R. Kinney Williams & Associates
R. Kinney Williams
& Associates

Internet Banking News

March 24, 2002

FYI - OCC Chief Counsel Julie L. Williams Urges Banks to be Vigilant In Avoiding Unfair and Deceptive Marketing Practices - New guidance issued by the Office of the Comptroller of the Currency will help banks maintain high-quality customer service.
Press release www.occ.treas.gov/ftp/release/2002-30.txt
Advisory Letter http://www.occ.treas.gov/ftp/advisory/2002-3.txt 

FYI  - The Federal Reserve Board announced the publication of a guide to help consumers better understand their rights and responsibilities with regard to electronic check conversion transactions.

OCC Concludes that GLBA and Barnett Decision Show Parts of Massachusetts Law do not Apply to National Banks - The Office of the Comptroller of the Currency concluded in an opinion that will be published in the Federal Register that some provisions of a Massachusetts insurance law would be preempted under the Gramm-Leach-Bliley Act (GLBA) and therefore would not apply to national banks.

- Specially Designated Nationals and Blocked Persons - On March 7, 2002, the Department of the Treasury's Office of Foreign Assets Control (OFAC) amended its listing of Specially Designated Nationals and Blocked Persons by removing the following Specially Designated Narcotics Trafficker:

FYI - Comptroller Urges Industry to Adapt Technology To Give Low-Income Americans Greater Access to Banking Services - Low-income Americans constitute a large and potentially important market for financial services providers, and technology gives banks a means to serve that market in a cost-effective way, Comptroller of the Currency John D. Hawke Jr. said today.

Bank of America, the No. 3 U.S. bank, said Sunday that it has corrected a computer processing problem that left a large number of West Coast customers without access to funds directly deposited to their accounts last Friday.  http://news.com.com/2100-1017-862061.html?tag=cd_mh

FYI - A London-based Internet security and risk consulting firm last week published the results of a two-day study that highlights in surprising detail the CIA's primary points of presence on the public Internet.  http://www.computerworld.com/storyba/0,4125,NAV47_STO68961,00.html

Truth in Lending Act (Regulation Z)

The commentary to regulation Z was amended recently to clarify that periodic statements for open-end credit accounts may be provided electronically, for example, via remote access devices. The regulations state that financial institutions may permit customers to call for their periodic statements, but may not require them to do so. If the customer wishes to pick up the statement and the plan has a grace period for payment without imposition of finance charges, the statement, including a statement provided by electronic means, must be made available in accordance with the "14-day rule," requiring mailing or delivery of the statement not later than 14 days before the end of the grace period.

Provisions pertaining to advertising of credit products should be carefully applied to an on-line system to ensure compliance with the regulation. Financial institutions advertising open-end or closed-end credit products on-line have options. Financial institutions should ensure that on-line advertising complies with the regulations. For on-line advertisements that may be deemed to contain more than a single page, financial institutions should comply with the regulations, which describe the requirements for multiple-page advertisements.

- We continue covering some of the issues discussed in the "Risk Management Principles for Electronic Banking" published by the Basel Committee on Bank Supervision in May 2001.

Sound Audit Trail Practices for E-Banking Systems

1. Sufficient logs should be maintained for all e-banking transactions to help establish a clear audit trail and assist in dispute resolution.

2. E-banking systems should be designed and installed to capture and maintain forensic evidence in a manner that maintains control over the evidence, and prevents tampering and the collection of false evidence.

3. In instances where processing systems and related audit trails are the responsibility of a third-party service provider:

a)   The bank should ensure that it has access to relevant audit trails maintained by the service provider.

b)   Audit trails maintained by the service provider meet the bank's standards.

- We continue our series listing the regulatory-privacy examination questions.  When you answer the question each week, you will help ensure compliance with the privacy regulations.

Annual Privacy Notice

6)  Does the institution provide a clear and conspicuous notice that accurately reflects its privacy policies and practices at least annually (that is, at least once in any period of 12 consecutive months) to all customers, throughout the customer relationship? [5(a)(1)and (2)]
(Note: annual notices are not required for former customers. [5(b)(1)and (2)])


PLEASE NOTE:  Some of the above links may have expired, especially those from news organizations.  We may have a copy of the article, so please e-mail us at examiner@yennik.com if we can be of assistance.  

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