Consumer Financial Protection Bureau (CFPB) 

CFPB Addresses Inaccurate Background Check Reports and Sloppy Credit File Sharing Practices 

The CFPB issued guidance to consumer reporting companies to address inaccurate background check reports, as well as sloppy credit file sharing practices. The two advisory opinions seek to ensure that the consumer reporting system produces accurate and reliable information and does not keep people from accessing their personal data. First, an advisory opinion on background check reports highlights that those reports must be complete, accurate, and free of information that is duplicative, outdated, expunged, sealed, or otherwise legally restricted from public access. Second, an advisory opinion on file disclosure highlights that people are entitled to receive all information contained in their consumer file at the time they request it, along with the source or sources of the information contained within, including both the original and any intermediary or vendor source. 

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Federal Trade Commission (FTC) 

Proposed Amendments to COPPA 

The FTC is proposing to amend existing Children’s Online Privacy Protection Act (COPPA) rule requirements. The proposed modifications are intended to respond to changes in technology and online practices, and where appropriate, to clarify and streamline the Rule. The proposed changes focus on several areas including: 

• Communications 

• Computer technology 

• Consumer protection 

• Infants and children, internet 

• Privacy 

• Reporting and recordkeeping requirements 

• Safety 

• Science and technology 

• Trade practices 

• Youth 

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Financial Crimes Enforcement Network (FinCEN) 

FinCEN Report Examines Suspicious Activity Tied to Identity-Related Suspicious Activity 

FinCEN issued a Financial Trend Analysis on information linked to identity-related suspicious activity in Bank Secrecy Act (BSA) reports filed in calendar year 2021. FinCEN’s analysis found that approximately 1.6 million reports (42% of the reports filed that year) related to identity—indicating $212 billion in suspicious activity. 

The report, which is part of what FinCEN has previously referred to as its Identity Project, explores how bad actors exploit identity-related processes involved in processing transactions as well as opening and accessing accounts. FinCEN identified over 14 typologies commonly indicated in identity-related BSA reports. The most frequently reported were fraud, false records, identity theft, third-party money laundering, and circumvention of verification standards. These top five typologies accounted for 88% of identity-related BSA reports and 74% of the total identity-related suspicious activity amount reported during calendar year 2021. 

Trends found in the BSA reporting include: 

• Although identity-related suspicious activity impacted all types of financial institutions, depository institutions filed the most identity-related BSA reports, around 54% of all identity-related filings. 

• While most financial institutions in the identity-related BSA dataset reported impersonation as their top identity exploitation, money services businesses most often reported circumvention of verification. 

• The report found that compromised credentials have a disproportionate financial impact as compared to other types of identity exploitation. 

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Washington State Department of Financial Institutions Division of Credit Unions (DCU) 

Initiatives and Exam Focus for 2024 

The WA DCU released the Division’s Initiatives and Exam Focus for 2024. Top areas of exam focus include: 

• Liquidity Risk 

• Earnings Risk 

• Interest Rate Risk 

• Consumer Compliance 

• Information Security & Technology 

League InfoSight Highlight: Annual Threshold Changes and MORE 

HAPPY NEW YEAR!!! We are so very excited for 2024 and all the changes that we plan to bring to our credit unions! Be on the lookout for more information on our plans and innovations for the year. 

A new year also brings new thresholds changes for all the regulations tied to the consumer price index. Below is a summary of the changes, which have already been incorporated into both CU PolicyPro and InfoSight. 

Regulation Z – Appraisals for HPMLs Exemption Threshold is reviewed each year and is typically adjusted based on inflation. HPMLs under this threshold are not required to have an appraisal conducted under the rules. The loan amount for 2024 increased to $32,400. 

Regulation Z – High-Cost Mortgage Loan Fee Threshold. Credit unions originating a high-cost mortgage have loans with points and fees that exceed thresholds established by the CFPB. These are adjusted annually. Effective on January 1, 2024, a transaction is high-cost if its points and fees exceed:  

a. 5% of the total loan amount for a loan greater than or equal to $26,092. 

b. 8% of the total loan amount or $1,305 (whichever is less) for a loan amount less than $26,092. 

