What's New? Risk Management: Third Party Relationships

The Board of Governors of the Federal Reserve (Board), the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued joint interagency guidance in 2023 to all banking organizations supervised by the agencies on managing risks associated with third-party relationships. Read more under Risk Management: Third Party Relationships in the Compliance chapter of The Gold Book. 

What's New? New FLSA Overtime Exemption Regulations

On April 23, the Biden Administration released final regulations which significantly limit overtime exemptions for financial institutions. The regulations, effective July 1, raise the salary requirement to $43,888 per year. Then the required salary payment increases further to $58,656 effective January 1, 2025. That is a dramatic change to the current $35,568 requirement. The new regulations include other changes such as automatic salary updates, which will also create compliance obstacles. Read more under Overtime Pay in the Human Resources chapter of The Gold Book. 

What's New? NYS Exemption for Restraining Notices and Levies Increased

Under New York’s Exempt Income Protection Act (“EIPA”), certain funds in deposit accounts are exempt from most restraining notices and levies. One exemption under the EIPA is for the direct deposit or electronic payment of certain statutorily exempt funds (such as social security) into a deposit account, with the amount of the exemption adjusted every three years based on inflation. That amount has increased to $3,425 as of April 1, 2024. See Exemptions to Adverse Claims, New York Rules in The Gold Book for further details.

Beneficial Ownership Small Entity Compliance Guide

FinCEN has publishing a Small Entity Compliance Guide to help small entities comply with the requirements of the Beneficial Ownership Information Reporting Rule. In particular, small entities may have new requirements under the Reporting Rule.

Click here for the Small Entity Compliance Guide.

Click here to read more about the Beneficial Ownership Rules in The Gold Book. 

CFPB Proposes Rule to Stop New Junk Fees on Bank Accounts

The Consumer Financial Protection Bureau (CFPB) has proposed to block banks and other financial institutions from one potential source of new junk fee revenue – fees on transactions declined right at the swipe, tap, or click. The proposed rule would prohibit non-sufficient funds (NSF) fees on transactions that financial institutions decline in real time. These types of transactions include declined debit card purchases and ATM withdrawals, as well as some declined peer-to-peer payments. The CFPB’s proposal is part of the agency’s proactive approach to protect consumers, and it would cover banks, credit unions, and certain peer-to-peer payment companies.

What's New? FDIC Modernizes Digital Sign

Since the 1930s, the black and gold FDIC official sign displayed at bank branch teller windows has given bank customers confidence that their deposited funds are safe. Depositors and consumers today have a variety of options for where they can deposit their money and how they can access banking products and services. On December 20, 2023, the Federal Deposit Insurance Corporation (FDIC) Board of Directors adopted a final rule to amend part 328 of its regulations to modernize the rules governing use of the official FDIC signs and advertising statements. The revisions in the final rule extend the certainty and confidence associated with the FDIC official sign to digital channels, such as bank websites and mobile applications, through which depositors are increasingly handling their banking needs. Read more here about the new Official Digital Sign.

Interagency Statement for Banks on the Issuance of the Beneficial Ownership Information Access Rule

The following guidance has recently been issued:

SR letter 23-11, “Interagency Statement for Banks on the Issuance of the Beneficial Ownership Information Access Rule” 

Summary: This letter and its attachment clarify that the issuance of the Access Rule does not create a new regulatory requirement for banking organizations to access beneficial ownership information (BOI) from the Financial Crimes Enforcement Network’s (FinCEN) Beneficial Ownership Information Technology System or a supervisory expectation that they do so. Therefore, the Access Rule does not necessitate changes to Bank Secrecy Act (BSA)/anti-money laundering (AML) compliance programs designed to comply with the existing Customer Due Diligence rule and other existing BSA requirements, such as customer identification program requirements and suspicious activity reporting.

What's New? DFS Guidance on Climate Change

The guidance recently issued by the Department of Financial Services is designed to support Institutions’ efforts to identify, measure, monitor, and control their material climate-related financial and operational risks in a manner consistent with current risk management principles.  It addresses key components of prudent risk management by Institutions — including corporate governance, internal control frameworks, risk management processes and data collection and analysis — so that Institutions will incorporate assessment of these risks into their existing risk frameworks, taking a strategic and forward-looking approach.  

Read more HERE in The Gold Book.

FinCEN Issues Final Beneficial Ownership Rules

House Financial Services Committee Chairman Patrick McHenry (R-NC) is calling on the Administration to delay the first phase of new beneficial ownership reporting that begins on January 1 under the Corporate Transparency Act, in part because “millions of small business owners remain unaware of their beneficial ownership reporting obligations.” Dozens of other House and Senate Republicans have also called for a delay. Yesterday, FinCEN issued the second phase of the final rules for accessing the data (in effect later in 2024) and eased some rules so that banks could use the ownership information for a broader range of purposes to combat money laundering and comply with sanctions. A third phase of final rules is still forthcoming.

