By: Jeremy Clifton, CRCM, CAMS
 
As a result of the Federal Reserve Board reducing reserve requirements for transaction accounts to zero percent, the Board noted “the retention of a regulatory distinction in Regulation D between reservable “transaction accounts” and non-reservable “savings deposits” is no longer necessary.”  As a result, the Federal Reserve Board has announced an interim final rule effective on April 24, 2020 that removed Regulation D transaction limitations (six per month) from savings deposits.  The interim final rule allows, in part, financial institutions to suspend excessive activity monitoring and customer notification procedures for savings and money market accounts. 
 
Under the interim final rule, the term “savings deposit” means a deposit or account, such as an account commonly known as a passbook savings account, a statement savings account, or as a money market deposit account (MMDA), that otherwise meets the requirements in this section and from which, under the terms of the deposit contract or by practice of the depository institution, the depositor may be permitted or authorized to make transfers and withdrawals to another account (including a transaction account) of the depositor at the same institution or to a third party, regardless of the number of such transfers and withdrawals or the manner in which such transfers and withdrawals are made.
 
In addition to the interim final rule, the Federal Reserve Board has issued technical guidance on the changes made by updating its document titled ““Savings Deposits Frequently Asked Questions”. Financial institutions should review the interim final rule and updated “Savings Deposits Frequently Asked Questions” supplement, along with its deposit account agreements and Truth in Savings disclosures for savings and money market products to determine any changes to policy and procedures as well as to determine if any action should be taken to notify customers of any possible changes that will take place as a result of the interim final rule.
 
It should also be noted this is an interim final rule with a comment period open until June 29, 2020; therefore, we expect more clarification on a few items not specifically delineated in the “Savings Deposits Frequently Asked Questions” supplement.  
 
On May 13, 2020, the Federal Reserve added additional information to its “Savings Deposits Frequently Asked Questions” supplement that covered some previously unanswered questions. The updates include FAQ #3 which indicates that removing the transaction limits from savings accounts is not expected to be a temporary measure and FAQ #13 which notes that the recent changes to Regulation D do not result in savings deposits now being covered by Regulation CC.
 

 
To access the Federal Reserve Board’s article, use the following link:
https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200424a.htm

To access the “Savings Deposits Frequently Asked Questions” supplement, use the following link:
https://www.federalreserve.gov/supervisionreg/savings-deposits-frequently-asked-questions.htm  

By: Steve Shepherd, CRCM,

On May 6, 2020 the CFPB (Consumer Financial Protection Bureau) issued a compliance aid with respect to compliance with Regulation B ECOA’s notice of action taken rules and the SBA’s (Small Business Administration) Paycheck Protection Program.
 
The new compliance aid comes in the form of three questions and answers from the CFPB regarding a completed application and the financial institution’s responsibilities for applications taken under the SBA’s Paycheck Protection Program.
 
A few of the interesting areas to note are that 1) an institution does not have a completed application sufficient to issue an action taken until it has been issued a loan number by the SBA and 2) if the institution refuses to grant credit prior to receiving an SBA loan number, the financial institution has made a credit decision and a notice of action taken would be required.
 
For additional information regarding the Regulation B ECOA requirements and the Paycheck Protection Program please see the compliance aid and additional guidance the CFPB has provided located at:
 
https://files.consumerfinance.gov/f/documents/cfpb_ecoa-regulation-b_faqs-covid-19.pdf
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By James Moore, CRCM

The CFPB (Consumer Financial Protection Bureau) has recently issued an interpretive rule under Regulation Z for TRID and Right of Rescission waiting period requirements.  Under the TRID Rule, creditors generally must deliver or place in the mail the Loan Estimate to consumers no later than seven business days before consummation and consumers must receive the Closing Disclosure no later than three business days before consummation. The Regulation Z Rescission Rules also provide consumers with at least three business days from consummation to rescind certain credit obligations secured by the consumer’s principal dwelling, and creditors are required to provide consumers with a disclosure informing them of this rescission right. Under the TRID Rule and the  Regulation Z Rescission Rules, however, after receiving the required disclosure(s), a consumer may modify or waive these waiting periods if the consumer determines that he or she needs credit extended to meet a bona fide personal financial emergency.  

Under the interpretive rule, the CFPB has determined that the COVID-19 pandemic could be considered a bona fide personal financial emergency for affected consumers.  This is not a change in the regulation but clarification that COVID-19 may be a reason to waive timing requirements if a personal financial emergency has occurred such as job loss or quarantine.  The rules still require for the waiting periods to be modified or waived, the creditor must have a dated written statement by the consumer that: (1) describes the emergency, (2) specifically modifies or waives the waiting period, and (3) bears the signature of all consumers who are primarily liable on the legal obligation (for the TRID Rule) or who are entitled to rescind (for the Regulation Z Rescission Rules). 

In addition, the CFPB recognized that the pandemic may also create valid changed circumstances in some instances that would permit a creditor to provide revised disclosures to consumers to reset tolerances for closing costs.  Financial institutions should use caution and document why the pandemic caused the changed circumstance and deliver revised disclosures within three business days of learning of the changed circumstance in accordance with established TRID requirements.
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The CFPB’s interpretive rule can be found here:
https://files.consumerfinance.gov/f/documents/cfpb_tila-respa-integrated-disclosure_rescission-pandemic-interpretive-rule.pdf