Independent Banker - January 2024 - 27

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review the feedback to develop a
data collection framework going
into 2024.
The Corporate Transparency
Act requires businesses to report
ownership data directly to FinCEN,
notes Rhonda Thomas-Whitley, ICBA
senior vice president and senior
regulatory counsel. " It's important
to remember that community banks
must continue beneficial ownership
data collection as it stands unless
rules are published that would
change requirements.
" We do have concerns that FinCEN
will require banks to help fulfill
FinCEN's statutory duties, " she adds.
A continued focus on fees is likely
in 2024, and community banks
should watch how the regulatory
agencies are treating them. Banks
must remain attentive to that and be
prepared to respond with comments,
especially once proposed rulemaking
on overdrafts has been announced.
" We've seen evidence that
UDAAP/UDAP is being used by
regulators to cite banks for assessing
legally and clearly disclosed fees on
consumer-demanded products and
services, " says Thomas-Whitley.
" Disclosures may be timely,
accurate and complete, but regulators
have made clear that UDAAP/UDAP
violations may be cited because it's
perceived that the consumer did not
have the opportunity to reasonably
avoid harm. "
The community bank view
Community bankers are staying
nimble to address the evolving
regulatory landscape. " I had three
main compliance issues for 2024, "
says Tim Grooms, vice president and
chief risk officer for $922 millionasset
First State Bank headquartered
in Winchester, Ohio.
" One is Section 1071. We worked
with our vendor for HMDA and
" It's important to remember
that community banks must
continue beneficial ownership
data collection as it stands
unless rules are published that
would change requirements. "
-RHONDA THOMAS-WHITLEY, ICBA
CRA data collection, scrubbing and
reporting, " he says. " We feel ready to
turn on the module to begin testing
when the time comes, and we've
begun working on loan operations
systems. We've already done some
training and combined it with CRA
training to help prepare our staff. "
Some of the federal regulators
have had UDAAP findings due to
nonsufficient funds (NSF) fees, and
Grooms is closely watching the issue
of those and " junk " fees. " We've had
an overdraft program for some time, "
he says. " We've now re-disclosed the
fee schedule to all our customers and
added language in bold font that we
would charge a fee on a represented
item; however, disclosure alone may
not now be sufficient to protect the
bank from UDAAP violations.
" We feel confident about our
compliance with the beneficial
ownership rule from FinCEN so far, "
he adds. " What is still in question
is FinCEN's database development,
having businesses submit
registrations to them directly after
Jan. 1 of 2024 and then the bank's
responsibilities. "
Keeping focus
Jamie Santistevan, senior vice
president of risk and compliance for
$273 million-asset Native American
Bank, N.A., is staying alert to support
risk management and compliance.
" First, we're watching changes to
the beneficial ownership reporting
rules from FinCEN, " he says.
" We're concerned about a lack of
specific guidance to both banks and
businesses clarifying data collection
and reporting requirements. "
The Denver-based community bank
is staying focused on cybersecurity
and third-party risk management.
" We also strive to smoothly
orchestrate change management, " he
adds, " whether that would be changes
to our management team, operations,
the risk management framework or
business activities. "
Santistevan notes there's concern
surrounding the uncertainty about
data collection for Section 1071
implementation. " We're geared up
and ready from the application and
software standpoints for what we
know now, " he says.
" Section 1033 to require banks
to provide customers with their
financial data in a specific digital
format could be a challenge to
operational capabilities and cost
management. Larger institutions
may be able to absorb those changes
and costs much more easily than
smaller institutions. "
Mary Thorson Wright is a writer
in Virginia.
independentbanker.org // 27
http://www.independentbanker.org
Independent Banker - January 2024

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