Read more about Beneficial Ownership in The Gold Book.

What's New? NYS New Consumer Protection Law for Credit Card Customers

A new law requires credit card companies to provide consumers a 90-day grace period to use up any points when rewards accounts are closed. Starting Sunday, December 10, 2023,  credit card companies must take additional steps to protect consumers from losing accrued points when rewards programs are modified or terminated. Read more under Credit Card Rewards in the New York Compliance section of The Gold Book.

New Banker Engagement Site through FDICconnect

The FDIC recently launched a new Banker Engagement Site through FDICconnect for examination-related activities.

The site will:

• Serve as the primary tool for exchanging documents, information, and communications for consumer compliance and Community Reinvestment Act examinations.
• Allow financial institutions’ authorized staff to communicate with FDIC exam staff and to respond to information and document requests made throughout the supervisory process.

Click here to learn more.

What's New? 2024 Cost of Living Adjustments

The Internal Revenue Service announcd cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024. For details see:

Cost of Living Adjustments for Pension Plans

Traditional IRA Deductions

Roth IRA Contribution Limitations

What's New? NYDFS Major Update to Part 500 Cybersecurity Requirements

The New York Department of Financial Services (NYDFS) adopted a long-expected amendment to its Part 500 Cybersecurity Regulations. These are the first significant changes to Part 500 since its inception in March 2017.

Covered entities should begin to determine how the Part 500 updates may affect existing licenses or applications currently under review. In particular, covered entities should:

• Determine whether they fall under the definition of a “Class A Company.”
• Update documentation to account for new policy and procedure requirements.
• Examine their cybersecurity governance structure to ensure that their CISOs and senior governing bodies have the capabilities and resources to manage the cybersecurity program and report on material issues as needed.

Read more in the Cybersecurity section of the Digital Banking chapter of The Gold Book.

Personal Financial Data Rights

The Consumer Financial Protection Bureau (CFPB) is proposing to establish 12 CFR part 1033, to implement section 1033 of the Consumer Financial Protection Act of 2010 (CFPA). The proposed rule would require depository and nondepository entities to make available to consumers and authorized third parties certain data relating to consumers’ transactions and accounts; establish obligations for third parties accessing a consumer’s data, including important privacy protections for that data; provide basic standards for data access; and promote fair, open, and inclusive industry standards. Read more here.

What's New? NYS Abandoned Property Death Validation

On March 23rd, 2023, the State of New York enacted legislation mandating property holders to perform death validations on customers for which a notification of death has been received through their normal course of business. Read more about Death Validation in the Abandoned Property section of The Gold Book. 

What's New? Junk Fees - Guidance

The CFPB released guidance for large banks that targets so-called "junk fees" charged to customers for checking their account balances or getting updates on their loans. The CFPB’s new guidance reflects the agency’s interpretation of section 1034(c) of the Dodd-Frank Act. Banks and credit unions that fail to adhere to the guidelines could be subject to monetary penalties after Feb. 1, 2024.

Read more in The Gold Book.

What's New? NJ Minimum Wage Increase

New Jersey's statewide minimum wage will increase by $1 to $15.13 per hour for most employees on Jan. 1, 2024. Read more in The Gold Book. 

What's New? NY Minimum Wage Increase

The state minimum wage is scheduled to increase on January 1, 2024 to $16.00 per hour for New York City and the counties of Nassau, Suffolk and Westchester, and to $15.00 per hour for the rest of the state. In addition to this increase, recent amendments to the Labor Law provide further increases by $0.50 per year on January 1, 2025 and January 1, 2026. As required by Labor Law § 652(2), the Commissioner filed proposed regulations to amend existing wage orders. 

Read more in The Gold Book.

Guidance on Overdraft Protection Practices

The FDIC, OCC and Federal Reserve have recently issued guidance on overdraft protection program practices, risk management, and representment. 

FDIC: Supervisory Guidance on Multiple Re-Presentment NSF Fees

OCC: Overdraft Protection Programs: Risk Management Practices

Federal Reserve: Supervisory Observations on Representment Fees

Also see The Gold Book for continuing updates:

Checking Accounts: Overdraft Protection Programs

Electronic Collection of Fees

FDIC launching new site for consumer compliance, CRA exam activities

New this month: The will launch a new Banker Engagement Site (BES) through FDICconnect for examination-related activities. The site will: Serve as the primary tool for exchanging documents, information, and communications for consumer compliance and Community Reinvestment Act examinations. Allow financial institutions’ authorized staff to communicate with FDIC exam staff and to respond to information and document requests made throughout the supervisory process. More: The FDIC’s existing tool to exchange exam information, the Enterprise File Exchange, will continue to be used for activity initiated prior to the availability of BES. FDIC exam management will inform financial institutions of the application that will be used for their exam during the transition to BES.