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Banker's Toolbox, Inc., leaders in compliance solutions for financial institutions, announced the acquisition of Georgia-based MainStreet Technologies (MST). MST is an industry leader in the loan risk management space. This acquisition adds to a strong and growing portfolio of compliance-related solutions and will continue to enhance the value Banker's Toolbox brings to both their customers and the industry. (Read full press release here.)

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Feedback on payments improvement operating vision

The U.S. Faster Payments Council has released a report on its survey of stakeholders eliciting feedback on the organization's Operating Vision, which describes the proposed mission, principles, structure, authority, funding and core focus areas of the organization. The Operating Vision is the work of a short-term work group established by the Faster Payments Task Force in 2017 to recommend a faster payments governance framework for the U.S. marketplace.


OFAC sanctions Burmese commanders and units for human rights abuses

Yesterday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four Burmese military and Border Guard Police (BGP) commanders and two Burmese military units for their involvement in ethnic cleansing in Burma’s Rakhine State and other widespread human rights abuses in Burma’s Kachin and Shan States. The designations were made under Executive Order 13818, which builds upon the Global Magnitsky Human Rights Accountability Act of 2016 to target perpetrators of serious human rights abuse and corruption. For identification information, see our OFAC Update.


OCC lists July enforcement actions

The OCC has released its August report of enforcement actions taken in July 2018 against institutions and institution-affiliated persons under its regulatory authority. Included were a previously-announced $3 million civil money penalty order and order to cease and desist and make restitution against TCF National Bank. Also listed were orders of prohibition against a former branch manager of Santander Bank, N.A., who was found to have made unauthorized withdrawals from a bank customer's account, and a former Wells Fargo Bank, N.A., teller who was found to have given at least 12 customers' account information to a third party, resulting in unauthorized charges to the customers' accounts and a loss to the bank of $67,994.


Complaint filed against Facebook for FHA violations

HUD has filed a formal complaint against Facebook for violating the Fair Housing Act by allowing landlords and home sellers to use its advertising platform to engage in housing discrimination. HUD's complaint claims Facebook enables advertisers to control which users receive housing-related ads based upon the recipient's race, color, religion, sex, familial status, national origin, disability, and/or zip code. Facebook then invites advertisers to express unlawful preferences by offering discriminatory options, allowing them to effectively limit housing options for these protected classes under the guise of "targeted advertising."


Homeowners and agent charged with housing discrimination

Minnesota homeowners and their real-estate agent have been charged by HUD with discrimination for refusing to rent thjeir house to a family because of race, national origin and their minor children. HUD’s charge alleges that the owners refused to rent a 7,000 square foot, six-bedroom, house to a family of four adults and seven children because of their race (Native American) and national origin (Hispanic), and because the family has minor children. The charge further alleges that the owner and real-estate agent discouraged the family from renting the home by offering them less favorable rental terms, including increasing the rent by $1,000. After being denied the home, the family had to split up and live in separate residences.


July construction activity mixed

HUD and the Census Bureau have released statistics on new residential construction for July 2018.

  • Building Permits: Privately owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,311,000. This is 1.5 percent more than the revised June rate of 1,292,000, and is 4.2 percent above the July 2017 rate of 1,258,000. Single-family authorizations in July were at a rate of 869,000, 1.9 percent above the revised June figure of 853,000. Authorizations of units in buildings with five units or more were at a rate of 410,000 in July.
  • Housing Starts: Privately owned housing starts in July were at a seasonally adjusted annual rate of 1,168,000, 0.9 percent above the revised June estimate of 1,158,000, but 1.4 percent below the July 2017 rate of 1,185,000. Single-family housing starts in July were at a rate of 862,000, 0.9 percent above the revised June figure of 854,000. The July rate for units in buildings with five units or more was 303,000.
  • Housing Completions: Privately owned housing completions in July were at a seasonally adjusted annual rate of 1,188,000. This is 1.7 percent below the revised June estimate of 1,209,000 and 0.8 percent below the July 2017 rate of 1,197,000. Single-family housing completions in July were at a rate of 814,000, 5.2 percent below the revised June rate of 859,000. The July rate for units in buildings with five units or more was 371,000.


