Compliance Update – August 2020

1. Changes in Allowances for Credit Losses (Schedule R1-B; Part II)

a. Provisions for Credit Losses on Off-Balance-Sheet Credit Exposures, New Memo Item 7. This new item would be used to report the portion of the overall amount of the provision for credit losses reported on Schedule R1 (Income Statement) Item 4 (Provision for Loan and Lease Losses) that can be attributed to the provisions for expected credit losses on off-balance-sheet credit exposures.

2. Securities (Schedule RC-B)

a. Investment in Mutual Funds and Other Equity Securities with Readily Determinable Fair Values (Item RC-B-7). This would be renamed “Unallocated last-of-layer fair value hedge basis adjustments.”

b. This would become effective following FASB’s adoption of the final last-of-layer hedge accounting standard that is not expected until Q3 or Q4 of 2021.

3. Memoranda (Schedule RC-M)

a. This would become effective following FASB’s adoption of the final last-of-layer hedge accounting standard that is not expected until Q3 or Q4 of 2021.

• Estimated Number of IRT’s Provided by your Institution during the calendar year ending on the report date (16(a)). This is information collected annually only on the December Call Report.
• Estimated Dollar value of IRT’s provided by your institution and usage of regulatory exceptions during the calendar year (16(b))
  • Estimated Dollar Value of IRT’s (16(b)(1))
  • Estimated Number of IRT’s for permanent exchanges rate exception (16(b)(2))
  • Estimated Number of IRT’s for which your institution applied for permanent covered 3rd party exceptions (16(b)(3))

Reference: Federal Register; July 22, 2020; pp. 44361 – 44376

A. Cares Act Payment Protected from Garnishment – S. 3841

05/21/2020 Introduced in the Senate by Chuck Grassley
07/23/2020 Passed by the Senate

Key Provisions

• Exempt the CARES Act economic impact payment from garnishment orders
• Would ensure that the $1,200 Economic Impact Payments Congress provided don’t end up in the pockets of creditors and debt collectors

B. Coronavirus Related Distribution – H.R. 7645

07/16/2020 Introduced in the House by Sean Maloney

Key Provisions

• Extend the time period for making coronavirus-related distributions from retirement plans
• Provide an exclusion from gross income of coronavirus-related distributions for first-time homebuyer distributions

Question:

If a bank wants to offer online games for children about money management, and the website requires a login, is it permissible to collect this information?

Answer:

Under the Children Online Protection Act (COPPA), personal information means:

• First and last name;
• Home or other physical address including street name and name of a city or town;
• E-mail address
• Telephone number;
• Social Security number
• Any other identifier that the Commission determines permits the physical or online contacting of a specific individual; or
• Information concerning the child or the parents of that child that the website collects online from the child and combines with an identifier described in this paragraph;

“If any of this information is going to be gathered disclosures, parental consent may be required. Before developing the games and website, be sure to review the entire act, privacy regulations, and other laws that pertain to websites and games that pertain to children.”

Reference: 15 USC 6501: Definitions (chapter 91). FTC 16 CFR 312.2; 312.5