Regulatory Bulletin: November 2010


We Hear That…

SAR filing on continuing activity: The “SAR Activity Review Trends, Tips & Issues” issued by FinCEN on October 2010, mentions a trend on inquiries seeking guidance on SAR filing for continuing activity. There are resources available such as the ‘FFIEC BSA/AML Examination Manual’ for questions and such guidance. The most common inquiries were:
1. How should we complete the date or date range of suspicious activity and total dollar amount involved (aggregation)?
2. How often should we file SAR’s for continuing activity?

Have you completed?

Annual training for the board: One of the most important aspects of board governance and the training program is the ‘Board of Director training’. Has this been completed within the past 12 months? Has the board been kept abreast of current changes? Does the board know any new changes required? What are they expecting in the upcoming year with the new Dodd-Frank Act? How do you prepare for this in the next budget year?

Did you know?

Division of Deposit and Consumer Protection (DCP): The FDIC created the DCP to help carry out responsibilities under the Dodd-Frank Act. This new division, dedicated to depositor and consumer protection, will provide increased focus to the FDIC’s compliance examination, enforcement, and outreach program.

TILA amended to establish new appraisal requirements

On October 15, 2010 the FRB announced an interim final rule establishing new real estate appraisal requirements when a consumer’s home is securing the loan. This is required by the Dodd-Frank Act. This will ensure that appraisers are free to use their judgment in assigning home values without influence or pressure from those with interests in the transactions. This rule will also ensure that appraisers receive customary and reasonable payments for their services.

  • Prohibits coercion and other similar actions designed to cause appraisers to base the appraised value of properties on factors other than their independent judgment;
  • Prohibits appraisers and appraisal management companies hired by lenders from having financial or other interests in the properties or the credit transactions;
  • Prohibits creditors from extending credit based on appraisals if they know beforehand of violations involving appraiser coercion or conflicts of interest, unless the creditors determine that the values of the properties are not materially misstated;
  • Requires that creditors or settlement service providers that have information about appraiser misconduct file reports with the appropriate state licensing authorities; and
  • Requires the payment of reasonable and customary compensation to appraisers who are not employees of the creditors or of the appraisal management companies hired by the creditors.

The compliance on this rule will be mandatory on April 11, 2011.

Getting to know us….

Hemant Mirchandani, Compliance Consultant of FRC.
Hemant Mirchandani is a Compliance Consultant of Financial Regulatory Consulting, Inc. (FRC). Prior to joining FRC, Hemant was the Chief Compliance Officer and BSA Officer for a community bank in New Jersey, where his responsibilities included oversight and management of the entire compliance management system. Currently, Hemant heads the Scottsdale, Arizona office and is also responsible for the business development in that area. He holds a Bachelor of Science Degree in Business Administration with concentration in Finance and Economics, from Montclair State University in New Jersey. He is also a Certified Anti-Money Laundering Specialist (CAMS issued by ACAMS) and a Certified Community Bank Compliance Officer (CCBCO issued by ICBA). He has a vast experience in retail banking and operations. He started his career in banking in 1996 as a teller and worked in many positions including branch manager, sales manager, mortgage specialist, branch administrator, operations officer, and also marketing manager. Hemant brings a positive attitude towards compliance with the ability to resolve problems quickly and accurately. At FRC, Hemant is responsible for designing the ACH Risk Assessment and the MSB Review programs. Also, he is responsible for issuing the monthly newsletter to all clients and prospects. Hemant is also a member of the Arizona Bankers Association and participates actively in community events.

Joint rules and guidance…

BSA defining mutual funds as financial institutions; extension of compliance date: On April 14, 2010, FinCEN issued a final rule that included mutual funds within the general definition of “financial institution”. This requires the creation, retention, and transmittal of records or information for transmittal of funds. The compliance date for this rule is extended from Jan 10, 2011 to April 10, 2011.

SAR proposed new list of data fields: FinCEN has begun the design of a new BSA database and is inviting comments on the list of proposed data fields that will support SAR filings. This notice does not propose any new regulatory requirements nor changes to the requirements related to SAR. The next newsletter will contain the list of proposed new fields.

Regulation D. Annual adjustments for reserve calculations: On October 26, 2010 announced the annual indexing of the reserve requirement exemption amount and of the low reserve tranche for 2011. These amounts are used in the calculation of reserve requirements of depository institutions.


This entry was posted on Monday, November 8th, 2010 at 8:40 pm and is filed under Board Training, BSA/AML/OFAC, Compliance - General, Deposits, Division of Deposit and Consumer Protection, Dodd-Frank Act, Lending, Mutual Funds - Financial Institution, Reg. D - Reserve Calculation for 2011, Regulatory Bulletins, SAR, TILA - Appraisal Requirements. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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