Regulatory Updates
By: KAREN L. GRANDSTRAND
March 2005
Fair and Accurate Credit Transactions Act of 2003 (FACT Act)
GUIDELINES REQUIRING PROPER DISPOSAL OF CONSUMER INFORMATION
The FACT Act requires any financial institution that maintains or otherwise possesses consumer information derived from consumer reports to properly dispose of that information. To implement section 216, the federal bank and thrift regulatory agencies have amended their “Guidelines Establishing Standards for Safeguarding Customer Information,” and renamed them “Interagency Guidelines Establishing Information Security Standards,” to require proper disposal. The new guidelines take effect on July 1, 2005.
USA PATRIOT Act
TREASURY'S NEW SECURE WEB-BASED DISTRIBUTION SYSTEM FOR 314(A) SEARCH REQUESTS
Section 314(a) of the USA PATRIOT Act requires banks to search their records for information about suspects on a “314(a)” list of suspects distributed by the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) every two weeks. This list is currently distributed by email or faxed to financial institution points of contact (POCs). FinCEN plans to introduce a new web-based 314(a) delivery and reporting system available on a secure website operated by FinCEN. POCs will be able to access the website and download files in various formats for searching. POCs will also be able to use the site to return positive and inconclusive hits to FinCEN. FinCEN is currently testing the program and is expected to replace the current system in March 2005.
12 CFR Part 30, Appendix C
OCC GUIDELINES ESTABLISHING STANDARDS FOR RESIDENTIAL MORTGAGE LENDING PRACTICES
On February 2, 2005, the OCC issued guidelines concerning the residential mortgage lending practices of national banks and their operating subsidiaries to protect against national bank involvement in predatory, abusive, unfair or deceptive residential mortgage lending practices. The Guidelines describe practices that are inconsistent with sound practices and describe other terms and practices that may be conducive to predatory, abusive, unfair or deceptive lending practices. The Guidelines address steps that banks should take to mitigate risks associated with purchasing residential mortgage loans and using mortgage brokers to originate loans.
Federal Financial Institutions Examination Council (FFIEC)
FFIEC INFORMATION SYSTEMS EXAMINATION HANDBOOK
The FFIEC has completed its update of the 1996 FFIEC Information Systems Examination Handbook. This new handbook, the FFIEC Information Systems Technology Handbook, replaces all chapters of the 1996 handbook and addresses significant changes in technology and incorporates the risk-based examination approach. The new handbook addresses:
- Audit
- Business continuity planning
- Development and acquisition
- Electronic banking
- FedLine®
- Information security
- Management
- Operations
- Outsourcing
- Retail payment systems
- Supervision of technology service providers
- Wholesale payment systems
The FFIEC’s InfoBase includes each booklet in Adobe Acrobat PDF file format, as well as an outline version with links to resource materials and presentations. The electronic versions of the booklets are available at http://www.ffiec.gov/ffiecinfobase/html_pages/it_01.html.