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by Blair Rugh
On June 4, 2010 the Federal Reserve published an amendment to Regulation DD to clarify its 2009 amendment relative to the disclosure of overdraft fees on periodic statements and available balance disclosures at ATMs and to conform the Regulation DD requirements with the recent changes to Regulation E.
The first change relates to the disclosure of overdraft fees on periodic statements. The 2009 amendment to the regulation requires a bank to disclose on a periodic statement the overdraft fees imposed during the statement cycle and year-to-date and the same information for NSF fees. The change requires a bank to include in the overdraft fees not only the fee imposed for the overdraft item but also any other fees or charges imposed on the account because an item was paid into overdraft creating an overdrawn balance in the account such as a daily or other periodic fee charged because an account is in an overdraft status. For example assume that in addition to a $25 per item overdraft fee, a bank charges an additional fee of $5 each day that an account is overdrawn. On Monday I have $50 in my account, an item is presented for $100 and the bank pays it, creating a $50 overdraft balance. On Thursday I make a deposit which takes the account back to a positive balance. In addition to the $25 overdraft fee, the bank charges $5 for each of the three days my account was overdrawn. The reportable overdraft fees were therefore $40. As with the prior amendment a bank is not required to include in overdraft fees charges for a transfer from another deposit account or credit line established for overdraft protection.
Additionally the regulation requires that the nomenclature “Total Overdraft Fees” be used to describe the overdraft charges. No variation of that description is allowed.
Compliance with this part of the regulation is mandatory on and after October 1, 2010 therefore all periodic statements provided to covered customers on October first of this year and thereafter must be in conformity with the new rules. Because of the relatively short time frame I recommend that all banks check with the automation provider that generates the content of their periodic statements to assure that they will have the necessary system enhancements sufficiently in advance of the mandatory date to install and test them.
The second change in the new amendment relates to the disclosure of available balances at ATMS or through other automated systems. First it clarifies that the requirement to provide a single account balance does not apply to what the regulation refers to as “retail sweep programs” but which are more generally described in the industry as reserve reclassification accounts. Many banks, to reduce their reserve requirements establish an account that has a transaction sub account and a savings sub account. Transfers are made between the two accounts by the bank to the extent allowed by regulation D to minimize the balance in the transaction account. The customer receives one statement of the aggregate of the two accounts and the account transfers are transparent. Where a bank has that type account product it may show as the account balance the aggregate balance in the two sub accounts, not just the balance in the transaction account.
The amendment also clarifies the description that is required it a bank discloses a second balance after the actual account balance that includes other funds that are available whether through a linked account or a courtesy overdraft program. If the second balance contains funds available from linked accounts or from a courtesy overdraft program there must be a statement that the balance includes overdraft funds. If the bank has a courtesy overdraft program that is not available to a particular customer because the customer has opted-out or not opted-in or otherwise the balance should not include funds that might otherwise be available under that service. If the courtesy overdraft program is available to the customer for some but not all types of transactions then it may be included in the second balance but there must be a statement that the additional funds may not be available for all transactions or reference the types of transactions for which the funds are not available. The compliance date for this portion of the amendment is July 6, 2010.
The most significant part of the amendment is the new requirements for periodic statements. Banks have less than four months to assure that their statements are compliant with the new requirement. Bankers should receive assurances immediately from their automation providers that their systems will accommodate the new requirements.
Tuesday, July 13, 2010
Thursday, July 8, 2010
Repurchase Agreement Accounts
Dear Blair:
Q. We currently have 10 accounts that are set up as repurchase agreement accounts. These accounts are tied to a non interest bearing checking account. Those accounts have the account agreement and the required disclosures. We have a separate repurchase agreement signed by the customer.
Our auditors are telling me that we need an account disclosure that goes with the repurchase agreement. Since the repurchase agreement is not FDIC covered and we have tied investments to the account for collateral purposes what kind of disclosure are we required?
A. I disagree with your auditors. The account of your customer that holds the purchased securities is not a deposit account and therefore does not require any of the disclosures that a deposit account requires. You have numerous disclosures in your repurchase agreement and you provide notifications every time there is a transaction in the repurchase account. That is all the disclosures that the account requires.
Blair Rugh is one of the preeminent experts on United States banking laws and regulations. He has authored compliance manuals recognized by the banking industry as the definitive treatise on banking law and regulation. He has extensive experience as a speaker to bankers' associations and has written numerous articles published in banking journals. For access to more of Blair's compliance expertise, sign up for TriNovus' weekly Bank Regulatory Compliance Update at www.trinovus.com.
