Compliance Update with Amy K

​Combatting elder financial exploitation; IRA webinar recording; an intro to HSA webinar; Pregnant Worker Fairness Act review; and more! 

Combatting Elder Financial Exploitation Series
The Consumer Financial Protection Bureau (CFPB), in observance of Older Americans Month, has announced a four webinar series on combatting elder financial exploitation. Registration for this series can be found here. Webinars can be attended live or on demand.

Two webinars in the series that may be of interest to credit unions include May 24 – “age-friendly banking and opportunities for collaboration.” This webinar will include discussion of trusted contacts; how financial institutions work with their communities to prevent elder fraud; and how the Community Reinvestment Act intersects with elder justice.

On June 1, the webinar – “financial caregiving and long-term services and support” will discuss the title subject, including nursing home debt collection and financial caregiving. Carefully choosing a financial caregiver and long-term care can help prevent elder financial exploitation.

May, 2023, marks the 60th anniversary of Older Americans Month. John F. Kennedy issued the first proclamation recognizing older Americans in 1963.
 
IRA webinar recording
Last week, credit unions tackled IRA training. In case you missed it, the recording is available for viewing for 90 days – please register here to receive the link.

This webinar will build on your knowledge of IRA basics to address some of the more complex IRA issues your credit union may handle. This course includes how the transitions rules work, RMDs and death distributions. We will also discuss amending documents.

Our speaker is Matthew Dickinson, who uses real-world exercises to help participants apply information to job-related situations. Mr. Dickinson has over 18 years in Banking and retirement and has held many titles within his career. He has worked for companies such as Ascensus, Merril Lynch, Wells Fargo, and Frandsen. On a day-to-day basis, Matt helps financial institutions gain and maintain their knowledge base to manage their IRA portfolio.
 
Intro HSA Training Coming Up
Register today for the upcoming webinar on Introduction to Health Savings Accounts (HSA), link can be found here.

As the nationwide growth of HSAs continue to rise, financial organizations are beginning to see more complex transactions due to increased customer activity.  This activity requires personnel to review their existing HSA procedures to ensure transactions are handled properly.  We’ll explore the areas of employee eligibility, handling excess and mistaken distributions, investment diversification and product expansion, including how HSAs are being touted as a retirement savings vehicle in addition to a health care coverage option. 
 
FinCEN – 2022 In Review
The Financial Crimes Enforcement Network (FinCEN) recently issued FinCEN Year In Review for FY 2022, which can be found here. This information is intended to shed light on how BSA information is used. As explained in the press release, “The information that financial institutions provide to FinCEN is integral to promoting national security, and aiding law enforcement agencies in their efforts to investigate and prosecute criminals that abuse the financial system,” said FinCEN Acting Director Himamauli Das. “We will continue to work with our partners to gather more information about how BSA reporting is being used, and the tangible outcomes that BSA reports make possible.”

Highlighting a few items from law enforcement, 84.2% of all IRS criminal investigations had BSA filings related to the primary subject. The FY 2022 saw $7.7 BILLION in asset seizures from IRS criminal investigations.

Collectively, 472 federal, state, and local law enforcement, regulatory, and national security agencies have access to BSA reports and FinCEN Query, and over 25,000 authorized personnel have access to the BSA data. In FY22, authorized users conducted over 2.3 million searches using FinCEN Query.
 
Pregnant Worker Fairness Act
The Pregnant Worker Fairness Act (PWFA) was signed into law at the end of 2022 and is effective June 27, 2023. The PWFA protects employees and applicants of “covered employers” who have known limitations related to pregnancy, childbirth, or related medical conditions. Under PWFA, “Covered employers” include private and public sector employers with at least 15 employees, Congress, Federal agencies, employment agencies, and labor organizations.

The EEOC has provided highlights that can be found here. PWFA relates to accommodations.
In addition to existing federal and state laws that already apply, the PWFA provides that covered employers cannot:  

• Require an employee to accept an accommodation without a discussion about the accommodation between the worker and the employer;
• Deny a job or other employment opportunities to a qualified employee or applicant based on the person's need for a reasonable accommodation;
• Require an employee to take leave if another reasonable accommodation can be provided that would let the employee keep working;
• Retaliate against an individual for reporting or opposing unlawful discrimination under the PWFA or participating in a PWFA proceeding (such as an investigation); or
• Interfere with any individual’s rights under the PWFA.

Examples of “reasonable accommodations” are discussed with the EEOC guidance at the link above.
 
CFPB – Proposed Rule PACE Loans
The Consumer Financial Protection Bureau (CFPB) has issued a proposed rule to amend Regulation Z that implements section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act which directs the CFPB to adopt ability-to-repay rules for Property Assessed Clean Energy (PACE) financing. The proposed rule and supporting information can be found here.

Comments are due July 26, 2023.

Briefly, PACE financing allows property owners to finance certain upgrades to real property through an assessment on their real property. In general, PACE financing is repaid through the property tax system along with the consumer’s other property tax payment obligations. PACE assessments are secured by a lien on the consumer’s real property. The liens securing PACE loans typically have priority under State law similar to that of other real property tax liens, which are superior to other mortgage liens on the property, including those that predated the PACE lien.

Under the proposed rule, “PACE transaction” means financing to cover the costs of home improvements that results in a tax assessment on the real property of the consumer.

The proposed rule would make updates to the Loan Estimates and Closing Disclosures when these disclosures are provided for PACE transactions. PACE transactions would be exempt from escrow account requirements under 1026.35 for higher priced mortgage loans, and would also be exempt from periodic statements under 1026.41. Section 1026.43 - ability to repay provisions, which some adjustments, would apply to PACE transactions.

As always, DakCU members may contact Amy Kleinschmit with any compliance related questions.