Former Maryland banker banned

The Federal Reserve Board has announced it has prohibited Jacob H. Goldstein, a former president and CEO of NBRS Financial, Rising Sun, Maryland, from participating in the banking industry. The Board found that Goldstein engaged in unsafe and unsound practices, violations of law, and breached his fiduciary duties to NBRS Financial, by engaging in self-dealing transactions involving bank loans and withholding material information from the NBRS board of directors. Goldstein did not respond to the Board's notice of enforcement action, and its prohibition order was issued by default.

NBRS Financial entered FDIC receivership when it was closed by the Maryland Office of the Commissioner of Financial Regulation in October 2014.


Credit Unions merge

The NCUA has announced the Ukrainian Future Credit Union, of Warren, Michigan, has merged into Selfreliance Ukrainian American Federal Credit Union, of Chicago, Illinois, effective August 17, 2018. The Michigan Department of Insurance and Financial Services placed Ukrainian Future Credit Union into conservatorship on February 23, 2018. Prior to the merger, Selfreliance Ukrainian American Federal Credit Union served 20,359 members and had assets of $485.9 million, according to the credit union’s most recent Call Report. At the time of the merger, Ukrainian Future Credit Union was a federally insured, state-chartered credit union with 3,652 members and assets of $77.9 million, according to the credit union’s most recent Call Report. Chartered in 1961, Ukrainian Future Credit Union served members of the Future Ukrainian-American Aid Association of Detroit.


GAAP disclosure requirements updated and simplified

The SEC has announced it has voted to adopt amendments to certain disclosure requirements that have become duplicative, overlapping, or outdated in light of other Commission disclosure requirements, U.S. Generally Accepted Accounting Principles (GAAP), or changes in the information environment. The amendments are intended to simplify and update the disclosure of information to investors, including long-term Main Street investors, and reduce compliance burdens for companies without significantly altering the total mix of information available to investors. The amendments would eliminate certain:

  • Redundant and duplicative requirements, which require substantially similar disclosures as GAAP, International Financial Reporting Standards (IFRS), or other Commission disclosure requirements.
  • Overlapping requirements, which are related to, but not the same as GAAP, IFRS, or other Commission disclosure requirements.
  • Outdated requirements, which have become obsolete as a result of the passage of time or changes in the regulatory, business, or technological environment.
  • Superseded requirements, which are inconsistent with recent legislation, more recently updated Commission disclosure requirements, or more recently updated GAAP.

The amendments will be effective 30 days after publication in the Federal Register.


FHA updates Puerto Rico and Virgin Islands disasters policy

To help struggling borrowers in Puerto Rico and the U.S. Virgin Islands impacted by Hurricanes Irma and Maria, the Federal Housing Administration (FHA) announced yesterday that it is updating its menu of foreclosure prevention options to allow borrowers with delinquent FHA-insured mortgages easier access to bring their mortgages current without increasing their interest rates or monthly payments. FHA is also providing a final 30-day extension of its foreclosure moratorium to allow distressed FHA-insured homeowners in Puerto Rico and the U.S. Virgin Islands an opportunity to find a permanent mortgage resolution. A letter about the options has been sent to mortgage servicers.


Fannie and Freddie refinance volumes decline

The Federal Housing Finance Agency (FHFA) has reported that Fannie Mae and Freddie Mac completed 299,466 refinances in the second quarter of 2018, compared with 356,002 in the first quarter. FHFA's second quarter Refinance Report also shows that 2,973 loans were refinanced through the Home Affordable Refinance Program (HARP), bringing the total number of HARP refinances to 3,491,140 since inception of the program in 2009.


