Compliance Question of the Week

In today’s banking environment as soon as one big new regulation is implemented another pops up. Our compliance resources help your community bank stay one step ahead of the regulators.

Regulations and Guidance

Question: Can my bank use an artificial or prerecorded voice to deliver a message to a residential land line?

ANSWER: 

No, unless there is prior express consent and:

(i) the call is made for emergency purposes;

(ii) the call is not made for a commercial purpose;

(iii) the call is made for a commercial purpose but does not include or introduce an advertisement or constitute telemarketing;

(iv) the call is made by or on behalf of a tax-exempt nonprofit organization; or

(v) the call delivers a “health care” message made by, or on behalf of, a “covered entity” or its “business associate,” as those terms are defined in the HIPAA Privacy Rule, 45 CFR 160.103.

Reference: 47 CFR § 64.1200 (a)(3)

 

 

 
 

 

 


 

Q&A Archives

ANSWER:

The primary purpose of the FFIEC Consumer Compliance Ratings System is to ensure that regulated financial institutions are evaluated in a comprehensive and consistent manner, and that supervisory resources are appropriately focused on areas exhibiting risk of consumer harm and on institutions that warrant elevated supervisory attention.

Reference: 81 Fed. Reg. 79473, 79477 (November 14, 2016). 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

 

 

 

ANSWER:

The charges for the MAPR includes, as applicable to the extension of consumer credit:

(i) Any credit insurance premium or fee, any charge for single premium credit insurance, any fee for a debt cancellation contract, or any fee for a debt suspension agreement;

(ii) Any fee for a credit-related ancillary product sold in connection with the credit transaction for closed-end credit or an account for open-end credit; and

(iii) Except for a bona fide fee (other than a periodic rate) which may be excluded under paragraph (d) of this section:

(A) Finance charges associated with the consumer credit;

(B) Any application fee charged to a covered borrower who applies for consumer credit, other than an application fee charged by a Federal credit union or an insured depository institution when making a short-term, small amount loan, provided that the application fee is charged to the covered borrower not more than once in any rolling 12-month period; and

(C) Any fee imposed for participation in any plan or arrangement for consumer credit, subject to paragraph (c)(2)(ii)(B) of this section.

Reference: Military Lending Act 32 CFR 232.4

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

 

 

 

ANSWER:

Having written policy and procedures in place for employee actions – especially related to customer service – helps ensure consistency in employee actions and helps ensure that personnel know what is expected of them.

When developing a policy, consider the following:

  • Text from the Americans with Disabilities Act
  • The ADA guidance
  • The types of accommodations the bank has in place – e.g., braille at ATM, widened doors, ramps, someone to read aloud disclosures, etc.
  • How the bank provides accommodations for customers
  • How to approach a customer about the need for assistance
  • How to handle a complaint
  • Who to refer a customer to when there is a problem
  • How to handle a phone call
  • How to ensure that conversations are not overheard (e.g., if someone has a hearing difficulty)
  • Assisting customers with service animals
  • Providing training for personnel on communicating with customers with hearing, visions, and/or speech difficulties

Reference: https://www.ada.gov/regs2010/smallbusiness/smallbusprimer2010.htm

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

 

 

 

ANSWER:

The agency must include the extended alert in the file and also provide that alert along with any credit score generated in using that file, during the 7 year period beginning on the date of the request, unless the consumer requests the alert be removed before the end of that period.

Reference: FCRA, Section 605A(b)(1)(A).

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

 

 

 

ANSWER:

If the institution is required to notify an account holder under 31 C.F.R. §212.7(a), the notice must contain the following information in “readily understandable language”:

  • the institution’s receipt of a garnishment order against the account holder;
  • the date on which the institution was served the garnishment order;
  • a succinct explanation of garnishment;
  • an explanation of the institution’s requirement, when a covered benefit is deposited into one of the account holder’s accounts within the last two months, to calculate and establish a protected amount and ensure that the protected amount is made available to the account holder;
  • the account or accounts subject to the garnishment order;
  • the protected amount the institution established;
  • the institution’s requirement to freeze funds in excess of the protected amount, if applicable, pursuant to state law to satisfy the garnishment order;
  • the amount of any garnishment fee charged to the account, consistent with 31 C.F.R. §212.6(h);
  • a list of all federal benefit payments covered by the Garnishment Rule, as identified in 31 C.F.R. §212.2(b);
  • the account holder’s right to assert exemption for amounts above the protected amount against the creditor that initiated the garnishment order by taking an action customarily applicable in a given jurisdiction, such as completing exemption claim forms, contacting the court of jurisdiction, or contacting the creditor;
  • the account holder’s right to obtain legal aid in asserting exemption against the creditor that initiated the garnishment order;
  • the name of the creditor, and
  • the means of contacting the creditor if contact information was included in the order.
Reference: Fed. Consumer Compliance Outlook, 3rd Quarter 2013; 31 CFR 212.7(b).

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

 

 

 

ANSWER:

Yes. The lender is permitted to require more flood insurance than required by the regulation.

Reference: Interagency Q&A 2022, X. Determining the Appropriate Amount of Flood Insurance Required; Amount 8.

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

 

 

 

ANSWER:

Consistent with 1005.5(a), an institution may issue an access device only in response to an oral or written request for the device, or as a renewal or substitute for an accepted access device. A consumer is deemed to request an access device for a payroll card account when the consumer chooses to receive salary or other compensation through a payroll card. A consumer is deemed to request an access device for a prepaid account when, for example, the consumer acquired a prepaid account offered for sale at a retail location or applies for a prepaid account by telephone or online.

Reference: Official Staff Interpretation 1005.18(a), comment 1.

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

 

 

 

ANSWER:

Internet gambling business means the business of placing, receiving or otherwise knowingly transmitting a bet or wager by any means which involves the use, at least in part, of the Internet, but does not include the performance of the customary activities of a financial transaction provider, or any interactive computer service or telecommunications service. For additional information see the definition of Unlawful Internet Gambling under 12 CFR 233.2(bb)

Reference: Regulation GG: 12 CFR 233.2(r) and (bb) Definitions

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

 

 

 

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