acxell Advisor Newsletter

Welcome to acxell's knowledge base of emerging risk management issues

DOWNLOAD WINTER 2022

Inside Winter 2022 Issue

FINCEN's new AML/CFT priorities

FinCEN’s National AML/CFT priorities set the tone

In June 2021, the Financial Crimes Enforcement Network (FinCEN) issued its first set of government-wide priorities (the Priorities) for anti-money laundering and countering the financing of terrorism (AML/CFT). As required by the Anti-Money Laundering Act of 2020 (AML Act), the Priorities identify and describe the most significant AML/CFT threats currently facing the United States.
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Should your bank use third party vendors?

Re-imagining branch banking for the digital age

Keeping branch banking profitable in the digital age

The COVID-19 pandemic has led to an increase in online banking. However, the transition to
virtual banking was already well underway.As community banks look to the future, they need to
re-imagine branch banking for the digital age. This means strengthening what’s working and getting rid of what isn’t. Direct banking at branches can still be vital to community banks’ financial health as long as they measure branch performance and correct as necessary.
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Managing risk for online account opening

Your bank's cyberattack ransomware plan

What's your Bank's plan to counter ransomware attacks?

Cybersecurity continues to be a key risk that businesses face today, and banking is among the industries most affected by cyberattacks.Some experts estimate that around a quarter of all
malware attacks target financial institutions. Of particular concern are ransomware attacks, which have increased dramatically in the past couple of years.
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Brief summary of recent trends in banking

Winter 2022

In this summary of recent developments in banking, we discuss the new deadline for compliance with the CFPB’s revised general qualified mortgage rule and how banks should prepare, look at the new lease accounting rules, and take note of a new guide for banks published by the federal banking agencies on conducting due diligence on FinTech companies.
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DOWNLOAD FALL 2021

Inside Fall 2021 Issue

COVID-19's impact on your UDAAP Program

UDAP resurfaces- Is your bank in compliance?

The Dodd-Frank Act gives the Consumer Financial Protection Bureau (CFPB) broad authority to prosecute unfair, deceptive or abusive acts or practices (UDAAP) by banks and other financial providers. Early last year, the CFPB announced a new policy that gave institutions a reprieve from UDAAP enforcement actions. But in March 2021, it rescinded this policy, signaling a return to more aggressive enforcement.
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Improve customer satisfaction and retention

Keep your customers satisfied

Over the past few years, community banking has withstood rapid technological changes, unprecedented economic challenges during a pandemic and new demands from its customer
base. To maintain profitability amidst all this turmoil,you need to ensure that your bank retains its existing customers. After all, studies show that attracting a new customer typically costs five times more than retaining an existing one
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COVID-19's impact on bank's internal controls

Maintaining internal controls in a post-pandemic environment

Internal controls are the lifeblood of a bank’s risk management system. Weak or ineffective
controls can lead to operational losses and expose a bank to a higher risk of fraud. As we continue to recover from the COVID-19 pandemic, banks need to assess the pandemic’s impact on their internal control systems and make appropriate adjustments.
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Brief summary of recent trends in banking

Fall 2021

This brief summary of recent trends in banking highlights Consumer Financial Protection Bureau answers to FAQs on unauthorized electronic fund transfers and discusses a Federal Reserve tool that simplifies CECL implementation. It also notes the OCC’s intention to rescind a 2020 Community Reinvestment Act rule.
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DOWNLOAD SUMMER 2021

Inside Summer 2021 Issue

COVID-19's impact on your BSA/AML Program

Time to revisit your AML program

The COVID-19 pandemic has impacted anti-money laundering (AML) compliance in many ways. It has increased risks, changed the behavior of bank customers, and accelerated implementation of online account opening and other technologies. This article suggests that in light of these changes, all banks should evaluate their AML programs, starting with a risk assessment. A sidebar looks at the Biden administration’s increased prioritization of compliance with the Anti-Money Laundering Act of 2020.
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Pros and Cons of asset Concentration

The pros and cons of asset concentration

The purpose of community banks is to serve their particular communities and the industries that fuel those local economies. This can lead to potential risk, including losses, if assets become concentrated in an industry that is struggling. This article points out that there are pros and cons to asset concentration — the key is to understand how to keep the right balance.....Read the full article

Has COVID-19 impacted your CRA rating?

Has COVID-19 hurt your Community Reinvestment Act rating?