Seven-day term deposit offering scheduled

The Federal Reserve has announced it will conduct a floating-rate offering of term deposits with an early withdrawal feature through its Term Deposit Facility on August 23, 2018. The Fed will offer seven-day term deposits with a rate set equal to the sum of the interest rate paid on excess reserves plus a fixed spread of 1 basis point. The maximum tender amount per institution will be $250,000,000. The operation window will be open from 10:30 a.m. to 12:30 p.m. EDT, and awarded deposits will settle the same day the operation is executed.


FFIEC releases census and geocoding information

The 2018 Census Data Products report and an update of the 2018 Geocoding System have been released by the FFIEC.


Citigroup pays $10.5M for SEC violations

The SEC announced yesterday that Citigroup has agreed to pay $10.5 million in penalties to settle two enforcement actions involving its books and records, internal accounting controls, and trader supervision. The charges stem from $81 million of losses due to trader mismarking and unauthorized proprietary trading and $475 million of losses due to fraudulently-induced loans made by a Mexican subsidiary.

In the first action, Citigroup Inc. and its U.S. broker-dealer subsidiary Citigroup Global Markets Inc. (CGMI) agreed to pay a $5.75 million penalty to settle charges of inaccurate books and records and CGMI’s failure reasonably to supervise traders. Citigroup and CGMI settled without admitting or denying the SEC’s findings and agreed to cease and desist from future violations.

In the second action, Citigroup agreed to pay a $4.75 million penalty to settle charges that it failed to devise and maintain adequate internal accounting controls. Citigroup settled without admitting or denying the SEC’s findings and agreed to cease and desist from future violations. An SEC order found that Citigroup subsidiary Grupo Financiero Banamex S.A. de C.V. loaned approximately $3.3 billion to Oceanografia, S.A. (OSA) between 2008 and 2014 based on invoices and work estimates for services that OSA provided to Petroleos Mexicanos (Pemex), the Mexican state-owned oil company. According to the order, many of the OSA work estimates were fraudulent and did not reflect amounts Pemex actually owed to OSA. Citigroup ultimately lost approximately $475 million as a result of OSA’s fraud. The SEC found that Banamex and Citigroup lacked the controls necessary to verify the invoices before making loans to OSA and ignored numerous red flags that should have led to discovery of the fraud.


OFAC targets facilitators of DPRK UN violations

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced North Korea-related designations, continuing the implementation of existing UN and U.S. sanctions. This action against one individual and three entities was taken pursuant to Executive Order 13810 of September 20, 2017, and targets persons involved in facilitating illicit shipments on behalf of North Korea. This action reinforces the United States’ ongoing commitment to prevent financial flows to the DPRK’s unlawful WMD programs and activities, in accordance with the decisions of the UN Security Council (UNSC).

As a result of this action, any property or interests in property of the designated persons in the possession or control of U.S. persons or within the United States must be blocked, and U.S. persons generally are prohibited from dealing with any of the designated persons. For identification of the designated individual and entities, see our OFAC Update.


Industrial and manufacturing production edges up

The Federal Reserve Board has released July 2018 G.17 Industrial Production and Capacity Utilization data. Industrial production edged up 0.1 percent in July after rising at an average pace of 0.5 percent over the previous five months. Manufacturing production increased 0.3 percent, the output of utilities moved down 0.5 percent, and, after posting five consecutive months of growth, the index for mining declined 0.3 percent. At 108.0 percent of its 2012 average, total industrial production was 4.2 percent higher in July than it was a year earlier. Capacity utilization for the industrial sector was unchanged in July at 78.1 percent, a rate that is 1.7 percentage points below its long-run (1972–2017) average.


OCC updates accounting advisory series

The OCC announced yesterday the release of its annual update to the Bank Accounting Advisory Series (BAAS), which covers a variety of topics and promotes consistent application of accounting standards among national banks and federal savings associations. The updated edition reflects accounting standards issued by the Financial Accounting Standards Board on such topics as hedging and credit losses. Also included are recent answers to frequently asked questions from the industry and examiners.


OCC workshops scheduled for Houston

The OCC has announced it will host two workshops at the Houston Marriott South at Hobby Airport, September 25 and 26, 2018, for directors of national community banks and federal savings associations supervised by the OCC.

