Compliance Bulletins

Compliance Bulletin

Agencies Acknowledge Exemptions to Certain HMDA Reporting Requirements for Small Lenders
July 13, 2018

On July 5, 2018 the Federal Reserve, the OCC and the FDIC each issued statements acknowledging partial exemptions from HMDA data reporting requirements that are set forth in the recently-enacted Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155).

Please read CBA’s Regulatory Compliance Bulletin for additional information.

Compliance Bulletin

Agencies Raise Appraisal Threshold for CRE Transactions
April 10, 2018

Effective April 9, 2018, the Federal Reserve, the OCC and the FDIC each enacted a final rule increasing the threshold level at or below which appraisals are not required for commercial real estate transactions from $250,000 to $500,000, i.e., formal appraisals are not required for any commercial real estate transaction with a transaction value less than $500,000. A “commercial real estate transaction” is defined as a real estate-related financial transaction that is not secured by a single 1-to-4 family residential property.

Compliance Bulletin

Bill Creates New Real Estate Recording Fee
December 1, 2017

A bill enacted this year, SB 2, creates the “Building Homes and Jobs Act,” which promotes development of affordable housing across the state in part by imposing a new fee in connection with the recording of real estate instruments, papers, and notices. Proceeds go into a new state treasury fund called the Building Homes and Jobs Fund. Moneys collected will be made available to local governments and to the Department of Housing and Community Development. In addition to existing applicable recording fees, a fee of at least $75 is imposed at the time of recording (with a maximum of $225).

Compliance Bulletin

Congress Overturns CFPB’s Arbitration Regulation
November 3, 2017

With the Senate able to muster 51 votes to disapprove the CFPB’s arbitration regulation, which followed a similar action by the House of Representatives in July, that paved the way for the president to sign the joint resolution to make it official: the CFPB arbitration regulation is dead. The action was undertaken under the Congressional Review Act, which allows Congress to overturn a regulatory action through an expedited process.

Compliance Bulletin

New Bill Updates DBO Authority to Enforce Military Lending Act
October 30, 2017

A new California bill, SB 266, updates existing laws that give the Department of Business Oversight authority over California lenders’ compliance with the federal Military Lending Act (MLA). In 2015, Congress strengthened several provisions of the MLA by covering more types of transactions and enhancing disclosure requirements. SB 266 incorporates the 2015 changes.

 See CBA’s Regulatory Compliance Bulletin for more information.

Compliance Bulletin

New California Bill Restricts Criminal History Inquiry
October 30, 2017

A new bill, AB 1008, strictly regulates California employers’ ability to inquire about and use a job applicant’s conviction history. An inquiry is allowed only after a conditional offer of employment is made. The bill also creates procedural protections allowing the applicant to dispute information contained in a report. Importantly, an exemption is provided for any position that is subject to regulation by other laws.

Compliance Bulletin

New Bill Limits Employer Inquiry About Salary History
October 16, 2017

A new bill, AB 168, prohibits an employer from relying on the salary history information of an applicant for employment as a factor in the hiring decision and what salary to offer. The rationale for the new law is that the gender wage gap is exacerbated when employers inquire about salary history and thus are in a position to perpetuate past salary discrimination. An applicant may voluntarily (without prompting) disclose salary history information to a prospective employer, and in that case the employer may consider that information “in determining the salary for that applicant.”

Compliance Bulletin

Collateral Requirement for State Deposits Eased
October 9, 2017

A new bill, SB 363, decreases from 110% to 100% the value of collateral that a bank needs to pledge for state deposits if the collateral is a Federal Home Loan Bank (FHLB) letter of credit. The state Treasurer’s office considers FHLB letters of credit to have high credit quality and has come to prefer to take them as collateral when placing deposits with a bank. Under existing state law banks are required to pledge various forms of collateral in the amount of 110% of the amount of state deposits taken.

Compliance Bulletin

New California Bill Further Strengthens Borrow Protections in PACE Lending
October 9, 2017

New California bill further strengthens borrow protections in Property Assessed Clean Energy (PACE) lending. SB 242 was enacted in California that places a series of new requirements on PACE program administrators. These are third party administrators retained by public agencies to run the agency’s PACE program. Concerns have arisen because contractors who desire to perform the property improvements are also arranging the financing. SB 242 imposes a series of requirements intended to ensure that property owners understand the obligations that they are undertaking. 

Compliance Bulletin

New California Law Imposes More Discipline in PACE Lending
October 9, 2017

A new bill, AB 1284, addresses the problem of property assessed clean energy (PACE) loans being granted to homeowners without the protections normally associated with taking on mortgage-like obligations. The bill establishes underwriting standards and brings PACE program administrators, solicitors, and solicitor agents within the California Finance Lenders Law, renamed by this bill to the California Financing Law. This means that they will be subject to the Department of Business Oversight’s’ supervision and enforcement authorities.

