Stein to speak at 2017 MBA Regulatory Compliance Conference

Banking and financial services attorney David Stein is a featured speaker at this year’s Mortgage Bankers Association (MBA) Regulatory Compliance Conference, which takes place September 17-19 in Washington, D.C. Addressing one of the most significant issues facing banks and lenders, he will participate in a panel discussion on loan originator compensation, Truth in Lending Act (TILA) rules and the Fair Labor Standards Act (FLSA). Stein is a member of the MBA Legal Committee and a thought leader in this area. He regularly works with banks and lenders to proactively plan compensation strategies that comply with TILA and FLSA. At the conference, he will share his knowledge and experience with industry leaders, attorneys and compliance personnel. To learn more about the MBA Regulatory Compliance Conference, visit the MBA website

Compliance Management, Consumer Lending and Services

Amended Military Lending Act goes into effect on October 3; CFPB releases updated exam procedures

Today, September 30, 2016, the Consumer Financial Protection Bureau (CFPB) identified the updated exam procedures it will use to audit lenders who do business with military personnel. According to CFPB Director Richard Cordray, “[t]he updated exam procedures…will help ensure that servicemembers and their families are dealt with in a fair and safe manner when attempting to access credit.” Specifically, the requirements prohibit interest rates above 36 percent MAPR, mandatory waivers of consumer protection laws and mandatory allotments.

In its press release, the CFPB vows to strictly monitor financial institutions, their compliance programs and their “overall efforts to follow the rule’s requirements.” Evaluating everything from staff training to loan implementation, the CFPB will use the new rules to prevent substantial consumer harm. The updated Military Lending Act rules go into effect on October 3 for creditors. Credit card companies must be prepared to comply with the new rules by October 3, 2017.

Pawnbrokers make up a segment of the financial services industry that will be affected by these new rules under the Military Lending Act. Attorney, Jackie Mallett recently hosted a webinar discussing the amended rules and how they will affect the pawn industry. View the webinar in its entirety here

Compliance Management, Consumer Lending and Services, Depository Institutions, Fair Lending, Federal Regulatory, Non-Depository Institutions

David Stein authors MBA’s social media and digital advertising compliance guide

David Stein, of counsel and chair of Bricker & Eckler's Banking & Financial Services group, authored the “Social Media and Digital Advertising Resource Guide,” which was recently published by the Mortgage Bankers Association (MBA).

The resource advises financial institutions “how to manage the challenges posed by digital marketing and advertising of residential mortgage products and services,” according to the MBA. The guide examines the statutory and regulatory background related to mobile and digital marketing, and provides draft policies and procedures.

The online resource guide is available for purchase on the MBA’s website here

Compliance Management, Consumer Lending and Services

Email spoofs: Criminals posing as your government examiner

Imagine the humiliation of having to confess that your company had a data breach and inadvertently sent hundreds of loan files chock full of nonpublic personal information directly to a criminal posing as your friendly government examiner. That would not be a good day at the office.

How could this happen and what steps can you take to prevent this nightmare? Here are dos and don’ts to help you verify the identity and credentials of examiners conducting remote examinations. Read more >>

Compliance Management

Ohio DFI issues data security guidelines

In response to increased financial fraud issues, the Ohio Division of Financial Institutions (DFI) recently issued data security guidelines. While the DFI specifically addressed debit card issues, its language indicates expectations for all institutions, requiring active steps to implement data security measures.

The DFI emphasized the following obligations:

  • Daily review of security-related issues
  • Email security and encryption
  • Timely review of security and activity reports
  • Suspicious activity report (SAR) training
  • Standardized security controls
  • After hours mechanisms to control suspicious activity

At its Ohio Banker’s Day on March 31, 2016, the DFI spent considerable time discussing financial fraud. It is apparent that further guidelines and bulletins will be forthcoming and will apply to all consumer-related activity, including lending. In light of its supervisory bulletin, verbal statements and the Consumer Financial Protection Bureau’s recent order in Dwolla, it is expected that data security will be a priority item in any future Ohio financial institution examinations.

Compliance Management, Consumer Lending and Services, State Regulatory

Announcing our Cybersecurity Law blog

Readers of the Financial Services Law blog are invited to visit our newly-launched Cybersecurity Law blog, an online resource featuring news, information and legal analysis on current cybersecurity and data breach issues. Articles and posts, authored by Bricker & Eckler attorneys, share in-depth insights and legal implications on topics that have both local and global significance.  

We encourage you to subscribe to the blog via FeedBurner to have frequent updates sent directly to your inbox. Additionally, be sure to visit the blog and bookmark the site for easy reference. 

Compliance Management, Consumer Lending and Services, Depository Institutions, Fair Lending, Federal Regulatory, Federal Regulatory, Legal Developments, Non-Depository Institutions, State Regulatory

The myth of fingerprints: Maturity in compliance

Fingerprints are unique to each individual. Likewise, every company is unique. However, the need for every lender to maintain effective management and control is the same across the board. Every financial institution is in the same boat, whether or not you think the CFPB will examine you and whether or not you feel your organization is subject to the bureau’s oversight. (Yes, they can and will regulate any company coming between a consumer and its money.) 

 
What are you doing to address this issue? Are you prepared to handle the scrutiny that may be headed your way? Read more.

 

Compliance Management, Consumer Financial Protection Bureau, Federal Regulatory

TRID implementation countdown

Do not be fooled by false reports of another delay in TILA/RESPA Integrated Disclosure (TRID) requirements — the rule takes effect October 3. Lenders are busy running sample loan scenarios through their loan origination systems, calling vendors to troubleshoot problems, consulting with IT employees and getting ready for the dreaded deadline. 

 
In the next few days, someone may advise you to not worry about the TRID deadline because CFPB Director Richard Cordray told members of Congress that there will be a “hold harmless” period. But Director Cordray said no such thing. When pressed during questioning at the House Financial Services Committee hearing today, he stated that there will be an informal grace period. However, this is not a free pass — October 3 is still the deadline for TRID compliance. 
 
If you want to be able to sell the loans you originate to investors, and if you want to avoid becoming a defendant in a civil action by a consumer for violating the Truth in Lending Act, keep forging ahead with TRID compliance and be ready to go this Saturday.

 

Compliance Management, Consumer Financial Protection Bureau, Federal News, Legal Developments