The COVID-19 pandemic has had a significant impact on community banks and their customers, but one area that is often overlooked is the potential impact on a bank’s Community Reinvestment Act (CRA) rating. This article notes that to mitigate the risk of receiving a poor CRA rating, a bank should identify and document the various factors — both bank-specific and community-specific — that influence its lending ability......Read the full article

BANK Wire - Summer 2021

This brief summary of current developments in community banking discusses LIBOR transition guidance that the Federal Reserve recently issued and notes the reintroduction of the SAFE Banking Act in Congress. It also explains that the federal banking agencies are seeking information about how financial institutions are using artificial intelligence in their activities. Finally, it lists some consumer protection recommendations put out by the CFPB’s Taskforce on Federal Consumer Financial Law.....Read the full article

DOWNLOAD SPRING 2021

Inside Spring 2021 Issue

Tips for Fair Lending Compliance

5 tips for fair lending compliance

Community banks need to develop and follow fair lending practices. This article summarizes some of the important provisions of the main laws that govern fair lending, such as the Fair Housing Act and the Equal Credit Opportunity Act. It then offers five tips to help a community bank create an effective compliance program, including conducting a risk assessment and developing a written policy. A sidebar explains that a useful source of guidance on fair lending compliance is the Interagency Fair Lending Examination Procedures used by federal financial agencies.
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Managing the emerging risks of use of 3rd party vendors

Should your bank use third party vendors?

In the uncertain economy resulting from the COVID-19 pandemic, community banks continue to streamline operations, improve efficiency and eliminate waste. This article points out that to help in this process, banks are increasingly turning to outside vendors to provide specialized services beyond the usual offerings. It also explains that to use third-party vendors successfully, it’s important for banks to evaluate liability and assess risk.....Read the full article

Managing the risks of online account opening

Online account opening: Managing the risk

Banking customers increasingly rely on electronic banking tools to open accounts, make deposits, transfer funds and otherwise manage their money — and the COVID-19 pandemic has accelerated this trend. This article points out that all of these activities increase an institution’s Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance risks, particularly the opening of online accounts.....Read the full article

BANK Wire - Spring 2021

This summary of recent developments in banking discusses some bank-specific relief provided by the Consolidated Appropriations Act (CAA). It also highlights several other CAA-related developments relevant to banks, including the SBA’s guidance for Paycheck Protection Program (PPP) loans and the CAA’s simplification of the PPP-related loan forgiveness application. In addition, it notes the recent announcement that the Federal Reserve Board intends to work with other banking agencies to develop a fintech vendor due diligence guide for community banks.
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Inside Winter 2021 Issue

Accounting for Loan Modifications During COVID-19

Lending in the age of COVID-19

Lending in the age of COVID-19: Accounting for loan modifications

Loan modifications during the COVID-19 era create accounting challenges for banks, which must determine whether a particular modification constitutes a troubled debt restructuring (TDR). This article discusses the ins and outs of how a TDR is triggered and explains how the CARES Act provides temporary relief from the TDR accounting rules. It notes that, to enjoy that accounting relief, banks need to show that concessions were made as a result of the pandemic’s impact and not on account of financial difficulties caused by other factors....Read the full article

Boost non-interest income for a healthier bottom line

In a difficult economy, community banks need to look beyond interest income and seek revenue streams that can help them maintain profitability. Bank managers need to evaluate potential non-interest income sources and determine which will be most likely to help shore up their bottom line going forward. This article offers some strategies to consider, including looking into overdraft and non-sufficient funds charges and revisiting waivers and collections....Read the full article

Need for Banks to Increase More On-Line Presence

What does COVID-19 mean for bank branches?

What does the pandemic mean for bank branches?

Many experts predict that much, or even most, of the prepandemic foot traffic at bank branches will remain online even after we return to “normal.” This means that the role of the branch will need to adapt to an increasingly digital model. This article explains that community banks need to focus on building or expanding their online presence while at the same time creating in-person customer experiences at their branches that can’t be duplicated elsewhere....Read the full article

BANKWire - Winter 2021

This brief summary of recent events in community banking explains an interim rule from the FDIC that temporarily suspends specific requirements of the Federal Deposit Insurance Corporation Improvement Act of 1991 for banks that experienced significant asset growth in 2020. It also notes that banks need to prepare for the upcoming transition away from LIBOR, and points out that the Small Business Administration recently released a simpler application designed to streamline the forgiveness process for some PPP loans....Read more