US Reg Round Up: 29/07/2024
Federal Reserve
2024 CRA list released for distressed and underserved nonmetropolitan areas - 12 July 2024
Federal bank regulatory agencies have published the 2024 list identifying distressed or underserved nonmetropolitan middle-income areas where certain bank activities can earn Community Reinvestment Act (CRA) credit. This list helps assess a bank's efforts to meet the credit needs of its entire community, including lower-income neighbourhoods, while maintaining safe operations. The areas are chosen based on economic indicators such as unemployment, poverty, and population shifts. Activities aimed at revitalizing or stabilizing these areas will be eligible for CRA credit for 12 months following the publication of the list. A one-year lag applies to areas previously designated but not included in the current list.
Federal agencies finalize rule on automated valuation models for mortgages - 17 July 2024
Today, six federal regulatory agencies issued a final rule under the Dodd-Frank Act to enhance the credibility and integrity of automated valuation models (AVMs) used for mortgages secured by a consumer's principal dwelling. This rule, largely unchanged from the June 2023 proposal, mandates that institutions implementing AVMs adopt robust policies and procedures to ensure high confidence in valuation estimates, guard against data manipulation, avoid conflicts of interest, conduct random sample testing, and comply with non-discrimination laws. As AVMs become more prevalent due to advancements in technology and data availability, these measures aim to uphold valuation quality and integrity. The rule will take effect at the beginning of the calendar quarter following 12 months from its publication in the Federal Register.
Federal agencies finalize guidance on reconsiderations of value for residential real estate - 18 July 2024
Today, five federal regulatory agencies issued final guidance on reconsiderations of value (ROVs) for residential real estate transactions. The guidance provides financial institutions with policies and procedures for allowing consumers to submit information that might not have been considered during an appraisal, or if deficiencies are detected in the original appraisal. ROVs enable institutions to request appraisers to reassess the value of properties when valuation issues arise, either from internal reviews or consumer input.
Federal agencies seek feedback on updated AML/CFT requirements - 19 July 2024
Four federal financial regulatory agencies have proposed updates to their requirements for anti-money laundering and countering the financing of terrorism (AML/CFT) programs, seeking public comment. These changes aim to align with amendments proposed by the Financial Crimes Enforcement Network (FinCEN) under the Anti-Money Laundering Act of 2020. The updates would require supervised institutions to assess and document risks related to money laundering, terrorist financing, and other illicit activities, and to consider FinCEN’s national AML/CFT priorities. The proposal also stipulates that AML/CFT responsibilities must be handled by U.S.-based personnel subject to relevant oversight and encourages institutions to explore innovative compliance methods.
Securities and Exchange Commission
SEC small business capital formation advisory committee to review SBA’s SBIC program - 12 July 2024
The Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee has announced the agenda for its July 30, 2024, meeting, focusing on recent updates to the U.S. Small Business Administration’s (SBA) Small Business Investment Company (SBIC) program. The meeting will feature observations on small business capital raising and a discussion on recent SBIC program changes aimed at improving access and diversifying funding for small businesses and startups. SBICs, which are SBA-licensed investment funds, leverage SBA-guaranteed loans to augment their investment capacity. The Committee will hear from an SBIC fund and a practitioner about the program’s evolution, including a new SBA-guaranteed loan type, the regulatory framework, and practical experiences.
SEC awards over $37 million to whistleblower for key contribution - 17 July 2024
The Securities and Exchange Commission has awarded more than $37 million to a whistleblower whose crucial information led to a successful enforcement action. This whistleblower provided previously unknown details, met with Enforcement staff, and identified potential witnesses and documents, aiding in the efficient resolution of the case. The award comes from an investor protection fund financed by sanctions imposed on securities law violators.
SEC launches interagency securities council to combat financial fraud - 19 July 2024
This month, the Securities and Exchange Commission’s Division of Enforcement inaugurated the Interagency Securities Council (ISC), a collaborative forum for federal, state, and local regulatory and law enforcement professionals. The ISC aims to enhance cooperation among agencies, address emerging scams and fraud trends, and foster unified strategies for investor protection. With participation from over 100 agencies, including federal bodies, state attorneys general, and local police, the ISC will facilitate discussions on financial fraud, provide investigative insights, and promote innovative case approaches.