Qualified Mortgage Final Rule Extended

The Consumer Financial Protection Bureau has issued a final rule to extend the mandatory compliance date of the General QM Final Rule from July 1, 2021 to October 1, 2022.

The final rule is available at: www.consumerfinance.gov/rules-policy/final-rules/qualified-mortgage-definition-under-truth-lending-act-regulation-z-general-qm-loan-definition-delay-mandatory-compliance-date/

The Bureau has also issued an executive summary and an unofficial redline of the rule and has updated other compliance aids related to the ATR/QM Rule. The resources are available at: www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/ability-repay-qualified-mortgage-rule/.

Read more in The Gold Book.

What's New? NYS COVID-19-Related Safety Protocols

Governor Cuomo has passed the New York HERO Act which will require businesses to have permanent and enforceable COVID-19-related safety protocols in place. Read more about NY HERO ACT in The Gold Book in the NYS Covid-19 Relief chapter.

What's New? ECOA (Reg B) Clarification

On March 9, 2021, the CFPB issued an Interpretive Rule to clarify that the prohibition against sex discrimination encompasses sexual orientation discrimination and gender identity discrimination, including discrimination based on actual or perceived nonconformity with sex-based or gender-based stereotypes and discrimination based on an applicant’s associations. Read more in The Gold Book, Regulation B.

What's New? NYS POA Rules Change in June

On December 15, 2020, Governor Andrew Cuomo signed into law amendments changing New York’s General Obligations Law governing powers of attorney (“POA”). The new law is effective on June 13, 2021 and is intended to simplify the POA form language which is prone to improper execution. Read more in The Gold Book, NYS Power of Attorney section.

2020 Tax Filing Deadline Extended

The Treasury Department and Internal Revenue Service has extended the federal income tax filing due date for individuals for the 2020 tax year from April 15, 2021, to May 17, 2021. 

This extension also applies to the deadline for Individual Retirement Account contributions for 2020.

COVID-19 Vaccination Time Off

On March 12, 2021, Governor Cuomo signed legislation (S2588A/A3354B) granting public and private employees paid leave in order to get a COVID-19 vaccine.  The new law, which went into effect immediately, gives employees up to four (4) hours of paid leave per injection.  Therefore, employees who receive a COVID-19 vaccine that requires two (2) injections are entitled to take up to eight (8) hours of paid time off.

For more, see The Gold Book, Covid Relief Chapter.

Spousal Consent for Certain Participant-Elected Distributions and Loans

Plan administrators of certain retirement plans are required to obtain spousal consent for some participant-elected distributions and loans, if applicable. The COVID-19 pandemic created challenges for spouses to appear physically before a notary public or plan representative to witness their consent. Temporary relief of this requirement was granted last year and has been extended through June 30, 2021. Read more.

Computer-Security Incident Notification Requirements

On 1/12/21, the joint regulators (OCC, Fed, & FDIC) published a proposal in the Federal Register that would require banks to provide their primary federal regulator with prompt notification of any “computer-security incident” that rises to the level of a “notification incident.” The proposed rule would require such notification upon the occurrence of a notification incident as soon as possible and no later than 36 hours after the banking organization believes in good faith that the incident occurred. This notification requirement is intended to serve as an early alert to a banking organization's primary federal regulator and is not intended to provide an assessment of the incident.

The full proposal can be found here.

OCC Preemption Interpretation

On December 18, the OCC issued Interpretive Letter 117 which offered the agency’s interpretation of its powers to preempt state regulation of national banks and federal associations. As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), Congress codified preemption standards and established procedural requirements in 12 U.S.C. § 25b applicable to certain preemption actions by the Office of the Comptroller of the Currency (OCC). The letter sets out how the OCC interprets these standards and requirements and summarizes the agency’s framework for compliance. Click here to read the OCC letter.

What's New? PPP Loans Re-Open

President Trump signed an additional COVID-19 relief bill that will re-open the Paycheck Protection Program through March 31, 2021.  Read about PPP loans here in The Gold Book - look for updates as more information on this becomes available. 

IRS 2021 Mileage Rates

The IRS has announced the 2021 standard mileage rates for business, medical, and other uses of an automobile. For 2021, the business standard mileage rate is 56 cents per mile (a 1.5 cent decrease from the 57.5 cents rate for 2020), and the rate when an automobile is used to obtain medical care —which may be deductible under Code § 213 if it is primarily for, and essential to, the medical care—will be 16 cents per mile for 2021.

What's New? COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020

Governor Andrew M. Cuomo has signed the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020. The Act (S.9114/A.11181) prevents residential evictions, foreclosure proceedings, credit discrimination and negative credit reporting related to the COVID-19 pandemic. The Act adds to New York State's efforts to protect tenants and homeowners from the economic hardship incurred as a result of the COVID-19 pandemic.

The legislation helps mortgagors facing foreclosure proceedings due the pandemic in three areas:

Residential Foreclosure Proceedings

Tax Lien Sales

Credit Discrimination and Negative Credit Reporting

For details, please visit The Gold Book.

2020 RMD Waiver Reminder

RMDs Waived for 2020

The CARES Act waives required minimum distributions (RMDs) during 2020 for IRAs and defined contribution retirement plans. RMDs are also waived for beneficiaries with inherited IRAs and accounts inherited in a retirement plan. 

Distributions of an amount that would have been an RMD in 2020 can generally be rolled over to another workplace retirement plan or IRA within 60 days of the distribution. RMDs rolled over by August 31, 2020, have special relief.

