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Regulatory News You Can Use: COVID-Related Regulations & Why Mortgage Companies Need to Start Worrying About CRA

2 min read
Dec 9, 2021

How is COVID-19 continuing to impact regulatory obligations? What’s the latest state to require non-depository mortgage lenders to comply with its Community Reinvestment Act (CRA) laws?

Ncontracts compliance pros answer these questions and more in this month’s episode of the Ncast podcast Regulatory Brief. The episode also digs into hot topics like the federal banking regulators new computer-security incident notification requirements and the latest developments in the growing area of climate risk.

Want to get all the details from the compliance team that tracks regulatory change for banks, credit unions, and mortgage companies every day? Listen in. Remember: You can also log in to Ncomply for updates and implementation guides on changes to state and federal regulations.

Here are the highlights from the Ncast Regulatory Brief covering November 2021:

COVID Updates for Financial Institutions

COVID-19 vaccine mandate for employers with 100+ employees delayed. Courts continue to block the OSHA-published emergency temporary standard (ETS) requiring employers with more than 100 employees to develop, implement, and enforce a mandatory COVID-19 vaccination policy. The EST includes an exception for employers that adopt a policy requiring employees to either get vaccinated or elect to undergo regular COVID-19 testing and wear a face covering at work in lieu of vaccination.

Originally, the EST required employers to comply with the vaccination and face covering requirements by December 6, 2021, with testing of employees who are not fully vaccinated required by January 4, 2022. However, those deadlines are on hold for now.

States & cities set their own COVID policies. While the EST is on hold, states and cities are passing their own COVID legislation. For example, Tennessee passed a law prohibiting private businesses from requiring or compelling proof of vaccination for employees and customers. Other states have laws requiring certain types of employees to be vaccinated or regularly testing. This will create an interesting preemption problem should the EST be upheld.

Winning Risk Management: How to Create Reliable Risk Assessments

End to Temporary Mortgage Servicing Flexibility. In April of 2020, federal regulators issued guidance saying they wouldn’t take supervisory or enforcement action against mortgage servicers for delays in sending required notices for early intervention and loss mitigation and taking certain actions pertaining to loss mitigation as required by Reg X, provided servicers were making good faith efforts to provide these notices and take these actions within a reasonable time. Now 18 months into the pandemic, regulators believe institutions have had enough time to adjust their business operations so regulators will resume using their enforcement authority to address noncompliance for violations of mortgage servicing rules.

Credit unions can still conduct virtual meetings. NCUA is extending the flexibility for federal credit unions to conduct meetings virtually in 2022 due to the ongoing challenges of COVID-19.

Mortgage News

NY Expands CRA to Non-Depository Mortgage Lenders. New York’s Community Reinvestment Act (CRA) has been expanded to include non-depository, state licensed mortgage banks. Under the legislation, the Superintendent can assess, in writing, an institution’s record of performance “in helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, and consistent with safe and sound operation of the mortgage banker.” This includes activities undertaken to assess the credit needs of its community; communicate its services; and the geographic distribution of its credit applications, extensions, and denials.

The law takes effect in a year so expect more details to come. New York is the third state, behind Massachusetts and Illinois to subject mortgage bankers to CRA obligations.

 For a more in-depth look at these topics plus climate risk, new computer-security incident notification requirements, and more, we invite you to listen to the Ncast podcast or subscribe on your favorite podcast platform!

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