2009 - What A Year!
By David Dickinson
I've been involved in regulatory compliance for 20 years (man, I'm getting old!). I started as a FDIC Examiner, then worked as a loan officer and then started Banker's Compliance Consulting in 1993. I remember when the flood rules only required us to document the panel number and the date of the map we reviewed. CRA was simply about having a public file and a lobby sign. I remember when Truth In Savings Act came out and we thought it was huge (that was 1993)! I also remember the early 2000's when we were bombarded with Privacy and then the USA Patriot Act and the BSA requirements went through the roof. But I can't ever remember so many regulations in one year.
There's been a major change to mortgage lending: the VERY confusing RESPA rules, MDIA, HPML, new escrow requirements (beginning in April 2010) and new Flood FAQs. We've also had non-mortgage lending changes: Open-end payment changes (thanks for letting us know it only applied to credit cards AFTER we made all of the changes - that's sarcasm, in case you didn't get it), prompt crediting of payment requirements, lots of advertising changes, credit card amendments (they've only just begun) and Truth in Lending has more changes coming. We also have Private Student Loan requirements and the dreaded Regulation GG (UGH!).
But that isn't all. There have been lots of deposit side changes too: Soon there will be no more non-local checks and Truth In Savings Act now requires balances to be clear about what's really in the customer's account vs. what's available from overdraft services, loans, etc. There have been CTR Exemption Rule changes and Truth In Savings Act periodic statement changes affecting the disclosure of overdraft and NSF fees. In July we have a huge change (from Reg E) prohibiting the charging of an overdraft fee on ATM and POS transactions unless the customer opts-in.
Then there's the new Privacy disclosure (that's not mandatory until 1/1/11), the new (final) rules for the FACT Act: Section 312 - Accuracy and Integrity and Direct Dispute Provisions, and the long awaited Section 311 - Risk Based Pricing Notices. Are you getting tired of this summary yet?
Unfortunately, I don't think we're seeing the end of the regulatory changes. While at the ABA's Regulatory Compliance Conference this summer, one ABA Attorney likened this to the Gettysburg battle. In other words, this is only the beginning of the war. We'll see revisions and FAQs to these quickly issued changes. We'll see more regulations as some find loopholes. Congress is on a rampage and they don't seem to care how it affects the banker.
So why am I bringing all of this up? It's not to depress you. It's to remind you that you are more valuable to your institution today than ever before. I encourage you to be optimistic and see this as job security - an opportunity to be a valued member of your bank's Team.
Be sure to update your management on all of these changes and let them know what's yet to come. They need to budget accordingly, allowing time for training and dedicating resources to equip and educate your bank's personnel. You should also keep your Board apprised of all of these regulatory changes. They need to understand the new burdens and complexities to your bank and its' personnel. They may also want to communicate with your State's Representatives. It would be great to give Congress some feedback on what they are doing to us.
Rest assured, we're doing all we can to read and digest all of these changes. We're looking for the pitfalls and loopholes and trying to answer your questions before you even know what to ask. It's been a tough year for us too. In fact, I've felt depressed not being able to get my arms around a regulation so we can explain it to all of you.
In summary, here's wishing you a blessed 2010! We welcome the opportunity to work with you through all of these changes and the headaches they bring.