RMD rolled over by August 31, 2020: Notice 2020-51 [PDF] provides that if a distribution from an IRA of an amount that would have been an RMD in 2020 was made between January 1, 2020, and July 2, 2020, then the distribution can be rolled over by August 31, 2020. If a 2020 RMD was distributed after July 2, 2020, then the distribution must be rolled over within 60 days of the distribution. A 2020 RMD that’s part of a series of substantially equal periodic payments does not prevent it from being eligible for rollover.

Additionally, if a 2020 RMD was distributed before August 31, 2020, but was repaid to the distributing IRA by August 31, 2020:

• The repayment is not subject to the one rollover per 12-month period limitation.
• An RMD from an inherited IRA can be repaid to the distributing IRA.

Inherited IRAs: Distributions from inherited IRAs are not required in 2020. For deaths prior to 2020, beneficiaries are required to take distributions using the 5-year rule or yearly distributions over their life expectancy. The 5-year rule requires the inherited IRA to be distributed within 5 years following the year of the account holder’s death. 2020 does not count toward the 5 years. A taxpayer would essentially have six years, instead of five, to distribute the inherited IRA if the account holder died before 2020.

Taxpayers taking distributions using the lifetime distribution option available for deaths prior to 2020, are not required to take a distribution in 2020. For an account holder who died in 2019, normally they would be required to begin taking distributions from the inherited IRA by the end of the following year, 2020, to take advantage of the lifetime distribution option. Since 2020 does not count, they have until the end of 2021 to begin taking distributions over their lifetime.

Tax treatment of 2020 RMDs that are not rolled over: RMDs in 2020 that are not rolled over or repaid may be eligible to be treated as coronavirus-related distributions for a qualified individual. A 2020 RMD that otherwise qualifies as a coronavirus-related distribution may be repaid over a 3-year period or have the taxes due on the distribution spread over three years. 

Special note for inherited IRAs: If a withdrawal from an inherited IRA qualifies as a coronavirus-related distribution, income from the withdrawal may be spread over three years for income inclusion. However, the withdrawal may not be repaid to the inherited IRA. 

Substantially equal periodic payments are not waived. If a taxpayer is using substantially equal periodic payments to meet one of the exceptions to the 10% additional tax on distributions prior to age 59 ½, they are still required to take the periodic payment in 2020. If the periodic payment is not taken in 2020, the exception is lost and those withdrawals taken in prior years will become subject to the 10% additional tax.

What's New? 2021 Annual CRA Asset Size Threshold Adjustments

The federal bank regulatory agencies announced the annual adjustment to the asset-size thresholds used to define small bank, small savings association, intermediate small bank, and intermediate small savings association under the Community Reinvestment Act (CRA) regulations.

The annual adjustments are required by the CRA rules.  Financial institutions are evaluated under different CRA examination procedures based upon their asset-size classification.  Those meeting the small and intermediate small institution asset-size thresholds are not subject to the reporting requirements applicable to large banks and savings associations unless they choose to be evaluated as a large institution.

Annual adjustments to these asset-size thresholds are based on the change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Read more on Bank Size Criteria in The Gold Book.

NYS POA Rules Amended in 2021

Governor Cuomo has signed legislation that will significantly change New York legislation regarding powers of attorney. The amendment will be effective 180 days from December 15. 

To summarize, the legislation:

• Expands the grounds for reasonably refusing to honor a power of attorney.
• Allows a person who, in good faith, accepts an acknowledged power of attorney without actual knowledge that the signature is not genuine, may rely upon the presumption that the signature is genuine.
• Specifies a timetable and process for a third party to accept or reject a power of attorney.
• Relaxes the wording requirement providing that a power will be acceptable if the language "substantially conforms" to the statutory language.
• Eliminates the statutory gifts rider is eliminated. 
• Provides authority to make gifts absent language in the modifications section has been increased from $500 to $5,000 in any calendar year.

NYS Minimum Wage to Increase

The minimum wage in New York State is still set to increase on New Year's Eve. The Department of Labor announced the minimum wage will rise to $12.50 an hour in areas of New York outside of the New York City area. The decision came despite calls from some lawmakers to delay the increase due to financial burdens on struggling businesses.

More about minimum wages can be found in The Gold Book.

New York Minimum Wage

New Jersey Minimum Wage

What's New? 2021 Regulation Z Exemption Threshold

Based on the annual percentage increase in the CPI-W as of June 1, 2020, the protections of the Truth in Lending Act and the Consumer Leasing Act generally will apply to consumer credit transactions and consumer leases of $58,300 or less in 2021. This exemption amount remains unchanged from 2020. However, private education loans and loans secured by real property (such as mortgages) are subject to the Truth in Lending Act regardless of the amount of the loan.

Read more in The Gold Book. 

What's New? 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 2021. For details see:

Cost of Living Adjustments for Pension Plans

Traditional IRA Deductions

Roth IRA Contribution Limitations

What's New? New COVID-19 Safety and Soundness Standards for Financial Institutions

On June 23, 2020, the financial institution regulatory agencies jointly issued interagency examiner guidance for assessing safety and soundness considering the effect of the COVID-19.

Read more on the interagency guidance in The Gold Book.

 

New CIP Rule Exemption

The FDIC, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the National Credit Union Administration, collectively the federal banking agencies (FBAs), with the concurrence of the Financial Crimes Enforcement Network (FinCEN), grant an exemption from the requirements of the customer identification program (CIP) rules for loans extended by banks and their subsidiaries to all customers to facilitate purchases of property and casualty insurance policies.

See Customer Identification Program in The Gold Book to learn more.