B of A in $16.6 million OFAC settlement The U.S Department of the Treasury's Office of Foreign Assets Control (OFAC) has announced a $16,562,700 settlement with Bank of America, N.A. (B of A) to settle potential liability for apparent violations of OFAC's Kingpin Act regulations, Narcotics Trafficking Sanctions Regulations, and Reporting, Procedures and Penalties Regulations. The B of A settlement resolves OFAC's investigation into transactions that the bank processed and accounts the bank maintained on behalf of individuals with multiple or multi-part last names on the SDN List. Between September 2005 and March 2009, B of A processed 208 transactions totaling approximately $91,192 on behalf of, and failed to properly block five accounts owned by, 10 individuals whom OFAC had previously added to its SDN List. Because OFAC determined that B of A did not voluntarily self-disclose the violations, and 79 of the transactions constitute an egregious case, OFAC said that the base penalty amount for all of B of A's violations exceeded $83 million. According to OFAC, the bank failed for more than two years to adequately address a known deficiency in its OFAC screening tool. Certain mitigating factors, however, resulted in the reduced settlement amount.
Bureau floats HMDA Reg proposals
The Consumer Financial Protection Bureau has announced proposed changes to Regulation C (12 CFR Part 1003), which implements the Home Mortgage Disclosure Act. The proposal is intended to provide better information about residential mortgage credit by expanding the list of data that financial institutions are required to provide, including new information that could help identify potential discriminatory lending practices. It is also expected to provide additional information to help regulators monitor access to credit. Additional changes in the proposal would—
Standardize the reporting threshold and provide a de minimis exception to reporting requirements, and eliminate reporting of some home improvement loans
Align reporting requirements with industry data standards
Improve the electronic reporting process
Improve data access
The proposed rule will be open for public comment through October 22, 2014.
July 24, 2014
Kingpin Act designations
Treasury has announced that it has designated 17 leaders and criminal associates of the violent Colombian drug trafficking organization Los Urabenos as specially designated narcotics traffickers (SDNTs) pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Treasury also designated six businesses in Colombia associated with members of Los Urabenos. As a result of these action, all assets of those designated that are based in the United States or in control by U.S. persons are frozen, and U.S. persons are generally prohibited from engaging in transactions with them. Information regarding the designations has been posted in a BOL OFAC Update.
Agencies take action to halt mortgage schemes
The Federal Trade Commission, the Consumer Financial Protection Bureau and various state agencies have announced actions taken against six mortgage relief operations, charging that defendants preyed on distressed homeowners by misrepresenting that they typically could lower homeowners' mortgage payments and interest rates or prevent foreclosure, and illegally charging advance fees. The actions were part of Operation Mis-Modification, a joint federal and state enforcement sweep conducted with the CFPB. The defendants were charged with violating the Federal Trade Commission Act and the Mortgage Assistance Relief Services (MARS) Rule (CFPB Regulation O, 12 CFR Part 1015), which bans mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable. The CFPB also issued a Consumer Advisory about foreclosure relief scams or bogus legal help.
OFAC releases additional formats for SSI List
OFAC has released additional file formats for the Sectoral Sanctions Identification (SSI) List. The SSI List will be available in the same file formats as the SDN and FSE Lists, and the layout of names on the SSI List will be identical to the layout of names on the SDN List. In addition, SSI List data files will follow existing SDN List data standards. Information regarding the SSI List has been added to the OFAC Frequently Asked Questions (FAQs).
NCUA plans regulatory relief actions
In a presentation at the National Association of Federal Credit Union's Annual Conference, Chairman Matz indicated credit unions will have greater flexibility and be able to offer better services to members under a series of planned regulatory relief changes. New relief proposals include eliminating the fixed-assets cap, modernizing member business lending and updating appraisal provisions. Changes to current regulations previously announced include facilitating associational fields of membership, expanding investment authorities and removing redundancy in appraisals.
Treasury Fiscal Service updates its ACH rules
Treasury's Bureau of the Fiscal Service has published a final rule [79 FR 42974] to amend its regulation governing the use of the Automated Clearing House (ACH) network by Federal agencies ("Federal Government Participation in the Automated Clearing House," 12 CFR Part 210). The changes include amendments set forth in NACHA's 2010, 2011, 2012, and 2013 Operating Rules books. The changes made by the Fiscal Service, which will become effective August 25, 2014, are routine updates, with minimal impact on financial institutions receiving ACH entries from Treasury.
July 23, 2014
Flood violation CMP
The Federal Reserve Board has announced it has imposed a $15,785 civil money penalty (CMP) against State Bank, New Hampton, Iowa for violations of Regulation H provisions that implement the National Flood Insurance Act. Information on the order has been posted on the BOL Flood Penalties Watch page.
Texter settles with FTC
The Federal Trade Commission has announced that a text message spammer and his company have agreed to settle charges that they were responsible for sending millions of unwanted messages to consumers across the country, falsely promising "free" $1,000 gift cards for major retailers like Walmart, Target and Best Buy. Sensitive personal information was collected from consumers who were lured to the scammers' website. The settlement includes a monetary judgment of $2,863,000, most of which is suspended due to the defendants' inability to pay more than $26,100. The scammer and the company are permanently banned from sending unwanted or unsolicited commercial text messages or assisting others in doing so.
The July 2014 NCUA Report has been posted, including these and other articles:
NCUA Board Proposes Allowing Credit Unions to Securitize Their Own Assets
Board Actions: Proposed Appraisal Rule and Final Voluntary Liquidation Rule Cut Red Tape
Understanding the Basics of an Information Security Policy
NCUA Can Help Consumers Improve Their Personal Finance Knowledge
NCUA Unveils New Resources for Interest Rate Risk and Consumer Compliance
Understanding the Civil Money Penalty Process for Late Filers
Agencies Issue Guidance for Home Equity Lines of Credit
FDIC assessment proposal published
The FDIC's proposal to amend its assessment rules [see our July 16 Top Stories] has been published in today's Federal Register, with a comment period ending September 22, 2014.
Groups urge longer comment period on Bureau complaints proposal
Five financial services groups have asked the CFPB to extend the 30-day comment period attached to its proposal to allow consumers to permit public access to narratives in complaints filed with the Bureau. According to an article on The Hill, a letter signed by the Financial Services Roundtable, American Bankers Association, Consumer Bankers Association, the Clearing House, and the U.S. Chamber of Commerce asked the CFPB to extend its comment period to 90 days because the proposal "raises many serious legal and practical issues." The Bureau's notice of its proposed policy statement [see our July 17 Top Stories] was published in today's Federal Register. It currently carries a comment due date of August 22, 2014.
Guidance on characteristics of mutual savings associations
The OCC has announced that it has issued OCC Bulletin 2014-35, "Mutual Federal Savings Associations: Characteristics and Supervisory Considerations." The bulletin describes the unique characteristics of mutual federal savings associations and the considerations the OCC factors into its risk-based supervision process. The guidance
describes the mutual governance structure and mutual members' rights
outlines mutuals' traditional operations
highlights supervisory considerations in rating mutuals for each component of the Uniform Financial Institutions Rating System (more commonly referred to as CAMELS, or capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk)
July 22, 2014
Bureau accepting prepaid card complaints
The Consumer Financial Protection Bureau has announced that it has added prepaid cards, such as gift cards, benefit cards and general purpose reloadable cards, to the list of financial service services and products concerning which it accepts consumer complaints. The Bureau also opened its complaint database to consumer reports of dissatisfaction with debt settlement services, credit repair services, and pawn and title loans.
FRB makes prepaid card report to Congress
The Federal Reserve has issued its annual report to the 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.
exploring how this segment of the financial services industry has changed over time
how minority depository institutions (MDIs) have performed financially
the extent to which MDIs have achieved their mission in serving the needs of their communities
The report also describes MDIs and FDIC-insured community development financial institutions (CDFIs) and where such institutions are located. A discussion of the study will be on the agenda of the next meeting of the Advisory Committee on Community Banking (July 23, 2014), which will be open to the public. A webcast of the meeting will be available on the FDIC's website.
Guidance to S-corporation institutions FDIC FIL-40-2014 has been issued with guidance clarifying how the FDIC will evaluate requests from S-corporation banks or savings associations to pay dividends to shareholders to cover taxes on their pass-through share of the institution's earnings, when these dividends would otherwise not be permitted under the capital conservation buffer requirements in the Basel III rule. In a related press release, the FDIC indicates that, absent significant safety-and-soundness concerns about the requesting bank, it will generally would expect to approve exception requests by well-rated S-corporation banks that are limited to the payment of dividends to cover shareholders' taxes on their portion of an S-corporation's earnings.
outlines its strategy and what has been done over the past year to enhance financial literacy and capability
describes the tools and information provided to consumers to help navigate financial choices
explains collaboration with organizations that reach consumers
discusses effective approaches to financial education.
July 21, 2014
OCC enforcement actions
The Office of the Comptroller of the Currency released a list of new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. Included were four cease and desist orders, six personal civil money penalty (CMP) orders and one CMP order against a bank.
Wisconsin bank gets BSA/AML penalty
The bank civil money penalty announced (see story above) by the OCC was assessed against a Wisconsin Bank in the amount of $500,000 for "BSA/AML deficiencies in the Bank's internal controls, independent testing, day-to-day monitoring and coordination, and training." Additional information is available on BOL's BSA/AML Penalties page.
Kentucky bank directors pay CMPs
Also among the Enforcement Orders announced by the OCC were five personal civil money penalty orders against directors—four of them apparently members of the same family—of the First National Bank of Manchester, Manchester, Kentucky:
$40,000 CMP and Order of Prohibition against the former president and chairman, found to have used bank credit card and accounts for personal expenses, and to have failed to establish and enforce adequate internal controls over the use of the bank's credit cards and accounts. This order also included an order for restitution.
three $10,000 CMPs [Order 1; Order 2; Order 3] issued against current directors for failing to implement and enforce adequate internal controls over the use of the bank's credit cards and accounts, and for violations of Regulations O and W
one $5,000 CMP issued against a former director for failing to implement and enforce adequate internal controls over the use of the bank's credit cards and accounts, for violations of Regulations O, and for voting to approve loans on which he had performed evaluations of the collateral
Georgia bank closed Eastside Commercial Bank, Conyers, Georgia, has been closed by the Georgia Department of Banking & Finance, which appointed the FDIC as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Community & Southern Bank, Atlanta, Georgia, to assume all of the deposits of Eastside Commercial Bank. The bank was the 13th FDIC-insured institution to fail this year, and the first in Georgia.
FDIC updates transferred regs
The Federal Deposit Insurance Corporation has published final and proposed rules to update or rescind regulations transferred to the FDIC following the dissolution of the former Office of Thrift Supervision as provided in the Dodd-Frank Act, as follows:
a final rule [79 FR 42181] removing Part 390, supbart A (former OTS regulation at 12 CFR Part 507), and amend FDIC regulations at 12 CFR Part 336 (relating to post-employment activities of senior examiners), effective August 20, 2014
a final rule [79 FR 42183] removing Part 390, subpart H (former OTS regulation at 12 CFR Part 533), and amend FDIC regulations at 12 CFR part 346 (relating to disclosure and reporting of CRA-related agreements), effective August 20, 2014
a proposed rule [79 FR 42225] that would remove parts of its regulations entitled "Management Official Interlocks" relating to State savings associations (12 CFR 390, subpart V); and amend its regulation at 12 CFR Part 348. Comments are due by September 19, 2014.
a proposed rule [79 FR 42231] that would remove its regulations regarding Electronic Operations at 12 CFR Part 390, Subpart L. Comments are due by September 19, 2014.
a proposed rule [79 FR 42235] that would remove its regulations regarding Possession by Conservators and Receivers for Federal and State Savings Associations at 12 CFR Part 390, Subpart N. Comments are due by September 19, 2014.
