FDIC Releases Consumer Compliance Supervisory Highlights

The FDIC recently released its Consumer Compliance Supervisory Highlights (Highlights) to provide an overview of the top consumer compliance issues that it identified in 2022.  It includes a summary of results and observations from FDIC’s consumer compliance examinations, summarizes consumer compliance resources and regulatory developments, and reviews recent consumer complaint trends.

Highlights noted that the most common regulatory violations were related to (i) closing cost information in Regulation Z’s Closing Disclosure requirements, (ii) non-sufficient funds fee issues constituting violations of the FTC Act’s prohibitions on unfair or deceptive acts or practices, (iii) the requirement under the Flood Disaster Protection Act for adequate flood insurance to be in place at particular times in the loan process, (iv) the investigation and resolution of electronic fund transfer errors pursuant to Regulation E, and (v) deposit account disclosures under Regulation DD.

It also noted that exams identified significant consumer compliance issues with (i) purchasing trigger leads but failing to make firm offers of credit as required by FCRA, (ii) servicemember protections under the Servicemembers Civil Relief Act, (iii) RESPA-related referral arrangements, and (iv) fair lending compliance (including findings of redlining).  Twelve fair lending matters were referred to the Department of Justice.

The most common consumer complaints issue, as discussed in Highlights, was credit reporting disputes, typically relating to the use of credit cards, installment loans, consumer lines of credit, and residential real estate.

Through Highlights, the FDIC also discussed its 2022 and early 2023 activities in the field of regulatory matters, including:

• Working with the PAVE Task Force to address property appraisal biases;
• Issuing a notice of proposed rulemaking with other banking regulators to address the Community Reinvestment Act;
• Working with other federal agencies to issue an interagency statement on special purpose credit programs under ECOA;
• Announcing changes to HMDA reporting thresholds for closed-end mortgage loans;
• Publishing revised flood insurance Q&As;
• Requesting all FDIC-supervised institutions to notify the FDIC if they intend to engage in (or are engaged in) activities involving crypto-assets; and
• Issuing supervisory guidance on multiple re-presentment non-sufficient fund fees.