Your guide to upcoming compliance deadlines

Complying with regulations can seem daunting, so it pays to have a clear view of the upcoming regulations that may affect your community bank.

By Mary Thorson Wright

Regulatory volatility is nothing new to community bankers. A relatively new administration and Congress with a new agenda for regulatory change means the compliance landscape is likely to shift in the coming months and years.

Community banks have historically balanced “compliance today” with the uncertainties of future events. Planning, of course, is everything. Here, we outline some major compliance deadlines for the months ahead and how your bank should be preparing.

Oct. 3, 2017
Military Lending Act—credit cards

Under the Military Lending Act (MLA), “consumer credit” means any credit offered or extended to a covered borrower primarily for personal, family or household purposes and that is (i) subject to a finance charge; or (ii) payable by written agreement in more than four installments, and credit cards. The provisions of the MLA for all forms of installment loans, vehicle title loans, payday loans, unsecured open-end line of credit, refund anticipation loans and deposit advance products became effective Oct. 3, 2016, and credit cards will be covered beginning Oct. 3, 2017.

Oct. 19, 2017
Mortgage Servicing Rule and FDCPA

Effective Oct. 19, 2017, the 2016 Mortgage Servicing Rule and Fair Debt Collection Practices Act (FDCPA) Interpretive Rule apply to financial institutions that service consumer first-lien mortgage loans retained in their portfolios as the originator, or ones sold in the secondary market but for which they retain servicing rights. It amends Regulation X—Real Estate Settlement Procedures Act and Regulation Z—Truth in Lending Act. The Consumer Financial Protection Bureau (CFPB) also issued an interpretive rule as an advisory opinion about the FDCPA, which provides safe harbors from FDCPA liability. The servicing rule and interpretive rule may have a limited impact on community banks, because there is an exemption for small servicers (those servicing 5,000 or fewer mortgage loans, and the bank, or an affiliate, is the creditor or assignee for all of them).

Jan. 1, 2018
HMDA Rules

The next implementation steps for the HMDA Rules adopt a uniform loan-volume threshold for all institutions and modify the types of transactions that are covered. In January 2018, a community bank will be subject to Regulation C if it originated at least 25 covered closed-end mortgage loans, or at least 100 covered open-end lines of credit in each of the two preceding calendar years, and it meets current Regulation C asset-size, location, federally related and loan activity tests. Covered loans under the HMDA Rule generally will include closed-end mortgage loans and open-end lines of credit secured by a dwelling.

April 17, 2018
EFTA and TILA

In October 2016, the CFPB published a final rule to protect consumers under Regulation E—Electronic Fund Transfer Act (EFTA) and Regulation Z—Truth in Lending Act (TILA) for prepaid accounts. All the provisions of the rule were initially mandatory by Oct. 1, 2017, except the requirement to submit prepaid account agreements to the CFPB is not effective until Oct. 1, 2018. On March 15, 2017, the CFPB issued a proposal to delay the Oct. 1, 2017, effective date until April 17, 2018.

The final rule extends Regulation E coverage to prepaid accounts by adding the term “prepaid account” to the definition of “account” in the regulation. The definition carves out numerous account types that are excluded from coverage, and it spells out requirements for disclosures, liability and error resolution, among others. The rule expands Regulation Z’s coverage to overdraft credit features that may be offered in conjunction with prepaid accounts and adds the term “hybrid prepaid-credit card” to Regulation Z.

May 11, 2018
Expanded customer due diligence rules

Expanded Financial Crimes Enforcement Network (FinCEN) rules become effective May 11, 2018, that strengthen customer due diligence (CDD) requirements for banks and other financial institutions. They place emphasis on CDD policies and procedures for those that represent a higher risk for money laundering and terrorist financing. The new rules require financial institutions to implement procedures to develop and maintain a customer risk profile and perform ongoing customer due diligence, including identification of beneficial owners, to effectively monitor accounts for suspicious activity.

Jan. 1, 2019 and 2020
HMDA Rules

The final pieces of the revised HMDA Rules become effective 18 months from now. On Jan. 1, 2019, Appendix A, which provides instructions for completing and submitting the HMDA loan application register (LAR), is removed from Regulation C, and covered institutions will report the new dataset required by the HMDA Rule, using a new electronic submission tool and revised procedures that will be available from the CFPB. Beginning in 2020, the HMDA Rule requires quarterly reporting for covered institutions that reported a combined total of at least 60,000 applications and covered loans in the preceding calendar year.

Compliance game plan
A simple evaluation process can be applied to these and other regulatory announcements. The evaluation should include products and services currently offered by the bank directly and those offered through or administered by a third party. As a prudent practice, keep a record of the analyses and results.

  1. Read each rule as soon as it is practical to understand the incumbent requirements.
  2. Determine if the rule applies to your bank.
  3. If the rule applies to your bank:
    • Confirm the effective date(s) and the specific requirements for each. Monitor for subsequent modification.
    • Identify key stakeholders, and determine which systems, procedures, and records may be affected.
    • Facilitate the changes to functional areas.
    • Update the compliance management system (CMS), and ensure follow-up reviews, monitoring and auditing are included in the support processes.
  4. If the rule doesn’t currently apply to your bank but could in the future (for instance, if the rule applies to banks, but your bank is not offering a covered product), schedule a relook on a periodic basis to monitor changes to your bank, its products or services or its third-party vendors.

Community banks can continue to effectively analyze and implement the variables in the regulatory landscape by watching the road before them while keeping a sharp eye on the horizon.


Mary Thorson Wright is a former Federal Reserve examiner and a writer in Virginia.

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