Independent Banker - December 2022 - 31

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While few new requirements were finalized in
2022, community bankers should ensure their
implementation as needed and continue to
closely monitor other evolving issues.
customer data access and UDAAP to
encourage the CFPB to commence
rulemaking about customer access to
financial data and to keep enforcing
UDAAP. The CFPB reversed a policy
of restraint on enforcement of
UDAAP.
It issued Consumer Financial
Protection Circular 2022-04 in August
2022 on " Insufficient data protection
or security for sensitive consumer
information. " The content specifies
that inadequate security for sensitive
consumer information collected,
processed, maintained or stored
can constitute an unfair practice in
violation of UDAAP.
Data protection. In July, the
CFPB issued an advisory opinion,
" Protect Privacy When Companies
Compile Personal Data. " It makes
clear that credit reporting companies
and users of credit reports have
specific obligations to protect the
public's data privacy, and it reminds
covered entities of potential criminal
liability for certain misconduct.
Regulatory requirements
enacted in 2022
Several regulatory requirements
became effective as expected.
General Qualified Mortgage
(QM). On Oct. 1, 2022, the final rule
became effective after delay from the
original July 1, 2021, effective date.
Home Mortgage Reporting Act
(HMDA). Effective Jan. 1, 2022, the
temporary reporting threshold of 500
open-end lines of credit expired and
reverted to 200.
Computer-security incident
notification requirements.
The federal banking regulatory
agencies' (FDIC, Federal Reserve and
OCC) computer-security incident
notification rule went into effect
as expected this year. Community
banks now have a requirement to
notify their primary regulator no later
than 36 hours after they determine
that a notification incident has
occurred. Bank service providers
are also required to notify affected
banks if an incident could disrupt,
degrade or impair services for four or
more hours.
Evolving and stalled
regulatory requirements
Several more are still evolving or
appear to have stalled.
Third-party oversight. The
comment period for the federal
banking regulatory agencies' proposed
guidance on third-party oversight
ended in September 2021, and the
agencies had not issued final guidance
as of October 2022.
Small business loan reporting.
Section 1071 of the Dodd-Frank Act
(DFA) amended the Equal Credit
Opportunity Act (ECOA) to require
reporting of data for certain business
loans. In 2021, the CFPB issued
a notice of proposed rulemaking
(NPRM), and comments were due
Jan. 6, 2022. A final rule is expected
by March 31, 2023.
CRA. On May 5, 2022, the OCC,
Federal Reserve, and FDIC jointly
released an NPRM to strengthen
and modernize the Community
Reinvestment Act (CRA) regulations
to better achieve the purpose of the
CRA. The comment period ended
Aug. 5, 2022; however, no analysis
of the comments or final rule have
been announced.
Fair lending. HUD had proposed
to rescind its 2020 changes to the
Fair Housing Act (FHA) disparate
impact rule, reverting to the 2013
standard. At this time, banks are
still following the 2013 rule. At the
time of this writing, no further action
had been taken. There has been
anecdotal information regarding
the regulators' scrutiny of REMA
(Reasonably Expected Market Area)
for fair lending.
Credit reporting. Discussion has
continued about changes to the credit
reporting system, use of alternative
data, credit scoring and limits on
the uses of credit information. The
CFPB issued an interpretive rule
in July affirming states' abilities to
police credit reporting and issuing
their own fair credit report laws and
one regarding permissible purposes
for furnishing, using and obtaining
credit reports.
While few new requirements
were finalized in 2022, community
bankers should ensure their
implementation as needed and
continue to closely monitor other
evolving issues, including those now
published by the CFPB through less
customary vehicles. 
Mary Thorson Wright is a writer
in Virginia.
independentbanker.org Q 27
http://www.independentbanker.org
Independent Banker - December 2022

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