BB&T 2012 Annual Report Download - page 38

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CFPB
The Dodd-Frank Act created a new, independent federal agency, the CFPB, which was granted broad rulemaking,
supervisory and enforcement powers under various federal consumer financial protection laws, including the laws referenced
above, fair lending laws and certain other statutes. The CFPB has examination and primary enforcement authority with
respect to depository institutions with $10 billion or more in assets, their service providers and certain non-depository entities
such as debt collectors and consumer reporting agencies. The CFPB has authority to prevent unfair, deceptive or abusive
practices in connection with the offering of consumer financial products. The Dodd-Frank Act authorizes the CFPB to
establish certain minimum standards for the origination of residential mortgages including a determination of the borrower’ s
ability to repay. In addition, the Dodd-Frank Act allows borrowers to raise certain defenses to foreclosure if they receive any
loan other than a “qualified mortgage” as defined by the CFPB. The Dodd-Frank Act permits states to adopt consumer
protection laws and standards that are more stringent than those adopted at the federal level and, in certain circumstances,
permits state attorneys general to enforce compliance with both the state and federal laws and regulations.
The CFPB has concentrated much of its rulemaking efforts on a variety of mortgage-related topics required under the Dodd-
Frank Act, including mortgage origination disclosures, minimum underwriting standards and ability to repay, high-cost
mortgage lending, and servicing practices. On August 9, 2012, the CFPB issued three NPRs covering loan origination and
servicing requirements, which were finalized in January 2013, along with other rules on mortgages. The ability to repay and
qualified mortgage standards rules, as well as the mortgage servicing rules, are scheduled to become effective in January
2014. The escrow and loan originator compensation rules are scheduled to become effective in June 2013. A final rule
integrating disclosure required by the Truth in Lending Act and the Real Estate Settlement and Procedures Act is expected
later this year. BB&T continues to analyze the impact that such rules may have on its business.
Interchange Fees
As required by the Dodd-Frank Act, the FRB adopted rules effective October 1, 2011, establishing standards for assessing
whether the interchange fees that may be charged with respect to electronic debit transactions are “reasonable and
proportional” to the costs incurred by issuers for such transactions. Interchange fees, or “swipe” fees, are charges that
merchants pay to BB&T and other credit card companies and card-issuing banks for processing electronic payment
transactions. Under the final rules, the maximum permissible interchange fee that an issuer may receive for an electronic
debit transaction will be the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. An
additional 1 cent per transaction fraud prevention adjustment is available to those issuers that comply with certain standards
outlined by the FRB.
Privacy
Federal law currently contains extensive customer privacy protection provisions, including substantial customer privacy
protections provided under the Financial Services Modernization Act of 1999 (commonly known as the Gramm-Leach-Bliley
Act). Under these provisions, a financial institution must provide to its customers, at the inception of the customer
relationship and annually thereafter, the institution’ s policies and procedures regarding the handling of customers’ nonpublic
personal financial information. These provisions also provide that, except for certain limited exceptions, an institution may
not provide such personal information to unaffiliated third parties unless the institution discloses to the customer that such
information may be so provided and the customer is given the opportunity to opt out of such disclosure. Federal law makes it
a criminal offense, except in limited circumstances, to obtain or attempt to obtain customer information of a financial nature
by fraudulent or deceptive means.
CRA
The CRA requires Branch Bank’ s primary federal bank regulatory agency, the FDIC, to assess the bank’ s record in meeting
the credit needs of the communities served by the bank, including low- and moderate-income neighborhoods and persons.
Institutions are assigned one of four ratings: “Outstanding,” “Satisfactory,” “Needs to Improve” or “Substantial
Noncompliance.” This assessment is reviewed for any bank that applies to merge or consolidate with or acquire the assets or
assume the liabilities of an insured depository institution, or to open or relocate a branch office. The CRA record of each
subsidiary bank of a financial holding company, such as BB&T, also is assessed by the FRB in connection with any
acquisition or merger application.
Automated Overdraft Payment Regulation
The FRB and FDIC have enacted consumer protection regulations related to automated overdraft payment programs offered
by financial institutions. In 2009, the FRB amended its Regulation E to prohibit financial institutions from charging
consumers fees for paying overdrafts on automated teller machine and one-time debit card transactions, unless a consumer