  • The Compliance Risk workshop on September 25 focuses on the critical elements of an effective compliance risk management program. It also covers major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Flood Disaster Protection Act, Fair Lending, Home Mortgage Disclosure Act, Community Reinvestment Act, and other compliance hot topics.
  • The Operational Risk workshop on September 26 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, internal fraud, and cybersecurity.


Failure to safeguard investor assets costs Ameriprise Financial $4.5M

The SEC has reported that Ameriprise Financial Services Inc. will pay $4.5 million to settle charges that it failed to safeguard retail investor assets from theft by its representatives. According to the SEC's Order, five Ameriprise representatives committed numerous fraudulent acts, including forging client documents, and stole more than $1 million in retail client funds over a four-year period. The SEC found that Ameriprise, a registered investment adviser and broker-dealer, failed to adopt and implement policies and procedures reasonably designed to safeguard investor assets against misappropriation by its representatives.


June TIC data

Treasury has released Treasury International Capital (TIC) data for June 2018. The sum total in June of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $114.5 billion. Of this, net foreign private inflows were $142.4 billion, and net foreign official outflows were $27.9 billion. Foreign residents decreased their holdings of long-term U.S. securities in June; net sales were $45.5 billion. Net sales by private foreign investors were $43.5 billion, while net sales by foreign official institutions were $2.0 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $9.0 billion.


OCC clarifies CRA policy in Policies and Procedures Manual

The OCC has issued Bulletin 2018-23 announcing the revision of Policies and Procedures Manual (PPM) 5000-43, which clarifies the OCC’s policy for applying the regulatory framework to determine the effect of evidence of discriminatory or other illegal credit practices on the Community Reinvestment Act (CRA) rating of a national bank, federal savings association, or federal branch.


Fed makes annual prepaid card report to Congress

The Federal Reserve Board has submitted its annual report to Congress on the use of general-use prepaid cards in federal, state, and local government-administered payment programs and on the interchange fees and cardholder fees charged with respect to the use of those cards. In 2017, government agencies disbursed $144 billion through prepaid cards across reported programs, about one percent less than in 2016. By far, the Supplemental Nutritional Assistance Program (SNAP) disbursed the largest share of total funds through prepaid cards.


FinCEN Director Blanco comments at AML conference

In prepared remarks delivered at the 11th annual Las Vegas Anti-Money Laundering Conference and Expo yesterday, FinCEN Director Kenneth Blanco listed four areas in which FinCEN sees needs for improvement with respect to AML/CFT efforts:

  • Understanding the value of BSA data
  • Utilizing information to ensure compliance with FinCEN requirements
  • Increasing information sharing through the 314(b) program
  • Cybersecurity and emerging payments


Iranian national designated as terrorist

OFAC has designated Iranian national Qassim Abdullah Ali Ahmed as a global terrorist. For identification information, see our OFAC Update.


HUD requests comments on fair housing rule proposal

HUD yesterday announced an advance notice of proposed rulemaking inviting public comment on amendments to its Affirmatively Furthering Fair Housing (AFFH) regulations. HUD's stated goal in pursuing new rulemaking is to offer more helpful guidance to states and local communities to effectively promote fair housing choice through the use of their federal funds. Comments are sought on changes that would: (1) minimize regulatory burden while more effectively aiding program participants to meet their statutory obligations, (2) create a process focused primarily on accomplishing positive results, rather than on analysis, (3) provide for greater local control and innovation, (4) seek to encourage actions that increase housing choice, including through greater housing supply, and (5) more efficiently utilize HUD resources. Comments will be accepted for 60 days following publication.

UPDATE: Published 8/16/18 at 83 FR 40713. Comments due by October 15, 2018.


