| |
Hot News
Check Processing News
The Federal Reserve System has announced plans to restructure check
processing operations to 32 locations and check adjustment operations
to 12 locations nationwide. The Second District, however, is not
closing any offices and Check operations will continue at the East
Rutherford and Utica Offices. Reportedly, these changes will begin
to be made later this year and will conclude by the end of 2004.
Beginning April 1, 2003, Check depositors will be able to benefit
from the High Dollar Group Sort cull option if they use the Other
Fed Group Sort B product at either the EROC or Utica Offices.
Lastly, the Federal Reserve System changed the criteria used for
automatically issuing transaction-based as-of reserve adjustments.
Effective March 3, 2003, the dollar value of the base transaction
must be $25,000 or greater and the aggregate amount (base transaction
multiplied by the number of days outstanding) must be $250,000 or
greater.
Information about these changes and how they may affect your institution
is available on the Federal Reserve System Web site at www.frbservices.org.
FinCEN’s SAR Activity
Review
Financial Crimes Enforcement Network (FinCEN) continued its examination
of terrorist financing methods in the just released fifth issue
of the SAR Activity Review — Trends, Tips and Issues. This
latest issue of The Review looks at terrorist financing methods
through Informal Value Transfer Systems (IVTS) such as hawalas,
as well as through nonprofit organizations.
Standard features of the Review include law enforcement cases in
which suspicious activity reports (SARs) played a role in a successful
investigation, SAR statistics, and tips and guidance for financial
institutions on SAR form preparation and filing. In addition, the
Industry Forum Section provides insights into aspects of compliance
management or fraud prevention by representatives from the financial
services.
In this issue's Industry Forum Section, the American Bankers Association
(ABA) provided their "Check Fraud Loss Report" from the
second quarter of 2002. The top five loss categories (by number
of accounts) were reported as follows (with last quarter's rank
in parentheses):
1. Forged maker's signature (2);
2. Counterfeit (1);
3. NSFs (4);
4. Return losses excluding closed accounts, NSFs, stop payments,
refer to maker; government reclamations, and uncollectible funds
(other return loss reasons) (3); and
5. Closed accounts (5).
back
to top
Regulation B Amendments
The Federal Reserve Board approved a final rule amending Regulation
B, which implements the Equal Credit Opportunity Act (ECOA). The final
rule is effective April 15, 2003. However, to allow time for any necessary
operational changes, the mandatory compliance date is April 15, 2004.
Regulation B contains specific rules concerning the taking and evaluating
of credit applications, how credit history information is reported
on accounts used by spouses, procedures for credit denials and other
adverse actions and limitations on requiring signatures of persons
other than the applicant on credit documents.
The amendments create an exception for collection
of prohibited information for the purpose of a self test, require
certain records retention, update racial and ethnic categorizations,
clarify various definitions, revise exceptions for certain industries,
add a clear and conspicuous requirement and retainability standards
for disclosures, and bar the presumption that the submission of
joint financial information constitutes an application for joint
credit.
back
to top
Expanded FHA-Insured ARMs
The Department of Housing and Urban Development is proposing to enhance
home-buying opportunities by expanding its offerings of adjustable-rate
mortgage (ARM) products on FHA-insured mortgages. Potential home buyers
would be able to choose mortgages with periods of three, five, seven
or ten years, depending on their needs, during which time the interest
rate would be fixed.
Under the proposed rule, the interest rate
for three- and five-year ARMs cannot change by more than 1% per
year after the fixed-payment period is over, with a maximum change
of 5% for the life of the loan. For seven- and ten-year ARMs, the
maximums are 2% annually and 6%, respectively, for the life of the
loan.
Currently, the only FHA-insured ARM that
is available has a one-year fixed-payment period, with caps of 1%
a year and 5% for the remainder of the term.
back
to top
For information on these and other banking issues, please consult
The Gold Book.
For information on purchasing a subscription to The Gold Book, Click here.
|
