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Friday
Nov212014

Financial Institutions . . . In the News

  • Median home prices dropped slightly and home sales increased by 26 percent in October.  (BDN 11.20.2014)
  • Personal income in Maine has its sharpest rise in Aroostook County.  (Central Maine 11.20.2014)
  • Ocwen Financial is being sued by homeowners for illegal fees and unfair treatment.  (MPBN 11.18.2014)
  • Large economic growth predicted in southern Maine by NBT Bank Maine President John Watt.  (PPH 11.18.2014)
  • NBT Bank opens regional headquarters at 245 Commercial Street in Portland.  (Mainebiz 11.4.2014)
  • Nation-wide average of completed foreclosures deceased by almost one third since September 2013.  (Housing Wire 10.29.2014)
  • Bond-buying program by the Federal Reserve ends as the economy improves.  (PPH 10.29.2014)
  • GM Financial subpoenaed in investigation of its subprime auto finance business.  (BDN 10.25.2014)
  • Apple Pay duplicated nearly 1,000 Bank of America transactions in error.  (News Maine 10.25.2014)
Tuesday
Nov182014

New England Financial Institutions Face Increased Cybersecurity Risks

Noted cyber security blogger and journalist Brian Krebs recently gained an exclusive interview with a New England bank that reported a sharp rise in fraudulent charges on debit cards. The scammers were making purchases on stolen card numbers from plain-old magnetic strip cards but making them look like they were made on EMV (“chip”) cards, although the bank had not yet issued such cards. This “EMV-spoofing” technique had been picked up by Canadian banks earlier this year and traced to Brazil.

“The recent EMV-spoofing cases point to the continued need for fraud detection mechanisms that even small banks and credit unions must implement to protect themselves,” said Ande Smith, a principal at the forensics and data security firm Deer-Brook, with whom Verrill Dana works closely in data breach cases. “During the transition phase, which may take years, the mish-mash of magnetic and chip/pin point-of-sale systems in the US will create opportunities to mask fraudulent activity.”

A recent report by the Federal Financial Institutions Examination Council (FFIEC) supports this call for improved risk management at regional banks and other financial Institutions.  The results of the FFIEC’s 2014 survey of 500 community financial institutions indicate that these institutions have room to improve in terms of employee education and training on cyber risks; improving cybersecurity controls; understanding their vendors’ cybersecurity risks; and establishing incident management procedures, among other things.

Rita Heimes is a privacy and cybersecurity attorney in Verrill Dana’s Intellectual Property & Technology practice group. She and her team help companies with comprehensive information risk management programs including privacy policies, incident response plans, third-party contracts, employee training, and breach response.

Monday
Nov172014

Financial Institutions May Now Post Annual Privacy Policies Online

Under the Gramm-Leach-Bliley Act and regulations promulgated by the Bureau of Consumer Financial Protection (Bureau), financial institutions are required to provide customers with an annual disclosure of their privacy policies. The cost of mailing paper copies to consumers is significant. The Bureau therefore promulgated a new rule effective October 28, 2014, that allows financial institutions to post their notices via alternative delivery means, including on their websites, provided certain conditions are met.

Financial institutions can avoid considerable compliance costs by using this alternative notice method.
Among the qualifications: (1) the privacy notice must not trigger any opt-out rights and the institution must have previously provided opt-out notices as required; (2) information included in the privacy notice must not have changed since the prior notice; and (3) the financial institution must use the Bureau’s model form as its annual privacy notice. Other qualifications also apply, including (but not limited to) notification to customers that the privacy policy is located online at least annually through a statement mailed to them.

For more complete information about qualifying for the alternative annual privacy policy delivery option, view the final rule here or contact Verrill Dana’s Banking Law group.

Wednesday
Oct222014

Financial Institutions...In the News

  • New federal requirements for banking institutions coming in 2016.  (MPBN 9.3.14)
  • Financial Institutions search for solutions to retail data breaches.  (Portland Press Herald 9.8.14)
  • Credit card use is on the rise while mortgage demand slows even though rates are at record lows for the year.  (Bangor Daily News 9.11.14)
  • Many older Americans are paying off student loan debts into retirement.  (Bangor Daily News 9.11.14)
  • 76 Million households affected by JPMorgan Chase data breach.  (Portland Press Herald 10.2.14)
  • Wealth-building 15-year mortgage may help homeownership.  (MPBN 10.4.14)
  • 10-Year deference of bonuses recommended by NY Fed President William Dudley to cover institutions’ fines from financial crisis.  (Bangor Daily News 10.20.2014)
  • Mortgage rates a bargain for 30-year fixed rate mortgages.  (Portland Press Herald 10.19.14)
  • Discussions of lowering mortgage requirements for homeowners are in the planning stages.  (Portland Press Herald 10.21.14)
Monday
Oct202014

Supreme Court Set to Decide if Mortgage Loan Officers Are Entitled to Overtime Pay

Whether or not mortgage loan officers are entitled to overtime pay is an unsettled issue under the Fair Labor Standards Act.  At one point, mortgage loan officers were deemed exempt “administrative” workers.  However, a 2010 interpretation of the US Department of Labor suggested that this exemption did not apply, an interpretation that has since been challenged in court and is now pending before the US Supreme Court in the case of Mortgage Bankers Association v. Harris, No. 12-5246 (D.C. Cir. July 2, 2013).

In the Sept/Oct. 2014 edition of the Maine Banker magazine, Verrill Dana lawyer Janet Britton discusses the uncertain history behind this provision, and why financial institutions should pay careful attention to the October 2014 term of the US Supreme Court.