By, Elva Coffey-Sears
By nature as much as necessity, compliance officers are accustomed to interpreting, implementing and monitoring compliance with complex regulatory requirements. New or amended regulations are not always black and white, but with the help of the analysis in the federal register, the commentary, examination procedures, compliance guides and other agency-issued resources, compliance is generally attainable. Even more challenging are the other situations generally not directly related to a new or amended regulation, which the compliance officer must resolve. For lack of a better term, we’ll call these compliance conundrums and review three of the conundrums we are currently facing.
Conundrum 1
Flood regulations require institutions to use the standard flood hazard determination form developed by the Administrator of FEMA when determining whether a building or mobile home offered as collateral is or will be located in a special flood hazard area in which flood insurance is available.
- The conundrum – the FEMA form expired on May 30, 2015! Fortunately, FEMA provided the resolution to this one by advising us to continue to use either the expired form or the prior version of the form until a new form is made available.
Conundrum 2
The Servicemembers Civil Relief Act provides a period of protection for members of uniformed services relating to mortgages, mortgage foreclosure, eviction and other purposes. The temporary extension of the period of protection to one year provided by the Foreclosure Relief and Extension for Servicemembers Act of 2014 expired on December 31, 2015.
- The conundrum – this technically reduces the period of protection from one year to 90 days. A bill before the House of Representatives (H.R. 4252) would reinstate the temporary extension through December 31, 2017, while a bill before the Senate (S. 2347) would extend the temporary extension through December 31, 2016. Institutions should monitor the status of these bills and consult legal counsel for guidance in covered situations.
Conundrum 3
Effective October 28, 2015, privacy regulations were amended to provide that institutions that do not engage in information sharing practices requiring an opt-out were allowed to post their privacy notice online instead of mailing annual privacy notices provided that: the online notice is clear, conspicuous and accessible without a login, a notice is mailed within 10 days of a phone request and, an annual availability notice, using model language, is provided. President Obama signed the FAST Act into law on December 4, 2015. Although primarily focused on highways and bridges, the FAST Act included an expanded exemption to the annual privacy notice requirement. Under this new law, an institution that has not changed its sharing practices since it last provided a privacy notice and only shares nonpublic personal information with nonaffiliated third parties in a manner that does not require an opt-out, is exempt from providing any annual privacy notice.
- The conundrum – while no regulations have been issued in support of this exemption, the law is effective as of the date signed. Institutions wanting to rely on the new exemption will need to decide whether to rely on the law or wait for the regulations.
