Compliance Briefing for Thursday, May 28, 2015

To access specific issuances, go to our Top Stories section, where you'll find links to all the relevant documents.
Risk Scoring — The Essential Element of BSA/AML Compliance

PATRIOT OFFICER automatically calculates risk scores for each customer to identify higher-risk customers and monitors them more closely as the regulations mandate. The solution automatically detects check fraud, check kiting, deposit fraud, ACH fraud, wire fraud, Internet banking fraud, credit/debit card fraud, ATM fraud, employee fraud, and financial fraud to prevent losses. PATRIOT OFFICER is the only BSA/AML/FRAUD solution endorsed by American Bankers Association.
— GlobalVision Systems, Inc.

Wisconsin bank to pay $200M to settle redlining case
The Department of Housing and Urban Development (HUD) has announced an agreement with Associated Bank, N.A., Green Bay, Wisconsin, to resolve a disparate treatment redlining case, one of the largest redlining complaints brought by the federal government against a mortgage lender. At over $200 million, it is the largest settlement of this kind HUD has ever reached. The complaint filed by HUD alleged that from 2008-2010, the bank engaged in discriminatory lending practices regarding the denial of mortgage loans to African-American and Hispanic applicants, and in and the provision of loan services in neighborhoods with significant African-American or Hispanic populations. Over the next three years, Associated will pay nearly $10 million in the form of lower interest rate home mortgages and down payment/closing cost assistance to qualified borrowers in majority-minority census tracts in the housing market areas of Chicago, Milwaukee, Minneapolis-St. Paul, Racine (WI), Kenosha (WI), and Lake County (IL). In addition, the bank agrees to:
  • Invest nearly $200 million through increased home mortgage lending activity in majority-minority census tracts in these areas;
  • Provide nearly $3 million to help existing homeowners repair their properties in these predominantly minority communities;
  • Pay $1.4 million to support affirmative marketing of loans in the above census tracts
  • Commit $1.35 million for community reinvestment and fair lending education and training;
  • Open four loan production offices in majority-minority census tracts (three in the Chicago area and one in the Milwaukee area), subject to regulatory approval, in addition to three branches Associated has opened or is committed to opening in or near majority-minority census tracts in Chicago, Milwaukee, and Racine since HUD's complaint was filed; and
  • Offer fair housing training to all its employees and agents with substantial residential lending activity within six months and maintain a second level review process for all denied residential loans.

Suspicious Activity Reporting for Dummies eBook
This guide walks you through the process of completing your SAR accurately and efficiently, and offers tips on how to spot and track potential money laundering activities. Get helpful advice on how to consolidate your AML workflow, save on costs, and streamline your institution's monitoring and reporting processes with automated SAR e-filing.
— Verafin

Deutsche Bank pays SEC $55M for misstated financials
The Securities and Exchange Commission has announced that Deutsche Bank AG has agreed to pay $55 million to settle charges it filed misstated financial reports during the height of the financial crisis that failed to take into account a material risk for potential losses estimated to be in the billions of dollars. An SEC investigation found that Deutsche Bank overvalued a portfolio of derivatives consisting of "Leveraged Super Senior" (LSS) trades through which the bank purchased protection against credit default losses. Because the trades were leveraged, the collateral posted for these positions by the sellers was only a fraction (approximately 9 percent) of the $98 billion total in purchased protection.

Managing Your Fair Lending Compliance Risk Just Got Easier
Fair Lending RiskCheck™ is a compliance officer's best friend. With this online risk assessment you can conduct a Fair Lending Risk Assessment more efficiently than ever before. . .even if you know little about fair lending compliance. RiskCheck comes with expert guidance and free support. Claim your free info kit today!
— TRUPOINT Partners

Survey of Household Economics and Decisionmaking
The Federal Reserve Board has released the results of its 2014 Survey of Household Economics and Decisionmaking, which provides new insight into Americans' economic security, housing and living arrangements, banking and credit access, education and student loan debt, savings behavior, and retirement preparedness. The Report on the Economic Well-being of U.S. Households in 2014 indicates individuals' overall perceptions of financial well-being improved modestly between 2013 and 2014 but their optimism about future financial prospects increased significantly. Sixty-five percent of adult respondents consider their families to be either "doing okay" or "living comfortably" financially -- an increase of 3 percentage points from the 2013 survey. Twenty-nine percent of survey respondents say they expect their income to be higher in the year following the survey, compared to 21 percent of 2013 respondents.

Ready for the TRID Rule? It all changes August 1!
Preparedness is as close as your own office with TILA and RESPA Integrated Disclosure (TRID) Training from Wipfli. Get customized, quality on-site training with a senior management compliance expert, who will help you develop strategies that position your bank for a smooth transition when the rules take effect.
— Wipfli

Fed TDF offering
The Federal Reserve has announced it will conduct today (May 28) a floating-rate offering of term deposits with an early withdrawal feature through its Term Deposit Facility (TDF). Seven-day term deposits with a rate set equal to the sum of the interest rate paid on excess reserves (currently 25 basis points) plus a fixed spread of 1 basis point will be offered. The maximum tender amount per institution will be $5,000,000,000. The offering window will be open from 10:30 a.m. to 12:30 p.m. EDT, and awarded deposits will settle later in the day.

A Message from Mary Beth Guard on the Integrated Disclosures Challenge
We know preparing for the Integrated Disclosure rules, on the heels of all the other major changes to lending compliance, is a big challenge. And we know you have lots of alternatives for obtaining the training you need. Here's why you should turn to BOL Conferences for that training.
OCC workshops in Iowa
The OCC will host two workshops in Des Moines, Iowa, for directors of national community banks and federal savings associations. The Risk Governance workshop will be held on July 14 and the Compliance Risk workshop on July 15.

First quarter earnings up
The FDIC has announced the publication of the First Quarter 2015 Quarterly Banking Profile, which reports insured institutions earned $39.8 billion, up $2.6 billion (6.9 %) from 2014. The increase in earnings was mainly attributable to a $4.3 billion rise in net operating revenue (net interest income plus total noninterest income). Nearly two-thirds (62.7 percent) of the 6,419 reporting institutions had year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable during the first quarter fell to 5.6 percent from 7.4 percent a year earlier.

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