ViClarity Compliance Update

Business account owners and OFAC; flood insurance on second mortgages; consumer liability for unauthorized EFT; and much more. 

The Dakota Credit Union Association’s dues-supported compliance solution –  ViClarity – is a world leader in credit union compliance. To read the complete articles that are linked, you will need to log in with your username and password. If you have questions about establishing your members-only account with ViClarity, click here for detailed instructions or contact John Alexander in the DakCU office.
 
Q: Which business account owners/signers must be checked against the Office of Foreign Assets Control (OFAC)?
A: The credit union should check the name of the business, the name(s) of all authorized signers, and the name(s) of the beneficial owners. Source: U.S. Department of Treasury
 
Q: Do members with a second mortgage need flood insurance coverage if the property is located in a flood zone?  
A: Yes. If a member is required to carry flood insurance for the outstanding principal balance of their loans, the home equity loan balance must be considered to determine the amount of insurance coverage that is sufficient to meet the federal requirements. All of the member’s loans should be aggregated and compared to any flood insurance coverage the member has or needs. The members are required to increase the amount of their flood insurance coverage if applicable. Source: FEMA
 
Q: If a transfer meets the Regulation E definition of unauthorized EFT, how does a credit union determine the consumer’s liability, if any?
A: If a consumer has provided timely notice of an error under 12 CFR 1005.11(b)(1) and the financial institution determines that the error was an unauthorized EFT, the liability protections in Regulation E section 1005.6 would apply. Depending on the circumstances regarding the unauthorized EFT and the timing of the reporting, a consumer may or may not have some liability for the unauthorized EFT. See 12 CFR 1005.6(b).

Q2 Town Hall Webinar: 3 Hot Topics + Upcoming Rules Review
As a reminder, ViClarity will hold their next town hall on Wednesday, June 26, at 1:00 p.m. (CT) when they will explore the latest trends and challenges in fraud, cybersecurity and fair lending – three topics frequently asked about via their league compliance hotlines. Learn strategies to assist with fraud prevention, understand cybersecurity vulnerabilities, and ensure your credit union maintains adherence to fair lending regulations. They will also review upcoming rules and regulations from NCUA and other agencies that impact credit unions. Don’t miss this opportunity to enhance your knowledge and stay ahead of upcoming changes in an ever-evolving compliance environment. Sign up today!

NCUA Voluntarily Participates in 10-Year De-Regulation Review
The National Credit Union Administration (NCUA) Board unanimously approved a voluntary regulatory review and request for comment to reduce the regulatory burden of federally insured credit unions. Over the next two years, the NCUA will publish four Federal Register notices requesting comments on various categories of regulations. While a voluntary effort by the NCUA, the end goal of this review process is to decrease the regulatory burden on federally-insured credit unions. However, this review process for other government agencies is a regulatory requirement. As part of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA), the Federal Financial Institutions Examination Council and federal bank regulatory agencies are required to review their regulations every 10 years to identify any outdated, unnecessary, or unduly burdensome regulations applicable to insured depository institutions. Read more on the topic here.
 
Hemp Industry Calls for Greater Regulation
The advent of cannabis or hemp banking is not new to the credit union industry. However, as more and more states legalize hemp and cannabis products, the hemp industry is calling for additional regulations. This past January, over 30 different hemp organizations signed a letter encouraging the House Committee on Energy and Commerce to hold a hearing “concerning FDA regulation or lack thereof, of the rapidly growing hemp market.” As the hemp industry continues to increase the proliferation of hemp products, the industry is looking for more certainty within the marketplace. Read more here.
 
CFPB and Federal Reserve Amend Regulation CC
In conjunction with the Consumer Financial Protection Bureau (CFPB), the Federal Reserve Board (the Board) has issued a final rule amending Regulation CC. The amendment implements the Expedited Funds Availability (EFA) Act, which adjusts for inflation dollar amounts relating to the availability of funds. The implementation is part of a final rule issued by the Board and the CFPB in 2019, which set a methodology for inflation adjustments to occur every five years. The amendment was implemented as a result of a 21.8 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers between July 2018 and July 2023. Full article available here.
 
FFIEC Publishes Guide on Reporting HMDA Data for 2024
The Federal Financial Institutions Examination Counsel (FFIEC) recently published the 2024 edition of A Guide to HMDA Reporting: Getting It Right! on the Home Data Mortgage Act (HMDA) reporting requirements. FFIEC’s HMDA-related guide specifically addresses the data collected in 2024 and reported in 2025. The guide serves as a resource for credit unions to better understand HMDA requirements, including the data collection and reporting provisions. Additional information and a copy of the guide available here.