Current financial reporting, governance, and risk management topics
On July 5, 2018, the FDIC, the OCC, and the Consumer Financial Protection Bureau (CFPB) each issued a statement acknowledging the partial exemptions granted under EGRRCPA for certain Home Mortgage Disclosure Act (HMDA) data reporting requirements for banks and credit unions originating fewer than 500 closed-end mortgage loans or fewer than 500 open-end lines of credit, as applicable, in each of the two preceding calendar years. The statements provide that EGRRCPA will not affect the format of the loan/application registers for institutions filing HMDA data collected in 2018. Institutions that no longer have to report information for certain data fields as a result of the new law should enter an exemption code for the specified field.
Institutions will not be required to resubmit HMDA data collected in 2018 and reported in 2019 unless data errors are material. Additionally, the agencies do not intend to assess penalties for errors in 2018 HMDA data, and they will credit good faith compliance efforts in their diagnostic examinations of 2018 HMDA data.
The CFPB expects to provide further guidance later this summer on the applicability of EGRRCPA to HMDA data collected in 2018.
On June 12, 2018, the federal banking agencies issued a policy on interagency cooperation in enforcement actions aimed at ensuring ongoing coordination of formal corrective action. The statement rescinds the Feb. 20, 1997, policy statement “Interagency Coordination of Formal Corrective Action by the Federal Bank Regulatory Agencies.”
Highlights of the coordination in the new policy statement include:
On June 15, 2018, the OCC issued Bulletin 2018-17, “Supervisory Policy and Processes for Community Reinvestment Act Performance Evaluations,” to clarify its supervisory policies and processes regarding examiner evaluation and communication of bank performance under the Community Reinvestment Act (CRA).
Policy clarifications for all CRA evaluations, which are effective immediately, address these areas:
These policies and processes apply to the evaluations of all OCC-supervised banks subject to the CRA, regardless of asset size or CRA evaluation type. Transitional procedures are being implemented. Banks that currently are undergoing CRA evaluations but believe these policies will create a burden during ongoing evaluations are encouraged to raise this concern with their examiners.
The OCC continues proceedings on a broader initiative to modernize the CRA exam process.
The National Credit Union Administration (NCUA) board, at its June 21, 2018, meeting, unanimously approved a final rule amending its regulations governing its chartering and field-of-membership rules with respect to applicants for approval, expansion, or conversion of a community charter.
These are some changes to the existing regulation:
The final rule, which does not raise the population limit for a presumptive community, will become effective Sept. 1, 2018.
On June 20, 2018, the FASB issued Accounting Standards Update (ASU) 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” to simplify the accounting for nonemployee share-based payments for goods or services to be used in a grantor’s own operations, by aligning it with and including it within the scope of Topic 718 for employee share-based compensation. Although uncommon, some financial institutions may issue awards to nonemployees providing advisory or consulting services (for example, legal advice, investment banking advice).
The guidance clarifies that the following are outside the scope of Topic 718: