Product Updates for October 2020
The Product Updates for October 2020 from BankPolicies.com feature the following new job description templates and revised policy template products:
Automated Clearing House Specialist Job Description Template – NEW!
Compliance Analyst Job Description Template – NEW!
Marketing Analyst Job Description Template – NEW!
These new products were developed in response to client requests who submitted their suggestions to our “Client Wish List.” Your comments and ideas are always greatly appreciated and will be taken into consideration whenever we revise our current products or create new ones. In summary, we want to ensure your success and earn your business!
The update to this product is in response to the Joint Press Release entitled “Agencies Issue Two Final Rules” dated 09/29/20 that announced a final rule that temporarily defers appraisal and evaluation requirements for up to 120 days after the closing of certain residential and commercial real estate transactions. The final rule temporarily deferring appraisal and evaluation requirements is substantially similar to the interim final rule issued in April. It will allow individuals and businesses to more quickly access real estate equity to help address needs for liquidity as a result of the coronavirus. In response to comments, the final rule clarifies which loans are subject to the deferral. The final rule is effective upon publication in the Federal Register and will expire on December 31, 2020.
Bank Secrecy Act Policy Template – Basic Version
Bank Secrecy Act Policy Template – Comprehensive Version
Customer Identification Program Policy Template
Office of Foreign Assets Control Policy Template
The update to the Bank Secrecy Act Policy Template products is in response to:
FinCEN’s File Rule entitled “Financial Crimes Enforcement Network; Customer Identification Programs, Anti-Money Laundering Programs, and Beneficial Ownership Requirements for Banks Lacking a Federal Functioning Regulator” dated 09/14/20 that requires minimum standards for anti-money laundering programs for banks lacking a federal functional regulator. The final rule also extends customer identification program and beneficial ownership requirements to those banks. The rule is effective November 16, 2020, but carries a compliance date of March 15, 2021.
FinCEN’s Advisory FIN-2020-A006 entitled “Advisory on Ransomware and the Use of the Financial System to Facilitate Ransom Payments” dated 10/01/20 that alerts financial institutions to predominant trends, typologies, and potential indicators of ransomware and associated money laundering activities.
In addition, the update to the Bank Secrecy Act Policy Template – Comprehensive Version and Customer Identification Program Policy Template is in response to the Joint Release entitled “Federal Banking Agencies and FinCEN Announce Exemption from Customer Identification Program Requirements for Premium Finance Loans” dated 10/09/20 that grants an exemption from customer identification program requirements implementing section 326 of the USA PATRIOT Act, 31 U.S.C. § 5318(l), for loans extended by banks (and their subsidiaries) subject to the jurisdiction of the Federal Banking Agencies to all customers to facilitate purchases of property and casualty insurance policies.
Furthermore, the update to the Bank Secrecy Act Policy Template – Comprehensive Version and Office of Foreign Assets Control Policy Template is in response to OFAC’s “Ransomware Advisory” dated 10/01/20 to alert companies that engage with victims of ransomware attacks of the potential sanctions risks for facilitating ransomware payments. This advisory highlights OFAC’s designations of malicious cyber actors and those who facilitate ransomware transactions under its cyber-related sanctions program. It identifies U.S. government resources for reporting ransomware attacks and provides information on the factors OFAC generally considers when determining an appropriate enforcement response to an apparent violation, such as the existence, nature, and adequacy of a sanctions compliance program. The advisory also encourages financial institutions and other companies that engage with victims of ransomware attacks to report such attacks to and fully cooperate with law enforcement, as these will be considered significant mitigating factors.
As a reminder, the complete contents of the Customer Identification Program Policy Template and Office of Foreign Assets Control Policy Template are included as Topics 7 and 19 within the Bank Secrecy Act Policy Template – Comprehensive Version.
Current Expected Credit Losses Policy Template
The update to this product is in response to the Joint Press Release “Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances” dated 09/30/20 that adopted a final rule that delays the estimated impact on regulatory capital stemming from the implementation of Accounting Standards Update No. 2016–13, Financial Instruments—Credit Losses, Topic 326, Measurement of Credit Losses on Financial Instruments (CECL). The final rule provides banking organizations that implement CECL during the 2020 calendar year the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period. The agencies are providing this relief to allow these banking organizations to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019, while also maintaining the quality of regulatory capital. This final rule is consistent with the interim final rule published in the Federal Register on March 31, 2020, with certain clarifications and minor adjustments in response to public comments related to the mechanics of the transition and the eligibility criteria for applying the transition. The final rule is effective September 30, 2020.
Other Real Estate Owned Policy Template
The update to these products is in response to OCC Bulletin 2020-79 dated 09/02/20 that announced the availability of a revised “Other Real Estate Owned” booklet of the Comptroller’s Handbook, which provides guidance on the acquisition, reporting, management, and disposition of other real estate owned (OREO). The updated booklet replaces the booklet of the same title issued in August 2018. Also rescinded is OCC Bulletin 2018-26, “Other Real Estate Owned: Updated Comptroller’s Handbook Booklet.”
Commercial Loan Policy Template
Participation and Purchased Loan Policy Template
The update to these products is in response to OCC Bulletin 2020-81 entitled “Credit Risk: Risk Management of Loan Purchase Activities” dated 09/10/20 that informs banks of sound risk management principles regarding loan purchase activities. Commercial and retail loan purchase activities include purchasing whole loans, loan pools, loan portfolios, loan participations, or participations in syndicated loans from other banks or nonbank lenders. Lending activities, including loan purchase activities, are subject to certain regulatory standards and long-standing risk management guidelines. Banks are expected to engage in loan purchase activities in a safe and sound manner and in compliance with applicable accounting standards, laws, rules, and regulations. Loan purchase activities should align with banks’ strategic plans and be supported by sound risk management systems. In addition, this bulletin rescinds Banking Circular 181 (REV), “Purchases of Loans in Whole or in Part—Participations,” issued on August 2, 1984.
As a reminder, the complete contents of the Participation and Purchased Loan Policy Template are included as Topic 8 within the General Loan Policy Template, and Topic 15 within the Commercial Loan Policy Template.
As a courtesy, we revised this product to eliminate any regulatory guidance that was in effect prior to the planned implementation of policy changes to procedures governing the provision of intraday credit to U.S. branches and agencies of foreign banking organizations (FBOs) that went into effect on 10/01/20.
Keeping You Informed
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