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Thursday, 27 Aug 2015

Fair Lending has been around for a long time but violations continue to show up. Fair Lending includes the Equal Credit Opportunity Act and the Fair Housing Act.

In a recent compliance newsletter a financial institution stated that they had been cited by their regulator for disparate treatment. In their conversations within the institution they discovered that employees were not clear on exactly what the different categories of discrimination involved.

We all have heard the phrases…

  • Overt Evidence of Disparate Treatment
  • Comparative Evidence of Disparate Treatment
  • Evidence of Disparate Impact

…but what do these phrases really mean? And how can you help every employee in your institution understand them? Let’s try this…

  • Obvious Evidence of Different Treatment
  • Comparable Evidence of Different Treatment
  • Evidence of Different Effect

While this second set of phrases are not legal substitutions for the regulatory text, they can help create a clearer picture of what the terminology means. To learn more about Fair Lending and what it really means to you and your institution, let us help.

Keeping your financial institution up to date on regulatory issues and your employees educated can be a daunting task. TRC can help. To learn more, contact us at or (800) 222-9909.

Wednesday, 12 Aug 2015

The Office of the Comptroller of the Currency (OCC) issued the OCC Report on Risks Facing National Banks and Federal Savings Associations. Even if you are not regulated by the OCC this report is worth a look.

Identifying risks before they become a serious issue is the goal of every compliance person. Highlights from the report include:

  • Evolving cyber threats and information technology vulnerabilities require heightened awareness and appropriate controls to identify and mitigate the associated risks.

  • Compliance risks remain high, as banks work to comply with new mortgage lending requirements and manage Bank Secrecy Act/Anti-Money Laundering risks.

  • Competition for limited lending opportunities is intensifying and resulting in loosening underwriting standards and layering of risk, particularly in indirect auto lending, asset-based lending, commercial real estate (CRE) lending, and commercial and industrial loans.

  • Many banks continue to re-evaluate their business models and risk appetites to generate returns against the backdrop of low interest rates.

  • The prolonged low interest rate environment continues to lay the foundation for future vulnerability. Banks that extend asset maturities to pick up yield could face significant earnings pressure and capital erosion depending on the severity and timing of interest rate moves.

  • Several risks have the potential to develop into broader, systemic issues. These risks include exposures to oil- and gas-related industries, rising CRE concentrations coupled with easing of underwriting standards, and exposures to nonbank mortgage servicer companies.

  • Almost half of outstanding home equity lines of credit balances will transition from draw period to repayment between 2015 through 2017. For most borrowers, monthly payments will change from interest-only to amortizing, which may pose interest rate risk from concentrated resets and rising market rates, payment shock from additional principal payments, and refinancing difficulties because of lower property values and conservative lending underwriting standards.

We in the compliance industry find ourselves buried in a mountain of compliance issues needing our attention every day. We at TRC have two suggestions. First, take a step back, evaluate your situation, and make a list to decide how to tackle that list even if it means asking for help.

Second, let your staff become your eyes and ears to compliance. Allow your employees access to our TRC compliance subjects that they may have an interest in. Let them learn and ask questions. Let them help you see things that you may have not looked at or thought about.

Keeping your financial institution up to date on regulatory issues and your employees educated can be a daunting task. TRC can help. To learn more, contact us at or (800) 222-9909.

Thursday, 25 Jun 2015

The Consumer Financial Protection Bureau (CFPB) Director Richard Cordray issued the following statement on the Know Before You Owe mortgage disclosure rule on June 17, 2015:

“The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

The public will have an opportunity to comment on this proposal and a final decision is expected shortly thereafter.

If all goes as expected the new effective date for the Truth in Lending Act / RESPA Integrated Disclosures (TRID) will be October 1, 2015 rather than August 1, 2015.

TRC Interactive Inc. will be presenting five new Truth in Lending courses to help your staff become familiar with the new requirements. We will maintain our existing Truth in Lending Act (Regulation Z) course until January 2016 to ensure all loans initiated under the previous rules have been finalized.