Q. We currently have 10 accounts that are set up as repurchase agreement accounts. These accounts are tied to a non interest bearing checking account. Those accounts have the account agreement and the required disclosures. We have a separate repurchase agreement signed by the customer.
Our auditors are telling me that we need an account disclosure that goes with the repurchase agreement. Since the repurchase agreement is not FDIC covered and we have tied investments to the account for collateral purposes what kind of disclosure are we required?
A. I disagree with your auditors. The account of your customer that holds the purchased securities is not a deposit account and therefore does not require any of the disclosures that a deposit account requires. You have numerous disclosures in your repurchase agreement and you provide notifications every time there is a transaction in the repurchase account. That is all the disclosures that the account requires.
Blair Rugh is one of the preeminent experts on United States banking laws and regulations. He has authored compliance manuals recognized by the banking industry as the definitive treatise on banking law and regulation. He has extensive experience as a speaker to bankers' associations and has written numerous articles published in banking journals. For access to more of Blair's compliance expertise, sign up for TriNovus' weekly Bank Regulatory Compliance Update at www.trinovus.com.
You Ask, Blair Answers
Dear Blair:
Q. My bank is exempt from submitting credit card agreements to the Federal Reserve.
Under 226.58(e), we must provide the agreements for all open card accounts either on our website or promptly upon customer request. When we provide the agreements, do we need to provide the actual card agreement & account opening table (pricing information)?
Or, do we need to revise the account opening table to be consistent with 226.58(c)(8)(ii)? If we need to revise the account opening table to be consistent with 226.58(c)(8)(ii), would we need to make the following revisions?
1. Delete the reference to the Fed’s credit card website.
2. Delete the billing rights information.
3. If the rate is variable, remove the actual rate from the table & state the
index + margin (or range of margins).
4. If the rate is fixed, the only changes needed are 1. & 2.
A. You are correct in your analysis of the requirement. You first provide your agreement and the pricing information as an addendum to it. There is no provision for providing extraneous information such as the reference to the Fed's website or the billing rights information. As to the rate, you disclose both the rate and if it is a variable rate the margin and index on which it is calculated.
Blair Rugh is one of the preeminent experts on United States banking laws and regulations. He has authored compliance manuals recognized by the banking industry as the definitive treatise on banking law and regulation. He has extensive experience as a speaker to bankers' associations and has written numerous articles published in banking journals. For access to more of Blair's compliance expertise, sign up for TriNovus' weekly Bank Regulatory Compliance Update at www.trinovus.com.
Q. My bank is exempt from submitting credit card agreements to the Federal Reserve.
Under 226.58(e), we must provide the agreements for all open card accounts either on our website or promptly upon customer request. When we provide the agreements, do we need to provide the actual card agreement & account opening table (pricing information)?
Or, do we need to revise the account opening table to be consistent with 226.58(c)(8)(ii)? If we need to revise the account opening table to be consistent with 226.58(c)(8)(ii), would we need to make the following revisions?
1. Delete the reference to the Fed’s credit card website.
2. Delete the billing rights information.
3. If the rate is variable, remove the actual rate from the table & state the
index + margin (or range of margins).
4. If the rate is fixed, the only changes needed are 1. & 2.
A. You are correct in your analysis of the requirement. You first provide your agreement and the pricing information as an addendum to it. There is no provision for providing extraneous information such as the reference to the Fed's website or the billing rights information. As to the rate, you disclose both the rate and if it is a variable rate the margin and index on which it is calculated.
Blair Rugh is one of the preeminent experts on United States banking laws and regulations. He has authored compliance manuals recognized by the banking industry as the definitive treatise on banking law and regulation. He has extensive experience as a speaker to bankers' associations and has written numerous articles published in banking journals. For access to more of Blair's compliance expertise, sign up for TriNovus' weekly Bank Regulatory Compliance Update at www.trinovus.com.
Tuesday, May 18, 2010
TriNovus Forms Partnership with FI Compliance Solutions
Birmingham, Ala., May 18, 2010 – TriNovus, LLC (www.trinovus.com), a company focused on delivering relevant technology solutions to the financial marketplace, announced today a partnership with FI Compliance Solutions (www.ficsas.com ), creators of GRC Pro, a web-based service designed to help community banks and credit unions remain healthy, stable, and competitive by ensuring the proper controls are in place to reduce and mitigate enterprise-wide risk.