Regulation Z – Qualified Mortgage Thresholds. Under the ability to repay rules, credit unions are provided with a safe harbor if they originate a qualified mortgage. Among other criteria, the loan is considered a qualified mortgage if the loan’s points and fees are below certain thresholds. Those thresholds are adjusted annually. Effective on January 1, 2024: 

In addition, for the “general qualified mortgage” category, the loan’s APR cannot exceed the threshold over the APOR for a comparable transaction as of the date by which the interest rate is set: 

• 2.25% or more for a first-lien loan with an amount greater than or equal to $130,461; 

• 3.5% or more for a first-lien loan with an amount equal to $78,277 but less than $130,461;
  

• 6.5% or more for a first-lien loan with an amount less than $78,277;
  

• 6.5% or more for a first-lien loan secured by a manufactured home with a loan amount less than $130,461;
  

• 3.5% or more for a subordinate-lien loan with an amount greater than or equal to $78,277; or
  

• 6.5% or more for a subordinate-lien loan with an amount less than $78,277.
   

IRS – Health Savings Accounts (HSA) Contribution Limits. These limits are adjusted by the IRS annually. Credit unions should ensure contributions to HSAs do not exceed these limits. For January 1, 2024, contributions must be no more than $4,150 for an individual plan and $8,300 for a family plan. This is an increase from 2023. 

Regulation M – Consumer Leasing. The threshold for determining if a contract is considered a consumer lease is adjusted annually. The amount will increase from the prior year for 2024 to $69,500.  

Regulation Z – Asset Size Exemption. There is a threshold change for credit unions that qualify for an exemption to the requirement for establishing an escrow account for higher-priced mortgage loans (HPMLs). This asset size threshold is $2.640 billion for 2024. Credit unions under this asset size and that meet other criteria, may be exempt from this requirement. 

Regulation C – Home Mortgage Disclosure Act Asset Size Exemption Threshold is $56 million for 2024. Credit unions are exempt from the HMDA reporting requirements if they have assets below this threshold.  

Regulation D – Reserve Requirements of Depository Institutions have been updated for 2024, even though the reserve ratios are still set at zero. 

Glory LeDu 

CEO, League InfoSight and CU Risk Intelligence 

Whether you are a federal or state-chartered credit union, there are state laws that impact your operations. The most efficient and quickest way to find those laws is through InfoSight. This member benefit provides you with access to applicable state content for all 50 states, without you needing to search through tons of random online sources. Stop wasting time trying to research when InfoSight has aggregated all the information your credit union needs to stay compliant in an ever-changing and evolving federal and state environment. 

Otsuka Sworn in as 25th NCUA Board Member 

FTC to Host Virtual Summit on Artificial Intelligence 

FinCEN Paycheck Protection Program (PPP) FAQs 

IRS Free File Now Available 

IRS Provides Initial Guidance to Employers Setting Up Emergency Savings Accounts for Their Employees 

Tracking the First Winter Storms of the Year? So Are Scammers 

WA DRI Issues Policy Statement and Consumer Alert to Increase Consumer Awareness of Scams Involving Virtual Currency Kiosks 

Are You Buying a New Home or Refinancing? Please Read This First! 

Jan 22, 2024: Comments Due FinCEN Proposed Rule on CVC Mixer Reporting 

Feb. 12, 2024: Comments Due FRB Interchange Proposal 

Feb 20, 2024: Effective Date FinCEN BOI Access Rule 

Mar 11, 2024: Comments Due FTC Proposed COPPA Changes 

May 27, 2024: Memorial Day – Federal Holiday 

We have a beneficiary on a Representative Payee account who has come in and requested a loan. What do we do? Can they use the SSI payments this way? 

The first thing to remember is that the beneficiary does not have access to the money in the Representative Payee account.  The rep payee does not have any requirement to make the payments, and you cannot compel them to do so.  Even if the rep payee said they would make the payments, they could change their mind or a new rep payee could be assigned by the Social Security Administration. 

The rep payee is to use the money in the account to make sure the beneficiary's day-to-day needs for food and shelter are met.  Then, the money can be used for any of the beneficiary's medical and dental care that is not covered by health insurance, and for personal needs, such as clothing and recreation.  If there is money left after the rep payee pays for the beneficiary's needs, it must be saved. 

So, the money from the SSA really should not be used for consideration when underwriting the loan.  If the beneficiary has any other income source, that can be used for making payments. 

For your individualized login, select your state below. 

If you have questions about this communication, contact us at 800.546.4465, or via our shared email inbox at compliance@gowest.org.

Have a great week!

Your GoWest Compliance Team, 

Copyright © 2023 GoWest Credit Union Association. All Rights Reserved.

Mailing Address:
GoWest Credit Union Association, 18000 International Blvd Ste. 1102, SeaTac, WA 98188, United States
1.800.995.9064

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