Independent Banker - January 2019 - 26

PORTFOLIO
has not successfully completed
its consumer identification and
verification process; application
of the rule's credit-related provisions
to digital wallets that are
capable of storing funds; certain
other clarifications and minor
adjustments; technical corrections;
and the extension of the
overall effective date to April 1,
2019. The agency released an
unofficial redline of the 2018
amendments to assist industry
and other stakeholders in
reviewing the changes the final
rule makes to its 2016 Prepaid
Accounts Final Rule.
Compliance with the prepaid
rule applied to prepaid accounts
beginning Oct. 1, 2017, and
prepaid account issuers were
required to submit all their prepaid
account agreements to the CFPB beginning Oct. 1,
2018. The scope of examinations in 2019 should begin to
cover the requirements.
With S.2155 passed, what next?
The bipartisan financial regulatory relief bill was signed
Keep your foot on the gas
Both Julia De France of RSM US LLP and Barbara
Boccia of Wolters Kluwer agree that a robust
approach to compliance in 2019 will benefit
community banks:
Q This is not the time to back off, regulatory reform
or not.
Q Focus on CMS soundness, policies, training,
change management and board involvement.
Q Look for parity among regulatory requirements,
bank policies and procedures, and actual
practices.
Q Watch for additional guidance on HMDA,
and a review and possible realignment of the
Community Reinvestment Act (CRA).
Q Sort out S.2155. What applies? Ask yourself,
" What must we do for compliance and beyond? "
into law May 24, 2018. Some
of its provisions were written
to take effect immediately,
while others have later specified
effective dates or are
open-ended, to be determined
by rule-making. Financial
institutions should carefully
review it in its entirety, which
includes compliance and much
more. The ICBA published a
comprehensive matrix to track
implementation of S.2155
provisions that affect community
banks.
Managing risk will be as
important, if not more important
than ever. Despite the bill's
name, community banks need
to be in sync with the focus on
risk management while staying
the course on technical
compliance, and it appears most have no false illusions.
In late 2018, Wolters Kluwer conducted a survey of 582
banks and credit unions. Despite the passage of S.2155,
62 percent of respondents indicated they don't anticipate
a likely reduction in regulatory burden.
" Consistent with the new examination rating system, "
De France forecasts, " expect more compliance management
system (CMS) focus from regulators as they move
from examinations less concentrated on technical data
and more on the change management process, implementation
plans, oversight sufficiency, training and the
testing/retesting process. "
Boccia emphasizes that enforcement actions have not
diminished, and community banks need to keep internal
controls strong for fair lending; Unfair, Deceptive,
or Abusive Acts or Practices Act (UDAAP); cybersecurity;
vendor management; complaints; and TILA-RESPA
Integrated Disclosure (TRID) management. She encourages
compliance officers to communicate in all directions
and to develop efficient, effective, clear and simple tools,
such as dashboards to enhance communications with
lines of business and the board of directors. Policies,
procedures, training and reporting must be institution-specific,
customized to products, services and the
bank's business model.
Mary Thorson Wright, a former Federal Reserve examiner, is
a financial writer in Virginia.
26 Q ICBA Independent Banker Q January 2019
Independent Banker - January 2019

Table of Contents for the Digital Edition of Independent Banker - January 2019
