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Myth Buster: Homeownership counseling certification


myth buster

Myth: Homeownership counseling certification requirements only apply to high cost mortgages.

Fact: Busted! This is false. When considering both the “old” and “new” mortgage rules, here is what’s required:

  • A notice of the availability of homeownership counseling (including the list of agencies offering such counseling in the borrower’s local area) must accompany ALL federally-related mortgage loans.

  • Applicants for high cost mortgages must obtain counseling before the loan closes and provide the lender with certification that the counseling has been completed.

  • First-time home loan borrowers must obtain counseling before obtaining a closed-end dwelling-secured loan with negative amortization, and must provide the lender with certification that the counseling has been completed.

Banking Compliance Q & A: HCM vs HPML

Banking Compliance Q & A

Q. As of January 2014, what will be the differences between a “High Cost Mortgage” (HCM) and a “Higher-Priced Mortgage Loan” (HPML)?

The difference between a HCM and a HPML is the thresholds applied to determine the loan’s status. Click to see a table which illustrates the differences between the two.  Among the significant changes from rules effective in 2013 and earlier: (1) An open-end loan can now be considered an HCM; and (2) The HPML definition now also relies on the Average Prime Offer Rate (APOR) as its index versus the previously-used comparison to Treasury securities yields.

Click to see a table which compares the differences between a “High Cost Mortgage” (HCM) vs. “Higher-priced Mortgage Loan” (HPML) loans.

Business Continuity Planning – Are You Ready for the Inevitable?


Summary: When it comes to putting business continuity plans to the test, it’s a matter of “if,” not “when.” With an ever-growing list of threats before them, ranging from natural disasters to cybercrime, financial institutions must be prepared to minimize operational disruption – including compliance activities.

A little more than a year ago, Hurricane Sandy devastated the Northeast causing many organizations within its financial epicenter – including the New York Stock Exchange – to halt operations. Today, as the world assesses the damage caused by Typhoon Haiyan in the Philippines, we are reminded that we are all vulnerable to the unthinkable.

It also reminds us in the banking industry to be prepared – to think beyond “how will we recover if disaster strikes?” and instead focus on “what can we do now to minimize disruption?”

When it comes to business continuity planning (BCP), financial institutions face unique pressures. In addition to keeping operations up and running (or minimizing downtime), banks and credit unions must make sure all activities remain compliant. In an industry that’s constantly being shaped by regulatory scrutiny, this requires regular reconciliation between new and changing regulations and the institution’s business continuity plan. In short, BCP – like compliance – isn’t an item that can be checked off a list; it’s an ongoing process.

Read the full article to gain a few practical tips to guide your institution as you rethink your BCP activities. 

Q4 2013 Regulatory Workload Report


Q4 2013 BCI Workload Reportwork report image Q4

The Regulatory Workload Report is published each quarter by Continuity Control to help financial institutions accurately plan for the work estimated to comply with each regulatory item. The workload is measured in terms of work shovels on a scale of 1 to 10 shovels. Download the Q4 2013 Regulatory Workload report.

To receive periodic regulatory updates as well as invitations to Continuity Control's RegAdvisor Quarterly Regulatory webinars (including coverage of that quarter's BCI), please subscribe to the RegAdvisor email list.

The ICBA PSP for Compliance Management System

ICBA PreferredServiceProvider


We're very pleased to announce that the Independent Community Bankers of America® (ICBA) has selected Continuity Control™ as the Preferred Service Provider (PSP) for its compliance management system (CMS). This new relationship will offer ICBA-member community banks access to a comprehensive, automated CMS, which provides one simple solution to manage the entire regulatory lifecycle. As part of this relationship, ICBA members will receive special discounts on a Continuity Control subscription.

The Continuity Control Compliance Management System is engineered to reduce regulatory burden (time, cost and risk) for community banks. Through this single, comprehensive system, bankers can automate the entire regulatory lifecycle for the first time, including: policy management, risk management, vendor management, custom controls, audit management, regulatory change management, and annual strategy and planning.  

Central to Continuity Control’s engineered advantages is the combination of integrating the code of federal regulations into the platform and the Continuity Regulatory Operations Center (ROC). The ROC provides bankers with timely monitoring and analysis for new regulatory changes by a team of former examiners and industry experts. This analysis is delivered as simple tasks via the Continuity platform with specific and actionable guidance. Tasks are assigned to the appropriate people within the bank and tracked through completion.

Continuity clients also have assigned experts that work closely with the banks to drive continual improvement to their compliance processes throughout the year. With Continuity Control, community banks can streamline compliance management, ensure they don’t miss any regulatory requirements and refocus their energy on growth and profitability. Read More.

ICBA members can visit Continuity Control at ICBA’s annual convention, Community Banking Live, March 2-6 in Honolulu, at Booth #813 and hear from Continuity Control's CEO, Andy Greenawalt, as he presents the workshop: Stop the Hemorrhaging-What Is Compliance Really Costing You? at the convention on March 4th.

Banking Compliance Q&A: Q4 2013 Regulatory Briefing


Continuity Control hosted its Q4 2013 RegAdvisor Briefing webcast on January 9th. This event provides a complimentary forum for financial institution executives and compliance management professionals to learn about the latest regulatory changes. The objective of the briefing is to bring clarity to the interpretation of the regulatory requirements, help assess the time and work effort that will be required to comply, and provide an opportunity to ask questions of regulatory experts. During our webcast, we received excellent questions from our audience and our experts have published their answers for your benefit.

Below are some of the questions that are answered in the Q & A document

Q: Both the CFPB and HUD websites do not include enough agencies instead they list ten but many are duplicates. What is the best way to comply if the sites are inaccurate?

