Each quarter, our financial institutions experts bring you the top headlines to keep you updated on regulatory compliance matters impacting banks and credit unions. Here’s the latest roundup of information you need to know.
The topics covered in this update include:
- Lending compliance
- Deposit compliance
- Other compliance
- Financial crimes, including anti-money laundering/countering the financing of terrorism
Lending compliance
CFPB Final Rule: FCRA medical information
The Consumer Financial Protection Bureau (CFPB) issued a final rule on Jan. 7, 2025, which removes the exception under Regulation V (which implements the Fair Credit Reporting Act, FCRA), that previously permitted creditors to obtain or use medical information, including medical debt information, in connection with credit eligibility determinations. The rule also revises the current exceptions for using medical information in determining credit eligibility and restricts the conditions under which consumer reporting agencies can share medical debt details with creditors for credit eligibility determinations. The final rule is effective 60 days from publication in the Federal Register.
Deposit compliance
CFPB Proposed Rule: Electronic Fund Transfer Act
The CFPB’s proposed rule published on Jan. 10, 2025, addresses electronic fund transfers through accounts established primarily for personal, family, or household purposes using emerging payment mechanisms, including digital assets. The rule aims to enhance consumer protections under the Electronic Fund Transfer Act (Regulation E). The proposed interpretive rule wouldn’t impose new or revised recordkeeping, reporting, or disclosure requirements, but aims to provide guidance to ensure compliance with EFTA and Regulation E, particularly in light of the growing interest in offering new types of products for transferring funds and making purchases through consumer accounts.
Other compliance
CFPB Proposed Rule: Prohibited terms and conditions in agreements for consumer financial products or services (Regulation AA)
The CFPB issued a proposed rule on Jan. 13, 2025, to prohibit certain contractual provisions in agreements for consumer financial products or services. This proposal would prevent covered persons from including terms that waive substantive consumer legal rights and protections granted by state or federal law. It would also prohibit contract terms that limit free expression, such as threats of account closure, fines, or breach of contract claims. Additionally, the proposal aims to codify longstanding prohibitions under the Federal Trade Commission’s (FTC) Credit Practices Rule. This would ensure that consumers retain their legal rights and protections and are not subjected to unfair or deceptive contract terms.
FDIC withdraws four outstanding proposed rules
On March 3, 2025, the Federal Deposit Insurance Corporation (FDIC) withdrew four proposed rules from consideration. The rules included:
- The proposal published in August 2024 that would significantly revise the regulations in part 303 and 337 with brokered deposits.
- The proposal published in October 2023 that would have established a number of prescriptive and process-oriented expectations for management and boards of directors of FDIC-supervised institutions with $10 billion or more in total consolidated assets.
- The proposal published in August 2024 that would amend part 303 of the filing requirements and processing procedures for notices filed under the Change in Bank Control Act.
- The proposal issued in May 2024 that would implement Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act regarding incentive-based compensation arrangements.
OCC removes references to reputation risk and discontinues reputation risk examinations
The Office of the Comptroller of the Currency (OCC) has started removing references to banks’ reputation risk from its Comptroller’s Handbook and guidance issuances. Examiners are instructed to no longer examine for reputation risk, which applies to community banks as well. The OCC has historically focused on risks to a bank’s financial condition and resilience from negative public opinion, rather than using reputation risk as a catch-all justification for supervisory action. The OCC believes this change will improve transparency and confidence in the supervisory process. For jointly issued handbooks and guidance, the OCC will work with other regulators to remove references to reputation risk.
Financial crimes, including anti-money laundering/countering the financing of terrorism
FinCEN removes beneficial ownership reporting requirements for U.S. companies and U.S. persons, sets new deadlines for foreign companies
The Financial Crimes Enforcement Network (FinCEN) has issued an interim final rule removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI). The definition of “reporting company” now includes only foreign entities registered to do business in the United States. Domestic entities and their beneficial owners are exempt from BOI reporting. Foreign entities must report BOI under new deadlines but aren’t required to report U.S. persons as beneficial owners. Foreign entities registered before the rule’s publication must file BOI reports within 30 days, while those registered after have 30 days post-registration to file. FinCEN is accepting comments on this rule and plans to finalize it this year.