July 18, 2014
FinCEN names foreign bank as money laundering concern
The Financial Crimes Enforcement Network (FinCEN) has announced the naming of FBME Bank Ltd., formerly known as the Federal Bank of the Middle East, as a foreign financial institution of primary money laundering concern pursuant to Section 311 of the USA PATRIOT Act. FinCEN reported that FBME openly advertises the bank to its potential customer base as willing to facilitate the evasion of AML regulations. FinCEN has delivered to the Federal Register a regulatory finding explaining the basis for the action as well as a notice of proposed rulemaking (NPRM) that, if adopted as a final rule, would prohibit covered U.S. financial institutions from opening or maintaining correspondent or payable-through accounts for FBME itself, and for other foreign banks being used to process transactions involving FBME.
Proposed stress test changes
OCC Bulletin 2014-33 is a reminder of a Notice of Proposed Rulemaking (NPR) that would adjust the timing of the annual stress testing cycle and to clarify the method used to calculate regulatory capital in the stress tests. The proposal also provides that covered institutions would not have to calculate their regulatory capital requirements until the stress testing cycle beginning on January 1, 2016. Similar proposals were published by the FDIC and Federal Reserve System. Comments on the OCC and FDIC proposals are due by September 1, 2014; comments on the Federal Reserve proposal are due by August 11, 2014.
OFAC announces WMDPSR settlement
OFAC has announced that Tofasco of America, Inc. of La Verne, California, has remitted payment of $21,375 to settle potential civil liability for an alleged violation of the Weapons of Mass Destruction Proliferators Sanctions Regulations (the "WMDPSR"). The company appears to have violated WMDPSR provisions when it dealt in blocked property by engaging a bank to process a blocked letter of credit transaction representing payment for a shipment of recreational chairs with a substitute bill of lading omitting reference to the Islamic Republic of Iran Shipping Lines ("IRISL"), an entity whose property and interests in property are blocked. The company initially presented trade documents to a prior bank in connection with the letter of credit transaction; however, the prior bank refused to advise the letter of credit transaction due to IRISL's involvement. Neither bank was cited by OFAC.
Bureau documents published
The Consumer Financial Protection Bureau has published two recently announced documents in the Federal Register.
An interpretive rule [79 FR 41631] clarifying that substitution or addition of certain successors-in-interest as obligors on dwelling-secured consumer credit obligations are not subject the the Bureau's Ability-to-Repay Rule (§ 1026.43 of Regulation Z)
Policy Guidance on Supervisory and Enforcement Considerations Relevant to Mortgage Brokers Transitioning to Mini-Correspondent Lenders [79 FR 41671]
GAO update on FDIC data security
The Government Accountability Office (GAO) has issued a report that the Federal Deposit Insurance Corporation (FDIC) has implemented numerous information security controls intended to protect its key financial systems. However, weaknesses continue to place the confidentiality, integrity, and availability of agency financial systems and information at unnecessary risk. The report indicated that, during 2013, the FDIC implemented 28 of the 39 open GAO recommendations pertaining to previously-reported security weaknesses that were unaddressed as of December 31, 2012. At year end 2013, the FDIC had not fully implemented controls for (1) identifying and authenticating the identity of users, (2) restricting access to sensitive systems and data, (3) encrypting sensitive data, (4) completing background reinvestigations for employees and (5) auditing and monitoring system access. The GAO recommended that, to help strengthen access controls and other information security controls over key financial information, systems, and networks, the Chairman of the FDIC should direct the Chief Information Officer to document security controls descriptions for all systems to describe the control thoroughly and ensure that all the required information is included.
July 17, 2014
New OFAC list and designations
Treasury has announced the introduction of the Sectoral Sanctions Identification (SSI) List to identify persons operating in sectors of the Russian economy identified by the Secretary of the Treasury pursuant to Executive Order 13662. A broad-based package of sanctions was imposed on entities in the financial services, energy, and arms or related materiel sectors of Russia, and on those undermining Ukraine's sovereignty or misappropriating Ukrainian property. Secretary Lew also issued a statement on the actions. An FAQ with more information on the SSI List was also released. Four entities were added to the new SSI List. In addition, five individuals and eleven entities were added to the SDN List. Information regarding the additions to the SSI and SDN Lists has been posted in a BOL OFAC Update.
Agricultural lenders are reminded to maintain prudent risk management practices that focus on a borrower's cash flow and repayment capacity across a range of future conditions.
Management should consider, but not rely unduly on, secondary repayment sources and collateral positions.
Lenders should carefully consider and closely monitor cyclical factors, such as land values, before and after making credit decisions.
Management should be cognizant of speculation in agricultural land or commodities.
Management should identify and effectively manage credit concentrations.
Lenders should work constructively with borrowers experiencing financial difficulties.
This FIL rescinds and replaces FIL-85-2010, Prudent Management of Agricultural Credit through Farming and Economic Cycles, dated December 14, 2010.
CFPB proposes to make complaints public
In prepared remarks at the CFPB Consumer Response Field Hearing in El Paso, Director Cordray announced a new proposal to allow consumers to select an option to share the narrative portion of their complaints in the agency's Consumer Complaint Database. A notice of proposed policy statement and request for public comment has been issued. Companies would be able to publish their own replies to the consumer narratives. Complaints are not entered into the public database until after the company responds or has had the complaint for 15 calendar days without responding. If a consumer has opted to have the complaint narrative published, both the narrative and any response that the company decides to submit would be listed simultaneously, and would be scrubbed to remove personal identifying information (company names would not be redacted). Comments will be due within 30 days after publication of the proposal in the Federal Register.
Lew challenges industry on cybersecurity
Treasury has announced a Call to Action by Secretary Lew urging financial institutions and firms to take critical steps to better protect consumers and strengthen the nation's defenses against cybersecurity thefts, disruptions, and attacks. In remarks at CNBC and the Institutional Investor's 4th Annual Delivering Alpha Conference, Secretary Lew specifically called on the U.S. financial sector to improve cybersecurity by using the Administration's new cybersecurity framework for their own systems and as a way to evaluate outside vendors.
Call Report update FDIC FIL-38-2014 has been issued to remind institutions that the June 30, 2014, Call Report must be received by Wednesday, July 30, 2014. The following information was also highlighted in the FIL:
Data on international remittance transfer activity, which were collected initially in Schedule RC-M, Memoranda, in the March 2014 Call Report, will now be reported semiannually in June and December, beginning this quarter. Questions in the March 2014 Call Report about international remittance transfer activity during 2012 have been deleted.
The Call Report forms and an instruction book update for June 2014 are available on the Federal Financial Institutions Examination Council's website and the FDIC's website.
New SAR statistics publication
FinCEN has published the first issue of SAR Stats, a technical bulletin that replaces The SAR Activity Review: By the Numbers. The inaugural issue examines only the data contained on the 1,369,529 unique FinCEN SARs with filing dates from March 1, 2012 to December 31, 2013, inclusive.
Beige Book update
The Federal Reserve has released a summary and full report of the July 7, 2014 issue of the Beige Book, a commentary on the current economic conditions of each Federal Reserve District.
Technical correction of Risk-Based Capital rules
A joint press release from the Federal Reserve, FDIC and OCC has announced the finalization of a technical correction to the definition of "eligible guarantee" in the agencies' risk-based capital rules. The final rule is effective October 1, 2014.
Fed halts ECI research
Federal Reserve Financial Services has announced that its research and development on electronically created items (ECI), begun in 2013, has been discontinued.
July 16, 2014
Counter terrorism designations
OFAC has announced the designation of one individual from Norway as a Specially Designated Global Terrorist (SDGT) and a change in an existing SDN listing. The details of these changes to OFAC's SDN List have been posted in a BOL OFAC Update.
FDIC proposes revision of insurance assessment method
The FDIC has issued FIL-37-2014 to announce the agency's approval of a proposed rule that would revise the FDIC's risk-based deposit insurance assessment system to reflect changes in the regulatory capital rules that go into effect in 2015 and 2018. For deposit insurance assessment purposes, the proposal would
revise the ratios and ratio thresholds relating to capital evaluations;
revise the assessment base calculation for custodial banks; and
require that all highly complex institutions measure counterparty exposure for assessment purposes using the standardized approach in the regulatory capital rules.
Comments are due 60 days following publication in the Federal Register. [Editor's note: This proposal was published [79 FR 42698] on July 23, 2014, with a comment period expiring on September 22, 2014.]
Yellen delivers money policy report to Congress
Chair Yellen has delivered the Federal Reserve Board's semiannual Monetary Policy Report to Congress. She discussed the current economic situation, the outlook, monetary policy and financial stability. The Secretary noted, "The economy is continuing to make progress toward the Federal Reserve's objectives of maximum employment and price stability." She stated, "The FOMC (Federal Open Market Committee) is committed to policies that promote maximum employment and price stability, consistent with our dual mandate from Congress." Chair Yellin indicated, "The Committee recognizes that low interest rates may provide incentives for some investors to 'reach for yield,' and those actions could increase vulnerabilities in the financial system to adverse events." She concluded, "The Federal Reserve remains committed to employing all of its resources and tools to achieve its macroeconomic objectives and to foster a stronger and more resilient financial system."
Georgia MSB pays $45,000 CMP for BSA infractions
FinCEN has announced the assessment of a $45,000 civil money penalty (CMP) against a Georgia money services business (MSB) which failed to register as an MSB and failed to report CTRs on 40% of required transactions. Numerous violations occurred after the MSB was put on notice by its examiner, the Internal Revenue Service's Small Business/Self-Employed Division, of deficiencies in meeting its reporting obligations.
Florida business pleads guilty in $44M bank fraud
U.S. Immigration and Customs Enforcement (ICE) has announced that Pedro "Pete" Benevides, of Astatula, Florida, has pled guilty to conspiracy to commit bank fraud and faces a maximum penalty of 30 years in federal prison. According to the plea agreement, from about 2005 through September 2008, he obtained 20 commercial and residential loans and lines of credit from several federally insured financial institutions, totaling approximately $44,049,565. Benevides, in addition to paying full restitution to the financial institutions that were the victims of his offense, also agreed to forfeit $44,059,565, including several bank accounts holding approximately $40 million in cash, and three exotic sports cars.
HUD adds funds for Illinois and Colorado
The Department of Housing and Urban Development has announced the allocation of more than $31 million to Illinois and $58 million to Colorado victims of 2013 storms and flooding. The allocations are in addition to funds previous allocated to victims in those states.
Roundtable on debt collection and Latino community
The Federal Trade Commission has announced that the agency will co-host with the CFPB a roundtable meeting in Long Beach, California, on October 23, 2014. "Debt Collection & the Latino Community" will bring together consumer advocates, industry representatives, state and federal regulators, and academics to discuss how debt collection issues affect Latino consumers, especially those who have limited English proficiency. The roundtable is free and open to the public.
July 15, 2014
Citigroup pays record CMP in $7 billion settlement
The Justice Department, along with federal and state partners, has announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup's conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) prior to January 1, 2009. The Department also released a Statement of Facts relating to Citigroup's conduct. Of the $7 billion total settlement, $4.5 billion will be paid to settle federal and state civil claims, including
$4 billion as a civil penalty under FIRREA (the largest to date)
$208.25 million to FDIC claims relating to its receiverships for three failed banks
$102.7 million to the State of California
$92 million the State of New York
$44 million to the State of Illinois
$45.7 million to the Commonwealth of Massachusetts
$7.35 million to the State of Delaware
The settlement also includes $2.5 billion in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup. Any of that sum not expended by the end of 2018 is to be paid to NeighborWorks America, a non-profit leader in providing affordable housing and facilitating community development.