  1. Truth in Lending Act Open - End Credit

  2. Truth in Lending Act Closed - End Credit

  3. Truth in Lending Act Certain Home Mortgage Transactions

  4. Truth in Lending Act General, Miscellaneous and Other

  5. Truth in Lending Act Overview

Keeping your financial institution up to date on regulatory issues and your employees educated can be a daunting task. TRC can help. To learn more, contact us at or (800) 222-9909.

Wednesday, 17 Jun 2015

The Federal agencies issued a final interagency policy statement establishing JOINT standards for assessing the diversity policies and practices of the entities they regulate. The final standards provide a framework for regulated entities to create and strengthen their diversity policies and practices—including their organizational commitment to diversity, workforce and employment practices, procurement and business practices, and practices to promote transparency of organizational diversity and inclusion within the entities' U.S. operations. The final Policy Statement provides that “diversity” refers to “minorities… and women.” For purposes of this definition, “minority” is defined as Black Americans, Native Americans, Hispanic Americans, and Asian Americans.

When drafting these standards, the Agencies focused primarily on institutions with more than 100 employees. The Agencies know that institutions that are small or located in remote areas face different challenges and have different options available to them compared to entities that are larger or located in more urban areas.

The Federal agencies (Office of the Comptroller of the Currency (OCC); Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC); National Credit Union Administration (NCUA); Bureau of Consumer Financial Protection (CFPB); and Securities and Exchange Commission (SEC) added to the Policy Statement a new standard providing that the “entity implements policies and practices related to workforce diversity and inclusion in a manner that complies with all applicable laws.” The final Policy Statement also includes another new standard, which provides that the “entity ensures equal employment opportunities for all employees and applicants for employment and does not engage in unlawful employment discrimination based on gender, race, or ethnicity.”

In a manner reflective of the individual entity’s size and other characteristics,

  • The entity includes diversity and inclusion considerations in both employment and contracting as an important part of its strategic plan for recruiting, hiring, retention, and promotion.

  • The entity has a diversity and inclusion policy that is approved and supported by senior leadership, including senior management and the board of directors.

  • The entity provides regular progress reports to the board and senior management.

  • The entity regularly conducts training and provides educational opportunities on equal employment opportunity and on diversity and inclusion.

  • The entity has a senior level official, preferably with knowledge of and experience in diversity and inclusion policies and practices, who oversees and directs the entity's diversity and inclusion efforts. For example, this official may be an executive-level Diversity Officer (or equivalent position) with dedicated resources to support diversity strategies and initiatives.

  • The entity takes proactive steps to promote a diverse pool of candidates, including women and minorities, in its hiring, recruiting, retention, and promotion, as well as in its selection of board members, senior management, and other senior leadership positions.

The Policy Statement can be accessed at:

In support of these efforts TRC Interactive Inc. provides Appreciating Diversity for Managers which is available now and Appreciating Diversity for Staff Members which is currently in development.

To stay up to date on regulatory trends and news, frequently visit our blog. TRC Interactive also offers online, interactive training on various compliance related topics. To learn more, contact us at or (800) 222-9909

Wednesday, 3 Jun 2015

As of January 1, 2012, the U.S. Department of the Treasury ended sales of paper savings bonds at financial institutions. People must have a TreasuryDirect account to buy an electronic savings bond. However, this change did not affect how paper savings bonds are redeemed for customers.

While paper savings bonds are no longer sold over the counter at financial institutions, redeeming paper savings bonds is still a service financial institutions can provide to their customers.

Financial institutions can redeem Series A–E, EE and I paper savings bonds, savings notes and savings stamps for customers who present proper identification.

Financial institutions may find additional information on how to service bond holders at

Keeping your financial institution up to date on regulatory issues and your employees educated can be a daunting task. TRC can help. To learn more, contact us at or (800) 222-9909.

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