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Tuesday, May 23, 2017

Acosta: No Additional Delay for Fiduciary Rule

Labor Secretary Alexander Acosta today announced that the Department of Labor will not delay the June 9 effective date for the fiduciary rule, which greatly expanded the definition of who counts as a “fiduciary” under the Employee Retirement Income Security Act and the Internal Revenue Code. Acosta wrote in a Wall Street Journal op-ed printed this morning that the Administrative Procedures Act, which governs federal rulemaking, would not allow a further delay.

"We...have found no principled legal basis to change the June 9 date while we seek public input," he wrote. "Respect for the rule of law leads us to the conclusion that this date cannot be postponed." While the new definition takes effect June 9, additional conditions -- such as specific disclosures and representations -- are not required until Jan. 1, 2018.

DoL issued a bulletin on its “temporary enforcement policy” of phased implementation. “The department has repeatedly said that its general approach to implementation will be marked by an emphasis on assisting (rather than citing violations and imposing penalties on) plans, plan fiduciaries, financial institutions, and others who are working diligently and in good faith to understand and come into compliance with the fiduciary duty rule and exemptions,” DoL said. “Accordingly, during the phased implementation period ending on Jan. 1, 2018, the department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.”

Although Acosta declined to authorize a further delay, he said that DoL will continue its review of the final rule pursuant to an executive action by President Trump. "The Labor Department has concluded that it is necessary to seek additional public input on the entire fiduciary rule, and we will do so," he wrote. "Trust in Americans' ability to decide what is best for them and their families leads us to the conclusion that we should seek public comment on how to revise this rule."

ABA has strongly advocated for an additional delay and revisions to the rule to facilitate compliance and ensure it does not negatively affect the services available to bank customers. The association expressed disappointment that DoL decided to pursue implementation of a rule that it has said remains “fundamentally flawed and unworkable in critical areas.”

Read the enforcement policy bulletin.

Read FAQs on compliance.

Friday, May 19, 2017

Mnuchin: Administration Seeking Growth through Tax Reform, Reg Relief

Testifying before the Senate Banking Committee yesterday, Treasury Secretary Steven Mnuchin said he is hoping to collaborate with senators on financial regulatory relief and housing finance reform. “This committee has done extensive work on [housing finance reform] along with your work on community financial institution regulatory relief,” he said. “I look forward to working with the Congress to develop a solution.”

The Treasury Department will soon release its first report responding to President Trump’s executive order outlining principles for regulatory reform, which Mnuchin said will include “recommendations to provide relief for community banks and make regulations more efficient, effective and appropriately tailored.” He added that a likely recommendation would be an exemption from Dodd-Frank Act supervisory requirements for banks with less than $10 billion in assets.

Regarding the nation’s largest banks, Mnuchin noted that “I do not believe that any [bank] is ‘too big to fail,’” and signaled that the administration is not in favor of breaking up large banks or returning to the Glass-Steagall Act’s separation of commercial and investment banking. Such a return could create significant issues for financial markets, liquidity and the economy, he said.

The administration will also continue moving forward with its tax reform plan as it pursues economic growth, Mnuchin said, adding that he believes a goal of 3 percent GDP or higher economic growth is achievable. “It is our goal to bring meaningful relief to middle income Americans and make American businesses competitive again. We will do this all while simplifying the system.”

In addition to tax reform and reg relief efforts, the administration will also ramp up its efforts on housing finance reform in the second half of the year, Mnuchin said. He committed to working with lawmakers on both sides of the aisle to find a workable solution for Fannie Mae and Freddie Mac, create greater liquidity in the housing market and minimize taxpayer risk.

Wednesday, May 17, 2017

ABA Calls for Revisions to Cyber Standards for Insurers

ABA yesterday submitted comments to the National Association of Insurance Commissioners on its draft of the insurance data security model law, which would establish data security and data breach notification standards for insurance licensees (insurers and insurance agencies). ABA requested that the association add language to the draft stating that bank-affiliated insurance agencies be considered in compliance with the model law if their bank affiliates are in compliance with existing interagency data security standards.

ABA noted that the proposed model law for insurance licensees is very similar to existing guidance already followed by banks, and that in most cases, banks and their affiliated insurance agencies use the same information system to manage their customer data. By adding the proposed language, bank-affiliated insurance agencies would be allowed to comply with one set of requirements regarding cybersecurity, ABA said.

In addition, ABA requested that the model law be revised to allow insurance licensees more time to report a cybersecurity event to an insurance regulator. As currently drafted, they have only 72 hours to report an incident.

For more information, contact ABA's Sarah Ferman.

Tuesday, May 9, 2017

Covering Bank Risk - the basics of P&C coverage for banks

Invite your bank risk managers to participate in a webinar that covers the basics of P&C coverage for banks. This P&C webinar presented by ABA Insurance Services is a must for anyone responsible for a bank's insurance program, where they will gain an understanding of the following:
  • Key terminology and definitions
  • Coverage options and other important policy provisions
  • Best practices to prevent common P&C claims
  • Purchasing considerations and other points of interest
ABA Insurance Services - an ABA subsidiary - is a managing general agency, program administrator and wholesale brokerage that offers professional and management liability lines, financial institution bonds, surety bonds, property and casualty liability insurance to banks and small businesses. Contact ABA's Steve Polestak with questions. 202.663.5577 https://aba.webex.com/aba/onstage/g.php?MTID=ea7d1b6ea2d0b4f1aad0accb77a29c1a4

Monday, May 8, 2017

House Health Care Bill Includes Several HSA Provisions

The American Health Care Act of 2017, which was passed by a 217 to 213 vote in the House on Thursday, contains several provisions that would expand Americans’ ability to access health savings accounts.

Among other things, the bill would increase the annual HSA contribution limit; allow both spouses to make catch-up contributions to one HSA beginning in 2018; lower the tax penalty for non-qualified HSA distributions made after Dec. 31, 2017; and delay the so-called Cadillac tax on high-cost employer-sponsored health plans until 2026. It would also repeal the prescription requirement for over-the-counter medications, making withdrawals from HSAs tax-free beginning in the 2018 tax year.