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The OCC has released 19 CRA evaluations that became public in May for national banks and federal savings associations. Eleven of those institutions received rating of Satisfactory. Eight institutions received ratings of Outstanding:

• PNC Bank, National Association, Wilmington, Delaware
• First National Bank, Cloverdale, Indiana
• United Fidelity Bank, F.S.B., Evansville, Indiana
• Industrial Commercial Bank of China (USA), National Association, New York, New York
• Keybank National Association, Cleveland, Ohio
• Texas National Bank, Mercedes, Texas
• Community National Bank, Derby, Vermont
• Hilltop National Bank, Casper, Wyoming

The Federal Reserve Board's archive of CRA evaluations of state member banks shows that the Reserve Banks made public ten CRA evaluation in May. Eight of those evaluations were rated Satisfactory, and Outstanding ratings were assigned to:

• Bank of Hawaii, Honolulu, Hawaii
• First State Bank, Anadarko, Oklahoma

The FDIC has issued a list of nine enforcement decisions and orders issued in April 2024.

• An order to pay a $13,000 civil money penalty for flood insurance rules violations was issued to CNB Bank, Carlsbad, New Mexico
• Consent orders were issued to —
  • Spring Valley Bank, Wyoming, Ohio
  • Tioga-Franklin Savings Bank, Philadelphia, Pennsylvania
  • Commodore Bank, Somerset, Ohio
  • The First Bank and Trust Company of Murphysboro, Murphysboro, Illinois (Corrected order)
• A notice of intention to prohibit and notice of charges for an order of restitution and assessment of a civil money penalty was issued to Derrick Alan Smith, formerly a community banking branch banker at Branch Banking and Trust Company (now known as Truist Bank), Charlotte, North Carolina
• An order of prohibition assessing a $7,000 civil money penalty was issued to Cody Kietzman formerly employed by The Frederick Community Bank, Paxton, Illinois
• An order of prohibition was issued to David P. Ritter formerly employed by Summit Community Bank, Inc., Moorefield, West Virginia
• An order approving the termination of FDIC insurance was issued to Interstate Federal Savings and Loan Association of McGregor, McGregor, Iowa

The Federal Reserve Board, FDIC, and OCC on Friday jointly issued state loan-to-deposit ratios that are used to evaluate compliance with the Riegle-Neal Interstate Banking and Branching Efficiency Act. Each respective host state loan-to-deposit ratio shows the ratio of total loans in a state to total deposits in the state for all banks that have that state as their home state. These ratios replace those issued in May 2023.

By law, a bank is generally prohibited from establishing or acquiring branches outside of its home state primarily for the purpose of acquiring additional deposits. This prohibition seeks to ensure that interstate bank branches will not take deposits from a community without the bank also reasonably helping to meet the credit needs of that community.

• Section 109 Host State Loan-to-Deposit Ratios

The CFPB has reported it has sued student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA), which does business as American Education Services (AES), for illegally collecting on student loans that have been discharged in bankruptcy and sending false information about consumers to credit reporting companies. The CFPB’s lawsuit asks the court to order PHEAA to stop its illegal conduct, provide redress to borrowers it has harmed, and pay a civil penalty.

PHEAA is a student loan servicer with its principal office in Harrisburg, Pennsylvania. It is a public corporation organized under the laws of the Commonwealth of Pennsylvania. As of December 2023, PHEAA serviced a portfolio of student loans worth roughly $17.8 billion.

The United States Bankruptcy Code provides consumers a financial fresh start by discharging debts and prohibiting creditors from collecting on discharged debts. Many student loans, both federal and private, can be discharged in bankruptcy only if a borrower initiates a separate proceeding and meets a more stringent legal standard than is applied to other debts. However, certain private student loans are discharged in normal bankruptcy proceedings like other unsecured consumer debt. These “non-qualified” private student loans include money borrowed to pay for tuition at schools that do not qualify for federal Title IV funding, such as unaccredited trade or K-12 schools, loans for medical and dental residency, loans to students attending school less than half-time, or loans where the loan amount was higher than the cost of attendance (which can occur when a loan is disbursed directly to a consumer).

AES services a range of private student loans, including those that have strict discharge requirements in bankruptcy and non-qualified loans that are routinely discharged. Nevertheless, when a consumer with private student loans serviced by AES receives a bankruptcy discharge, the company’s practice is to treat all of that consumer’s education-related loans as not discharged, unless it receives an explicit court order or other express direction from the loan owner.

In March 2023, the CFPB issued a bulletin warning the industry about this issue, detailing how supervisory examinations had found some student loan servicers illegally returning loans to collections after bankruptcy courts had discharged the loans.

The CFPB's complaint alleges that, between 2017 and 2021, AES collected or attempted to collect on approximately 7,934 private student loans after a bankruptcy proceeding. Although discovery in litigation will reveal the total scope of PHEAA’s unlawful collection activity, the Bureau says at least 177 were loans eligible for discharge in bankruptcy. Borrowers were thus subjected to illegal collections on loans they did not owe. AES also furnishes inaccurate information to credit reporting companies regarding borrowers’ outstanding debt, which causes financial harm to consumers and may make it harder to qualify for other credit in the future.

This is the CFPB’s second public enforcement action against PHEAA this year. On May 6 the CFPB filed a complaint and proposed stipulated judgment, which, if approved by the court, would require PHEAA and the National Collegiate Student Loan Trusts to pay more than $5 million for student loan servicing failures, including failing to provide accurate information to borrowers and incorrectly denying forbearance requests.

On Friday, the Treasury Department reported that OFAC has targeted four entities associated with OFAC-designated Rayan Roshd Afzar Company that have procured critical parts for Iran’s unmanned aerial vehicle (UAV) program. Additionally, OFAC is targeting an Iranian executive of Iran Aviation Industries Organization, a subsidiary of Iran’s Ministry of Defense and Armed Forces Logistics that oversees UAV manufacturers Iran Aircraft Manufacturing Industrial Company and Qods Aviation Industries.

For the names and identification information of the designated parties, see the May 31, 2024, BankersOnline OFAC Update.

The FDIC has issued FIL-31-2024 to remind all FDIC-insured financial institutions of the annual Summary of Deposits Survey as of June 30, 2024. All institutions with branch offices are required to submit the survey; institutions with only a main office are exempt. Survey responses are due by July 31, 2024, and no extensions will be granted.

• The description for the Home Banking service level (13) has been expanded to include mobile applications (mobile apps). Refer to Section 7 of the SOD instructions.
• No later than September 30, 2024, SOD survey results will be published on the FDIC’s SOD Deposit Market Share website.
• The FDIC’s SOD Deposit Market Share website will be discontinued by the end of 2024, and will be replaced by a new and improved SOD application that is available for preview now. Refer to Section 1G of the SOD instructions for more information.
• Institutions must either complete the survey directly in the Central Data Repository (CDR), or use vendor software to prepare and submit their survey responses to the CDR. Software vendors available to assist with the SOD filing are listed under “Filing Procedures” within this FIL.
• Consistent with the prior year, password requirements have been implemented for the CDR. Refer to Section 5C of the SOD instructions.
• Reporting instructions are available on the FDIC’s Summary of Deposits website. Refer to Section 5I of the SOD instructions for amending SOD surveys after initial submission.

The FDIC has posted its Community Reinvestment Act examination schedules for the third and fourth quarters of 2024.