FI Compliance Solutions will be resellers of TriNovus’ TriComply product suite that consists of BankRISK, a loan portfolio stress testing solutions, StartSAFE, a solution for compliance with The Safe Act, and compliance webinars conducted by banking compliance expert Blair Rugh.
“GRC Pro offers institutions a simple and cost effective way to identify, measure, and monitor risk by combining the power of software with implementation assistance and independent 3rd party review,” said David Brasfield, CEO of TriNovus. “We feel it will be a good fit with our current customer base and target market,” he said.
“Now more than ever institutions are facing additional pressure from regulators requiring increased attention to compliance. TriNovus’ TriComply product suite meets several key areas that banks need to address,” said Eric Strohl, president of FI Compliance solutions.
About TriNovus
TriNovus, a Birmingham, Ala.-based company, was founded with the goal of delivering relevant technology solutions to the financial marketplace. The TriNovus product suite currently consists of solutions addressing compliance, stress testing, vendor management and distressed assets. For more information on TriNovus, visit www.trinovus.com or contact David Brasfield at 205.991.5636 or david.brasfield@trinovus.com.
About FI Compliance Solutions
FI Compliance Solutions, Inc. provides highly-focused corporate governance and risk management solutions specifically for financial institutions. Our team of seasoned professionals average more than 35 years of experience in internal audit, compliance, risk management and IT infrastructure security. Our solutions are designed to help clients implement a simple and sustainable risk management program at an affordable price point. For more information on FI Compliance Solutions contact Eric Strohl at 610.265.1002 ext. 100 or estrohl@ficsas.com.
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FI Compliance Solutions will be resellers of TriNovus’ TriComply product suite that consists of BankRISK, a loan portfolio stress testing solutions, StartSAFE, a solution for compliance with The Safe Act, and compliance webinars conducted by banking compliance expert Blair Rugh.
“GRC Pro offers institutions a simple and cost effective way to identify, measure, and monitor risk by combining the power of software with implementation assistance and independent 3rd party review,” said David Brasfield, CEO of TriNovus. “We feel it will be a good fit with our current customer base and target market,” he said.
“Now more than ever institutions are facing additional pressure from regulators requiring increased attention to compliance. TriNovus’ TriComply product suite meets several key areas that banks need to address,” said Eric Strohl, president of FI Compliance solutions.
About TriNovus
TriNovus, a Birmingham, Ala.-based company, was founded with the goal of delivering relevant technology solutions to the financial marketplace. The TriNovus product suite currently consists of solutions addressing compliance, stress testing, vendor management and distressed assets. For more information on TriNovus, visit www.trinovus.com or contact David Brasfield at 205.991.5636 or david.brasfield@trinovus.com.
About FI Compliance Solutions
FI Compliance Solutions, Inc. provides highly-focused corporate governance and risk management solutions specifically for financial institutions. Our team of seasoned professionals average more than 35 years of experience in internal audit, compliance, risk management and IT infrastructure security. Our solutions are designed to help clients implement a simple and sustainable risk management program at an affordable price point. For more information on FI Compliance Solutions contact Eric Strohl at 610.265.1002 ext. 100 or estrohl@ficsas.com.
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Thursday, April 1, 2010
TriNovus to Expand Compliance Division with Addition of Industry Veteran
Blair Rugh Joins TriNovus to Contribute to the Direction of TriNovus’ TriComply Compliance Division
Birmingham, Ala., April 1, 2010 – TriNovus, LLC (www.trinovus.com), a company focused on delivering relevant technology solutions to the financial marketplace, announced today the expansion of its TriComply compliance division with the addition of industry veteran and expert Blair Rugh to the organization. As part of the expansion, TriNovus will introduce a free email newsletter, TriComply - Bank Regulatory Compliance Update, that breaks down the most recent compliance changes and concisely outlines actions banks should take to respond to those changes in order to best comply with new and established guidelines Bankers interested in receiving the TriComply - Bank Regulatory Compliance Update can sign up on TriNovus’ website at www.trinovus.com.
In addition, TriNovus will be featuring a series of compliance training webinars targeted to community banks. The schedule for April features webinars on The Safe Act, Regulation O, portfolio stress testing, and vendor management. Many sessions feature a live question and answer period with Rugh where bankers have an opportunity to ask questions and receive answers specific to their institutions. A complete schedule and registration details can be found on the TriNovus website at www.trinovus.com.