Mnuchin comments on FIRRMA signing

Treasury Secretary Mnuchin released a statement on the enactment of the National Defense Authorization Act. The new law contains the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which strengthens and modernizes the Committee on Foreign Investment in the United States (CFIUS). “FIRRMA delivers much-needed reforms that will ensure CFIUS has the tools necessary to identify, examine, and address national security concerns arising from foreign investment. America is a vibrant place to invest, and better protecting critical U.S. technology and infrastructure will ensure it stays that way. FIRRMA passed with overwhelming bipartisan support, and I am extremely proud of the work between Treasury and Congress to reach this historic agreement.”


McWatters promotes financial literacy

In the keynote speech at the Defense Credit Union’s Annual Conference in Williamsburg, Virginia, NCUA Chairman McWatters said, “Service members and their families face unique financial challenges, whether serving on active duty, returning to civilian life, or living as a veteran,” McWatters also said, “A strong foundation of personal finance knowledge, knowing how to save and create a budget, and understanding the value and importance of money, is essential in today’s rapidly evolving financial marketplace. Not only does it affect an individual’s financial well-being, it also has implications for the economic well-being of the nation and, in the case of service members, our military’s readiness.” He also noted the NCUA website,, has resources available in a variety of formats, including brochures, videos and interactive learning tools to help credit unions with their financial education programs.


Bureau settles payday lending case

The CFPB announced on Friday that a federal court in the Western District of Missouri had entered an order approving a settlement between the Bureau and Richard Moseley Sr., Richard Moseley Jr., and 20 interrelated corporate entities (Hydra Group) controlled by the Moseleys in a lawsuit for the unlawful origination and servicing of short-term, small-dollar online loans to consumer across the country. The suit alleged violations of the Consumer Financial Protection Act and other federal consumer protection laws. The Bureau claimed the defendants obtained consumers’ personal and financial information from third-party data brokers, and used that information to access consumers’ bank accounts without authorization; then, the Hydra Group deposited "loans" in consumers’ bank accounts, then debited biweekly “finance charges” indefinitely. The Bureau also alleged that in any written disclosures consumers received, the price terms and repayment obligations of the "loans" were misrepresented.

Under the consent order, the defendants will be banned from the industry, forfeit approximately $14 million in assets, and pay a $1 civil money penalty (based on the defendant's limited ability to pay). A judgment of $69 million was ordered for redress payments, but was suspended upon compliance with other requirements of the order.


Citigroup pays $8.6M for improper mortgage docs

The Federal Reserve Board has announced an $8.6M fine against Citigroup for the improper execution of residential mortgage-related documents, addressing the deficient execution and notarization of certain mortgage-related affidavits prepared by a subsidiary, CitiFinancial. The improper practices occurred in 2015 and were corrected. CitiFinancial exited the mortgage servicing business in 2017.

Also on Friday, the Board announced the termination of an enforcement action from 2011 against Citigroup and CitiFinancial related to residential mortgage loan servicing. The termination of that action was based on evidence of sustainable improvements.


Bureau finally updates Regulation P

The CFPB announced on Friday it had finalized amendments to its Regulation P to implement a December 2015 amendment to the Gramm-Leach-Bliley Act that provides financial institutions that meet certain conditions an exemption to the requirement under the GLBA to deliver an annual privacy notice. A financial institution can use the annual notice exception if it limits its sharing of customer information so that the customer does not have the right to opt out, and has not changed its privacy notice from the one previously delivered to its customer.

The rule issued by the Bureau implements this legislation and establishes deadlines for institutions resuming annual privacy notices if their practices change and they therefore cease to qualify for the exemption. The Regulation P amendments will be effective 30 days after publication in the Federal Register. Financial institutions have been able to take advantage of the GLBA amendments since their enactment in 2015, but some have been reluctant to do so until the regulatory changes were finalized. The final rule is substantially the same as proposed amendments to the regulation issued in July 2016, with changes to the timing provisions for provision of an annual privacy notice when the institution no longer qualifies for the exception.


FDIC guidance on recovery after California fires

FDIC FIL-41-2018, released yesterday, announced steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Shasta County, California, affected by wildfires and high winds.


