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Compliance Update with Amy K by Amy Kleinschmit, Chief Compliance Officer National Consumer Protection Week National Consumer Protection Week (NCPW), February 28 to March 6, 2021, is a time to help people understand their consumer rights and make well-informed decisions about money. There are a number of virtual events planned throughout the week which will cover a range of topics, including avoiding coronavirus scams, government imposters, and cyber fraud. The FTC has a list of events found here, and also has a number of shareable social media images to help educate members about scams and frauds that are circulating. These images can be found here. FinCEN Advisory – Financial Crimes Targeting COVID-19 Economic Impact Payments The Financial Crimes Enforcement Network (FinCEN) issued advisory FIN-2021-A002 regarding crimes targeting COVID-19 Economic Impact Payments (EIP). This advisory contains descriptions of EIP fraud, associated red flag indicators, and information on reporting suspicious activity. There are a number of fraudulent activities and theft of EIPs. Some examples include fraudulent checks; altered checks; counterfeit checks; phishing schemes; inappropriate seizure of EIP. The advisory goes on to list red flags related to each of these activities. It is important for credit unions to review these red flags, and to be aware of fraudulent activities. Some of the red flags include: An existing account receives, or an account holder makes, multiple EIP-related deposits for individuals other than the account holder(s), and the individuals named on the checks reside outside the geographic region of the account holder, or do not have a history at the account holder’s purported address. This may be indicative of funnel account activities in which multiple EIPs are deposited or transferred throughout the United States into one account, which may be held by a fraudster or a money mule working for the fraudster. A customer opens a new account with an EIP check or debit card, and the name of the potential account holder is different from that of the depositor or the payee of EIP. An account receives several EIP-related deposits and almost immediately thereafter (a) disburses funds for large purchases at merchants that offer cash back as an option, in amounts not typical of this type of merchant, or (b) has funds transferred onto prepaid debit or gift cards. Deposits of one or more EIP checks or electronic deposits are made into a nursing home or assisted living facility’s business account and those payments have not been returned to the resident. This may be an indication that the business is inappropriately withholding residents’ EIP funds. FinCEN also issued a consolidated COVID-19 SAR Key Terms and Filing Instructions which can be found here. As credit unions are aware, there have been several FinCEN advisories related to scams and fraudulent activity related to COVID-19. Each of those advisories included filing instructions and keywords that were to be used when filing an SAR in response to this activity. This notice consolidates all these filing instructions and key terms for fraudulent activities, crimes, and cyber and ransomware attacks related to Coronavirus Disease 2019 (COVID-19). Make sure the individual responsible for completing SARs at your credit union has a copy of this notice. CFPB – QM Final Rules The Consumer Financial Protection Bureau (CFPB) has updated their small entity compliance guides related to the Qualified Mortgage (QM) rules. These updated resources can be found here. As you may recall, in 2020 the CFPB issued the GSE Patch Extension Final Rule, General QM Final Rule, and Seasoned QM Final Rule. The new General QM rule and Seasoned QM rule are set to take effect March 1. Mandatory compliance of the new General QM rule is July 1. However, this is probably not the last we will see of rulemaking affecting the QM definitions. The CFPB also issued a statement, found here, that provides “The Bureau is considering whether to initiate a rulemaking to revisit the Seasoned QM Final Rule. If the Bureau decides to do so, it expects that it will consider in that rulemaking whether any potential final rule revoking or amending the Seasoned QM Final Rule should affect covered transactions for which an application was received during the period from March 1, 2021, until the effective date of such a final rule.” Furthermore, with regard to the General QM final rule, “The Bureau also expects to issue shortly a proposed rule that would delay the July 1, 2021 mandatory compliance date of the General QM Final Rule.” The Statement concludes with “The Bureau will consider at a later date whether to initiate another rulemaking to reconsider other aspects of the General QM Final Rule.” InfoSight FAQs (Continued!) InfoSight is a FREE resource included with your DakCU membership. Login today to take advantage of this fantastic resource! If you’re new to InfoSight, here are some more frequently asked questions. Q: How do I view information from other states? A: Go under the Resources area in the top navigation and click the InfoSight Listing by State option. Q: How can I view all the information for a topic at one time without opening the orange bars for each section? A: Click the View/Print All button in the upper right-side corner (just below the blue navigation bar). This will give you a fully expanded view of all the content. The content can be printed from this screen as well. Q: There is so much information on InfoSight. How can I quickly find what I am looking for? A: The search feature, found in the upper right corner of site (click the magnifying glass icon!) can help pinpoint what you are looking for in InfoSight. We also have an A-Z Index under the Resources area in the top navigation which many credit unions find very useful to get them to the right spot. Have a question not on the list above? Contact Amy Kleinschmit for assistance.