Compliance Bulletin

CBA-Sponsored Bill Further Protects Elders and Dependent Adults from Financial Abuse
October 9, 2017

The governor signed a bill, AB 611, allowing mandated reporters of suspected financial abuse of elders and dependent adults to refuse to honor a power of attorney if the potential abuser wields a power of attorney to act on behalf of the person suspected of being abused. The mandated reporter may, but is not required to, refuse to honor a power of attorney if the reporter makes a report to an adult protective services agency or a local law enforcement agency of any state that the elder or dependent adult may be subject to financial abuse by that holder of the power.

Compliance Bulletin

Federal Appeals Court Issues Favorable Ruling Under the Telephone Consumer Protection Act
August 21, 2017

The Telephone Consumer Protection Act (TCPA) prohibits companies from initiating any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a messages without the prior express consent of the called party. In this case, Reyes v. Lincoln Automotive Financial Services, the court considered the novel question whether a consumer may revoke a consent to receive calls when that consent had been given as consideration under a contract.

Compliance Bulletin

Ninth Circuit Holds Holds Mortgage Underwriters Are Entitled to Overtime Pay
July 18, 2017

The Ninth Circuit has held that mortgage underwriters are entitled to overtime compensation under the Fair Labor Standards Act (“FLSA” or “the Act”), 29 U.S.C. § 201 et seq., for hours worked in excess of forty per week. The court’s decision in McKeen-Chaplin v. Provident Savings Bank, FSB (July 5, 2017) Case No. 15-16758, is particularly significant because two prior U.S. Courts of Appeals to consider the same issue reached different conclusions.

Compliance Bulletin

An Extraordinary Treatment of a Prepetition Loan Payment as an Avoidable Preference Payment
May 15, 2017

The CBA Legal Affairs Committee Chairman Ted Kitada, SVP, senior company counsel, Wells Fargo Bank, N.A., has prepared a Regulatory Compliance Bulletin discussing In re Tenderloin Health, where the Ninth Circuit Court addressed the treatment of a prepetition loan payment by a bank as an avoidable preference in a bankruptcy proceeding initiated by a trustee.

Compliance Bulletin

The California Supreme Court erected another roadblock against the enforceability of arbitration agreements, setting the stage for yet another possible U.S. Supreme Court decision. The California high court held that it was against public policy for parti
April 17, 2017

The California Supreme Court erected another roadblock against the enforceability of arbitration agreements, setting the stage for yet another possible U.S. Supreme Court decision. The California high court held that it was against public policy for parties to agree to waive statutory rights that are intended to benefit the public. The plaintiff in the case, a bank customer, sought to obtain injunctive relief, a form of remedy that the arbitration agreement did not allow. The defendant bank argued that the U.S. Supreme Court, in its decision AT&T Mobility v.

Compliance Bulletin

Federal Court Issues Ruling Favorable to Targets of ADA Shakedown Lawsuits
April 3, 2017

The Federal District Court in the Central District of California issued a ruling dismissing a lawsuit against Domino’s Pizza, LLC for alleged violations of the American With Disabilities Act related to its website and mobile application. The basis of the ruling is that to hold the retailer liable would violate its due process rights because the U.S. Department of Justice, which is responsible for enforcing the ADA, has failed to establish clear accessibility standards for the visually impaired for businesses to follow.

Compliance Bulletin

Court May Hear Challenge to its Assigned CAMELS Rating
March 6, 2017

After the FDIC assigned a composite CAMELS “4” supervisory rating to Builders Bank in Illinois, the $100 million asset bank sued the FDIC in federal court arguing that the agency should have given it a “3” rating instead. The federal district court dismissed the bank’s suit for lack of jurisdiction on the grounds that the FDIC’s determination of a bank’s minimal capital requirements is not reviewable under federal law. Builders Bank was undeterred and appealed the decision to the federal Seventh Circuit Court of Appeals.

Compliance Bulletin

State Agency to Issue Restrictions on Criminal History Screening
March 6, 2017

Following the lead of a handful of local ordinances around the country, including San Francisco and Los Angeles, the state’s Fair Employment and Housing Council (FEHC) is finalizing a regulation restricting California employers from using a person’s criminal history information in making employment decisions. The regulation will apply to applications for employment as well as decisions affecting existing employees.

Compliance Bulletin

Supreme Court Rules Rest Periods May Not Involve “On-call” Duties
January 3, 2017

The California Supreme Court held that “on-call” rest periods are impermissible under Labor Code Section 226.7 and Industrial Welfare Commission wage order no. 4-2001. In Augustus v. ABM Security Services, Inc. the Court held that the applicable standard for rest periods is the same for meal periods: employers must relieve the employee of all duty and relinquish any employer control over the employee and how he or she spends the time. Thus an employer may not compel employees to remain on call during rest periods.

Compliance Bulletin

New Bill Authorizes Disclosure of State Agency Accounts
September 15, 2014

A new bill, SB 898, allows banks to divulge to the State Treasurer’s Office certain information related to accounts held by state agencies and departments. The purpose of the bill is to help the treasurer’s office to monitor state monies not deposited within the centralized state treasury system. See CBA’s Regulatory Compliance Bulletin for more information.