Q2 Financial Regulations Recap: Blockchain, ECOA, OCC Updates & More

Financial Regulations

There’s no doubt about: Summer is in full swing! From the constant stream of “out of office” replies to the sweltering temps outside — it’s clear we’re in the heat of things. As Q2 comes to a close, we’re highlighting the top industry stories, from the implementation of the new BSA regulations to how blockchain is going to reshape the financial industry from the inside out. Get for the latest scoop below, and don’t forget to reach out with your questions — we’ll use your helpful insights to guide next quarter’s recap.

Q2 Financial Regulations Recap:

Check collections are about to change — dramatically.

The Federal Reserve Board rolled out a final amendment during the last week in May in Regulation CC (Availability of Funds and Collection of Checks), implementing an almost entirely virtual check collection process for the country. With new rules for collection, return, and creation, the updated electronic framework came into effect during the first week of July. In addition to this updated system, the Board requested additional general feedback from the public on Regulation CC, which touched on additional liability provisions.

Still finding ECOA rules difficult to manage? These tips will help.

When ECOA dropped new regulations in 2013, it was thanks to amendments made by Dodd-Frank to provide guarantees for applicants receiving information about their home value estimates. Even though we’re 5 years into the new rules, your financial institution may still be at risk for not complying with the paperwork requirements, loan offerings, and more. Get the 411 on staying up to date with ECOA guidelines here.

Dodd-Frank Revisions are coming…

If your bank or credit union has assets less than $10 billion, or over $50 billion, this bill will affect you.

Modifying provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), S. 1255 amendments are scheduled to take considerable time to reflect the required statutory changes. In the meantime, OCC comptroller Otting has advised all institutions under OCC supervision to verify with a regional OCC office that significant changes to internal and external systems are warranted under the provision of law before updating any framework.

Blockchain is going to change the game for financial institutions, starting now.

Let’s start from the beginning — so what’s blockchain?

“A blockchain is a database that is shared across a network of computers. Once a record has been added to the chain it is very difficult to change. To ensure all the copies of the database are the same, the network makes constant checks. Blockchains have been used to underpin cyber-currencies like bitcoin, but many other possible uses are emerging.”

Blockchain has been a buzzword since it was created to power Bitcoin in 2008, but even ten years later, there are still ways it’s shaking things up for banks and credit unions. Because of its innate characteristics as a decentralized, secure, and transparent currency, blockchain is aiming to reduce costs and lower settlement risk (and fraud) in future payment spaces. It’s also making waves in data management, giving authorized parties access to verify records and transaction information with smart contracts and blocks.

BSA implementation and customer due diligence rules are now in effect.

After issuing a final rule on the Bank Secrecy Act in May 2016, covered institutions were required to be compliant as of May 11, 2018, for verifying and identifying the actual persons behind institutions’ legal entity customers. Applying only to new accounts opened by legal entity customers — including LLCs, corporations, limited partnerships, trusts, and more — this rule requires that institutions collect data on any individual who owns 25% or more of the equity interest. Each legal entity is required to submit details including name, date of birth, address, social security number, and more, so that banks can access customer information and expected transactions.

Concerned about your financial institution’s risk in 2018? Here’s what you need to know.

Risk is an unavoidable part of business — we’re not telling you anything new. But in 2018 the risks are getting more technical, from emerging technology to updated FLSA regulations. Get the insider details on the compliance guidelines that will affect your institution this year, the company technology you need to ditch for good, and the industry resources that top appraisal management companies swear by (and you should too).

Still have questions on these recent financial regulations? We’re happy to help answer any questions you might have concerning residential or commercial appraisals, financial news, and more.