Pub. 5 2015-2016 Issue 4

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S January • February 2015 17 the bank would not verify the discrepancies between the deposit slip and the item. Prior to 2012, the threshold was $50 and after September 2012, the threshold was $25 for verification. In cases where the amount fell under the threshold amount, the bank credited the account for the total of the deposit slip even when it was known that the item the consumer deposited was in a different amount. The bank’s general ledger was then credited or debited with the difference between the amounts. The bank failed to give full credit to the customer where the deposit slip was less than the amounts deposited and in total, it was found that Citizens had under-credited their customers, and credit the bank’s general ledger, to the tune of $12.3 million dollars. In addition, the bank’s own verification policy required a lim- ited review when the amount fell between $23 and $50 (prior to February 2011) and later, between $5 and $20. However, the limited review was generally not completed and therefore, most deposits that fell under the threshold were not verified. Finally, the bank’s advertising and account agreements were found to have either explicitly stated or implied that the every deposit would be verified when they were not. So, what does this mean for your bank? It means that if you have a threshold amount for verifications, now would be a good time to look at that system and ensure that the appropriate checks are in place to avoid under-crediting your customers. Fur- thermore, it would be prudent to ensure the bank’s advertising is accurate as to deposit verification and that the bank and its employees are following its verification policies and procedures. Given that there has been a consent order on this issue, this is something that is more likely to be reviewed in your next exam and/or audit. Did the Patriot Act Expire? Does that mean banks no longer have to comply with CIP requirements? How does the USA Freedom Act affect my bank? There has been a lot of confusion over the sunsetting of pro- visions of the Patriot Act but the Patriot Act did not expire – only certain sections of it did. Those sections were then reinstated via the USA Freedom Act. However, the USA Freedom Act did not replace the Patriot Act which means the provisions that affect banks – namely the CIP requirements, are, and have been, in place. The provisions that did sunset and were reinstated deal with intelligence collection. You can find more information by looking at the bill, which you find at HR 2048: http://1.usa . gov/1QBgqt6. What else should I be on the lookout for? I would definitely stay tuned to the CFPB who is expected to finalize both the proposed HMDA rules from last winter and the Prepaid Card rules. The HMDA rules are expected to be finalized this fall and the Prepaid Card rules are expected to be finalized in early 2016.  Silvia Garcia Maggio serves as an Associate General Counsel for Compliance Alliance. After graduating from The University of Texas School of Law in 2011, Silvia began her career in real property and foreclosure law. Employed by a national mortgage servicer since 2012, Silvia worked on the OCC independent foreclosure audit and in compliance for Enterprise Risk Manage- ment, gaining amultitude of experience dealing withmulti-state and federal banking regulations. Silvia started with Compliance Alliance in March of 2014. Silvia is part of our team of attorneys who assist CA members with a wide-range of regulatory and compliance inquiries. Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call (888) 353-3933, visit compliancealliance.com, or email info@compliancealliance.com .