Compliance Question of the Week

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Regulations and Guidance

Compliance Question of the Week

QUESTION: What is the "lookback period" under the Garnishment of Accounts Containing Federal Benefit Payments?


Lookback period means the two month period that begins on the date preceding the date of account review and ends on the corresponding date of the month two months earlier, or on the last date of the month two months earlier if the corresponding date does not exist.

Reference: 31 CFR 212.3.

Q&A Archives


In general, FinCEN regulations require certain MSB principals to register with FinCEN. Many MSBs, including many in the US, operate through a system of agents. An agent may not be required to register with FinCEN. FinCEN states that a money services business that is an agent of a principal money services business will generally have contracts and agreements with the principal money services business and agents should be expected to provide these agreements to the bank upon request. Additionally, many large money services businesses list information about their agents on their public web sites.

Reference: FinCEN: FAQs in Interagency Interpretive guidance on Providing Banking Services to Money Services Businesses Operating in the United States, April 2005.



To qualify for the privilege described under Regulation B 1002.15(b), must meet the definition: A self-test is any program, practice, or study that:

(i) Is designed and used specifically to determine the extent or effectiveness of a creditor's compliance with the Act or this part; and

(ii) Creates data or factual information that is not available and cannot be derived from loan or application files or other records related to credit transactions.

Accordingly under the Official Staff interpretation of Regulation B, a self-test is only privileged if it was designed and used for that purpose. A self-test that is designed or used to determine compliance with other laws or regulations or for other purposes is not privileged under this rule.

Reference: 12 CFR 1002.15; and Official Staff Interpretation of Regulation B Paragraph 15(b)(1)(i).




Yes. If the bank requires more than the maximum amount in order to protect its collateral interest, private insurance is an option. If the borrower gets private insurance, the bank must do due diligence to ensure that the private policy meets FEMAs requirements for a private policy. If the borrower needs assistance finding a private insurer, the bank may consider providing names of companies that it has used in the past, but not dictate which provider the borrower uses; and/or suggest using FEMA’s resources to find a provider.

Reference: Interagency Questions and Answers Regarding Flood Insurance, 2009, Question 63




Notice is considered given when a consumer take steps reasonably necessary to provide the bank with the pertinent information. Even when the consumer is unable to provide the account or card number in reporting a lost or stolen access device or an unauthorized transfer, the notice effectively limits the consumer liability if the consumer otherwise identifies sufficiently the account in question.

For example, the name on the account and type of account. The notice may be in person, telephone or in writing. A notice in writing the notice is considered given at the time the consumer mails or delivers it for transmission to the bank by any other usual means.

Reference: 1005.6(b)(5); Official Staff Interpretation 1005.6(b)(5).


While the Right to Financial Privacy does state that a government agency is not to access customer records without proper authorization – including a subpoena, for a SAR it is different.

FinCEN has issued guidance stating that while it is important for banks to have procedures to ensure that the requesting person/agency is verified, disclosure of SARs to appropriate law enforcement and supervisory agencies is protected by the safe harbor provisions applicable to both voluntary and mandatory suspicious activity reporting by financial institutions.

Reference: Right to Financial Privacy 12 USC 3402 FIN-2007-G003, Suspicious Activity Report Supporting Documentation, June 13, 2007



While trust departments do buy, sell and recommend nondeposit investment products, a trust department is not permitted to make retail sales of nondeposit investment products. Retail sales are not a trust department activity and banks should not direct retail customers to the trust department for NDIP.

Reference: FDIC Uninsured Investment Products: A pocket guide for Financial Institutions.





Under the BSA exam procedures, part of the bank’s due diligence and risk assessment should include confirming FinCEN registration, if required. (Note: registration must be renewed every two year). Guidance from April 2005, states that banks are not expected to terminate existing accounts of MSB based solely on the discovery that the customer is an MSB that has failed to comply with licensing and registration requirements (although noncompliance may be an indicator of heightened risk).

However, the BSA AML examination manual states that given the importance of licensing and registration requirements, a bank should file a SAR if it becomes aware that a customer is operating in violation of the registration or state licensing requirements.

There is no requirement in BSA regulations for a bank to close an account that is subject of a SAR. The decision to maintain or close an account should be made by bank management under standards and guidelines approved by its Board of directors.

Reference: FinCEN: Interagency Interpretive guidance on Providing Banking Services to Money Services Businesses Operating in the United States, April 2005. See also: BSA AML examination manual 2014, pages 301-306.




The agencies’ regulations permit a lender or its servicer to force place flood insurance beginning on the date the borrower’s policy lapsed or did not provide sufficient coverage to ensure continuous flood coverage for both the institution and the borrower, and any time after that date.

However, if a borrower fails to obtain flood insurance within 45 days of the lender’s notification to the borrower of the need to obtain flood insurance, the lender must force place flood insurance at that time. 

Reference: Interagency Flood Insurance Regulation Update Webinar: Q&As, 2015, Q11.

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