Bureau sues Georgia debt collector
The Consumer Financial Protection Bureau has announced the filing of a lawsuit in a federal district court against a Georgia-based firm, Frederick J. Hanna & Associates, and its three principal partners for operating a debt collection lawsuit mill that uses illegal tactics to intimidate consumers into paying debts they may not owe. The Complaint alleges the firm churns out hundreds of thousands of lawsuits that frequently rely on deceptive court filings and faulty or unsubstantiated evidence.
FRB Discount Rate Meeting minutes
The minutes of the June 2 and June 16 discount rate meetings have been released by the Federal Reserve Board.
Second quarter Call Report instructions
The FDIC has issued FIL-36-2014 with materials attached pertaining to the June 30, 2014, Call Report. The Call Report forms and an instruction book update for June 2014 are available on the FFIEC and FDIC websites.
clarify how the agencies consider community development activities benefiting a broader statewide or regional area that includes an institution's assessment area
provide guidance related to CRA consideration of, and documentation associated with, investments in nationwide funds
clarify the consideration of certain community development services, such as service on a community development organization's board of directors
address the treatment of loans or investments to organizations that, in turn, invest those funds and use only a portion of the income from their investments to support a community development purpose
clarify that community development lending performance is always considered in a large financial institution's lending test rating
CFPB guidance for mortgage brokers
The Consumer Financial Protection Bureau has announced it has issued guidance for mortgage brokers who are transitioning to a "mini-correspondent" lender model, some of whom may be under the mistaken belief that identifying themselves as such would automatically exempt them from important consumer protection rules affecting broker compensation. The guidance sets out how the Bureau evaluates mortgage transactions involving mini-correspondent lenders and confirms who must comply with the broker compensation rules, regardless of how they may describe their business structure.
SDN List removal
An entity with a counter terrorism designation has been removed from OFAC's SDN List. Further information has been posted in a BOL OFAC Update.
$1 coin miscellany
The Federal Reserve has released the Second Quarter 2014 report of $1 Coin Quarterly Inventories, Payments, and Receipts (listed in millions of pieces).
Credit Extended through Federal Reserve Liquidity Facilities
Support for Specific Institutions
Selected Liabilities of the Federal Reserve
July 11, 2014
Payday lender to pay up for abusive debt collection
The Consumer Financial Protection Bureau has announced an enforcement action against ACE Cash Express, a payday lender, which will pay $5 million in refunds plus a $5 million penalty for pushing payday borrowers into a cycle of debt. A CFPB investigation found ACE used illegal debt collection tactics to pressure overdue borrowers into taking out additional loans they could not afford. The press release was accompanied by remarks by Director Cordray on the enforcement action.
Counter terrorism designations
Treasury has announced that it has targeted a key Hizballah procurement network by designating brothers Kamel and Issam Mohamad Amhaz, their consumer electronics business Stars Group Holding based in Beirut, Lebanon, its subsidiaries, and certain managers and individuals who support their illicit activities. These actions were taken pursuant to E.O. 13224, which targets terrorists and those providing support to terrorists, or acts of terrorism. As a result of the action, all assets of those designated that are based in the United States or in control by U.S. persons are frozen, and U.S. persons are generally prohibited from engaging in transactions with them. Information regarding the designations has been posted in a BOL OFAC Update.
FHFA proposes mortgage insurer eligibility requirements
The Federal Housing Finance Agency (FHFA) is seeking input on draft requirements that would apply to private mortgage insurance companies that insure mortgage loans owned or guaranteed by Fannie Mae and Freddie Mac. Comments must be submitted by September 8, 2014.
Kentucky CU liquidated
The NCUA has announced the liquidation of IBEW Local 816 Federal Credit Union, Paducah, Kentucky. It was the sixth federally insured credit union to be liquated in 2014.
CFPB schedules El Paso consumer complaint hearing
The CFPB has announced that a field hearing on consumer complaints will be held in El Paso, Texas on July 17, 2014, at 10:30 a.m. MDT. It will feature remarks from Director Cordray and testimony from consumer groups, industry representatives, and members of the public. The event is open to the public and a livestream will be available, but a reservation is required to attend.
June Housing Scorecard
HUD and Treasury have released the June 2014 Obama Administration Housing Scorecard—a comprehensive report on the U.S. housing market. The data includes key indicators, including equity and the sale of new and existing homes.
OFAC Syria and Non-proliferation designations
The Department of the Treasury has announced that it has taken action to increase pressure on the Syrian regime and those providing support that could aid its military efforts. The Department designated United Arab Emirates-based Pangates International Corporation Ltd. (Pangates) pursuant to Executive Order (E.O.) 13582 for providing material support for, and goods and services to, the Government of Syria, including SYTROL, a Syrian state oil company sanctioned by the United States. The Department also designated Syria-based front companies Expert Partners and Megatrade pursuant to E.O. 13382 for acting for or on behalf of the U.S.-sanctioned entity Scientific Studies and Research Center (SSRC), Syria's government agency responsible for developing and producing non-conventional weapons and ballistic missiles. Both SYTROL and SSRC have been sanctioned by the European Union. Information regarding the designations has been posted in a BOL OFAC Update.
OCC increases assessments for large banks
The Office of the Comptroller of the Currency has announced its publication of a final rule [79 FR 68769] in the Federal Register that raises the OCC's assessments for national banks and federal savings associations with total assets over $40 billion. The average increase in assessments for affected banks and savings associations will be 12 percent. The final rule, which makes no change in the assessments for banks or federal savings associations with $40 billion or less in total assets, is effective August 8, 2014.
The minutes of the June 17–18, 2014, meeting of the Federal Open Market Committee (FOMC) have been released by the Federal Reserve Board.
OCC workshops in Syracuse
The OCC will host risk assessment and compliance risk workshops in Syracuse, New York on August 5–6,2014, designed exclusively for directors of institutions supervised by the OCC. The compliance risk workshop focuses on major compliance risk and consumer protection regulations, such as the Qualified Mortgage Rule, Bank Secrecy Act, and Community Reinvestment Act, along with key elements of an effective compliance risk management program. The risk assessment workshop discusses the OCC's approach to risk-based supervision, and best practices to identify, measure, monitor and control risk. The interactive sessions also cover industry hot topics such as credit risk, strategic risk, and the regulatory environment.
Refunds on way to mortgage modification scam victims
The Federal Trade Commission has announced the mailing of refund checks totaling $499,701.84 to 229 consumers who paid the Lucas Law Center an advance fee for mortgage loan modifications the company falsely claimed it would obtain for them. The average check amount is $2,182.10.
July 9, 2014
Bureau issues Ability-to-Repay interpretive rule
The CFPB has announced a new interpretive rule to clarify that when a borrower dies, the name of the borrower's heir generally may be added to the mortgage without triggering the Bureau's Ability-to-Repay rule. The interpretive rule can also apply to other transfers, including transfers to living trusts, transfers during life from parents to children, transfers resulting from divorce or legal separation, and other family-related transfers. The interpretive rule does not require that the creditor or assignee of the loan accept the change of obligor(s); it facilitates such a change when the creditor or assignee is willing to accept it.
Equal treatment for same-sex married couples memo issued by CFPB
An article has been posted by the CFPB stating that, due to the recent Supreme Court decision in the case of United States V. Winsor, Director Cordray has issued a memo to staff clarifying that the Bureau's policy is to recognize all lawful marriages valid at the time of the marriage in the jurisdiction where the marriage was celebrated. This policy applies to all of the laws, regulations, and policies that the Bureau administers, including the Equal Credit Opportunity Act (ECOA), Fair Debt Collection Practices Act (FDCPA), Truth in Lending Act (TILA), and Real Estate Settlement Procedures Act (RESPA).
SIRFers to do time
The Department of Justice has announced the sentencing of two Alabama men in separate stolen identity refund fraud (SIRF) cases. One case involved the use of stolen identities to steal money from the IRS by filing fraudulent tax returns claiming refunds in the victims' names and the other involved the sale of stolen identities to others to be used in SIRF crimes.
NMLS to host open meeting with Ombudsman in Seattle
The NMLS has announced an open meeting with the NMLS Ombudsman will be held on August 5, 2014 from 9:00–11:30 am, in conjunction with the American Association of Residential Mortgage Regulators (AARMR) Annual Regulatory Conference in Seattle, Washington. Conference registration is not required to attend the meeting. The meeting will be in-person only; there will be no dial-in available.
Consumer Credit report
The Federal Reserve Board has released the May 2014 G.19 Consumer Credit Report, which indicates consumer credit increased at a seasonally adjusted annual rate of 7½ percent. Revolving credit increased at an annual rate of 2½ percent, while nonrevolving credit increased at an annual rate of 9¼ percent.
FDIC Community Affairs webinar FIL-35-2014 has been issued by the FDIC to announce a webinar, "Model Approaches to Community Bank/Community Development Financial Institution (CDFI) Partnerships," to be held on July 31, 2014, from 2:00 p.m. to 3:30 p.m. ET. FDIC staff will provide an overview of a resource guide, Strategies for Community Banks to Develop Partnerships with CDFIs, designed to help community banks identify and evaluate opportunities to collaborate with CDFIs. The webinar also will include presentations on model bank/CDFI partnerships and an overview of U.S. Department of the Treasury programs that can potentially support partnership efforts. The session is free but registration is required by July 28.
NCUA July training sessions
The NCUA announced that credit union staff, managers and senior leadership still have time to register for the following informative training sessions in July:
SEC charges school district with misleading investors
A California school district has been charged by the SEC with misleading bond investors about its failure to provide contractually required financial information and notices. The case is the first to be resolved under a new SEC initiative to address materially inaccurate statements in municipal bond offering documents. A cease and desist order has been issued.
FDIC announces Board agenda
The FDIC has announced the agenda for the July 15, 2014, meeting of its Board of Directors.
Bureau report on remittance histories and credit scoring
The CFPB has released a report on its study into the feasibility of using remittance information—records of certain electronic transfers by U.S. consumers to overseas recipients—as a supplement to traditional credit history data in credit scoring. The study was mandated under section 1073(e) of the Dodd-Frank Act. The report suggests there are multiple impediments to successful use of remittance information in credit scoring, concluding that "remittance transfers offer little potential to either allow scores to be generated for consumers with unscorable credit records or to improve the scores of consumers with scorable credit records."
FRB delivers TALF report
The Federal Reserve Board has issued an update to Congress on the status of the Term Asset-Backed Securities Loan Facility (TALF), which was established in 2008. The TALF was intended to assist financial markets in accommodating the credit needs of consumers and businesses of all sizes by facilitating the issuance of asset-backed securities collateralized by a variety of consumer and business loans.
Independent Foreclosure Review report published
A Federal Reserve press release has been issued to announce the publication of a report on the Independent Foreclosure Review (IFR) and the Payment Agreement that replaced the IFR. The report provides information on the process for the review of the foreclosure files during the IFR and file review results.
FDIC CRA webinar FDIC FIL-34-2014 reminds bankers of the July 17, 2014, teleconference that will focus on the recently revised Interagency Questions and Answers regarding Community Reinvestment and the updated Interagency Large Institution Community Reinvestment Act Examination Procedures. The webinar is scheduled to run from 2:00 p.m. to 3:30 p.m. ET. Registration is required by July 16, 2014.
2014 geocoding system updates
The Federal Financial Institutions Examination Council (FFIEC) has updated its Geocoding System with the 2014 census demographic data.
New Federal Reserve short-term offering
Today, the Federal Reserve's Term Deposit Facility (TDF) will conduct a fixed-rate offering of seven-day term deposits with an interest rate of 0.30 percent. This offering marks the fourth consecutive one basis-point up-tick in the offering interest rate, which was at 0.26 percent from the start of the year through the June 9 offering. In the current offering, tender amounts from $10,000 through $10 billion will be accepted.
Ocwen settlement claim forms available
The CFPB has posted an article on the submission of a claims by consumers who were foreclosure victims of Ocwen Financial Corporation and Ocwen Loan Servicing (Ocwen). The National Ocwen Settlement Administrator, who will distribute $125 million to the victims, has created an informational website with a commonly asked questions page. Filing a claim is free and can be done online. Claims must be submitted online or postmarked by September 15, 2014.
OFAC issues Central African Republic rules
The Treasury Department's Office of Foreign Assets Control (OFAC) has published [79 FR 38248] regulations to implement Executive Order 13667 of May 12, 2014 ("Blocking Property of Certain Persons Contributing to the Conflict in the Central African Republic"). OFAC intends to supplement this part 553 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy.
July 3, 2014
OFAC Transnational Criminal Organizations designations
Treasury has announced action against four transnational criminal organizations (TCOs): the Camorra, the Yakuza, the Brothers' Circle, and Mara Salvatrucha (MS-13). New designations include seven members of the Camorra, one of Europe's largest criminal organizations; the Kudo-kai, a violent syndicate within the Japanese Yakuza criminal network along with two of its leaders; an individual known to act on behalf of the Brothers' Circle, a large multi-ethnic Eurasian criminal network; and one member of MS-13, a criminal street gang that operates internationally. These designations were imposed under Executive Order (E.O.) 13581, "Blocking Property of Transnational Criminal Organizations," which targets significant TCOs and individuals or entities determined to have provided material support to, or to be owned or controlled by, or to have acted or purported to act for or on behalf of, such organizations. Information regarding the designations has been posted in a BOL OFAC Update.
Unused ITINs will expire after five years
An IRS news release has announced that individual taxpayer identification numbers (ITINs) will expire if not used on a federal income tax return for five consecutive years. The new policy applies to any ITIN regardless of when it was issued. To allow for an adjustment period, ITINs will not be deactivated until 2016. Under the former IRS policy, ITINs issued after January 1, 2013, would have automatically expired after five years, even if used properly and regularly by taxpayers.
CFPB develops resources for libraries and librarians
A CFPB blog article provides an update on a CFPB project to make public libraries the places to go for financial information. The initiative was announced in April 2014 and the first set of program ideas, online resources and free government publications is now available. A guidebook for librarians has also been released.
State loan-to-deposit ratios issued
The Federal Reserve, FDIC and OCC have issued the host state loan-to-deposit ratios that the agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. Section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. It also prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production.
Yellen on monetary policy and financial stability
In a presentation at the 2014 Michel Camdessus Central Banking Lecture of the International Monetary Fund, Federal Reserve Chairman Yellen addressed the question: How should monetary and other policymakers balance macroprudential approaches and monetary policy in the pursuit of financial stability?
Public sections of resolution plans released
A joint press release from the Federal Reserve Board and the FDIC has announced the release of the public portions of annual resolution plans for 17 financial firms. Each plan must describe the company's strategy for rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure of the company. The public portions of the plans are available on the Federal Reserve and FDIC websites.
Student loans and closed schools
An article on the CFPB Blog offers advice for students if they have a student loan and the school they are attending or have recently attended shuts its doors. The article discusses the impact on federal and private student loans and offers a cautionary note on how "teach-out" arrangements may affect a borrower's options.
July 2, 2014
Mortgage lender pays $48,000 for Fair Housing violation
HUD has announced that Greenlight Financial Services, an Irvine, California-based mortgage lender, will pay $48,000 to settle allegations that it violated the Fair Housing Act when it denied or delayed mortgage loans to women because they were on maternity leave.
Chicago bank pays $4.1M CMP for deceptive practices
The Board of Governors of the Federal Reserve System has announced a consent order to cease and desist and civil money penalty assessments totaling $4,110,000 against Cole Taylor Bank of Chicago, Illinois, related to the participation by the bank and its agent, Higher One, Inc. of New Haven, Connecticut (Higher One), in deceptive practices in violation of section 5 of the Federal Trade Commission Act. Higher One, under Cole Taylor's oversight, offered students a deposit account and debit card product known as OneAccount. The FRB determined that, at various points in the financial aid refund selection process, students were mislead about the OneAccount by:
The omission of material information about how students could get their financial aid refund (the amount of financial aid in excess of tuition and school fees) without having to open a OneAccount
The omission of material information about the fees, features, and limitations of the OneAccount product
The omission of material information about the locations of ATMs where students could access OneAccount without cost and the hours of availability of those ATMs
The prominent display of the school logo, which may have erroneously implied that the school endorsed the OneAccount product
Under the Order, which was issued jointly with the Illinois Department of Financial and Professional Regulation, Division of Banking, the bank remains contingently liable for up to an additional $30 million in required restitution if Higher One cannot pay any amounts of restitution that Higher One may be required to pay for the benefit of consumers who opened OneAccounts at Cole Taylor under the terms of any enforcement action by the Board of Governors against Higher One. Finally, the Board's press release stated that actions are also pending against another state member bank that has a similar arrangement with Higher One relating to OneAccounts.
Consumer Compliance Outlook
The Second Quarter 2014 issue of Consumer Compliance Outlook is now available online, featuring these articles:
Risk-Focused Consumer Compliance Supervision Program for Community Banks
Risk-Focused Supervision Webinar Questions and Answers
News from Washington
On the Docket
Consumer Compliance Risk Management for Social Media
Treasury has issued a press release as a reminder of the July 1, 2014, effective date of the Foreign Account Tax Compliance Act (FATCA). FATCA was enacted in 2010 by Congress to target noncompliance by U.S. citizens of tax obligations through the use of foreign accounts. See Treasury's FATCA Page for more information.
HELOC 'end-of-draw' guidance
Four federal financial institutions regulatory agencies and the Conference of State Bank Supervisors (CSBS) today issued guidance to financial institutions regarding home equity lines of credit (HELOCs) nearing their "end-of-draw" periods, when the principal amount of the HELOC must begin to be repaid. The guidance encourages financial institutions to effectively communicate with borrowers about the pending reset and provides broad principles for managing risk as HELOCs reach their end-of-draw periods. Three of the agencies issued separate industry announcements on the Guidance:
FEMA suspending communities
The Federal Emergency Management Agency has published three final rules identifying communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on the effective dates listed below because of noncompliance with the floodplain management requirements of the program.
July 7, 2014—communities in Massachusetts, Rhode Island, Delaware, Georgia; Kentucky, North Carolina, Indiana, Minnesota, Texas, Nebraska, and Idaho
July 16, 2014—communities in Massachusetts, Pennsylvania, Indiana, Michigan, Louisiana, and Kansas
AML/BSA Written Agreement
The Federal Reserve has announced the execution of a Written Agreement with Turkiye Cumhuriyeti Ziraat Bankasi A.S., Ankara, Turkey and Turkiye Cumhuriyeti Ziraat Bankasi A.S. New York Branch, New York, New York. The Agreement concerns steps the bank will take to address deficiencies relating to the New York Branch's risk management and compliance with applicable federal and state laws, rules, and regulations relating to anti-money laundering compliance, including the Bank Secrecy Act; the rules and regulations issued by the U.S. Department of the Treasury (31 C.F.R. Chapter X); and the requirements of Regulation K of the Board of Governors to report suspicious activity and to maintain an adequate BSA/AML compliance program; and the related regulations of State of New York.
Term deposit offering results
The results of the June 30, 2014, fixed-rate offering of term deposits has been released by the Federal Reserve.
First quarter trading revenues increase
The OCC has released the First Quarter 2014 Report on Bank Trading and Derivatives Activities, which indicates insured U.S. commercial banks and savings associations reported trading revenue of $6.1 billion in the first quarter of 2014, up $3.2 billion, or 108 percent, from $2.9 billion in the fourth quarter of 2013.
July 1, 2014
French bank to pay over $8.9 billion for OFAC violations
The Treasury Department's Office of Foreign Assets Control (OFAC) has announced a $963 million agreement with BNP Paribas SA (BNPP), a French bank and financial services company, to settle potential liability for apparent violations of U.S. sanctions. An OFAC investigation indicated BNPP concealed, removed, omitted, or obscured references to information about U.S.-sanctioned parties in 3,897 financial and trade transactions routed to or through banks in the United States between 2005 and 2012 in apparent violation of the Sudanese Sanctions Regulations, the Iranian Transactions and Sanctions Regulations, the Cuban Assets Control Regulations; and the Burmese Sanctions Regulations. The settlement is the largest to date of any kind for OFAC. In addition, the Federal Reserve Board has announced a $508 million penalty against BNPP, the largest penalty ever assessed by that agency for violations of U.S. sanctions laws, plus a Cease and Desist order issued jointly with the Autorité de Contrôle et de Prudentiel et de Résolution (ACPR), the home country supervisor of BNPP.
These actions are taken in conjunction with actions by the Asset Forfeiture and Money Laundering Section of the Criminal Division of the Department of Justice, the Office of the U.S. Attorney for the Southern District of New York, the New York County District Attorney's Office, and the New York Department of Financial Services for violations of U.S. sanctions laws and various New York State laws. The assessments issued by the agencies total $8.9736 billion in a combination of a forfeiture of $8.8336 billion and various civil money penalties and fines. The forfeiture amount approximates the dollar value of the transactions involved in the allegations.
As part of the penalty extracted by the Department of Financial Services, the bank must suspend its U.S. dollar clearing operations through its New York branch for one year involving business lines on which the misconduct centered.
$200 million for ineligible loans
A Justice Department release reports that U.S. Bank has agreed to pay $200 million to resolve allegations that it violated the False Claims Act by knowingly origination and underwriting mortgage loans insured by the FHA that did not meet applicable requirements. As part of the settlement, U.S. Bank admitted that, from 2006 through 2011, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements. The bank also admitted that its quality control program did not meet FHA requirements, and as a result, it failed to identify deficiencies in many of the loans it had certified for FHA insurance, failed to self-report many deficient loans to HUD, and failed to take the corrective action required under the program.
FHA seeks feedback on new single-family handbook sections
HUD has announced Federal Housing Administration requests for feedback on two new handbook sections posted on The Drafting Table, an agency website for posting draft policies and handbook sections. The new sections are:
Comments on both sections are due by July 29, 2014.
Distressed or Underserved list
The Federal Reserve, FDIC and OCC have announced the availability of the 2014 list of distressed or underserved nonmetropolitan middle-income geographies where revitalization or stabilization activities will receive Community Reinvestment Act (CRA) consideration as "community development."
Basel Coordination Committee Bulletin Bulletin BCC 14-1 has been issued by the Basel Coordination Committee to provide examination guidance relating to the implementation of the advanced approaches risk-based capital rule (advanced approaches rule). The Bulletin provides guidance regarding supervisory expectations for data, modeling, and model risk management under the operational risk advanced measurement approaches (AMA) to calculate a regulated banking organization's operational risk. The BCC consists of Federal Reserve System staff who are responsible for overseeing the Federal Reserve System's process for implementing the advanced approaches rule.
NCUA prohibition orders
The NCUA has issued six orders prohibiting designated individuals from participating in the affairs of any federally insured financial institution. One of the individuals had been separately ordered to pay $437,250 in restitution.
FRB/US model package updated
The Federal Reserve has posted the June 30, 2014, updates of the FRB/US model package and the FRB/US dataset and variable listing. The main FRB/US model package is a self-contained set of equations, data, programs and documentation that enables various types of simulations and provides information about the model's structure.
Missouri bank to pay $70K CMP and restitution
Also included in the FDIC's May enforcement orders is a consent order for restitution and order to pay a $70,000 civil money penalty issued to a Missouri bank. The FDIC determined that the bank engaged in violations of section 8 of RESPA and section 1024.14 of CFPB Regulation X (Prohibition Against Kickbacks and Unearned Fees). Each consumer entitled to restitution under the order is to receive at least $400.
Integrated disclosure webcast recording
A recording of the June 17, 2014, FRB/CFPB Consumer Compliance Outlook Live webcast on the TILA-RESPA Integrated Disclosures Rule has been made available on the Outlook Live website. Those who have not previously registered for the event will need to provide registration information before accessing the recording. There's been a lot of chatter about the webinar in a Bankers' Threads discussion in the Integrated Mortgage Disclosures Final Rules forum.
Oklahoma bank closed
The FDIC announced on Friday that the Freedom State Bank, Freedom, Oklahoma, had been closed by the Oklahoma State Banking Department, which appointed the FDIC as receiver. The FDIC reported that it entered into a purchase and assumption agreement with Alva State Bank & Trust Company, Alva, Oklahoma, to assume all of the deposits of the closed bank. This is the twelfth FDIC-insured institution to fail in 2014, and the second in Oklahoma.
OFAC penalties settlement
Treasury's Office of Foreign Assets Control has announced that Red Bull North America, Inc., has settled potential civil liability for alleged violations of the Cuban Assets Control Regulations, agreeing to pay $89,775 for seven alleged violations. In June 2009, seven representatives of the company traveled to Cuba to film a documentary without OFAC authorization.
California woman pleads guilty to tax and wire fraud
The Justice Department has announced that a Fresno, California, woman pleaded guilty on Thursday to conspiracy to defraud the IRS and wire fraud. The plea agreement in the case states that from February 2008 through April 2012 Kathryn Darlese Caryell and a co-conspirator filed more than 150 false and fraudulent tax refund claims on behalf of themselves and others, those claims totaling more than $400,000.
Revisions to FRB Operating Circular 5
Federal Reserve Financial Services has announced that, effective August 1, 2014, Operating Circular 5 – Electronic Access is amended with respect to the use of the FedLine Web Channel for the submission of certain regulatory reports. Continued use of services on or after August 1 will constitute agreement to the new terms.
June 27, 2014
OFAC Kingpin Act designation
OFAC has announced the designation of a Colombian entity and the addition of its name to the SDN List with the SDNTK designation. Information regarding the entity has been posted in a BOL OFAC Update.
NCUA consumer compliance page
The NCUA has posted a new Consumer Compliance webpage to help credit unions comply with the new mortgage rules and other consumer lending rules required by the Dodd-Frank Act and other laws.
OFAC has announced that Network Hardware Resale LLC (NHR) has agreed to pay $64,758 to settle potential civil liability for apparent violations of the Sudanese Sanctions and the Iranian Transactions and Sanctions Regulations. OFAC determined that NHR voluntarily self-disclosed the violations. The base penalty for the violations was $143,906.
GAO report on virtual currencies
The Government Accountability Office has published a report, "Virtual Currencies: Emerging Regulatory, Law Enforcement, and Consumer Protection Challenges." Among the key findings in the report were:
Virtual currency systems may provide greater anonymity than traditional payment systems and sometimes lack a central intermediary to maintain transaction information. As a result, financial regulators and law enforcement agencies may find it difficult to detect money laundering and other crimes involving virtual currencies.
Many virtual currency systems can be accessed globally to make payments and transfer funds across borders. Consequently, law enforcement agencies investigating and prosecuting crimes that involve virtual currencies may have to rely upon cooperation from international partners who may operate under different regulatory and legal regimes.
The emergence of virtual currencies has raised a number of consumer and investor protection issues. These include the reported loss of consumer funds maintained by bitcoin exchanges, volatility in bitcoin prices, and the development of virtual-currency-based investment products.
The GAO recommended that the Consumer Financial Protection Bureau take steps to identify and participate in pertinent interagency working groups addressing virtual currencies, in coordination with other participating agencies. The report indicates the CFPB concurred with this recommendation.
Treasury Secretary Lew has announced a new financing partnership between Treasury and HUD aimed at supporting the FHA multifamily mortgage risk-sharing program.
Large bank systemic footprint data
The Federal Reserve Board has announced the availability of data that can be used to evaluate the individual systemic footprint of 33 large U.S. bank holding companies. The data will help to ensure comparability when evaluating the systemic risk profile of each banking organization. The data for year-end 2013 can be found on the National Information Center website.
Reg YY implementation FAQs
The Federal Reserve has issued frequently asked questions (FAQs) on the implementation of Regulation YY enhanced prudential standards for foreign banking organizations.
Seven-day term deposits offering
On June 30, 2014, the Federal Reserve will conduct a fixed-rate offering of seven-day term deposits with an interest rate of 0.29000 percent and a maximum tender amount of $10 billion through its Term Deposit Facility (TDF). The offering rate is one basis point higher than the rate for the June 24 offering, and three basis points higher than for offerings this year through June 9.
Mortgage performance improvement
The OCC has released the First Quarter 2014 Mortgage Metrics Report, which indicates the performance of first-lien mortgages serviced by large national and federal savings banks improved in the first quarter of 2014. At the end of the quarter, 93.1 percent of mortgages were current and performing, compared with 91.8 percent at the end of the previous quarter and 90.2 percent a year earlier. The percentage of mortgages that were 30 to 59 days past due decreased 19.8 percent from a year earlier to 2.1 percent of the portfolio, the lowest level since the OCC began reporting mortgage performance in 2008.
June 26, 2014
Regions Bank to pay $51 million for reporting violations
The Federal Reserve Board has announced that Regions Bank, Birmingham, Alabama, will pay a $46 million penalty for misconduct related to the process followed by the bank in the first quarter of 2009 for identifying and reporting non-accrual loans. The Alabama Department of Banking, which is assessing a $5 million penalty against the bank, joined in the Board's investigation and Orders. Enforcement actions and Orders of Prohibition were also issued against the former senior commercial credit executive (separately assessed a $2.4 million CMP), the former chief credit officer and former head of the bank's problem loan workout department, who were all deemed responsible for the misconduct addressed in the action against the bank. The SEC is separately taking action against the three former employees for their misconduct.
Fraudulent debt collectors shut down
The Federal Trade Commission has announced the issuance of a federal court order prohibiting a Houston debt collection company and Raymond T. Blair, its president and sole shareholder, from continuing the allegedly deceptive tactics they have been using to bully English- and Spanish-speaking consumers into paying debts and unnecessary fees. The complaint filed by the Commission alleged the defendants violated the FTC Act and the Fair Debt Collection Practices Act by using false and deceptive methods to collect more than $1.3 million in so-called "convenience fees" and "transaction fees" from consumers who authorized payments by telephone. The federal court order imposed a penalty of $4 million, which will be partially suspended based on inability to pay once Blair surrenders assets totaling $100,000.
OCC Semi-Annual Risk Perspective report
The OCC has issued its Spring 2014 Semiannual Risk Perspective, which examines risks facing national banks and federal savings associations.
Key findings from the report include:
Competition for limited lending opportunities is intensifying, resulting in loosening underwriting standards.
The prolonged low interest rate environment continues to lay the foundation for future vulnerability.
Many banks continue to re-evaluate their business models and risk appetites to generate returns against the backdrop of slow economic growth and low interest rates.
Cyber-threats continue to evolve, requiring heightened awareness and appropriate resources to identify and mitigate the associated risks.
Financial asset prices have experienced very low volatility for an extended period.
Bank Secrecy Act and Anti-Money Laundering risks remain prevalent as money-laundering methods evolve, and
electronic bank fraud increases in volume and sophistication.
NMLS SRR Annual Report
The National Mortgage Licensing System & Registry (NMLS) has released the 2013 annual report of the State Regulatory Registry LLC (SRR) and NMLS operations and performance.
Cybersecurity webpage launched by FFIEC
The Federal Financial Institutions Examination Council has announced the launch of a Cybersecurity Awareness webpage. The page is a central repository for current and future FFIEC-related materials on cybersecurity.
FSOC Annual Report
In testimony before the House Committee on Financial Services, Treasury Secretary Lew discussed the 2014 Annual Report of the Financial Stability Oversight Council. He also reviewed the formation and function of the Council.
April housing prices
The Federal Housing Finance Agency (FHFA) has released the April 2014 housing price index (HPI), which showed no change from March 2014. For the nine census divisions, seasonally adjusted monthly price changes from March 2014 to April 2014 ranged from -1.3 percent in the New England division to +0.6 percent in the East South Central division. The 12-month changes were all positive ranging from +1.7 percent in the Middle Atlantic division to +10.7 percent in the Pacific division.
April Finance Companies report
The April 2014 G.20 Finance Companies report of owned and managed receivables outstanding and auto loans: terms of credit has been released by the Federal Reserve.
Term deposit offering results
The Federal Reserve has announced the results of its June 23, 2014, offering of term deposits. Forty-six participants placed $92.4 billion in seven-day deposits at 0.28%, which will settle tomorrow (June 26) and mature on July 3.
June 24, 2014
Call Report changes proposed
The FDIC, OCC and FRB have published [79 FR 35634] for public comment proposed revisions to the risk-weighted assets portion of Schedule RC-R, Regulatory Capital, and to line items related to securities lent and borrowed in Schedule RC-L, Derivatives and Off-Balance Sheet Items, in the Consolidated Reports of Condition and Income (Call Report or FFIEC 031 and FFIEC 041). The proposed revisions to the Call Report are consistent with the revised regulatory capital rules published by the agencies (revised regulatory capital rules), and would be effective with the March 31, 2015, report date. Comments on the proposal are due by August 22, 2014.
NCUA mobile apps webinar
The NCUA will host a free webinar, "Mobile Applications — The Next Step," on Wednesday, July 9, 2014, at 2 p.m. ET. Webinar participants will learn how consumers are using mobile technology and mobile applications to meet their financial needs. In addition, participants will hear from credit unions that have successfully developed and implemented their own mobile strategies. Online registration for the program is open.
CFPB fellowship program
The Bureau has announced that applications are now being accepted for the next round of CFPB Technology & Innovation Fellows. The fellowship is a two-year program for software developers, graphic and user experience (UX) designers, data specialists, and cybersecurity professionals interested in leveraging technology to help further the CFPB's mission of making financial products and services work for consumers.
June 23, 2014
OFAC adds Ukraine-related SDNs
Treasury has announced the designation of seven separatists in Ukraine responsible for or complicit in actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine, and/or asserting governmental authority over a part or region of Ukraine without the authorization of the Government of Ukraine. Information regarding the additions has been posted in a BOL OFAC Update.
OCC enforcement actions
The Office of the Comptroller of the Currency has released a list of enforcement actions recently taken by the agency against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations has been released. Included were two civil money penalty (CMP) orders totaling $14,885 for Flood Act violations, and 13 individual CMP orders issued to members of a Utah bank's board of directors for failure to take appropriate actions in response to previous criticisms and violations relating to the bank's compliance with the Real Estate Settlement Procedures Act (RESPA).
TARP stock auctions results
The results of six auctions of preferred stock held by Treasury in the Troubled Asset Relief Program (TARP) have been released. The closings for the auctions are expected to occur on or about July 2, 2014, and aggregate gross proceeds to Treasury from the auctions are expected to be approximately $64.4 million.
Prohibition letters issued
Nine letters of prohibition, also known as Section 19 letters, have been issued by the Federal Reserve Board during the first four months of 2014. The recipients were notified that due to their being convicted of a crime involving dishonesty or breach of trust, they are automatically subject to the prohibitions set forth in Section 19 of the Federal Deposit Insurance Act and Section 205 of the National Credit Union Act, for insured credit unions. They are prohibited from becoming or continuing as an institution-affiliated party with respect to any insured banking organizations or credit unions.
Two banks closed
The FDIC has announced the closing and assumption of all deposits of Valley Bank, Moline, Illinois, and Valley Bank, Fort Lauderdale, Florida. The failed banks, which are not related, are the 10th and 11th FDIC-insured institutions to fail in 2014. There have been three failures this year in Illinois and one in Florida.
NCUA interest rate risk resources
The NCUA has announced the availability of a new web resource page and a new video. The resource page includes videos, charts showing trends that affect interest rate risk, and links to NCUA regulations and letters to credit unions, interagency guidance, and best practice resources. The video posted on the NCUA You Tube channel concerns interest rate risk and the questions credit unions should answer.
June 20, 2014
OFAC drops 308 names
Treasury has announced that OFAC has completed the largest removal of SDN list names in the history of its sanctions programs. The names of 308 SDNT-designated individuals and entities have been removed from the list following the financial collapse of Colombia's Cali Cartel under the weight of economic sanctions. The 78 individuals and 230 entities were part of the network led by Cali Cartel leaders Miguel and Gilberto Rodriguez Orejuela, who themselves remain on the SDN List and are currently incarcerated in the United States, serving 30-year sentences. Additional information and all of the removed names are included in a BOL OFAC Update.
Bureau and Justice order GE Capital to pay $225 million
The Consumer Financial Protection Bureau (CFPB) has announced it is ordering GE Capital Retail Bank (GE Capital), now known as Synchrony Bank, to provide an estimated $225 million in relief to consumers harmed by illegal and discriminatory credit card practices. GE Capital must refund $56 million to approximately 638,000 consumers who were subjected to deceptive marketing practices. As part of the joint enforcement action by the CFPB and Department of Justice (DOJ), GE Capital must also provide an additional $169 million to about 108,000 borrowers excluded from debt relief offers because of their national origin (according to DOJ's press release, $131.8 million of that penalty has already been paid). The Bureau's enforcement action related to credit card add-on products stems from a CFPB examination conducted between December 2012 and February 2013. The action related to the discriminatory credit card practices resulted from GE Capital's self-reporting of the issue to the CFPB, which led to a joint investigation between the CFPB and the DOJ.
FHFA settles with RBS for $99.5 million
The Federal Housing Finance Agency (FHFA), in its role as conservator of Freddie Mac, has settled claims against RBS Securities, Inc. (RBS) alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities purchased by Freddie Mac during 2005–2007. The settlement agreement resolves claims in a case, FHFA v. Ally Financial, Inc., in the Southern District of New York. A separate case, FHFA v. The Royal Bank of Scotland Group, was not affected by the settlement. FHFA reports that this is the 15th settlement relating to 18 private-label securities suits it filed in 2011.
FHA issues reverse mortgage guidance
A HUD press release has been issued announcing Federal Housing Agency (FHA) Mortgage Letter 2014-10, which reminds lenders participating in the agency's Home Equity Conversion Mortgage (HECM) Program to make certain senior borrowers are fully informed of all their options when applying for reverse mortgages. The advisory states that the FHA prohibits the utilization of misleading or deceptive advertising, and that the prohibition extends to misleading or deceptive descriptions of the HECM program.
NCUA Board Action Bulletin
An NCUA Board Action Bulletin has been issued on the actions taken at the June 19, 2014, meeting of the Board, including the approval of the following items:
a proposed rule expanding the powers of federal credit unions by allowing qualified institutions to securitize loans they have originated
a proposed rule creating safe-harbor protection for certain securitized assets and protecting investors in cases of conservatorship or liquidation
a proposed rule to assist underwater borrowers by allowing federally insured credit unions to refinance or modify real estate loans without obtaining an additional appraisal
a final rule reducing administrative burdens on solvent credit unions that voluntarily liquidate
Protecting assisted living residents from financial exploitation
The Consumer Financial Protection Bureau has announced its release of a CFPB guide for the staff of assisted living and nursing facilities on the protection of residents from financial exploitation. The guide gives staff the tools to:
prevent financial exploitation and scams by educating staff, residents, and family members about warning signs and precautions
recognize, record, and report financial abuse as early as possible using a model protocol and a team approach
get help from first responders in the community
The guide also has a list of warning signs that a resident is being financially exploited.
FRB term deposit auction
The Federal Reserve has announced a June 23, 2014, fixed-rate offering of term deposits through its Term Deposit Facility (TDF). Seven-day term deposits with an interest rate of 0.28000 percent and a maximum tender amount of $10 billion will be offered.
June 19, 2014
Credit repair company assessed $2.35M CMP
The FTC has announced that RMCN Credit Services, Inc., a Texas-based company, has agreed to settle charges listed in a complaint filed in federal court that it violated federal law by lying to consumer reporting agencies, and charging consumers up-front fees before providing its services. A court order has been issued permanently restraining and enjoining the defendants from similar conduct in the future, and imposing a $2.35 million civil penalty, which will be partially suspended upon the payment of $400,000, based on an inability to pay the full penalty.
FOMC statement and projections
The Federal Reserve Board has issued the statement and economic projections from the June 17–18, 2014, meeting of the Federal Open Market Committee (FOMC).
OCC Ohio workshop
A workshop for directors of national community banks and federal savings associations will be hosted by the Office of the Comptroller of the Currency on July 28-30, 2014, in Columbus, Ohio. "Mastering the Basics: A Director's Challenge" is a three-day workshop that provides practical information on the roles and responsibilities of a community bank director. Discussion topics include:
OCC structure and communication channels for directors
Roles of the board and management
Board committees and best practices
Significant board activities, including compensation and succession planning
CAMELS, specialty ratings, and composite ratings
Report of Examination—a blueprint for action
Managing risk with board reports
The workshop is limited to the first 35 registrants and the fee is $99.
June 18, 2014
SunTrust to pay nearly $1B for mortgage servicing practices
A joint press release from the Consumer Financial Protection Bureau, Department of Justice, Department of Housing and Urban Development and 50 attorneys general has announced the filing of a proposed consent judgment that would require SunTrust Mortgage, Inc. to provide $500 million in loss-mitigation relief to underwater borrowers. Under the order, SunTrust would also pay $40 million to consumers who lost homes in foreclosure, $10 million to the federal government and a $418 million penalty to the DOJ. The complaint filed in federal court addresses systemic mortgage servicing misconduct, including robo-signing and illegal foreclosure practices. SunTrust is a mortgage lender and servicer headquartered in Richmond, Virginia, and is a wholly-owned subsidiary of Atlanta-based SunTrust Banks, Inc.
SCOTUS to hear appeal of MLO overtime decision
The Supreme Court of the United States has agreed to hear an appeal from last year's D.C. District Court of Appeals decision that the Department of Labor had violated the Administrative Procedures Act (APA) with its 2010 reversal of a 2006 determination that mortgage loan officers were exempt employees under the Fair Labor Standards Act. The 2006 determination meant that mortgage loan officers did not have to be paid overtime under the Act; the 2010 action would have reversed that determination, but was ruled illegal by the Court of Appeals because the Labor Department failed to comply with the APA in issuing the reversal. BOL's Courtwatch article announcing the July 2, 2013, Appeals Court decision has been annotated to note the pending appeal to the Supreme Court.
Counter terrorism designation and SDN List format notice
OFAC has issued a notice that it has updated its "human-readable" PDF lists by slightly changing the font and spacing to support new functionality that will be added to these files in the near future. The change increases the length of the printed List by approximately 300 pages. In addition, an individual has been designated as a specially-designated global terrorist and his name has been added to the List. Information regarding the update and the addition has been posted in a BOL OFAC Update.
Florida bank pays $4,000 Flood Act CMP
The Federal Reserve has announced the assessment of a $4,000 civil money penalty (CMP) upon the consent of First Southern Bank, Boca Raton, Florida, for violations of the National Flood Act and Regulation H. information regarding the CMP has been posted on the BOL Flood Penalties Watch Page.
NCUA AML compliance webinar
The NCUA will host part two of its webinar series, "How to Be in Compliance with OFAC and FinCEN" on Wednesday, June 25, at 2 p.m. Eastern time. The webinar will utilize real-world scenarios and case studies to explore emerging issues in anti-money laundering compliance that credit unions could face in their daily operations. Online registration for this free webinar is now open.
OCC to host Minneapolis workshops
The OCC has announced it will host risk assessment and compliance risk workshops in Minneapolis on July 22–23, 2014, for directors and national community banks and federal savings associations. The fee for each workshop is $99 and attendance for each session is limited to the first 35 registrants. Registration for the sessions is currently open.
The June 2014 NCUA Report has been released. The Report highlights important NCUA Board actions and key issues. It is a one-stop resource to learn not just the "what" but also the "why" behind NCUA's actions.
Seized Bitcoins to be auctioned
The U.S. Marshals Service has posted an announcement of an auction of nearly 30,000 Bitcoins that were seized by the Service in October 2013 from the now-shuttered Silk Road "Dark Web" marketplace. Participation in the auction requires registration by noon ET on Monday, June 23, 2014, and a deposit of $200,000 with the Service. The Service plans to offer nine lots of 3,000 Bitcoins each, and one lot with the balance of the seized cryto-currency.
Residential construction results
HUD and the Census Bureau have announced the May 2014 residential construction statistics. Building permits and housing starts were below and housing completions were above revised April 2014 numbers.
June 17, 2014
Expanded HOEPA coverage affects HMDA reporting
The FFIEC has posted a recent Federal Reserve Board notice concerning the impact on HMDA reporting requirements of the January 10, 2014, change to the HOEPA (High Cost Mortgage) Rule (Regulation Z, section 1026.32) that expanded HOEPA coverage. Revised HMDA edits are currently available on the FFIEC website, and a new version of the HMDA Data Entry Software that incorporates the HOEPA revisions will be made available in early August.
Treasury selling preferred stock
The Department of the Treasury has announced it has begun the auctions of all of its holdings of TARP Capital Purchase Program preferred stock in six institutions:
Marine Bank & Trust Company (Vero Beach, Florida)
Market Bancorporation, Inc. (Elko New Market, Minnesota)
Maryland Financial Bank (Towson, Maryland)
Royal Bancshares of Pennsylvania, Inc. (Narberth, Pennsylvania)
United American Bank (San Mateo, California)
White River Bancshares Company (Fayetteville, Arkansas)
The auctions began at 9:00 a.m. Eastern Time yesterday, and will close at 6:00 p.m. Eastern Time, on Thursday, June 19, 2014.
April TIC data
Treasury has released the Treasury International Capital (TIC) data for April 2014.
IMF report on U.S. economy
The International Monetary Fund (IMF) has released a statement following this year's Article IV Consultation with the United States. The statement represents the independent judgment and assessment by IMF staff of U.S. economic performance and policies. Article IV consultations typically take place once a year. IMF economists visit the member country to gather information and hold discussions with government and central bank officials, and often private investors and labor representatives, members of parliament and civil society organizations.
in the first quarter of 2014, more than 300,000 borrowers returned to a position of positive equity in their homes
foreclosure starts continue their downward trend
purchases of new homes rebounded in April after declining for four out of the previous five months
sales of previously owned (existing) homes rose in April for the first time this year
FHFA report to Congress
The Federal Housing Finance Agency (FHFA) has announced the release of its 2013 Report to Congress, which details the findings of the agency's 2013 examinations of Fannie Mae, Freddie Mac (the Enterprises), the 12 Federal Home Loan Banks (FHLBanks) and the FHLBanks' joint Office of Finance. The statutorily-required report also details FHFA's actions as conservator of Fannie Mae and Freddie Mac during the year, and the agency's regulatory guidance, research and publications.
Guidance on income tax allocation agreements
The federal banking regulators have jointly issued final supplemental guidance on income tax allocation agreements involving holding companies and insured depository institutions. The guidance supplements a policy statement issued in 1998 [63 FR 64757] by instructing insured depository institutions and their holding companies to review their tax allocation agreements to ensure the agreements expressly acknowledge that the holding company receives any tax refunds as an agent. In addition, all banking organizations are asked to insert specific language in their tax allocation agreements to further clarify tax refund ownership. The guidance also clarifies how sections 23A and 23B of the Federal Reserve Act, which establish certain restrictions on and requirements for transactions between depository institutions and their affiliates, apply to tax allocation agreements.
The June 15, 2014, issue of FedFlash has been posted by Federal Reserve Bank Services. The issue contains articles on:
updated FedLine security token driver software
Fedline web security and control procedures
the enhanced EUAC Center
an update on the Next Generation VPN Solution initiative
the FedACH FedPayments Reporter Service
a change to the minimum thresholds for Check Adjustments Service NOI and ERR investigation types
June 13, 2014
Title company hit with $30,000 Section 8 CMP
The Consumer Financial Protection Bureau has announced that it has issued a Consent Order under which Stonebridge Title Services, Inc., Parsippany, New Jersey, will pay $30,000 for paying illegal kickbacks for referrals. The Bureau charged that Stonebridge violated Section 8 of RESPA by paying commissions to more than twenty independent salespeople who referred title insurance business to Stonebridge.
amend the capital plan and stress test cycles from October 1 of a calendar year to January 1 of the calendar year
limit the ability of a BHC to make certain capital distributions
clarify the application of the capital plan rule for subsidiaries of foreign banking organization
revise the Board's Policy Statement on the Scenario Design Framework for Stress Testing and Regulation YY to reflect the revisions to the start date of the stress test cycle
Comments on the Board's proposal must be received on or before August 11, 2014.
In addition, the Office of the Comptroller of the Currency has announced it is seeking comment on a proposal to amend the OCC's Annual Stress Test rule. The proposed rule would shift back the timing of the annual stress testing cycle by approximately 90 days, and clarify that institutions covered by the Annual Stress Test rule will not have to calculate their regulatory capital ratios using the Basel III advanced approaches until the stress testing cycle beginning on January 1, 2016. This proposal will have a 60-day comment period beginning with publication in the Federal Register.
Volcker Rule interim exam procedures OCC Bulletin 2014-27 has announced interim procedures for examiners to assess banks' progress in developing a framework to comply with requirements of section 619 of the Dodd-Frank Act, commonly known as the Volcker Rule, and the implementing regulations adopted by the OCC with the other rule-writing agencies. The OCC's Volcker Rule regulation prohibits national banks (other than certain limited-purpose trust banks), federal savings associations, and federal branches and agencies of foreign banks (collectively, banks) from engaging in short-term proprietary trading of financial instruments and from owning, sponsoring, or having certain relationships with hedge funds or private equity funds (also known as covered funds). It was issued on an interagency basis that brings essentially all financial institutions under the same requirements.
Calvery on casino industry and risk-based AML efforts
In prepared remarks delivered at the 2014 Bank Secrecy Act Conference, FinCEN Director Calvery stressed the importance of the casino industry understanding and embracing a risk-based approach to anti-money laundering (AML) efforts. She noted that casinos have the same responsibility as more traditional financial institutions to file reports about certain financial transactions.
Term deposit offering
The Federal Reserve has announced that on June 16, 2014, it will conduct a fixed-rate offering through its Term Deposit Facility (TDF) of seven-day term deposits with an interest rate of 0.27000 percent and a maximum tender amount of $10 billion.
June 12, 2014
Bureau asks for mobile financial services input
The CFPB has published in this morning's Federal Register a notice requesting information about how consumers are using mobile financial services to access products and services, manage finances and achieve their financial goals, with a focus on economically vulnerable consumers. With regard to mobile POS payments, the inquiry is restricted to mobile payment products targeted specifically for low-income and underserved customers, and whether such targeting could benefit or harm such customers. The Bureau's press release provides a summary of the information request, and Director Cordray's remarks at yesterday's CFPB field hearing in New Orleans provide additional background. A ninety-day comment period will expire on September 10, 2014.
Lew on the economy
Secretary Lew discussed the economy in a speech at The Economic Club of New York. He commented on America's potential, investing in America, rewarding innovation and productivity, and a better foundation for the future.
NMLS quarterly industry report
The NMLS Mortgage Industry Report for the first quarter of 2014 has been released. The report contains an analysis of companies, branches, and mortgage loan originators who were licensed or registered through NMLS to conduct mortgage activities.
OCC Advisory Council to meet
The OCC has announced a pubic meeting of its Minority Depository Institutions Advisory Committee (MDIAC) to be held on June 25, 2014, in Dallas. The meeting agenda will include a discussion of the status of minority depository institutions, regulatory changes that may ensure the health and viability of the institutions, and current topics of interest to the industry. Individuals who wish to attend should contact the OCC in advance of the meeting.
June 11, 2014
Volcker Rule FAQs
The FRB, OCC, FDIC, SEC and Commodity Futures Trading Commission have collectively developed and issued an FAQ on Section 619 of the Dodd-Frank Act (the "Volcker Rule").
Builder pays $650,000 CMP
The Federal Trade Commission has announced that a Pennsylvania-based home builder that offers home financing has paid $650,000 to settle charges that it deceived consumers by advertising low-cost mortgages while hiding fees and not disclosing vital information about the true cost of the mortgages. The FTC complaint alleged the operation violated the Federal Trade Commission Act; the Mortgage Acts and Practices Advertising Rule (or "MAP" Rule) and CFPB Regulation N; and the Truth in Lending Act and Regulation Z.
Written Agreement with Illinois BHC
The Federal Reserve Board has announced the execution of a Written Agreement with Allied First Bancorp, Inc., Oswego, Illinois.
OCC executive changes
The Office of the Comptroller of the Currency has announced the following executive changes:
Jennifer Kelly will succeed John Lyons as the agency's Senior Deputy Comptroller for Bank Supervision Policy and Chief National Examiner when Mr. Lyons retires August 1.
Toney Bland will replace Ms. Kelly as Senior Deputy Comptroller for Midsize and Community Bank Supervision.
Senior Deputy Comptroller for Management and Chief Financial Officer Tom Bloom will be loaned to NeighborWorks America to serve as its acting Chief Financial Officer.
Deputy Comptroller and Chief Accountant Kathy Murphy will serve as acting Senior Deputy Comptroller for Management and Chief Financial Officer while Mr. Bloom is at NeighborWorks.
Term deposits offering
The results of the June 9th offering of fixed-rate term deposits have been announced by the Federal Reserve.
June 10, 2014
FDIC improves insurance education materials
The FDIC has announced significant new improvements to the deposit insurance education materials available on the FDIC's website, at www.fdic.gov/deposit/. The enhancements are designed to improve the accessibility and presentation of deposit insurance information for the general public through organizational changes as well as through the expanded use of explanatory videos and interactive infographics. The changes are designed to allow the public to quickly access basic information while still offering the in-depth and comprehensive deposit insurance information that has traditionally been available.
Upgraded SDN search tool
OFAC has posted a notice that it has updated its SDN Search tool, which has been relabeled "Sanctions List Search." As the name-change suggests, the upgraded tool now allows users to search for a name on the Specially Designated Nationals (SDN) List, the Foreign Sanctions Evaders (FSE) List, or both the SDN and FSE Lists simultaneously. The tool can be found on OFAC's site at https://sdnsearch.ofac.treas.gov/. An FAQ on the operation of the tool is also available.
OCC proposes integration of licensing rules
The Office of the Comptroller of the Currency has published in today's Federal Register a proposed rule [79 FR 33259] that would integrate its rules relating to policies and procedures for corporate activities and transactions involving national banks and Federal savings associations, to revise some of those rules in order to eliminate unnecessary requirements consistent with safety and soundness, and to make other technical and conforming changes. The OCC also is proposing amendments to update its rules for agency organization and function. Comments are due by August 11, 2014.
Proposal to revise large position reporting
The Department of the Treasury has published a notice of proposed rulemaking [79 FR 33145] in this morning's Federal Register to solicit public comment on proposed amendments to Treasury's rules for reporting large positions in certain Treasury securities, as required by the Government Securities Act (GSA). The proposed amendments are designed to improve the information available to Treasury and simplify the reporting process for many entities subject to the large position reporting rules. Comments on this proposal are due by August 9, 2014.
Cordray delivers report to Congress
In written testimony before the Senate Banking, Housing and Urban Affairs Committee, Director Cordray discussed CFPB's fifth Semi-Annual Report to Congress. He noted "we have been focused on making consumer financial markets work better for the American people, the honest businesses that serve them, and the economy as a whole." He also stated "we have aided in efforts to refund more than $3.8 billion to consumers who fell victim to various violations of consumer financial protection laws. We have also fined wrongdoers more than $141 million, all of which has gone into our Civil Penalty Fund and can be used to compensate wronged consumers and, to the extent compensating consumers is not practicable, to pay for consumer education and financial literacy programs."
June 9, 2014
Board appoints new Consumer and Community Affairs head
The Federal Reserve Board has announced its appointment of Eric S. Belsky as its Director of Consumer and Community Affairs. Dr. Belsky, who is expected to assume the directorship in August, currently serves as Managing Director of the Joint Center for Housing Studies of Harvard University and is Lecturer in Urban Planning and Design at the Harvard Graduate School of Design.
FEMA to suspend three more communities
The Federal Emergency Management Agency has published a notice [79 FR 32876] in today's Federal Register to identify three communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on June 16, 2014, because of noncompliance with the floodplain management requirements of the program. The communities to be suspended are:
the City of Maricopa, Pinal County, Arizona (community 040052)
the City of Knox, Starke County, Indiana (community 180242)
Unincorporated areas of Starke County, Indiana (community 180240)
G.19 Consumer Credit report
The Federal Reserve has released the April 2014 G.19 Consumer Credit report. Consumer credit increased at a seasonally adjusted annual rate of 10¼ percent. Revolving credit increased at an annual rate of 12¼ percent, while nonrevolving credit increased at an annual rate of 9½ percent.
June 6, 2014
$10.5M OFAC settlement
OFAC has announced a settlement with Fokker Services B.V. ("FSBV"), Hoofddorp, The Netherlands, of its potential civil liability of $50,922,208 for 1,112 alleged violations of the Iranian Transactions and Sanctions Regulations and 41 alleged violations of the Sudanese Sanctions Regulations. FSBV exported or reexported aircraft spare parts that were obtained or repaired in the United States to Iranian and Sudanese customers or end users without first obtaining required licenses. FSBV will satisfy its liability with the payment of a combined $10.5 million civil monetary penalty to OFAC and the Department of Commerce, a forfeiture of an additional $10.5 million pursuant under a deferred prosecution agreement reached with the Department of Justice's U.S. Attorney's Office for the District of Columbia, and the acceptance of responsibility for its egregious conduct. The base penalty for the alleged violations is over $145 million. OFAC determined that FSBV voluntarily self-disclosed this matter to OFAC and that the alleged violations constitute an egregious case.
Summary of Deposits deadline FDIC FIL-29-2014 has been issued to remind insured institutions the deadline for the filing of the Summary of Deposits annual survey is July 31, 2014, and that no extensions will be granted. Reporting instructions were attached to the FIL.