Compliance Update with Amy K
by Amy Kleinschmit, Chief Compliance Officer
National Consumer Protection Week
National Consumer Protection Week (NCPW), February 28 to March 6, 2021, is a time to help people understand their consumer rights and make well-informed decisions about money. There are a number of virtual events planned throughout the week which will cover a range of topics, including avoiding coronavirus scams, government imposters, and cyber fraud.
The FTC has a list of events found here, and also has a number of shareable social media images to help educate members about scams and frauds that are circulating. These images can be found here.
FinCEN Advisory – Financial Crimes Targeting COVID-19 Economic Impact Payments
The Financial Crimes Enforcement Network (FinCEN) issued advisory FIN-2021-A002 regarding crimes targeting COVID-19 Economic Impact Payments (EIP). This advisory contains descriptions of EIP fraud, associated red flag indicators, and information on reporting suspicious activity.
There are a number of fraudulent activities and theft of EIPs. Some examples include fraudulent checks; altered checks; counterfeit checks; phishing schemes; inappropriate seizure of EIP. The advisory goes on to list red flags related to each of these activities. It is important for credit unions to review these red flags, and to be aware of fraudulent activities. Some of the red flags include:
An existing account receives, or an account holder makes, multiple EIP-related deposits for individuals other than the account holder(s), and the individuals named on the checks reside outside the geographic region of the account holder, or do not have a history at the account holder’s purported address. This may be indicative of funnel account activities in which multiple EIPs are deposited or transferred throughout the United States into one account, which may be held by a fraudster or a money mule working for the fraudster.
A customer opens a new account with an EIP check or debit card, and the name of the potential account holder is different from that of the depositor or the payee of EIP.
An account receives several EIP-related deposits and almost immediately thereafter (a) disburses funds for large purchases at merchants that offer cash back as an option, in amounts not typical of this type of merchant, or (b) has funds transferred onto prepaid debit or gift cards.
Deposits of one or more EIP checks or electronic deposits are made into a nursing home or assisted living facility’s business account and those payments have not been returned to the resident. This may be an indication that the business is inappropriately withholding residents’ EIP funds.
FinCEN also issued a consolidated COVID-19 SAR Key Terms and Filing Instructions which can be found here. As credit unions are aware, there have been several FinCEN advisories related to scams and fraudulent activity related to COVID-19. Each of those advisories included filing instructions and keywords that were to be used when filing an SAR in response to this activity. This notice consolidates all these filing instructions and key terms for fraudulent activities, crimes, and cyber and ransomware attacks related to Coronavirus Disease 2019 (COVID-19). Make sure the individual responsible for completing SARs at your credit union has a copy of this notice.
CFPB – QM Final Rules
The Consumer Financial Protection Bureau (CFPB) has updated their small entity compliance guides related to the Qualified Mortgage (QM) rules. These updated resources can be found here. As you may recall, in 2020 the CFPB issued the GSE Patch Extension Final Rule, General QM Final Rule, and Seasoned QM Final Rule. The new General QM rule and Seasoned QM rule are set to take effect March 1. Mandatory compliance of the new General QM rule is July 1.
However, this is probably not the last we will see of rulemaking affecting the QM definitions. The CFPB also issued a statement, found here, that provides “The Bureau is considering whether to initiate a rulemaking to revisit the Seasoned QM Final Rule. If the Bureau decides to do so, it expects that it will consider in that rulemaking whether any potential final rule revoking or amending the Seasoned QM Final Rule should affect covered transactions for which an application was received during the period from March 1, 2021, until the effective date of such a final rule.”
Furthermore, with regard to the General QM final rule, “The Bureau also expects to issue shortly a proposed rule that would delay the July 1, 2021 mandatory compliance date of the General QM Final Rule.” The Statement concludes with “The Bureau will consider at a later date whether to initiate another rulemaking to reconsider other aspects of the General QM Final Rule.”
InfoSight FAQs (Continued!)
InfoSight is a FREE resource included with your DakCU membership. Login today to take advantage of this fantastic resource! If you’re new to InfoSight, here are some more frequently asked questions.
Q: How do I view information from other states?
A: Go under the Resources area in the top navigation and click the InfoSight Listing by State option.
Q: How can I view all the information for a topic at one time without opening the orange bars for each section?
A: Click the View/Print All button in the upper right-side corner (just below the blue navigation bar). This will give you a fully expanded view of all the content. The content can be printed from this screen as well.
Q: There is so much information on InfoSight. How can I quickly find what I am looking for?
A: The search feature, found in the upper right corner of site (click the magnifying glass icon!) can help pinpoint what you are looking for in InfoSight. We also have an A-Z Index under the Resources area in the top navigation which many credit unions find very useful to get them to the right spot.
Have a question not on the list above? Contact Amy Kleinschmit for assistance.