Regulatory Relief: Financial Needs of Customers Affected by Hurricane Sandy

The FDIC encourages depository institutions to consider all reasonable and prudent steps to assist customers in communities affected by recent storms. The FDIC realizes that although the effects of natural disasters on local businesses and individuals can be devastating, they often are transitory. The FDIC recognizes that efforts to work with borrowers in the affected communities can be consistent with safe-and-sound banking practices and in the public interest.

Hurricane Sandy Human Resource FAQs

Hurricane Sandy was a tropical cyclone that severely affected portions of the Caribbean, Mid-Atlantic and Northeastern United States in late October 2012. Many financial institutions and/or their branch offices were forced to close due to the devastation and power outages. Though the FAQs below may apply to other cases where employees are absent from work, these issues are presently in the minds of employers who were affected by Hurricane Sandy. We have added some FAQs to the Fair Labor Standards Act sections of the Human Resources chapter to address these concerns.

We are back in the office....

....thanks to all who were concerned about how we were doing!

Carlos
Jeffrey
Cheryl
Karen 

OCC Allows National Bank and Federal Savings Association Offices Affected by Hurricane Sandy to Close

The Office of the Comptroller of the Currency has issued a proclamation allowing national bank and federal savings association offices affected by Hurricane Sandy to close at their discretion.

Those offices should make every effort to reopen as quickly as possible to address the banking needs of customers.

CFPB Remittance Rule Guide Available

The Consumer Financial Protection Bureau(CFPB) has published an International Fund Transfers Small Entity Compliance Guide to assist small businesses in complying with the new remittance rule, which takes effect February 7, 2013. Read more here.

Web Site Accessibility Standards

There are no uniformly-accepted standards that determine the accessibility to web site-based services for persons with disabilities.  The Americans with Disabilities Act of 1990 (“ADA”) provides safe-harbors for providing accessibility to physical banking locations. Proposed ADA rulemaking addresses the requirements for making goods, services, facilities, privileges and accommodations via the internet. For more details, see Websitesunder the Americans with Disabilities Actin the Compliance chapterof The Gold Book. 

IRS Issues 2013 Cost of Living Adjustments

The Gold Book has been updated to reflect the cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2013. In general, many of the pension plan limitations will change for 2013 because the cost-of-living index met the statutory thresholds that trigger their adjustments. Several sections within the Pension chapter are updated accordingly.

Foreign Remittances

The remittance rule published by the CFPB (subpart B of Regulation E), which goes into effect on February 7, 2013, generally requires remittance transfer providers to give certain specified disclosures to consumers sending remittance transfers. Among other requirements, a provider generally must disclose to a sender the total amount the recipient will receive, as well as the applicable exchange rate, fees, and taxes. In certain circumstances, the rule permits providers to estimate these amounts. Click here to read more about foreign remittances and the safe harbor list.

Bank management may declare legal holiday

The Comptroller of the Currency issued supervisory guidance on declaring a legal holiday for banks because of an emergency or natural disaster. Read more.

What's New? NYS Preauthorized EFT Law

On August 17, 2012, Governor Cuomo signed S.219-A / A978, which became Chapter 403 of the laws of 2012.  The new law amends Banking Law section 9-s regarding stop payments of electronic funds transfers (the New York version of the Electronic Funds Transfer Act.)

Text in The Gold Book addressing New York rules for stopping payment on preauthorized electronic transfers have been updated in the Compliance and Electronic Banking chapters.

What's New? NYS Social Security Law Amended

A person may not be required to disclose or furnish his or her Social Security Number (SSN) for any purpose under a new law signed by New York Governor Andrew Cuomo.  The new law safeguarding SSNs (A.8992-A/S.6608-A) applies to employers and certain other entities in the state.   It adds new section 399-ddd to the General Business Law and becomes effective December 12, 2012. Businesses must review their practices with employees, customers and other individuals in situations where all or a part of the Social Security Number is involved.

Read more in The Gold Book. Click Here.

FDIC Issues Two New Deposit Insurance Resources

The FDIC has developed two new resources to help bank employees and depositors understand FDIC deposit insurance coverage: (1) a large-print version of the brochure Your Insured Deposits and (2) a computer-based, interactive training module called FDIC Deposit Insurance Coverage for Bankers.

Insured institutions may access and order the FDIC's two new deposit insurance resources on the FDIC's Web site at www.fdic.gov/deposit/deposits/.

Announcing New Website

Banking Spectrum is proud to announce

the launch of our new website!

To better serve our clients, our new website is even easier to learn more about the services we provide.

Registered users of The Gold Book may access the online manual through the website or directly at http://goldbook.bankingspectrum.com.

And be sure to visit the What's New page with each visit for the latest banking news and updates to The Gold Book.

Don't have access to The Gold Book? Click here to Register and a representative will be in touch.

We hope you like the new site. Let us know what you think.

NYS Law Abolishes Yield Spread Premiums

Effective August 17, 2012, Governor Cuomo signed A.7329/S.886, which became Chapter 404 of the Laws of 2012.  The law adds Banking law Section 3-a, which states that a person who makes or brokers a home loan may not receive compensation based on, or varies with, any of the loan terms.  Compensation based on the loan amount (principal) is permitted.

The amendment also bans yield spread premiums - compensation paid by a lender to a mortgage loan broker based on the difference between a stated interest rate or loan yield preferred by the lender.

Brokers being paid on the basis of a yield spread premium, as opposed to a percentage of the loan amount or points, may be inclined to steer applicants to lenders offering loans at higher rates, thus acting in their own or the lender’s interests and not the interest of their applicant-client.

CFPB Proposal Requires Free Appraisal Reports

The CFPB issued a proposed rule that would require creditors to inform consumers of their right to receive a free copy of appraisal reports and home-value estimates within three days of applying for a mortgage loan. Creditors then would be required to provide the reports to consumers as promptly as possible, but no later than three days before closing -- regardless of whether credit is extended, denied, incomplete or withdrawn.

New Appraisal Requirements Proposed

The regulatory agencies issued a proposed rule under Dodd-Frank that would establish new appraisal requirements for “higher-risk mortgage loans.”

The proposal would require creditors to use a licensed or certified appraiser to prepare a written report based on a physical inspection of the property’s interior. The proposal also would mandate that creditors disclose information about the appraisal’s purpose and provide consumers with a free copy of the appraisal report.

CFPB Proposes Mortgage Servicing Rules

The Consumer Financial Protection Bureau proposed two sets of rules aimed at mortgage servicers. The first set, issued under the Truth in Lending Act, would require servicers to provide monthly mortgage statements that include a breakdown of payments by principal, interest, fees, and escrow; the amount of and due date of the next payment; recent transaction activity; and notices about fees. It also would require more advanced warning about interest rate adjustments on most adjustable-rate mortgages; advanced notice and pricing information before charging customers for “force-placed” insurance; and earlier information and alternatives for avoiding foreclosure. The second set of rules, issued under the Real Estate Settlement Procedures Act, would govern the handling of consumer accounts, correcting errors, and evaluating borrowers for alternatives to avoid foreclosure.  Comments are due October 9, with final rules expected in January 2013.

NYS Law on Out of State and Interstate Branching Activities

On July 18, 2012, Governor Cuomo signed S.677-B / A.10567A, which became Chapter 180 of the Laws of 2012.  The Chapter amends various provisions of the state banking laws that address in state and out of state branching activities of out of state banks, national banks and thrifts seeking to do business in New York.  The law updates and conforms state law branching rules to the branching activity sections of the Dodd-Frank Act.

NYS Reciprocal Public Deposits Bill Signed Into Law

This month, Governor Cuomo signed the reciprocal public deposits bill (Chapter 128 of the Laws of 2012), a measure that authorizes local governments to use reciprocal deposit services to increase the FDIC deposit insurance coverage of municipal deposits. This law, effective immediately, increases deposit insurance coverage from the current level of $250,000 per account to the maximum $50 million. Read more in The Gold Book.

Banking Agencies Issue Host State Loan-to-Deposit Ratios

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency recently issued the host state loan-to-deposit ratios that the banking agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios update data released on June 30, 2011.In general, section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 109 also prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production.

Section 109 provides a process to test compliance with the statutory requirements. The first step in the process involves a loan-to-deposit ratio screen that compares a bank's statewide loan-to-deposit ratio to the host state loan-to-deposit ratio for banks in a particular state.

A second step is conducted if a bank's statewide loan-to-deposit ratio is less than one-half of the published ratio for that state or if data are not available at the bank to conduct the first step. The second step requires the appropriate banking agency to determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank's interstate branches.

A bank that fails both steps is in violation of section 109 and is subject to sanctions by the appropriate banking agency.

The updated host state loan-to-deposit ratios are attached.

Attachment (22 KB PDF)