December 31, 2019

BSA, funds availability, ID fraud among top compliance issues of 2019

ComplianceAs NAFCU and the industry achieved some big wins in 2019, NAFCU's Regulatory Compliance Team answered hundreds of questions and published blogs and other resources each month to help member credit unions stay updated on trends and compliant with changing regulations. Here's a look at some of the most popular topics in 2019.

Bank Secrecy Act (BSA)

After topping the list last year, BSA/anti-money laundering (AML) issues remained top of mind for credit unions in 2019 as Congress considered legislation to provide NAFCU-sought relief. The association's Compliance Team addressed several components of the issue throughout the year – from civil penalty increases, to hemp banking, to strengthening compliance, and more. In addition, this blog from 2018 on disclosing suspicious activity reports (SARs) continued to be widely-read.

Regulation CC

The CFPB and Federal Reserve issued a final rule in June to implement new calculation methodology for adjusting dollar amounts under the Electronic Funds Availability (EFA). A NAFCU Compliance Blog post, as well as a Final Regulation, provided analysis to help credit unions implement the new methodology. In addition, NAFCU answered Regulation CC FAQs, specifically related to notices on deposit receipts and requirements around funds availability.

Synthetic Identity Fraud

Synthetic ID fraud is among the fastest-growing types of identity theft and financial crime in the U.S. Criminals are using these fake identities to then apply for credit in what is known as a bust-out scheme. NAFCU detailed how 11 individuals defrauded $3 million from banks using this type of fraud in a NAFCU Compliance Blog post, and the Federal Reserve also released a white paper to help financial institutions detect potential scams to prevent financial losses.

Federal Credit Union Bylaws

The NCUA Board in September finalized a rule that codifies in one place several existing NCUA legal opinions and clarifies several bylaw provisions. NAFCU's Regulatory Compliance Team posted a number of blogs covering what credit unions should know about the bylaw updates in regards to expulsion and limitation of servicesbylaw amendmentsmeetings and electionsdirectors and the board, adopting bylaw updates, and some FAQs.

Remote Deposit Capture (RDC)

In November, a jury in Texas determined that Wells Fargo had intentionally infringed on USAA's mobile RDC patents, resulting in $200 million in damages to be paid by Wells Fargo to USAA. In late 2017, credit unions – as well as other financial institutions – began receiving letters from a firm alleging that the credit union's RDC function infringed on USAA's patents. NAFCU addressed the jury's decision, including how credit unions could be affected by it, in a message to members and Compliance Blog post. Wells Fargo is expected to appeal the decision.

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