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Inside TRC

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Monday, 27 Oct 2014

The Consumer Financial Protection Bureau (CFPB) finalized a rule where certain institutions can post their notices online instead of mailing them!

Generally, the Gramm-Leach-Bliley Act (GLBA) requires that financial institutions send annual privacy notices to customers. However the new rule, which was proposed in May, allows financial institutions to post privacy notices online instead of distributing an annual paper copy, if they satisfy certain conditions such as not sharing data in ways that would trigger consumers’ opt-out rights. The new rule applies to both banks and those non-banks that are within the CFPB’s jurisdiction under the GLBA. Institutions that choose to rely on this new method of delivering privacy notices will be required to use the model disclosure form developed by federal regulatory agencies in 2009.

Also, if an institution qualifies for and wants to rely on the online disclosure method, it will have to inform consumers annually about the availability of the disclosures. Previously, institutions were required to send consumers a separate communication about privacy disclosures. The new rule allows institutions to include a notice on a regular consumer communication, such as a monthly billing statement for a credit card, letting consumers know that the annual privacy notice is available online and in paper by request at a provided telephone number. If an institution chooses not to use the new disclosure method, it will need to continue to deliver annual privacy notices to its customers using other delivery methods.

The Bureau is finalizing the rule largely as it was proposed in May, with a number of technical, clarifying, and minor revisions. The rule will be effective immediately upon publication in the Federal Register.

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 info@trcinteractive.com or (800) 222-9909.

The final rule is available at: http://files.consumerfinance.gov/f/201410_cfpb_final-rule_annual-privacy-notice.pdf.

Tuesday, 7 Oct 2014

The Internal Revenue Service issued a fraud alert for international financial institutions complying with the Foreign Account Tax Compliance Act (FATCA). Scam artists posing as the IRS have fraudulently solicited financial institutions seeking account holder identity and financial account information.

The IRS does not require financial institutions to provide specific account holder identity information or financial account information over the phone or by fax or email. Further, the IRS does not solicit FATCA registration passwords or similar confidential account access information.

“Tax scams using the IRS name can take many forms and they are not limited by national borders,” said IRS Commissioner John Koskinen. “People should always be cautious before sending sensitive information to anyone.”

Financial institutions directly registered to comply with FATCA and those in jurisdictions that are treated as having in effect intergovernmental agreements (IGAs) to implement FATCA through intergovernmental cooperation have been approached by persons representing themselves as the IRS. The IRS has reports of incidents from multiple countries and continents.

These fraudulent solicitations are known as “phishing” scams. These types of scams are typically carried out through the use of unsolicited emails and/or websites that pose as legitimate contacts in order to deceptively obtain personal or financial information.

Financial institutions or their representatives that suspect they are the subject of a “phishing” scam should report the matter to the Treasury Inspector General for Tax Administration (TIGTA) at 800-366-4484, or through TIGTA’s secure website. Any suspicious emails that contain attachments or links in the message should not be opened, and the email should be forwarded to phishing@irs.gov.

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 info@trcinteractive.com or 800-222-9909.

Thursday, 18 Sep 2014

Have you heard about “Pass it On” from the Federal Trade Commission (FTC)? The Federal Trade Commission’s mission is to prevent business practices that are anti-competitive or deceptive, or unfair to consumers; to enhance informed consumer choice and public understanding of the competitive process; and to accomplish this without unduly burdening legitimate business activity.

In an effort to further their mission, the FTC has created “Pass it On” which provides articles, presentations, video and activities—directed at arming consumers with the knowledge they need to protect themselves and their friends and families. So how does the word get out?

The website contains free publications, such as bookmarks, your staff can hand to their customers to start the conversation. The free presentation materials include subjects such as:

• Identity Theft
• Imposter Scams
• Charity Fraud
• Health Care Scams
• Paying Too Much
• “You’ve Won” Scams

TRC can help you create an informed and knowledgeable staff with products such as First Line of Defense and The Fraud Prevention Series, and the Federal Trade Commission free publications can help you take that message to your customers…for free!

http://www.consumer.ftc.gov/features/feature-0030-pass-it-on.

Wednesday, 3 Sep 2014

The FDIC is clarifying its supervisory approach to institutions establishing account relationships with third-party payment processors (TPPPs). In an informational article, the FDIC contained lists of examples of merchant categories associated with higher-risk activity. To some, this created the misperception that these categories were “prohibited or discouraged”!

In fact, it is FDIC's policy that insured institutions that properly manage customer relationships are neither prohibited nor discouraged from providing services to any customer operating in compliance with applicable law. Accordingly, the FDIC is clarifying its guidance to reinforce this approach, and as part of this clarification, the FDIC is removing the lists of examples of merchant categories from its official guidance and informational article.

The complete financial institution letter can be accessed HERE

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 info@trcinteractive.com or (800) 222-9909.

Thursday, 21 Aug 2014

On August 11, 2014 FinCEN issued the following Advisory:

Advisory to U.S. Financial Institutions on Promoting a Culture of Compliance BSA/AML shortcomings have triggered recent civil and criminal enforcement actions — FinCEN seeks to highlight the importance of a strong culture of BSA/AML compliance for senior management, leadership and owners of all financial institutions subject to FinCEN’s regulations regardless of size or industry sector.

While this advisory does not change any existing expectations or obligations toward BSA/AML requirements; nor is it intended to change or otherwise interpret regulatory expectations or obligations that financial institutions may have outside of the BSA. It is, however, designed to specifically emphasize the following:

• Leadership Should Be Engaged
• Compliance Should Not Be Compromised By Revenue Interests
• Information Should Be Shared Throughout the Organization
• Leadership Should Provide Adequate Human and Technological Resources
• The Program Should Be Effective and Tested By an Independent and Competent Party
• Leadership and Staff Should Understand How Their BSA Reports are Used

Understanding and communicating the context and the purpose of FinCEN’s BSA/AML regime is equally important to a financial institution’s culture as understanding its underlying requirements, and financial institutions should consider including such information as part of their ongoing training requirement.

TRC Interactive can help your staff understand the significant importance of the BSA/AML requirements as well as how the information in BSA reports is used. Our BSA training courses are tailored to job description and are supported by additional information requirements including Anti-Money Laundering, USA PATRIOT Act, Customer Identification Program, Suspicious Activity Reporting, and Office of Foreign Assets Control. To learn more, contact us at info@trcinteractive.com or (800) 222-9909.

The complete FinCEN advisory is available HERE.

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