McWatters on minority credit unions

In a presentation at the Annual Meeting of the African-American Credit Union Coalition in Atlanta, NCUA Chairman McWatters noted minority credit unions play a vital role in providing affordable financial services in the nation’s most underserved communities and the agency is looking at new ways to support them. He said, “Unfortunately, minority credit unions are too often the only federally insured financial institution available in rural and urban communities that have been historically unserved by traditional financial institutions. Their presence in these communities provides an alternative to actors that engage in unfair practices at the expense of consumers. It’s that commitment to serve that makes minority credit unions the embodiment of the credit union philosophy of people helping people.” As of the end of the first quarter of 2018, there were 564 credit unions classified as minority depository institutions, accounting for 10 percent of all federally insured credit unions. Collectively, these credit unions had more than 4.3 million members and $42 billion in assets.


NCUA proposes loan regs amendments

The NCUA Board has published [83 FR 39622] to amend its regulations regarding loans to members and lines of credit to members. The proposal would reduce regulatory burden by making amendments to improve clarity and to make compliance easier. The proposal would:

  • identify in one section all the various maturity limits applicable to federal credit union loans
  • better define the maturity date of new loans
  • more clearly express the limits on loans to a single borrower or group of associated borrowers

The NCUA Board also seeks comment on whether it should provide longer maturity limits for certain 1-4 family real estate loans. Comments on the proposal are due October 9, 2018.


Bureau makes 2018 HMDA file format check tool available

The Bureau of Consumer Financial Protection emailed an announcement Thursday that it has made available a File Format Verification Tool (FFVT) for HMDA data collected in 2018 and submitted in 2019. The FFVT is a resource for testing whether a HMDA file meets certain formatting requirements specified in the HMDA Filing Instructions Guide. The tool does not test for compliance with edits.


OCC authorizes bank closings in California

The OCC announced Thursday it has issued a proclamation allowing national banks, federal savings associations, and federal branches and agencies of foreign banks directly affected by wildfires and high winds in California to close. The news release also reminded bankers of OCC Bulletin 2012-28, "Supervisory Guidance on Natural Disasters and Other Emergency Conditions," which includes suggestions on actions bankers could consider when their bank operates or has customers in areas affected by a natural disaster or emergency.


New 20% deduction for pass-through businesses proposed

Treasury and the IRS have issued proposed regulations implementing a significant provision of the Tax Cuts and Jobs Act that allows owners of sole proprietorships, partnerships, trusts, and S corporations to deduct 20 percent of their qualified business income. The proposed rules:

  • Ensure that all small business income below $315,000 for married couples filing jointly (and $157,500 for single filers) is eligible for the deduction;
  • Provide clarity and flexibility for filers over those income thresholds by:
    • Including “aggregation rules” for filers with pass-through income from multiple sources;
    • Issuing guidance relating to specified service, trade or business (SSTB) income above the thresholds, which may be subject to limitation for the purposes of claiming the deduction; and
    • Allowing a de minimis exception to avoid unnecessary compliance costs for businesses earning only a small percentage of SSTB income; and
  • Establish anti-abuse safeguards to prevent improper tax avoidance schemes, such as relabeling employees as independent contractors.

Although income from "financial services" businesses would not be subject to the deduction afforded by the rule, the term "financial services" would be narrowly defined, omitting banking. Comments on the proposal will be accepted for 45 days following publication.


U.S. Congressman charged with insider trading

The Securities and Exchange Commission has announced the filing of insider trading charges against Congressman Christopher Collins, the U.S. Representative for New York’s 27th Congressional District, his son, Cameron Collins, and a third individual, Stephen Zarsky. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced related criminal charges.

The SEC reports that Christopher Collins, who served as an independent director of an Australian biotech company, Innate Immunotherapeutics Ltd., is charged with tipping Cameron Collins after receiving confidential information about negative clinical trial results for Innate’s multiple sclerosis drug. Cameron Collins and his girlfriend’s father, Stephen Zarsky, are charged with trading and tipping others on the basis of the material, nonpublic information. The SEC’s complaint alleges that Christopher Collins learned of negative clinical trial results on the evening of June 22, 2017, in an email from Innate’s CEO to the board of directors, which stated that the CEO had “extremely bad news” indicating that drug trial results “pretty clearly indicate ‘clinical failure.’ ” Cameron Collins and Zarsky allegedly avoided losses of over $700,000 by selling Innate shares before the clinical trial results were made public.


Counterfeit official checks on ND bank

The OCC has issued Alert 2018-10 concerning counterfeit official checks appearing to have been issued by Gate City Bank, Fargo, North Dakota, which has reported that the phony checks using the bank’s routing number are being presented for payment nationwide in connection with a variety of up-front fee scams involving fictitious employment opportunities and online auction purchases. For details, see our Alerts page.


OCC Innovation Office hours in NYC

The OCC has announced it will hold Innovation Office Hours, September 25–27, 2018, in New York to promote responsible innovation in the federal banking system. Office Hours are one-on-one meetings with OCC officials to discuss financial technology, new products or services, partnering with a bank or fintech company, or other matters related to responsible innovation. OCC staff will provide feedback and respond to questions. Each meeting will last no longer than one hour.

Interested parties should request a session by August 17, 2018, and are asked to provide information on why they are interested in meeting with the OCC. Specific meeting times and arrangements will be determined after the OCC receives and accepts the request. For more information see the Responsible Innovation web page and a General Guide.


FinCEN extends exceptive relief 30 days

FinCEN has announced a 30-day extension of the limited exceptive relief that was to expire on August 9. The exceptive relief was from the obligations of the Beneficial Ownership Rule for Legal Entity Customers for automatically renewing certificate of deposit accounts or loans established before May 11, 2018. FinCEN Ruling FIN-2018-R003 extends the exceptive relief up to, and including, September 8, 2018.


OCC CRA evaluations

The OCC recently released a list of 40 national banks, federal savings associations and insured federal branches of foreign banks whose Community Reinvestment Act evaluations were made public in July. Thirty of the institutions were rated Satisfactory, and ten received Outstanding ratings. Of the Outstanding-rated institutions, three are large banks, three are small banks, one is an intermediate-small bank, two are wholesale banks, and one is a specialty bank evaluated under a strategic plan.


Results of Fannie and Freddie stress tests

The FHFA yesterday released its Dodd-Frank Act Stress Tests – Severely Adverse Scenario report, which provides the results of the annual stress​ tests Fannie Mae and Freddie Mac (the Enterprises) are required to conduct under the Dodd-Frank Act. The Act requires certain financial institutions with more than $10 billion in assets to conduct annual stress tests to determine whether they can absorb losses as a result of adverse or severely adverse economic conditions. The report provides updated information on possible ranges of future financial results of the Enterprises under severely adverse economic conditions. Links to Summary Instructions and FAQs were provided in the FHFA announcement.


Consumer credit continues to increase

The Federal Reserve Board has released the June 2018 G.19 Consumer Credit Report, which indicates consumer credit increased at a seasonally adjusted annual rate of 4-1/2 percent during the second quarter. Revolving credit increased at an annual rate of 4 percent, while nonrevolving credit increased at an annual rate of 5 percent. In June, consumer credit increased at an annual rate of 3 percent. Technical Q&As explaining the report were also released.


NCUA charges former Melrose CEO

Wielding an infrequently used authority, the NCUA has filed administrative charges against Alan S. Kaufman, former chief executive officer, treasurer, and board member of Melrose Credit Union, Queens, NY. The NCUA is seeking a prohibition order against Kaufman and is requesting he be ordered to pay restitution of at least $3.5 million.and a civil money penalty of $1 million. A seven-count notice of charges was filed alleging that Kaufman breached his fiduciary duties to Melrose by placing his own interests above those of the credit union, that he engaged in unsafe or unsound practices, and that he violated applicable laws and regulations. The notice further alleges that Kaufman benefited from his actions and that he caused “severe financial loss” to Melrose.


