Archive

PREPAID ACCOUNTS – EXAMINATION PROCEDURES

The Federal Deposit Insurance Corporation has released examination procedures for Prepaid Accounts to incorporate the Consumer Financial Protection Bureau’s (CFPB) amendments to Regulation E and Regulation Z. The examination procedures may be helpful to financial institutions seeking to better understand how examiners will evaluate an institution’s compliance with the prepaid account rule.. On October 3, 2016, the CFPB published its Final Rule for Prepaid Accounts to create comprehensive consumer protections for prepaid accounts. Specifically, the […]

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COMPLIANCE RISK – READING BUT NOT ACTING

In late 2017 the FDIC’s Dallas Region Quarterly Newsletter contained an article entitled Automated Overdraft Program and One-Time Debit and ATM Opt-In Procedure Considerations. The article described a situation observed in several examinations regarding overdraft programs and the interplay with Regulation E opt-in requirements. The well-written article concluded with the following admonition, “If you self-identify violations or potential issues described in this article, management should immediately modify procedures to prevent consumer harm, identify any customers […]

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USAA ENFORCEMENT ACTION

When a big bank gets hit with a big penalty I often find that community banks think it is a “big bank thing” that does not impact community banks. Big banks make the same mistakes as community banks but they do it on a bigger scale. The recent settlement between the Consumer Financial Protection Bureau (CFPB) and USAA Federal Savings Bank (USAA) is a good case in point. The CFPB found that USAA: Violated the […]

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CFPB DELAYS PREPAID ACCOUNTS RULE

On January 25, 2018 the Consumer Financial Protection Bureau (CFPB) announced  final updates to its 2016 prepaid rule. The changes extend the effective date of the rule by one year to April 2019. The changes to Regulations E and Z: Adjust error resolution requirements; and Provide more flexibility concerning credit cards linked to digital wallets. Read more: https://www.jackscomplianceresource.com/prepaid-rule-lives-to-fight-another-day/ https://www.jackscomplianceresource.com/effective-date-of-prepaid-account-rule-delayed/ https://www.jackscomplianceresource.com/prepaid-rule-takes-a-much-needed-pause/ https://www.jackscomplianceresource.com/prepaid-accounts-just-got-kicked-up-to-the-consumer-protection-suite/ A copy of the 325 page final rule is available at:  https://files.consumerfinance.gov/f/documents/cfpb_prepaid_final-rule_2018-amendments.pdf […]

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CFPB’s ANNOUNCEMENT ON OVERDRAFT PROTOTYPES AND THEIR AFFECT ON YOUR BANK

Very early Friday morning the CFPB sent another shot across the bow regarding overdraft accounts that likely are a forerunner to upcoming rules on automated overdrafts which will cover check and ACH transactions.   The CFPB has been in testing mode for a few years now and as part of that testing has been obtaining customer feedback as to the clarity of a variety of overdraft disclosures. Director Cordray stated the bureau is not proposing any […]

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