Weekly Fintech Focus

  • FFIEC updates the BSA/AML Examination Manual.
  • FFIEC releases APR and APY computational tools.
  • State AGs request CFPB Director to withdraw COVID‑19 credit reporting guidance.
  • RevenueWire settles FTC charges for $6.75 million.
  • Delaware check seller and money transmitter license required to transition to NMLS.
  • SBA releases PPP Loan FAQ for borrowers and lenders.
  • The Fed removes savings deposit account withdrawal restrictions.

FFIEC Updates the BSA/AML Examination Manual

The Federal Financial Institutions Examination Council (FFIEC) released several updates to the Bank Secrecy Act/Anti-Money Laundering Examination Manual. The premise of the updates was to draw a clear distinction between mandatory regulatory requirements and supervisory expectations.

The four key areas that the updates focused on include clarity on: (1) risk-focused BSA/AML supervision, examination procedures, and examination planning; (2) risk assessments and related examination procedures; (3) compliance program assessment, internal controls, independent testing, training, and compliance officer requirements; and (4) the formulation of conclusions about the adequacy of the BSA/AML compliance program relative to its risk profile.

Notably, the members of the FFIEC, which include the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the State Liaison Committee, stated that the updates to the manual should not be interpreted as new requirements or areas that will see an increase in scrutiny.

The FFIEC Released APR and APY Computational Tools

The FFIEC released two computational tools for calculating annual percentage rates (APR) and annual percentage yields (APY). Financial institutions can leverage these tools to ensure compliance with consumer protection laws and regulations.

State AGs Request CFPB Director to withdraw COVID‑19 Credit Reporting Guidance

The Attorneys General (AGs) from 21 states and territories sent a letter to the Director of the Consumer Financial Protection Bureau (CFPB) requesting that the CFPB withdraw its April 1, 2020, guidance regarding decreased enforcement efforts of certain requirements under the Fair Credit Reporting Act (FCRA) during the COVID‑19 crisis.

The AGs assert that American consumers must be fully equipped to reenter the market if the U.S. hopes to have a quick economic recovery and that the status of Americans’ credit reports will be vital to ensuring strong participation in the economy.

The AGs believe that the CFPB’s guidance will discourage consumers from taking advantage of forbearances and other accommodations that lenders are offering, that credit reporting agencies will ignore the 30-day statutory timeline to investigate disputes, and that scams will increase in prevalence.

RevenueWire Settles Scam Charges with FTC for $6.75 Million

 RevenueWire, a Canadian company, settled charges with the Federal Trade Commission (FTC) that they laundered credit card payments for, and assisted and facilitated, two tech support scams.

The FTC alleged that RevenueWire laundered payments by entering into contracts with payment processors to obtain merchant accounts to process credit card charges for its own sales of eBooks and software. Among other things, these contracts prohibited RevenueWire from submitting third-party sales through its merchant accounts. However, the FTC alleged that RevenueWire used its account to process and collect payments from consumers on behalf of Inbound Call Experts, LLC and Vast Tech Support, LLC that have allegedly used tech support scams in the past.

In addition to paying $6.75 million, RevenueWire and its CEO are permanently banned from any further payment laundering or violations of the Telemarketing Sales Rule, in addition to other enhanced screening and monitoring measures of high-risk clients.

Delaware Check Seller and Money Transmitter License Required to Transition to NMLS

Companies that conduct sale of checks or money transmission activities in Delaware must now submit their licensing application through the NMLS. Additionally, companies currently holding a Sale of Check and Transmission of Money License in Delaware are required to submit a license transition request through NMLS by filing an MU1 for the company and an MU2 for each control person no later that June 15, 2020.

SBA Releases PPP Loan FAQ for Borrowers and Lenders

The Small Business Administration (SBA), in consultation with the U.S. Department of the Treasury, released FAQs on the Paycheck Protection Program Loans initiative put in place in response to the COVID‑19 crisis. The FAQs provide guidance and clarity on several topics under the PPP Interim Final Rule, in addition to various qualification and eligibility metrics. It also covers select procedural and regulatory requirements relating to a borrower’s loan application and the ability for a PPP loan to be sold on a secondary market.

Notably, the SBA stated that borrowers and lenders alike may rely on the guidance provided in the FAQs and guidance previously provided in the PPP Interim Final Rule. The SBA also stated that the U.S. government will not challenge lender PPP actions that conform with such.

The Fed Removes Savings Deposit Account Withdrawal Restrictions

On April 23, the Board of Governors of the Federal Reserve System (the Fed) amended Regulation D to remove the numeric limits on certain kinds of transfers and withdrawals that may be made each month from savings deposit accounts. The Fed’s intent is to enable customers of depository institutions to have more convenient access to their funds and to simplify account administration for depository institutions. This amendment does not result in any mandatory changes to deposit reporting.

Prior to the amendment to Regulation D, certain kinds of transfers or withdrawals from a savings deposit account were limited to six transfers per month. Now, customers can conduct an unlimited number of transfers and withdrawals from their savings deposits. Notably, however, the change does not require depository institutions to forego enforcing a six-transfer limit, as the new rule merely removes the limitation.

The Fed has posted FAQs addressing several topics related to this change that it will update from time to time.