Bureau joins global financial innovation network

The CFPB/BCFP announced yesterday it has joined 11 financial regulators and related organizations in an initiative to create the Global Financial Innovation Network (GFIN). The network will seek to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. It will also create a new framework for cooperation between financial services regulators on innovation-related topics. The GFIN is organized around a draft consultation document that sets out the three primary proposed functions of the organization:

  • act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models;
  • provide a forum for joint policy work and discussions; and
  • provide firms with an environment in which to trial cross-border solutions.

The Bureau and the other regulators are seeking views by October 14, 2018, on the mission statement for the GFIN, its proposed functions, and where it should prioritize activity.


FDIC lists CRA compliance ratings

The FDIC has issued a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in May 2018. Of the 82 banks listed, 72 received a rating of Satisfactory. Six banks (one each in Delaware, Illinois, Mississippi and New York and two in Utah) were rated Outstanding. Three banks (in California, Nebraska and New Jersey) received Needs to Improve ratings, and one (in Illinois) was found to be in Substantial Noncompliance.


OFAC Iran-related actions

Treasury issued a bulletin on Monday to announce the president's issuance of a new Iran-related Executive Order, "Reimposing Certain Sanctions with Respect to Iran" [83 FR 38939] and OFAC's publication of FAQs relating to the new Executive Order. Treasury also announced that OFAC has amended existing FAQs relating to the Iran Freedom and Counter-Proliferation Act of 2012, and has archived FAQs relating to E.O. 13622, Section 4 of E.O. 13628, and E.O. 13645.

OFAC also published a revised statement and updated existing FAQs relating to the Administration’s implementation of the President’s May 8, 2018 decision to cease the United States’ participation in the Joint Comprehensive Plan of Action (JCPOA) and to reimpose all sanctions lifted or waived in connection with the JCPOA. Monday was the last day of the 90-day wind-down of certain sanctions relief in the JCPOA.


July SLOOS released, C&I standards easing

The Federal Reserve Board has released the report of the July 2018 Senior Loan Officer Opinion Survey (SLOOS) on bank lending practices, which addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the second quarter of 2018.

  • Regarding loans to businesses, respondents to the July survey indicated that they eased their standards and terms on commercial and industrial (C&I) loans to firms of all sizes and kept commercial real estate (CRE) lending standards about unchanged on balance. Banks reported stronger demand for C&I loans by small firms and weaker demand for CRE loans.
  • Banks also responded to a set of special questions inquiring about the level of banks' current lending standards relative to the midpoint of the range over which banks' standards have varied between 2005 and the present. Banks, on balance, reported that their levels of lending standards on C&I loans are currently at the easier end of the range from 2005 to the present. For CRE loans, banks reported currently having relatively tight lending standards on net.
  • For loans to households, banks reported that, on balance, their lending standards on residential real estate (RRE) loans and auto loans remained little changed, while a moderate share of banks tightened standards on credit card loans. In addition, banks reported weaker demand for all categories of RRE loans, while demand for consumer loans reportedly remained about unchanged. From a longer-term perspective, banks, on balance, reported that their current level of RRE and subprime consumer lending standards are at the tighter end of the range from 2005 to now.


FDIC Consumer News special Issue

A Special anniversary edition of FDIC Consumer News has been released. The Summer 2018 edition celebrates 25 years of tips you can bank on: time-tested strategies for managing and protecting your money. The edition features articles over the years on various topics including: Saving money, About FDIC Insurance, Protecting Yourself, Banking and Bill Paying, Borrowing Money, Getting Organized, For Different Ages and Stages, and Test Your Financial IQ.


SEC updates list of firms using inaccurate info

The Securities and Exchange Commission has announced that it has updated its list of unregistered firms that use misleading information to primarily solicit non-U.S. investors, adding 16 soliciting entities, four impersonators of genuine firms, and nine bogus regulators.

The updates by the SEC Division of Enforcement’s Office of Market Intelligence, in coordination with the SEC’s Office of Investor Education and Advocacy and the Office of International Affairs, are part of the agency’s continuing effort to protect retail investors.


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