Rugh is one of the preeminent experts on United States banking laws and regulations. He has authored compliance manuals recognized by the banking industry as the definitive treatise on banking law and regulation. He has extensive experience as a speaker to bankers' associations and has written numerous articles published in banking journals. With more than 20 years experience in commercial and investment banking, Rugh's background includes a Bachelor of Science degree in chemical engineering from the University of Kansas as well as a juris doctor degree from Southern Methodist University Law School.
“Compliance requirements are constantly changing and with what a community banker has to do on a daily basis, there isn’t always enough time to devote to really examining them,” said David Brasfield, president and CEO of TriNovus. “TriComply – Bank Regulatory Compliance Update provides the highlights of the requirements and suggests actions to take – all written in language that is easy to understand. This coupled with our webinars will minimize the time and effort it takes for community bankers to stay up-to-date with the latest in compliance.”
About TriNovus
TriNovus, a Birmingham, Ala.-based company, was founded with the goal of delivering relevant technology solutions to the financial marketplace. In addition to its compliance division also featuring BankRISK a loan portfolio stress testing solution and StartSAFE a solution for compliance with The Safe Act, products include:
BankerMLS (www.bankermls.com) - a web-based application that enables financial institutions to obtain maximum exposure and value for repossessed assets.
BankerVMS (www.bankervms.com) - a vendor relationship management system that provides financial institutions with an organized, efficient and compliant solution for managing third party relationships.
For more information on TriNovus, visit www.trinovus.com or contact David Brasfield at 205.991.5636 or david.brasfield@trinovus.com.
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Birmingham, Ala., April 1, 2010 – TriNovus, LLC (www.trinovus.com), a company focused on delivering relevant technology solutions to the financial marketplace, announced today the expansion of its TriComply compliance division with the addition of industry veteran and expert Blair Rugh to the organization. As part of the expansion, TriNovus will introduce a free email newsletter, TriComply - Bank Regulatory Compliance Update, that breaks down the most recent compliance changes and concisely outlines actions banks should take to respond to those changes in order to best comply with new and established guidelines Bankers interested in receiving the TriComply - Bank Regulatory Compliance Update can sign up on TriNovus’ website at www.trinovus.com.
In addition, TriNovus will be featuring a series of compliance training webinars targeted to community banks. The schedule for April features webinars on The Safe Act, Regulation O, portfolio stress testing, and vendor management. Many sessions feature a live question and answer period with Rugh where bankers have an opportunity to ask questions and receive answers specific to their institutions. A complete schedule and registration details can be found on the TriNovus website at www.trinovus.com.
Rugh is one of the preeminent experts on United States banking laws and regulations. He has authored compliance manuals recognized by the banking industry as the definitive treatise on banking law and regulation. He has extensive experience as a speaker to bankers' associations and has written numerous articles published in banking journals. With more than 20 years experience in commercial and investment banking, Rugh's background includes a Bachelor of Science degree in chemical engineering from the University of Kansas as well as a juris doctor degree from Southern Methodist University Law School.
“Compliance requirements are constantly changing and with what a community banker has to do on a daily basis, there isn’t always enough time to devote to really examining them,” said David Brasfield, president and CEO of TriNovus. “TriComply – Bank Regulatory Compliance Update provides the highlights of the requirements and suggests actions to take – all written in language that is easy to understand. This coupled with our webinars will minimize the time and effort it takes for community bankers to stay up-to-date with the latest in compliance.”
About TriNovus
TriNovus, a Birmingham, Ala.-based company, was founded with the goal of delivering relevant technology solutions to the financial marketplace. In addition to its compliance division also featuring BankRISK a loan portfolio stress testing solution and StartSAFE a solution for compliance with The Safe Act, products include:
BankerMLS (www.bankermls.com) - a web-based application that enables financial institutions to obtain maximum exposure and value for repossessed assets.
BankerVMS (www.bankervms.com) - a vendor relationship management system that provides financial institutions with an organized, efficient and compliant solution for managing third party relationships.
For more information on TriNovus, visit www.trinovus.com or contact David Brasfield at 205.991.5636 or david.brasfield@trinovus.com.
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Wednesday, February 24, 2010
TriNovus Signs New BankRISK Client
TriNovus is excited to announce that Merchants Bank of Alabama has signed with TriNovus for BankRISK.
