Product Updates for February 2023
The Product Updates for February 2023 from BankPolicies.com feature the following revised policy template products:
Bank Secrecy Act Policy Template – Comprehensive Version
Office of Foreign Assets Control Policy Template
The update to these products is in response to OFAC’s Final Rule entitled “Inflation Adjustment of Civil Monetary Penalties” dated 01/12/23 that adjust certain civil monetary penalties for inflation pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The final rule is effective 01/13/23.
BSA Suspicious Activity Report Notices Template
The update to this product is in response to:
- FinCEN Alert FIN-2023-Alert001 entitled “FinCEN Alert on Human Smuggling Along the Southwest Border of the United States” dated 01/13/23 to better aid financial institutions in the detection of financial activity related to human smuggling along the U.S. southwest border (“SW border”). Human smugglers engage in the crime of transporting people across international borders through deliberate evasion of immigration laws, often for financial benefit. Human smuggling can endanger lives and have devastating consequences because criminal organizations involved in human smuggling value profit over human life. This alert builds upon FinCEN’s previous 2014 and 2020 human smuggling and human trafficking advisories, while providing trends and typologies specifically related to human smuggling occurring along the SW border. This alert also provides red flag indicators to help financial institutions better identify transactions potentially related to human smuggling and reminds financial institutions of their Bank Secrecy Act (BSA) reporting obligations. It further supports ongoing initiatives by the U.S. Government to combat human smuggling and human trafficking. Human smuggling and human trafficking are also included in FinCEN’s anti-money laundering and countering the financing of terrorism priorities (AML/CFT) published in June 2021.
- FinCEN Alert FIN-2023-Alert002 entitled “FinCEN Alert on Potential U.S. Commercial Real Estate Investments by Sanctioned Russian Elites, Oligarchs, and Their Proxies” dated 01/25/23 to alert all financial institutions regarding potential investments in the U.S. commercial real estate (CRE) sector by sanctioned Russian elites, oligarchs, their family members, and the entities through which they act (collectively, “sanctioned Russian elites and their proxies”). In March 2022, FinCEN issued an alert on the risk of sanctions evasion by sanctioned Russian elites and their proxies involving high-value assets, including both residential and commercial real estate. This alert specifically highlights sanctions evasion-related vulnerabilities in the CRE sector and is based on a review of Bank Secrecy Act (BSA) reporting indicating that sanctioned Russian elites and their proxies may exploit them to evade sanctions.
As a reminder, the BSA Suspicious Activity Report Notices Template is included in the purchase price of the Bank Secrecy Act Policy Template – Comprehensive Version.
Fair Housing Act Policy Template
The update to these products is in response to the OCC Bulletin 2023-2 entitled “Fair Lending: Revised Comptroller’s Handbook Booklet and Rescissions” dated 01/12/23 that announced the issuance of version 1.0 of the “Fair Lending” booklet of the Comptroller’s Handbook. This booklet provides information and examination procedures to assist examiners in assessing fair lending risk and evaluating compliance with the Fair Housing Act, Equal Credit Opportunity Act, and Regulation B – the consumer protection regulation that implements the Equal Credit Opportunity Act. In addition, the revised booklet replaces the booklet of the same title issued in January 2010. Also rescinded is OCC Bulletin 2010-4, “Compliance Policy: Fair Lending – Revised Booklet,” which transmitted the prior version of this booklet.
Human Resources General Policy Template
Human Resources Vacation Policy Template
The update to these products is in response to client requests that we incorporate mandatory paid time off (PTO) for officers and employees involved or engaged in transactional business, have the ability to change the official records of the Bank, or who perform trading activities on behalf of the Bank, and who are capable of influencing or causing such activities to occur.
Other Real Estate Owned Policy Template
The update to this product is in response to the revised FDIC’s “Risk Management Manual of Examination Policies” dated 02/02/23 that announced an update to Section 3.6 – Other Real Estate. The updated section includes revisions for relevant accounting changes related to foreclosed real estate, with a focus on sell-financed other real estate, as well as other technical edits.
The update to this product is in response to the Federal Reserve’s Final Rule entitled “Regulation A: Extensions of Credit by Federal Reserve Bank” dated 02/08/23 that announced final amendments to its regulations to reflect the Federal Reserve Board’s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board’s primary credit rate action.
The amendments to part 201 (Regulation A) are effective February 8, 2023. The rate changes for primary and secondary credit were applicable on February 2, 2023.
The update to this product is in response to the Federal Reserve’s Final Rule entitled “Regulation A: Extensions of Credit by Federal Reserve Bank” dated 01/13/23 that announced final amendments to its regulations to reflect the Federal Reserve Board’s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board’s primary credit rate action.
The amendments to part 201 (Regulation A) are effective January 13, 2023. The rate changes for primary and secondary credit were applicable on December 15, 2022.
The update to this product is in response to the Federal Reserve’s Final Rule entitled “Regulation D: Reserve Requirements of Financial Institutions” dated 02/08/23 that announced final amendments to its regulations to revise the rate of interest paid on balances (“IORB”) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORB is 4.65 percent, a 0.25 percentage point increase from its prior level. The amendment is intended to enhance the role of IORB in maintaining the federal funds rate in the target range established by the Federal Open Market Committee (“FOMC” or “Committee”).
The amendments to part 204 (Regulation D) are effective February 8, 2023. The IORB rate change was applicable on February 2, 2023.
The update to this product is in response to the Federal Reserve’s Final Rule entitled “Regulation D: Reserve Requirements of Financial Institutions” dated 01/13/23 that announced final amendments to its regulations to revise the rate of interest paid on balances (“IORB”) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORB is 4.40 percent, a 0.50 percentage point increase from its prior level. The amendment is intended to enhance the role of IORB in maintaining the federal funds rate in the target range established by the Federal Open Market Committee (“FOMC” or “Committee”).
The amendments to part 204 (Regulation D) are effective January 13, 2023. The IORB rate change was applicable on December 15, 2022.
Unfair, Deceptive, or Abusive Acts or Practices Policy Template
The update to this product is in response to the CFPB’s Circular 2023-01 entitled “Unlawful Negative Option Marketing Practices” dated 01/19/23 that announced a new circular affirming that companies offering “negative option” subscription services must comply with federal consumer financial protection law. Negative option programs include subscription services that automatically renew unless you affirmatively cancel, and trial marketing programs that charge a reduced fee for an initial period and then automatically begin charging a higher fee.
Companies risk violating the law if they do not clearly and conspicuously disclose the terms of their subscription services and obtain your informed consent, or if they make it unreasonably difficult for you to cancel.
The circular continues the CFPB’s focus on raising awareness about the growing scourge of dark pattern practices (design features used to deceive, steer, or manipulate users) and other harmful tactics that companies use to trick consumers into paying for products or services they do not want. The CFPB is partnering with the Federal Trade Commission (FTC) in its effort to combat the rise of digital dark patterns, and both agencies will continue to monitor these practices and bring agency actions where needed.
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