Q: I have an ATR question regarding simultaneous loans. for example: If you have a consumer who decides to subordinate their Heloc with another bank and refinance with you, what calculation do you use to calculate the ATR for the HELOC as a part of their monthly expenses?

Q: You mentioned that the OCC and the CFPB issued vendor mgmt guidance last quarter. Did you mean the OCC and the Federal Reserve? I was unaware of CFPB issuance and cannot find it.

Q: If available could you send me a summary of the mortgage rule changes that would apply as a small servicer (under 5000) loans.

Q: Is a financial institution allowed to charge an administrative fee for force-placed insurance policy?

Q: Can you give us the name of the two FDIC enforcement actions on CMS (Compliance Management Systems) that happened in Q4?

Click here for a copy of the Q & A document from the Q4 2013 RegAdvisor Briefing.

View recorded session of the Q4 2013 RegAdvisor Briefing.

Click here for a copy of the presentation slides from the Q4 2013 RegAdvisor Briefing.

Q4 2013 Banking Compliance Index (BCI)


2013: Toughest Regulatory Year on Record

Community Financial institutions faced the toughest regulatory year on record in 2013. With 245 regulatory changes and more than 16,000 pages issued, community banks were forced to expend more than 3,400 additional hours and $150,000 to keep pace with the new rules. Coping with the extra regulatory load required the average community bank to devote an additional 2.1 full-time employee equivalents to get the added work done. The total regulatory cost to the industry for the year was more than $1.1B.

The Q4 2013 BCI shows that the average financial institution will require the time of 1.61 full time employee (FTE) equivalents to research and address the quarter’s 66 regulatory changes. Although this is slightly lower than last quarter’s number, the dip offered no relief to bankers. There were over 5,500 pages of new regulations added and the incremental quarterly cost burden for an average institution remained high at $35,798. The Q4 aggregate cost burden for the industry is $241M. In addition, the enforcement climate continues to be active with 134 enforcement actions in this quarter, and the FDIC’s continued scrutiny of compliance management systems, consumer protection and BSA.

Q4 2013 Banking Compliance Index

Download BCI

Read BCI Report

To receive monthly regulatory updates as well as invitations to Continuity Control's complimentary RegAdvisor Quarterly Update webinars (including coverage of that quarter's BCI), please subscribe to the RegAdvisor email list.

Q4 2013 BCI: The Story the Numbers Don’t Tell


SUMMARY: The data tracked by the Q4 2013 Banking Compliance Index suggest a mild reprieve in the world of compliance. But, a closer look and peek into the regulatory pipeline indicates this isn’t the case at all. 


Last quarter, something very interesting happened in the world of banking compliance. For the first time in more than a year, key indicators tracked by the Q4 2013 Banking Compliance Index suggested the growth rate of the regulatory burden is slowing down.

While regulators issued roughly the same amount of regulatory changes as they did in Q3 (66 vs. 65), the hours of work required for each institution to comply with these new regulations are 30 percent fewer compared to the previous quarter. Q4 also saw fewer enforcement actions issued by regulators – the lowest levels since early 2012. Lastly, the incremental cost of compliance per institution (i.e. the cost to comply with the quarter’s new regulations) in Q4 decreased by nearly 18 percent when compared to Q3’s data.

On paper, this data suggests a break from the storm. But, is that really an accurate assessment?

Most likely not, say most compliance officers. The truth is that Q4, like those before it, still brought a significant amount of additional work and cost to financial institutions. And, while the regulatory burden did grow at a slower rate compared to previous quarters, a closer look into the data and the state of the regulatory environment reveals why any suggestion of a reprieve is delusional.

Read Full Article

Compliance Officer 2.0 – Are You Ready?

Compliance Officer 2.0 whitepaper thumbnail

This is the time of year when business leaders of all kinds begin to reflect on the state of their industry – what’s changing, what will drive evolution in the New Year, and how to respond. But, for those of us in banking, the question isn’t so much “What has changed?” as “What hasn’t changed?”

Like years prior, 2013 pushed financial institutions further into uncharted territory. The impact of mobile, cloud and social network technologies cannot be ignored, and the role of the branch continues to rapidly be redefined. Most institutions have accepted that there is no “business as usual”…and, that’s not a bad thing! The transformation and innovation that’s happening across the industry is quite amazing. Meanwhile, the pace of change in the regulatory environment has reached an all-time high.

But, there’s a hiccup in supporting this transformation – and that’s compliance management.

There have been between 150 to nearly 300 regulatory changes issued each year, and the average number of enforcement actions issued per quarter in recent years have been three times the amount at the peak of the Savings & Loan Crisis. Examiners are also putting increasing pressure on institutions of all sizes to demonstrate that they have an effective compliance management system in place that will keep up with this pace.

The result? There is an urgent need for the role of the compliance officer to evolve to the next generation – Compliance Officer 2.0. This represents a great opportunity for compliance officers as their role becomes more strategic and there’s the opportunity to become a trusted advisor to the executive team.

Learn more about the evolution from Compliance officer 1.0 to 2.0 by downloading Continuity Control’s white paper and Self Assessment Checklist on “Compliance Officer 2.0 – Are You Ready?

Download White Paper

Myth Buster: OFAC scans


myth buster

Myth: If our financial institution doesn’t have any foreign customers, or conduct any foreign transactions, we don’t need to run OFAC scans. 

Fact: This is false. There are thousands of American names and domestic addresses on the Office of Foreign Assets Control’s (OFAC) published list of Specially Designated Nationals (SDN). Persons and businesses engaged in terrorism, drug trafficking and other criminal activities that require international monetary transactions via financial institutions include both domestic and foreign parties.

To receive monthly regulatory updates as well as invitations to Continuity Control's complimentary RegAdvisor Quarterly Update webinars (including coverage of that quarter's BCI), please subscribe to the RegAdvisor email list.

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