BANKER S GUIDE TO COMPLIANCE How to Use This Service The Banker s Guide to Compliance is written in bankers language and intended for use by bankers. You need not be a lawyer or compliance expert to use it and this manual is updated semi-annually to keep you up to speed on changes in compliance. Table of Contents The table of contents is organized by functional departments (Deposits, Loans, Customer-Related Operations, and Internal Operations). These sections contain materials on laws and regulations within the functional area, and topics that provide you with a more thorough understanding of the applicable issues. Index The index allows you to easily locate the topic in which you are interested. Frequently, you will know there is a regulation dealing with a particular topic, but you may not know which regulation. We have indexed the Banker s Guide to Compliance using the terms that bankers actually use when talking about the regulations, so that you can find the information quickly. Each term is followed by the page number(s) on which the term occurs. If you look up a term, you will always find a page number on which you can find the information. This document is protected under the trade secret and copyright laws as the property of FIS. Copying or other reproduction, or any other disclosure to third parties, is strictly prohibited. Original Publication 1991 Recent Revisions 12/14 6/15 9/15 12/15 3/16 8/16 This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. 8/22/16
Table of Contents 1 Introduction...1 Compliance Is Tough...1.1 How to Establish and Maintain the Compliance Function...1.2 CITATION TABLE FOR CFPB REGULATIONS...1.15 REGULATORY THRESHOLDS CHART 2016...1.16 2 Deposits...2 Federal Deposit Insurance...2.1 Advertising Deposits...2.10 Insurance Rules...2.10 Unfair, Deceptive or Abusive Acts or Practices ( UDAAP )...2.13 Truth in Savings...2.14 FTC Communication Laws...2.17 The CAN-SPAM Act...2.17 The National Do Not Call Registry...2.20 The No Fax Rules...2.23 Lotteries...2.24 Non-Deposit Investment Products...2.26 Privacy of Consumer Information...2.35 Privacy of Consumer Information...2.35 FCRA - Sharing With Affiliates...2.45 Right to Financial Privacy Act...2.53 Reimbursement for Providing Financial Records...2.57 Fair Credit Reporting Act...2.60 Truth In Savings Act...2.61 Electronic Fund Transfers Act...2.71 Overdraft Protection Products...2.89 Expedited Funds Availability Act...2.104 Stored Value Cards & Prepaid Access...2.116 Remittance Transfers...2.128 Collection and Return of Checks...2.147 CHECK 21...2.152 Unlawful Internet Gambling Enforcement Act...2.160 Individual Retirement Accounts and Other Tax Sheltered Deposit Plans...2.167 Remote Deposit Capture...2.177 Safe-Deposit Box...2.182 Savings, Money Market, and Time Deposits...2.185 NOW Account Eligibility...2.188 Foreign Account Tax Compliance Act...2.192 3 Loans...3 Advertising Loans...3.1 I 8/22/16
Fair Lending Considerations...3.1 Equal Credit Opportunity Act...3.1 Fair Housing Act...3.1 Misleading or Deceptive Advertisements...3.3 Disclosures...3.8 Other Advertising Considerations...3.13 Privacy of Consumer Information...3.16 Fair Lending...3.17 Regulation B - Equal Credit Opportunity Act...3.17 Fair Housing Act...3.34 Fair Credit Reporting Act Rules on Medical Information...3.37 Adverse Actions and Notices Related to Consumer Credit Rating...3.39 Adverse Actions...3.39 Fair Credit Reporting Act...3.39 Equal Credit Opportunity Act...3.42 Notice to Home Loan Applicants...3.47 FCRA - Risk-Based Pricing...3.48 Home Mortgage Disclosure Act...3.55 Gathering Government Monitoring Information under ECOA...3.66 Registration, Compensation and Kickbacks for Mortgage Loans...3.68 SAFE Act...3.68 Loan Originator Compensation...3.74 RESPA - Prohibition Against Kickbacks and Unearned Fees...3.80 Mortgage Types...3.83 Regulation Z Covered Mortgages...3.83 RESPA Covered Mortgages...3.84 Qualified Residential Mortgages...3.97 Higher Priced Mortgage Loans...3.98 High Cost Mortgage Loans...3.101 Refinancing Mortgages...3.104 Home Equity Lines of Credit...3.104 Mortgage Disclosures...3.106 Introduction...3.106 Closed-End Dwelling Secured Loans...3.107 Open-End Dwelling Secured Loans...3.149 Mortgage Servicing...3.159 Servicing Policies and Procedures...3.159 Servicing Closed-End Dwelling Secured Loans...3.160 Servicing Home Equity Lines of Credit...3.189 Servicing Reverse Mortgages...3.193 Truth In Lending Act Other Loans...3.195 Background...3.195 Closed-End Non-Dwelling Secured Loans...3.199 Other Closed-End Non-Dwelling Secured Loans...3.205 II 8/22/16
Other Closed-End Unsecured Loans...3.210 Open-End Credit...3.211 Open-End Credit Credit Cards...3.223 EMV Chip Technology...3.240 Truth in Leasing Act...3.242 Real Estate Settlement Procedures Act...3.246 The Homeowners Protection Act...3.247 HUD Notice Requirements...3.254 Lending to Service Members...3.258 The John Warner National Defense Authorization Act of 2007...3.262 Flood Insurance...3.270 Fair Debt Collection Practices Act...3.284 Real Estate Lending Standards...3.287 Appraisals and Valuations...3.292 Regulation Z - Appraisals and Valuation Independence...3.292 Appraisal Requirements for Higher-Priced Mortgage Loans...3.294 Regulation B - Appraisal Requirements...3.297 Appraisals and Interagency Appraisal Standards...3.299 CERCLA...3.311 4 Customer-Related Operations...4 Fair Credit Reporting Act Consumer Report Issues...4.1 Permissible Purpose for Consumer Reports...4.2 Notice of Negative Information...4.4 Disputed Information...4.5 Accuracy and Integrity of Information Furnished to CRAs...4.7 Red Flag Guidelines...4.8 Duties of Users of Consumer Reports...4.14 Fraud and Active Duty Alerts...4.15 Penalties...4.15 Disposal of Records...4.15 Bank Secrecy Act...4.17 Introduction...4.17 BSA/AML Risk Assessment...4.18 BSA/AML Compliance Program...4.20 Customer Identification Program...4.22 Due Diligence...4.29 Currency Transaction Reporting...4.34 Suspicious Activity Reporting...4.42 Other Recordkeeping Requirements...4.50 Recordkeeping for Funds Transfers and Transmittals...4.52 USA PATRIOT Act Section 314(a) Mandatory Information Sharing with the Government...4.59 USA PATRIOT ACT 314(b) -Voluntary Information Sharing...4.61 Office of Foreign Assets Control...4.76 III 8/22/16
Unfair or Deceptive Acts or Practices...4.84 Social Media...4.96 The E-SIGN Act and Internet Banking...4.102 5 Internal Operations...5 FIRREA Enforcement and Civil Penalty Provisions...5.1 Insider Loans...5.4 Transactions Between Banks and Their Affiliates...5.15 Insider Related Regulations...5.20 Community Reinvestment Act...5.24 Alternative Mortgage Transaction Parity Act...5.36 Lending on Securities...5.42 Securities Inquiries...5.45 Exceptions for Banks from the Definition of Broker...5.48 Bank Protection Act...5.58 Bank Bribery Act...5.60 Branch Closings...5.63 Interbank Liabilities...5.66 Index... IN.1 IV 8/22/16