BankRISK is a comprehensive stress test and risk management solution that proactively evaluates the effects of adverse economic conditions on a bank’s loan portfolio. Stress testing enables a bank to project future portfolio strengths and weaknesses based on hypothetical conditions that are imposed on the institution’s loan data.
BankRisk will apprise Merchants Bank of Alabama of inherent risk exposure and allow the management team to effectively evaluate capital and liquidity needs while satisfying regulatory requirements.
Merchants Bank of Alabama is located in Cullman, AL and has approximately $245M in assets.
BankRISK is a comprehensive stress test and risk management solution that proactively evaluates the effects of adverse economic conditions on a bank’s loan portfolio. Stress testing enables a bank to project future portfolio strengths and weaknesses based on hypothetical conditions that are imposed on the institution’s loan data.
BankRisk will apprise Merchants Bank of Alabama of inherent risk exposure and allow the management team to effectively evaluate capital and liquidity needs while satisfying regulatory requirements.
Merchants Bank of Alabama is located in Cullman, AL and has approximately $245M in assets.
Thursday, February 18, 2010
TriNovus Announces StartSAFE Solution For Bank Compliance With The SAFE Act
Birmingham, Ala., February 17, 2010 – TriNovus, LLC (www.trinovus.com), a company focused on delivering relevant technology solutions to the financial marketplace, announced today the launch of StartSAFE, a comprehensive solution to aid banks in meeting the compliance requirements of The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act). StartSAFE will be a part of TriComply, TriNovus’ suite of products designed to provide community banks solutions to aid in compliance with new and ever-changing banking regulations.
The SAFE Act requires that all mortgage loan originators (“MLOs”) register in a national registry and provide the registry information about themselves. The regulation also places significant responsibility on banks that employ MLOs requiring among other things for them to establish procedures and tracking systems for monitoring registration and renewals and to develop educational programs for MLOs covering registration requirements.
StartSAFE addresses SAFE Act requirements by providing banks a turnkey solution consisting of SAFE Act training for MLOs; SAFE Act policy and procedure templates; and the web-based StartSAFE solution for automated submissions to the Nationwide Mortgage Licensing System and Registry, tracking of MLO initial submission data and updates, and secure archival and off-site storage of MLO data and NMLS submissions.
Also currently part of TriNovus’ TriComply product suite is BankRISK, its stress testing and risk management solution for assessing loan portfolio risk. Additional compliance solutions are currently in development.
“With compliance there is always something new that the banks need to do,” said David Brasfield president and CEO of TriNovus. “It is our goal that TriNovus’ TriComply product suite will offer solutions that enable community bankers to respond to new regulatory requirements as efficiently and cost effectively as possible. StartSAFE is one of many such products that we plan to introduce to the market.”
About TriNovus
TriNovus, a Birmingham, Ala.-based company, was founded with the goal of delivering relevant technology solutions to the financial marketplace. For more information on TriNovus, visit www.trinovus.com or contact David Brasfield at 205.991.5636 or david.brasfield@trinovus.com.
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The SAFE Act requires that all mortgage loan originators (“MLOs”) register in a national registry and provide the registry information about themselves. The regulation also places significant responsibility on banks that employ MLOs requiring among other things for them to establish procedures and tracking systems for monitoring registration and renewals and to develop educational programs for MLOs covering registration requirements.
StartSAFE addresses SAFE Act requirements by providing banks a turnkey solution consisting of SAFE Act training for MLOs; SAFE Act policy and procedure templates; and the web-based StartSAFE solution for automated submissions to the Nationwide Mortgage Licensing System and Registry, tracking of MLO initial submission data and updates, and secure archival and off-site storage of MLO data and NMLS submissions.
Also currently part of TriNovus’ TriComply product suite is BankRISK, its stress testing and risk management solution for assessing loan portfolio risk. Additional compliance solutions are currently in development.
“With compliance there is always something new that the banks need to do,” said David Brasfield president and CEO of TriNovus. “It is our goal that TriNovus’ TriComply product suite will offer solutions that enable community bankers to respond to new regulatory requirements as efficiently and cost effectively as possible. StartSAFE is one of many such products that we plan to introduce to the market.”
About TriNovus
TriNovus, a Birmingham, Ala.-based company, was founded with the goal of delivering relevant technology solutions to the financial marketplace. For more information on TriNovus, visit www.trinovus.com or contact David Brasfield at 205.991.5636 or david.brasfield@trinovus.com.
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