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Jerry Sanchez provides legal and regulatory counsel for banks and financial companies on a variety of compliance and consumer finance matters. For non-bank entities, Jerry advises on state license and registration requirements, interest and usury limits, unfair and deceptive trade practices, and state consumer disclosure laws

Generally

In an important joint statement issued on September 11, 2018, the federal financial regulatory agencies (the FDIC, the OCC, the Federal Reserve, the NCUA, and the CFPB) clarified the role of supervisory guidance, stating that supervisory guidance “does not have the force and effect of law.” Community and regional banks and other regulated financial institutions are applauding this effort by regulators to ensure that both the regulated and their regulators have a clear understanding of the appropriate role of guidance in supervision. Financial institutions over the years have raised numerous concerns about the application of guidance in the examination process, and will likely view this as a positive step towards providing greater clarity.

The agencies said guidance can provide examples of practices that the agencies generally consider consistent with safety-and-soundness standards or other applicable laws and regulations, including those designed to protect consumers. “Supervised institutions at times request supervisory guidance, and such guidance is important to provide insight to industry, as well as supervisory staff, in a transparent way that helps to ensure consistency in the supervisory approach,” the agencies point out in the joint statement.   Continue Reading Federal Financial Regulators Clarify Supervisory Guidance Not “Force of Law”

July 13, 2018, marks the comment deadline for the federal bank agencies’ proposed capital rules amendments to grant all banks the option to elect a three-year phase-in of the “day 1” regulatory capital effects from adopting the new and burdensome FASB Current Expected Credit Losses (CECL) methodology under GAAP (scheduled to become effective for the first group of banking organizations in their first fiscal year beginning after December 15, 2019). Critically, the election to use the three-year phase-in approach would be required to be made by the end of the first regulatory reporting period in which the banking organization applies CECL, otherwise it is forfeited. The proposed three-year phase in period affords community banks with much-needed time to plan and test for CECL implementation thereby easing some of the CECL anxiety community bankers are experiencing.

Continue Reading Federal Bank Agencies Set to Grant Community Banks Temporary Reprieve from FASB’s Burdensome Credit Losses Rule

The House Financial Services Committee’s previous passage of the Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs” Act (“CHOICE Act”) provides a roadmap to potential financial regulatory reform early during the Trump administration, including reform of the Dodd-Frank Act’s and BASEL III’s bank capital requirements. House Committee on Financial Services Chairman Jeb Hensarling (R-TX-5) has indicated a desire to introduce a “2.0” version of the bill early in 2017 when the new Congress convenes. Continue Reading Dodd-Frank Reform: BASEL III and Capital Requirements

Real estate lenders and agents struggling with the new TILA-RESPA Integrated Disclosure rules will have the opportunity to suggest improvements to the rules this summer. On April 28, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray sent a letter to eight financial industry trade groups stating that the agency intends to propose new amendments in late July 2016 to the rules synthesizing mortgage lending disclosures under the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA). Issued pursuant to the Dodd-Frank Act, the rules are known as the TILA-RESPA Integrated Disclosures (TRID) rule, also referred to by the CFPB as the Know Before You Owe rules.

Continue Reading CFPB to Issue Proposal in July Amending Rules on TILA-RESPA Integrated Disclosures

The U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) has stated that it is taking the last steps in the process to finalize its long-awaited beneficial ownership rule, which it proposed in 2014. If finalized as proposed, the rule would, for the first time, extend Customer Due Diligence (“CDD”) requirements under Bank Secrecy Act (“BSA”) rules to the natural persons behind a legal entity. FinCEN has indicated that the rule will now go to the White House’s Office of Management and Budget (“OMB”) for review, a process that generally can take up to 90 days, before a final rule can be issued. FinCEN did not confirm any concrete time frame for this process.

Continue Reading In Wake of “Panama Papers” Disclosures, FinCEN Moves to Finalize Anti-Money-Laundering Rules Affecting Shell Companies