Maine Amends Loans to One Borrower Regulation

On December 19, 2012, the Maine Bureau of Financial Institutions announced the final adoption of revisions to Regulation 128, Loans to One Borrower Limitation.  Under the revised rule, state-chartered financial institutions must evaluate credit exposure to derivatives transactions when calculating lending limits to a single borrower.  This modification was adopted to conform to the Dodd-Frank Act, and is consistent with interim final regulations recently established by the OCC for national banks.  The relevant portion of the Dodd-Frank Act is scheduled to go into effect on January 21, 2013.  Revised Regulation 128 will also go into effect on this date, but state-chartered banks will have until April 1, 2013 to begin using this new methodology for calculating credit exposure.

Maine Banks...In the News

• Maine bankers and consumer advocates speak out about Maine’s Foreclosure Process.  Does it help borrowers, or create costs for the community?   (MaineBiz, 12.10.12)
• Maine Sen. Susan Collins:  Dodd-Frank not intended to subject insurers to bank capital requirements (Life Health Pro.com, 11.28.12)
• Mainers voice opinions over potential loss of mortgage deduction in fiscal cliff negotiations (Portland Press Herald, 11.30.12)
• Plaintiff in PATCO fraud settlement case warns against ACH transfers (Bank Info Security.com, 11.29.12)
• Second wave of foreclosures hits judicial foreclosure states like Maine (Forbes.com, 12.01.12)
• PATCO aftermath:  What are “commercially reasonable” security measures for electronic banking? (Bangor Daily News, 11.30.12)
• HSBC to pay multi-billion dollar fine following money-laundering investigation (Kennebec Journal, 12.11.12)

FTC Issues Interim Rule Amending the Scope of its Identify Theft "Red Flags" Rule

The Federal Trade Commission (“FTC”) recently issued an interim final rule amending its “Red Flags Rule,” 16 C.F.R. Part 681. The amendment, which affects “creditors” under the FTC’s jurisdiction, limits the applicability of the Rule by making reference to a new definition of “creditor” in Section 1681m(e)(4) of the Fair Credit Reporting Act (“FCRA”). Section 1681m(e)(4) was part of the “Red Flag Program Clarification Act” enacted by Congress in December of 2010. The FTC’s interim rule directly references this new definition, discussed below...

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FinCEN Issues Advisory on Third-Party Payment Processor Risk

The Financial Crimes Enforcement Network (FinCEN) recently issued an advisory bulletin warning financial institutions on the risks associated with maintaining deposit accounts for third-party payment processors (“Payment Processors”). Payment Processors are companies that initiate payment transactions on behalf of their own customers, typically merchants and other businesses, where these customers lack a direct relationship with the financial institution. Payment processors may service domestic or foreign businesses that are conventional bricks-and-mortar establishments or internet-based.

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President Designates Gruenberg as FDIC Chairman

On November 30^th, the FDIC announced that acting chairman Martin Gruenberg had been formally designated by President Obama as Chairman of the FDIC for a six year term.  The President also designated Thomas Hoenig as Vice Chairman.  Both were appointed by the President on March 29^th of this year, and confirmed by the Senate on November 15^th. 

More details regarding these designations can be found in the FDIC’s press release.