new challenges of 2017.  Anyone with a compliance background understands there is no such thing as a fresh start for a new year.  The following is a list of reminders and updates to make sure you are heading in the right direction for the New Year. 
 
Deposit Compliance:

• Regulation CC training should have been provided during 2016 and make plans to provide Reg. CC training during 2017.
• Annual privacy training should have been provided for 2016 to all Bank personnel and make sure annual privacy training is scheduled for 2017.  Furthermore, ensure that the Board of Directors has received privacy training.
• Ensure annual privacy disclosures will be mailed during 2017 or verify the Bank’s exemption status for 2017.   
• Determine the number of remittance transfers under Regulation E from the previous calendar year to ensure the institution has not exceeded the threshold for “normal course of business.”
• Ensure the ID Theft Program administrator has reported to the Board annually on the status of the ID Theft Program.

 
Loan Compliance:

• The 2016 HMDA LAR and CRA LAR for large institutions must be submitted by March 1, 2017.
• Check the historic examples for HELOC and/or ARM application disclosures to ensure the most recent 15 years are used in the examples.
• The CRA Public File should be updated by April 1, 2017.
• Check the accuracy of the affiliated business disclosures to ensure all affiliated businesses are disclosed along with the current range of fees and the current ownership interest of each affiliated business.
• The 2017 HOEPA points and fees test will use the following:
  • > 5% of loan amounts of 20,579 or more
  • > lesser of 8% of loan amounts under 20,579 or $1,029
• The 2017 QM points and fees test will use the following:
  • For a loan amount greater than or equal to $102,894: 3% of the total loan amount
  • For a loan amount greater than or equal to $61,737 but less than $102,894: $3,087
  • For a loan amount greater than or equal to $20,579 but less than $61,737: 5% of the total loan amount
  • For a loan amount greater than or equal to $12,862 but less than $20,579: $1,029
  • For a loan amount less than $12,862: 8% of the total loan amount
• The 2017 Truth In Lending threshold remains $54,600 for loans not secured by real property and private education loans.
• The 2017 “small creditor” threshold is $2.069 billion.
• The 2017 “small loan” exemption for HPML appraisal rules remains $25,500.
• If the creditor allows borrowers to shop for any required services for TRID loans, it should update (as necessary) the written list provided with the Loan Estimate to identify at least one available provider for each settlement service for which the consumer is permitted to shop. 
• Ensure that Bank personnel have received fair lending and CRA training for 2016.  Further, ensure that the Board of Directors has received annual fair lending and CRA training for 2016.  Training should be planned for 2017.
• CRA asset size thresholds for 2017 are under $307 million for small bank, at least $307 million up to $1.226 billion for intermediate small bank, and $1.226 billion and over for large bank.
• The HMDA asset size threshold for 2017 remains $44 million
• NEW REQUIREMENT for 2017 HMDA reporting:  In addition to meeting the above HMDA asset threshold, an institution must have in each of the two preceding calendar years, originated at least 25 home purchase loans, including refinancings of home purchase loans.  Ensure a review of 2015 and 2016 LAR data is conducted for 2017 reporting requirements. 
• Ensure procedures are in place for performing escrow account analyses and that the Bank has implemented procedures for providing annual escrow account notices.
• Ensure loan officers complete S.A.F.E. Act license renewal procedures.
• Ensure annual independent S.A.F.E. Act audit has been performed.
• Ensure lenders who receive compensation based off of insurance sales (credit life/disability) complete license renewal procedures.
• Ensure the bank has documented whether or not they meet the definition of a small servicer and that documentation of the determination is retained for record retention.
• Ensure the bank has documented whether or not they meet the definition of a small creditor and that documentation of the determination is retained for record retention.
• Review the final list of rural or underserved counties for 2016, calculate rural or underserved status by address on the CFPB’s website for covered loans, and ensure the bank has documented whether or not it qualifies for the rural / underserved TILA exemption by originating at least one covered loan in a rural or underserved area and that documentation of the determination is retained for record retention.

 
BSA Compliance:

• Ensure annual training was conducted for all employees during 2016 and is scheduled for 2017.  Furthermore, the Board of Directors should also be receiving annual BSA training which should be documented in the Board minutes.
• Annual reviews should be conducted of all exempt customers for suspicious activity and continued eligibility.
• Update procedures for monitoring high risk customers and reevaluate the risk levels of each customer designated as high risk.
• Ensure annual due diligence is completed for MSBs, remote deposit capture, private ATM customers, and deposit brokers in accordance with the Bank’s BSA/AML program.

 
Finally, ensure that all risk assessments are updated to reflect the Bank’s current risk profile (e.g. Regulatory Compliance Risk Assessment, Enterprise Wide BSA/AML Risk Assessment, OFAC Risk Assessment, Fair Lending Risk Assessment, etc.).  Ensure all policies and written programs have annual Board of Directors approval.