Compliance Question of the Week

In today’s banking environment as soon as one big new regulation is implemented another pops up. Our compliance resources help your community bank stay one step ahead of the regulators.

Regulations and Guidance

Compliance Question of the Week

Question: An employee has recently sought accommodations based on migraines stating it is covered under Americans with Disabilities Act. What is considered a disability under ADA?


In general, the ADA defines disability to include in part, “a physical or mental impairment that substantially limits one or more major life activities of such individual” (The complete definition should be consulted to ensure proper context.)

When making such a determination, ensure that proper consultation by qualified individuals is sought e.g., bank’s HR, legal counsel, etc.

Reference: Americans with Disabilities Act of 1990 (ADA), including changes made by the ADA Amendments Act of 2008 (P.L. 110-325): Title 42 Chapter 126 section 12101 “definition of disability”.

Question: What are the record retention requirements under the E-Sign Act?


Under the E-Sign Act, if a financial institution is legally required to maintain copies of a contract or other records of a transaction, the institution may rely on an electronic record of the information that accurately reflects the information in the contract or other record, and that remains accessible to all persons who are legally entitled to access the information in a form that can later be reproduced.

Reference: Fed. Consumer Compliance Outlook, 4th Quarter 2009; 15 U.S.C. 7001(d).

Question: What is definition of affirmative consent under CAN-SPAM?


The term "affirmative consent", when used with respect to a commercial electronic mail message, means that

(A) the recipient expressly consented to receive the message, either in response to a clear and conspicuous request for such consent or at the recipient's own initiative; and

(B) if the message is from a party other than the party to which the recipient communicated such consent, the recipient was given clear and conspicuous notice at the time the consent was communicated that the recipient's electronic mail address could be transferred to such other party for the purpose of initiating commercial electronic mail messages.

Reference: Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) 15 USC 7701.

Question: Under the Homeowners Protection Act, when must unearned premiums be returned for cancelled insurance?


Unearned premiums must be returned not later than 45 days after the termination or cancellation of a private mortgage insurance requirement under this section, all unearned premiums for private mortgage insurance shall be returned to the mortgagor by the servicer.

Reference: Homeowners Protection Act 12 USC 4902(f)

Question: How is a promotional savings account defined and what can and can’t a bank do in regard to that type of account? Are FDIC banks permitted to have this type of account?


The OCC, FED, and FDIC all have revised their laws to include the term ‘savings promotion raffle’ which means a contest in which the sole consideration required for a chance of winning designated prizes is obtained by the deposit of a specified amount of money in a savings account or other savings program, where each ticket or entry has an equal chance of being drawn, such contest being subject to regulations that may from time to time be promulgated by the appropriate prudential regulator (as defined in section 1002 of the Consumer Financial Protection

Act of 2010 (12 U.S.C. 5481)).’’. As stated Under the Law,

(a) LIMITATION OF APPLICABILITY.—Sections 1301, 1302, 1303,
1304, and 1306 shall not apply—
(1) to a savings promotion raffle conducted by an insured depository institution or an insured credit union; or
(2) to any activity conducted in connection with any such savings promotion raffle, including, without limitation, to the—
(A) transmission of any advertisement, list of prizes, or other information concerning the savings promotion raffle;
(B) offering, facilitation, and acceptance of deposits, withdrawals, or other transactions in connection with the savings promotion raffle;
(C) transmission of any information relating to the savings promotion raffle, including account balance and transaction information; and

(D) deposit or transmission of prizes awarded in the savings promotion raffle as well as notification or publication thereof.

Reference: OCC 12 USC 25a; FED Section 9a of Federal Reserve Act; FDIC section 20 of Federal Deposit Insurance Act.

The American Savings Promotion Act of 2014 (PUBLIC LAW 113–251), limitations on applicability.


Q&A Archives


The recordkeeping requirements do not require actual copies of documentation. The bank must keep a description of any documents relied upon during account opening. While many institutions do retain copies of driver's licenses, they are careful to avoid use of this information in a prohibited context and examiners find this practice controversial and prohibited in some states. Be sure to know your states rules regarding copies of driver's license/identification cards. Also, ensure that all account opening staff, know what the banks written policies and procedures are for the collection and retention of Customer Identification documents. They must follow the banks exact policies and procedures to avoid a violation during an audit or exam.

Note: Title 18 of the United States Code outlines that it is not permissible to photocopy a military ID.

Reference: 31 CFR 1020.200(a)(2)(iii)(D)(3)



Regulation R states relationship compensation is any compensation the bank receives attributable to a trust or fiduciary account that consists of:

  • An administration fee
  • An annual fee
  • A fee based on a percentage of assets under management
  • A flat or capped per order processing fee
  • Any combination of such fees
Reference: Regulation R: 12 CFR 218.721(a)(2)


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