2020 Compliance Update Reminders

 By James M. Moore, CRCM
 
One more year has passed, and we are faced with the new challenges of 2020.  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 2019 and make plans to provide Reg. CC training during 2020.
• Annual privacy training should have been provided for 2019 to all bank personnel and make sure annual privacy training is scheduled for 2020.  Furthermore, ensure that the Board of Directors has received privacy training.
• Ensure annual privacy disclosures will be mailed during 2020 or verify the bank’s exemption status for 2020.   
• 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 2019 HMDA LAR and CRA LAR for large institutions must be submitted by March 1, 2020.
• 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, 2020.
• 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 2020 HOEPA points and fees test will use the following:
  • > 5% of loan amounts of $21,980 or more
  • > lesser of 8% of loan amounts under $21,980 or $1,099
• The 2020 QM points and fees test will use the following:
  • For a loan amount greater than or equal to $109,898: 3% of the total loan amount
  • For a loan amount greater than or equal to $65,939 but less than $109,898: $3,297
  • For a loan amount greater than or equal to $21,980 but less than $65,939: 5% of the total loan amount
  • For a loan amount greater than or equal to $13,737 but less than $21,980: $1,099
  • For a loan amount less than $13,737: 8% of the total loan amount
• The 2020 Truth In Lending threshold increases to $58,300 for loans not secured by real property and private education loans.
• The 2020 “small creditor” threshold is $2.202 billion as of December 31, 2019.
• The 2020 “small loan” exemption for HPML appraisal rules is $27,200.
• 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 2019.  Further, ensure that the Board of Directors has received annual fair lending and CRA training for 2019.  Training should be planned for 2020.
• CRA asset size thresholds for 2020 are under $326 million for small bank, at least $326 million up to $1.305 billion for intermediate small bank, and $1.305 billion and over for large bank (based on the last two calendar years).
• The HMDA asset size threshold for depository institutions for 2020 is $47 million.
• 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 or more covered closed-end dwelling secured loans to report closed-end loans.  Dwelling secured open-end lines of credit must be reported in 2020 if a covered institution originated 500 or more covered dwelling secured open-end lines of credit in each of the previous two calendar years.  Ensure a review of 2018 and 2019 transaction data is conducted for 2020 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 completed S.A.F.E. Act license renewal procedures.
• Ensure an annual independent S.A.F.E. Act audit has been performed.
• Ensure lenders who receive compensation based on 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 or rural or underserved counties for 2019, 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:
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• Schedule a Board review and approval of current BSA/AML and OFAC program policies.
• Update the BSA/AML and OFAC Risk Assessments.
• Ensure annual training was conducted for all employees during 2019 and is scheduled for 2020.  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.