Product Updates for October 2019
The Product Updates for October 2019 from BankPolicies.com feature the following revised policy template products:
The update to this product is in response to the Joint Press Release entitled “Agencies Issue Final Rule to Exempt Residential Real Estate Transactions of $400,000 or Less from Appraisal Requirements” dated 09/27/19 that announced a final rule that increases the threshold for residential real estate transactions requiring an appraisal from $250,000 to $400,000. The portions of the rule increasing the appraisal threshold are effective on October 9, 2019.
The appraisal threshold was last changed in 1994. Given price appreciation in residential real estate transactions since that time, the change will provide burden relief without posing a threat to the safety and soundness of financial institutions.
For transactions exempted from the appraisal requirement, the final rule requires institutions to obtain an evaluation to provide an estimate of the market value of real estate collateral. Evaluations are generally less burdensome than appraisals and have been required since the 1990s.
The final rule incorporates the appraisal exemption for rural residential properties provided by the Economic Growth, Regulatory Relief, and Consumer Protection Act and similarly requires evaluations for these transactions. The final rule also requires institutions to review appraisals for compliance with the Uniform Standards of Professional Appraisal Practice. These two provisions of the final rule are effective January 1, 2020.
The update to these products is in response to FinCEN’s Advisory FIN-2019-A006 entitled “Advisory to Financial Institutions on Illicit Financial Schemes and Methods Related to the Trafficking of Fentanyl and Other Synthetic Opioids” dated 08/21/19 to alert financial institutions to illicit financial schemes and mechanisms related to the trafficking of fentanyl, fentanyl analogues, and other synthetic opioids, and to assist them in detecting and reporting related activity.
The update to these products is in response to the Joint Release entitled “Simplifications to the Capital Rule – Final Rule” dated 07/22/19 that announced a final rule in the Federal Register that simplifies certain aspects of the capital rule. The majority of the simplifications apply solely to banking organizations that are not subject to the advanced approaches capital rule (the advanced approaches capital rule generally applies to banks that are part of banking organizations with $250 billion or more in total consolidated assets or $10 billion or more in total consolidated foreign financial exposure).
The update to this product is in response to the U.S. Department of Labor’s News Release entitled “U.S. Department of Labor Issues Final Overtime Rule” dated 09/24/19 that announced a final rule to make 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act (FLSA). The final rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses (and commissions) towards meeting the salary level. The new thresholds account for growth in employee earnings since the currently enforced thresholds were set in 2004. In the final rule, the Department is:
- Raising the “standard salary level” from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
- Raising the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year;
- Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices; and
- Revising the special salary levels for workers in U.S. territories and in the motion picture industry.
The final rule is effective on January 1, 2020.
The update to this product is in response to the CFPB’s guidance entitled “Secure and Fair Enforcement for Mortgage Licensing Act FAQs” dated 09/25/19 that provides questions and answers that pertain to compliance with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) as of November 24, 2019, the effective date of the 2018 amendments to the statute.
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