On February 5, the Federal Reserve released the scenarios banks and supervisors will use for the 2019 Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act stress test exercises. The Federal Reserve also announced that it will be providing relief to less complex firms from stress testing requirements and CCAR by effectively moving the firms to an extended stress test cycle for this year. The relief applies to firms generally with total consolidated assets between $100 billion and $250 billion. As a result, these less complex firms will not be subject to a supervisory stress test during the 2019 cycle and their capital distributions for this year will be largely based on the results from the 2018 supervisory stress test. At a later date, the Federal Reserve will propose for notice and comment a final capital distribution method for firms on an extended stress test cycle in future years.
The CFPB has posted a set of frequently asked questions related to the TILA-RESPA Integrated Disclosure Rule. Topics include model forms as well as corrected closing disclosures and the three-business-day waiting period before consummation of a transaction.
On January 31, the OCC released a revised “Subsidiaries and Equity Investments” booklet of the Comptroller’s Licensing Manual, which supersedes the October 2017 version of the booklet. The revised booklet reflects additional guidance describing activities of federal savings associations that may be performed in operating subsidiaries and service corporations, or through pass-through investments. The revisions include new appendixes describing appropriate precedent for such activities, as well as updated footnotes and other references.
The Federal Deposit Insurance Corporation (FDIC) will host a webinar for financial institutions on February 19, 2019, from 2 p.m. to 3 p.m. Eastern Time. The webinar will provide an update on the standardized export of the imaged loan documents initiative, which was first introduced on April 24, 2018. The initiative was begun by the FDIC, in consultation with the Federal Financial Institutions Examination Council, to help streamline the process for conducting loan review examinations offsite. The webinar will highlight results from its testing of the initiative, lessons learned, and next steps. For more information and registration details, see the FDIC’s January 31, 2019, notice.
On February 1, the SEC’s Division of Investment Management released an Information Update announcing that certain forms available on its website have been updated to reflect amendments recently adopted by the SEC, including amendments pertaining to the SEC’s Investment Company Reporting Modernization Initiative and the Investment Company Liquidity Risk Management Programs and related liquidity disclosure initiatives. The updated forms are: Form N-1A, N-2, N-3, N-4, N-5, N-6, N-8B-2, N-14 and N-CSR. The updated forms include bracketed text for certain amended form items and additional information about those amendments’ effective dates and compliance dates.
Enforcement & Litigation
Jamie Fleckner, chair of Goodwin’s ERISA litigation practice, sat down with Law360 for a Q&A session to discuss issues affecting litigation under the Employee Retirement Income Security Act (ERISA), his practice, and more. Fleckner, who co-led the Goodwin team that recently secured dismissal of an ERISA class action challenging the use of proprietary funds in 401(k) plans, discusses how this case gives fiduciaries and employers latitude to design their plans, and that there is no cookie-cutter approach to how benefits should be provided. He is also looking toward a future in which courts have decided whether fiduciaries should apply a paternalistic approach to managing 401(k) plans. He says courts’ competing views on this issue create a tension that underlies many ERISA lawsuits and leads to confusion for plan managers. View the Law360 article.
On January 25, the CFPB announced that it had entered into a consent order with an online lender that extends unsecured payday and installment loans, as well as lines of credit, resolving allegations that the lender had engaged in unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536. View the Enforcement Watch blog post.
On January 23, the CFPB announced that it had entered into a consent order with a loan broker, resolving allegations the broker’s offering of high-interest credit to veterans on behalf of several unnamed companies had thereby violated the CFPA, 12 U.S.C. §§ 5531, 5536. View the Enforcement Watch blog post.
On January 22, the California Department of Business Oversight (DBO) announced that it had entered into a consent order with a payday lender to resolve allegations that the company violated the California Financing Law, Fin. Code Section 22000 et seq. View the Enforcement Watch blog post.
Join Goodwin and EY for a timely post-midterm election financial regulatory update. With a newly divided Congress and increasingly aggressive state regulators, the years ahead may see broader regulatory enforcement emanating from Washington, D.C., and across the country.
Our speakers will provide unique insight into this changing regulatory environment, including business and legal perspectives from former federal and state financial regulators, industry professionals, and “DC insiders.” We will engage in a dynamic discussion focusing on current trends in federal and state regulations, including consumer financial services, securities regulatory and litigation risks, and the critical opportunities for financial and other institutions to proactively address the compliance risks of doing business in this new environment. Please find the registration link here.
The ABA Conference for Community Bankers is the premier event developed for — and by — community bank CEOs. Goodwin is a sponsor and will appear on two peer exchanges. Partner and Chairman Emeritus Regina Pisa will facilitate the Board Member session on February 11 and Partner Samantha Kirby will facilitate the Board Management and Strategic Planning session on February 12. Please find the registration link here.