About the 2019.1 Updates
This package contains materials required to update your Wolters Kluwer Deposit Account Manual (Laws & Regulations Affecting Deposit Accounts). Please update promptly, following the installation instructions below.
Wolters Kluwer is committed to keeping you informed on all the latest regulatory changes. Wolters Kluwer will continue to distribute one update each year, usually in November or December.
Significant Compliance Change
Effective September 17, 2018, the CFPB amended Regulation P, 12 CFR Part 1016, which requires among other things that financial institutions provide an annual notice describing their privacy policies and practices to their customers. The Regulation P amendment implements a statutory amendment to the GLBA (Section 503(f)), that provides an to exception to this annual notice requirement for financial institutions that meet certain conditions.
As part of its implementation, the CFPB also amended Regulation P to provide timing requirements for delivery of the annual privacy notices if a financial institution that qualified for the notice exception later changes its policies or practices in a way that it now no longer qualifies for the exception. The CFPB further removed the Regulation P provision that allowed for use of the alternative delivery method for the annual privacy notices.
We have updated the “Notice requirements” sub-section to reflect the amendments to Regulation P in the Federal Financial Privacy Laws chapter in the Ongoing Responsibilities section of the Manual.
On June 24, 2019, the CFPB and the Federal Reserve Board jointly announced a final rule amending Regulation CC. The Final Rule implements changes based on their 2018 proposal, which includes the five (5) year periodic COLA adjustments required by the Dodd-Frank Act, as well as certain amendments made by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).
The non-EGRRCPA changes include the adjustments of several dollar amounts incorporated into Subpart B of Regulation CC that go into effect July 1, 2020. The changes also include a schedule for future COLA adjustments. The second round of COLA changes will be effective July 1, 2025 and they will re-occur every five (5) years thereafter. The dollar amounts for the changes effective July 1, 2020, are: the $200 rule (formerly the $100 rule) under Sec.229.10(c) – changing to $225; the $400 cash-withdrawal rule under Sec. 229.12(d) – changing to $450; the $5,000 new account threshold under Sec. 229.13(a) – changing to $5,525; the $5,000 large deposit threshold under Sec. 229.13(b) – changing to $5,525; and the $5,000 threshold for determining a repeat overdraft under Sec. 229.13(d) (2) – changing to $5,525.
The EGRRCPA amendments made to Regulation CC include extending coverage of the Expedited Funds Availability Act, which is implemented by Regulation CC, to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam. These changes became effective September 3, 2019.
The details of the Final Rule have been incorporated into the Introduction, Availability Time Limitations, Section 13 Safeguard Exceptions, Case-By-Case Exceptions, and Regulation CC Exercises sections in the Ongoing Responsibilities Toward The Account Holder Under Regulation CC (Funds Availability) chapter in the Ongoing Responsibilities section of the Manual. The details of the Final Rule have also been incorporated into the Regulation CC – Funds Availability Disclosures chapter in the Account-Opening Responsibilities section of the Manual.
New Topic of Interest
Notable New State Privacy Law
Under this new topic we have provided a general overview of the California Consumer Privacy Act of 2018 and indicated some of the Act’s provisions you may find particularly notable. This law’s requirements are effective January 1, 2020. This new topic is found in “The relationship between the privacy regulations and other laws” section in the Federal Financial Privacy Laws chapter in the Ongoing Responsibilities section of the Manual.
Notable Section Revisions
Agency Guidance Regarding Informal Overdraft Protection
Due to recent litigation trends and marketplace regulatory reports, we have expanded our coverage of federal agency guidance regarding informal overdraft payment programs, including best practices. The FDIC is particularly concerned about risks posed by automated overdraft payment programs that are used by supervised institutions to determine whether non-sufficient fund transactions qualify for overdraft coverage based on pre-determined criteria. On June 13, 2019, the FDIC issued a new publication, Consumer Compliance Supervisory Highlights. In this publication the issue of “Overdraft Programs: Debit Cards Holds and Transaction Processing” was among the most salient issues the FDIC had observed in their 2018 examinations. Particular concern was expressed about overdraft programs that used an “available balance” method to determine when overdraft fees could be assessed instead of using a “ledger balance” method. The concerns raised by the FDIC are also consistent with articles released by the Consumer Financial Protection Bureau and the Federal Reserve. In addition to expanding our agency guidance, we have also included reference to recent case law you may want to review. This expanded coverage is found in the Overdraft Protection section in the Postdated Checks and Overdraft Protection chapter in the Ongoing Responsibilities section of the Manual.