Page 12 - Compliance Monthly 10-7-2019

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Compliance News

NMLS

NMLS has launched a Temporary Authority to Operate web page on the NMLS Resource Center to help prepare for the November 24, 2019
implementation of this new legislation. The page will make it easy for industry to access a variety of Temporary Authority resources including educational
materials, policies and more. The Temporary Authority to Operate, streamlines the license application process for federally registered mortgage loan
originators (MLOs) seeking state licensure, and state-licensed MLOs seeking licensure in another state.

Source: NMLS; Publication Date September 4, 2019 https://mortgage.nationwidelicensingsystem.org/slr/common/Pages/Temporary-Authority-to-
Operate.aspx

CFPB Issues Policies to Facilitate Compliance and Promote Innovation

The Consumer Financial Protection Bureau (Bureau) today issued three new policies to promote innovation and facilitate compliance: the No-Action
Letter (NAL) Policy, Trial Disclosure Program (TDP) Policy, and Compliance Assistance Sandbox (CAS) Policy. The Bureau proposed the policies in 2018
and received public comments on each from a diverse array of stakeholders.
• Regulatory uncertainty can hinder the development of innovative products and services that benefit consumers. NALs provide increased
regulatory certainty through a statement that the Bureau will not bring a supervisory or enforcement action against a company for providing
a product or service under certain facts and circumstances. The NAL policy can be found at:
https://files.consumerfinance.gov/f/documents/cfpb_final-policy-on-no-action-letters.pdf. In addition, The HUD NAL may be found at:
https://files.consumerfinance.gov/f/documents/cfpb_HUD-no-action-letter.pdf
• Under the new TDP Policy, entities seeking to improve consumer disclosures may conduct in-market testing of alternative disclosures for a
limited time upon permission by the Bureau. The Dodd-Frank Act gives the Bureau the authority to provide certain legal protections for
entities to conduct trial disclosure programs, as outlined in the TDP Policy. The new policy streamlines the application and review process. The
TDP policy can be found at: https://files.consumerfinance.gov/f/documents/cfpb_final-policy-to-encourage-tdp.pdf
• The CAS Policy enables testing of a financial product or service where there is regulatory uncertainty. After the Bureau evaluates the product
or service for compliance with relevant law, an approved applicant that complies in good faith with the terms of the approval will have a “safe
harbor” from liability for specified conduct during the testing period. Approvals under the CAS Policy will provide protection from liability
under the Truth in Lending Act, the Electronic Fund Transfer Act, or the Equal Credit Opportunity Act. The CAS policy can be found at:
https://files.consumerfinance.gov/f/documents/cfpb_final-policy-on-cas.pdf

Source: CFPB; Publication Date September 10, 2019 https://www.consumerfinance.gov/about-us/newsroom/bureau-issues-policies-facilitate-
compliance-promote-innovation/

FDIC Examination Manual Updates

The FDIC has issued the following examination manual updates:
• Risk Management Manual of Examination Policies Section 3.2 Loan found at https://www.fdic.gov/regulations/safety/manual/index.html.
Changes include updated revised loan evaluation instructions, technical updates for accounting, appraisal thresholds, syndicated lending
instructions, and terminology updates.
• Compliance Examination Manual Sections IV-3.1 and V-6.1found at https://www.fdic.gov/regulations/compliance/manual/index.html.
Section IV-3.1 Fair Lending Scope and Conclusions Memorandum was revised to reflect changes to pre-examination interview questions and
information requests. Section V-6.1 Flood Disaster Protection was updated to incorporate the private flood insurance final rule’s provisions
pertaining to the mandatory and discretionary acceptance of private flood insurance by financial institutions.

Source: FDIC; Publication Dates September 2019

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