Financial Services Spotlight

February 2016 First Half Developments

Posted by Roy Andersen on Feb 16, 2016 12:00:00 PM


The BCFP published a Compliance Bulletin to remind banks that they must have reasonable written policies and procedures to insure that any consumer reporting data they pass on to consumer reporting agencies is accurate and complete.  This has been a requirement for some time, but the BCFP has notice an uptick in inaccurate date, particularly with regard to deposit account data.  Banks can expect increased focus on these procedures during the next consumer compliance examination.  After 7 years of review, the CFTC has determined that Korea has sufficient supervisory systems in place to permit certain Korean swaps entities to do business with U.S. persons.  OFAC is abandoning certain reporting requirements in connection with remittance transactions with Cuba.

Credit Reporting Procedures to Foster Accuracy

On February 4, 2016, the BCFP published a compliance bulletin to remind banks that they must have written policies and procedures regarding the accuracy and integrity of information relating to consumers that they furnish to Credit Reporting agencies.  Banks' establishment and implementation of reasonable policies and procedures regarding the accuracy and integrity of information are essential components of a fair and accurate credit reporting system.  When creating these policies and procedures, furnishers must consider the factors listed in the ``Interagency Guidelines Concerning the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies'' and incorporate those guidelines that are appropriate.  Additionally, each furnisher must periodically review and update its policies and procedures to ensure their continued effectiveness.  See the Bulletin at:

Currency Transaction Reports

On February 2, 2016, FinCEN published notice that it was planning to revise the current version of the CTR reports.  The notice does not propose any new regulatory requirements or changes to the requirements related to currency transaction reporting.  It noted that many holding companies now file for subsidiaries.  Also the reporting of the total dollar amount was not clear where multiple transactions were reported.  In addition, the term teller has been revised to reflect that non banks don’t generally have tellers.  See the proposed changes at:

Regulatory Capital Policy Statement

On February 3, 2016, the Fed published a proposed policy statement on the framework that the Fed will follow in setting the amount of the U.S. countercyclical capital buffer for advanced approaches bank holding companies.  The advanced approaches capital rules generally apply to banking organizations with greater than $250 billion in total assets or $10 billion in on-balance-sheet foreign exposure.  The framework consists of a set of principles for translating assessments of financial-system vulnerabilities that are regularly undertaken at the Board.  These assessments will be used to set the buffer.  See the policy statement at:

Assessments for FDIC Insurance

On February 4, 2016, the FDIC published a proposed rule to refine the deposit insurance assessment system for small insured depository institutions that have been federally insured for at least 5 years (established small banks).  The Proposed rule would use a brokered deposit ratio (that treats reciprocal deposits the same as under current regulations) as a measure in the financial ratios method for calculating assessment rates for established small banks instead of the previously proposed core deposit ratio; remove the existing brokered deposit adjustment for established small banks; and revise the previously proposed one-year asset growth measure.  See the proposed rule at:

Remittances to Cuba

On February 4, 2016, OFAC published a proposal to reduce the reporting required of financial institutions sending remittances to Cuba.   Because of policy changes OFAC is collecting less information on such remittances.  OFAC requires only that U.S. persons providing remittance services retain for at least five years from the date of the transaction a certification from each customer indicating provision of OFAC’s regulation that authorizes the person to send the remittance to Cuba. In addition, banking institutions must maintain on file the names and addresses of individual remitters, the number and amount of each remittance, and the name and address of each recipient.  See the changes at:

Stress Testing for Banks over $50 billion

On February 5, 2016, the OCC published a proposal to amend the forms on the stress tests to set forth baseline and bank-specific scenarios for the 2017 stress tests.  The use of the so-called advances approaches would be delayed in calculating the capital requirements.  See the notice at:

National Emergency regarding Ivory Coast

On February 5, 2016, the President published notice that the emergency established in 2006 would be continued for another year noting that while the situation has improved, there was still a threat to national security of the U.S.  See the notice at:

Foreign Futures and Options

On February 11, 2016, the CFTC published an order granting an exemption to certain firms regulated by Korea from the application of certain of the Commission's foreign futures and option regulations based upon substituted compliance with certain comparable regulatory and self-regulatory requirements of a foreign regulatory authority.  On January 23, 2009, Korea petitioned the Commission on behalf of its member firms, located and conducting a financial investment business in the Republic of Korea, for an exemption from the application of the Commission's Part 30 Regulations to those firms.  Other countries may seek similar relief.  See the order at:

Topics: OFAC, Cuba, Currency Transaction, CFTC, BCFP, Korea, Credit Reporting, FDIC, Foreign Regulatory

About the Spotlight

The Financial Services Spotlight examines the regulatory and technology developments impacting banks, asset managers and other financial services providers—where challenges meet opportunities.


Meet the Authors

Roy C. Andersen, of counsel in Sullivan & Worcester's New York office, is a member of the Corporate Department. Mr. Andersen focuses on bank regulatory and compliance matters, including international banks and their branches and agencies in New York.

Joel Telpner, partner in the firm's New York office, is a seasoned advisor, strategist and problem solver. Mr. Telpner brings more than 30 years of legal experience in a career that includes time as an AmLaw 100 partner, the former U.S. general counsel of a global financial institution, and a venture capitalist. He is recognized for his ability to deftly manage complex financial transactions, especially those involving sophisticated structured finance and derivatives matters and has an extensive and unique combination of transactional and regulatory experience.

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