Fannie and Freddie g-fees comments sought
The Federal Housing Finance Agency (FHFA) has announced it is requesting input on the guarantee fees (g-fees) that Fannie Mae and Freddie Mac charge lenders.
Term deposits offering
The Federal Reserve has announced a fixed-rate offering of term deposits to be held on June 9, 2014, through its Term Deposit Facility (TDF). Seven-day term deposits with an interest rate of 0.26000 percent and a maximum tender amount of $10,000,000,000 will be offered.
Z.1 Financial Accounts report
The Federal Reserve Board has released the June 5, 2014, Z.1 Financial Accounts of the United States report. The Z.1 is released during the second week of March, June, September, and December of each year.
FDIC State Profiles
The First Quarter 2014 State Profiles have been posted by the FDIC. The State Profiles are a quarterly data sheet summary of banking and economic conditions by state.
NCUA Quarterly Map Review
The NCUA has announced the release of the First Quarter 2014 Quarterly U.S. Map Review, which tracks performance indicators for federally insured credit unions. The review includes two key state-level economic indicators: unemployment rates and home price changes, and also has data on median loan growth and median return on average assets to aid comparisons of typical credit unions across states.
NCUA Board meeting video
The video of the May 2014 meeting of the NCUA Board has been posted.
June 5, 2014
NCUA starting regulation review
The National Credit Union Administration has published a notice [79 FR 32191] in the Federal Register announcing its second, comprehensive review of its regulations to identify outdated, unnecessary, or burdensome regulatory requirements imposed on federally insured credit unions, as contemplated by section 2222 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA).
The June 2014 issue of the Beige Book has been published by the Federal Reserve Board. The report on current conditions in each Federal Reserve District is published eight time per year.
OCC Seattle workshops announced
The Office of the Comptroller of the Currency will host two workshops in Seattle on July 8–9. The "Risk Assessment" and "Credit Risk" workshops are designed exclusively for directors of institutions supervised by the OCC. The risk assessment workshop discusses the OCC's approach to risk-based supervision, and best practices to identify, measure, monitor and control risk. The credit risk workshop focuses on the roles of the board and bank management, current events, emerging industry trends, and a range of credit issues, from the credit approval process, to managing credit risk, to collections. Registration is open for each workshop.
FDIC CRA ratings
The ratings received by banks recently examined for CRA compliance have been released by the FDIC.
June 4, 2014
CFPB schedules Big Easy field hearing
The Consumer Financial Protection Bureau has announced that it has scheduled a field hearing on mobile financial services in New Orleans on June 12, 2014. The hearing will start at 10 a.m. Central Time on the 3rd floor of Old US Mint. The hearing is open to the public but an RSVP is required. Streaming video of the event will also be available.
Written Agreement announced
The Federal Reserve Board has announced the execution of a Written Agreement with CBOA Financial, Inc., Tucson, Arizona.
New collateral margins requirements
The Federal Reserve has announced a new schedule of margins applicable for collateral pledged by depository institutions to secure discount window loans and for payment system risk purposes. The new schedule is effective July 1, 2014.
CU growth continues
The NCUA has released information from the first quarter 2014 Call Report data indicating outstanding loan balances were up 8.8 percent from the first quarter of 2013 to $652.7 billion. Annual growth also occurred in the following areas:
New auto loans grew 13.9 percent to $73.5 billion
Used auto loans increased 11.3 percent to $130.1 billion
Net member business loan balances rose 11.1 percent to $47.3 billion
Non-federally guaranteed student loans went up 26.5 percent to $2.8 billion
Short-term small loan originations, a consumer-friendly alternative to predatory payday loans, totaled $92.1 million at an annualized rate, up 34.8 percent from the first quarter of 2013
Agencies begin regulations review
The OCC, Federal Reserve and FDIC have jointly published a notice of their reviews of the regulations they have issued to identify outdated, unnecessary, or unduly burdensome regulations for insured depository institutions. The review is required by section 2222 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 ("EGRPRA"). The current announcement requests public comments on regulations in three (Applications and Reporting, Powers and Activities, and International Operations) of twelve subject-matter categories. Three additional requests for comment covering the remaining nine categories will be published within the next two years. Comments on regulations in the first group of categories are due by September 2, 2014.
June 3, 2014
Board meets under expedited procedures
A meeting was held yesterday, June 2, 2014, by the Board of Governors of the Federal Reserve System under expedited procedures, to review and consider advance and discount rates to be charged by Federal Reserve Banks.
Bay State AG sues FHFA and GSEs
Massachusetts Attorney General Martha Coakley has announced the filing of a complaint on behalf of the Commonwealth in a civil action against the Federal Housing Finance Agency (FHFA) and the government-sponsored enterprises Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal National Mortgage Association (Fannie Mae) to compel them to comply with a Massachusetts law that forbids banks and lenders from refusing to allow the sale of homes in foreclosure to non-profit organizations if the property will be resold or leased by the non-profit to the former homeowner. In the complaint, the Commonwealth alleges that two of FHFA's policies violate state law. Coakley asserts that Fannie and Freddie's "arm's length transaction" policy prohibits property sales to non-profits who resell to the original homeowner, and the "make whole" policy has the same effect, as it prevents Fannie and Freddie from accepting anything less than the outstanding loan amount from the former homeowner or anyone seeking to resell or rent to the former homeowner.
OFAC FAQ on South Sudan transactions
OFAC has posted a Frequently Asked Question (FAQ) concerning payments to or transactions with non-designated individuals or entities in South Sudan.
OCC announces CRA ratings and exam schedule
The Office of the Comptroller of the Currency has released the ratings received by 36 national banks and savings associations recently evaluated for Community Reinvestment Act compliance. Eight were rated outstanding and 28 received satisfactory ratings. The agency also announced its third quarter 2014 CRA evaluation schedule.
Santander sued for mortgage bias
Santander Bank, N.A., the U.S. unit of Madrid, Spain's Banco Santander SA, is named in a suit filed May 29 in U.S. District Court, District of Rhode Island, reports the Insurance Journal. The City of Providence claims that the bank stopped issuing mortgages in minority neighborhoods after the housing bubble burst, beginning in 2009 when, as Sovereign Bank, it was acquired by its current Spanish parent company. The suit seeks millions in dollars in damages, arguing that the bank's alleged pull-back from minority neighborhoods led to boarded-up homes and other blight that was expensive for the city to maintain and deprived the city of property-tax revenue.
Kingpin designations and updates
OFAC has announced the designation of three individuals as SDNTKs and the addition of their names to the SDN List. In addition, a change has been made to an existing SDNTK listing. Information regarding the designations and change has been posted in a BOL OFAC Update.
HUD expands Sandy relief
HUD has announced an agreement with the State of New Jersey to expand the hurricane Sandy recovery programs in nine impacted counties. In addition, the third round of disaster recovery funds to four states and New York City to assist recovery to the Sandy region was announced.
Reminder of increased flood coverage cap OCC Bulletin 2014-26, FRB CA Letter 14-3 and FDIC FIL-28-2014 have been issued regarding the Interagency Statement on increased maximum flood insurance coverage for other residential buildings. The increased coverage limits, effective June 1, 2014, required that lenders reevaluate the adequacy of flood coverage for affected buildings and compel coverage increases as necessary.
Maryland bank closed
The FDIC has announced the closing of Slavie Federal Savings Bank, Bel Air, Maryland, and the assumption of all of the failed bank's deposits by Bay Bank, FSB, Lutherville, Maryland.
FDIC enforcement actions
A list of thirty-one orders of administrative enforcement actions taken against banks and individuals in April 2014 has been released by the FDIC. The list includes an assessment of a civil money penalty of $485,000 and a removal/prohibition order against the former CEO and chairman of a failed Franklin, Tennessee, bank involving a series of alleged attempts to cover up loan fraud.
The NCUA has announced the issuance of nine orders prohibiting the named individuals from participating in the affairs of any federally insured financial institution.
CFATF identifies Guyana AML/CFT deficiencies
The Caribbean Financial Action Task Force (CFATF) has identified Guyana as a jurisdiction with strategic AML/CFT deficiencies and has called on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from Guyana.
May 30, 2014
Subprime auto lender to pay $5.5M
The Federal Trade Commission has announced that Consumer Portfolio Services, Inc. (CPS), a national subprime auto lender, will pay more than $5.5 million to settle charges that the company used illegal tactics to service and collect consumers' loans, including collecting money consumers did not owe, harassing consumers and third parties, and disclosing debts to friends, family, and employers. The FTC's press release included links to the agency's Complaint against CPS and the Order settling the charges.
FINRA alert on high-yield CD scams
The Financial Industry Regulatory Authority (FINRA) has issued a new investor alert called High-Yield CDs: Red Flags That Signal a Scam warning investors to be wary of promotions touting certificates of deposit (CDs) that promise interest rates that are substantially higher than current averages. The alert advises investors who believe they have been victimized by a CD scam to contact their financial institution immediately to report a loss or theft of funds through an electronic funds transfer. In a press release, FINRA cited warning signs of such scams, including:
interest rates that are significantly higher than average (one such scam offered a 15 percent yield);
emails with addresses that are not originated and sent by the financial institution that is cited in the promotion;
emails that contain misspellings or grammatical errors;
promotions that claim to be from a U.S. financial institution that has aligned with an international bank;
promotions that claim to be for a "limited time only"; and
promotions that claim to be directed at "best customers" and that require extremely high minimum investments (for example, $100,000).
Written Agreement executed
The Federal Reserve Board has announced the execution of a Written Agreement with Columbus Junction State Bank, Columbus Junction, Iowa.
Fixed-rate term deposit offering
On June 2, 2014, the Federal Reserve will conduct a fixed-rate offering of term deposits through its Term Deposit Facility (TDF). The offering will consist of seven-day term deposits with an interest rate of 0.26000 percent and a maximum tender amount of $7,000,000,000.
Cordray on promoting financial education
In a presentation at the Financial Literacy and Education Commission Meeting, CFPB Director Cordray discussed the activities of the Commission to promote and encourage opportunities to incorporate financial education in schools, workplaces, and communities. He said that "the federal government is the nation's single largest employer and it is important to lead by example."
May 29, 2014
OCC to expand large bank exam force
A news release from the OCC has announced significant changes intended to strengthen both the supervisory process and the examining force supervising the nation's largest and most complex financial institutions. The changes include:
the expansion of organization, functions, and responsibilities of its large bank lead expert program to improve horizontal perspective and analysis, systemic risk identification, quality control and assurance, and resource prioritization
the establishment of a formal rotation program for all examiners to provide them with broader, fresh perspectives on a regular basis
the formalizing of an enterprise risk management framework, that will involve developing a risk appetite statement, creating a decision-tree process, and enhancing the OCC's existing National Risk Committee framework and processes
Comptroller's Handbook updated Bulletin 2014-25 has been issued by the OCC announcing the revision of the "Collective Investment Funds" booklet of the Comptroller's Handbook and the rescinding of OCC Banking Circular 247, "Application of Securities Laws to Common Trust Funds," issued September 12, 1990.
Alabama firm to pay $500,000 for RESPA violations
The Consumer Financial Protection Bureau has announced a Consent Order under which RealtySouth, the largest real estate firm in Alabama, will pay $500,000 for inadequate disclosures that could leave consumers unaware of their rights to choose service providers during the home-buying process. The Bureau charged the firm violated RESPA by utilizing preprinted purchase contracts which either explicitly directed or suggested that title and closing services be conducted by its affiliate.
Advisory on Mexican U.S. currency restrictions and funnel accounts Advisory FIN-2014-A005 has been issued by the Financial Crimes Enforcement Network (FinCEN) as an update for financial institutions on the increased use of "funnel accounts" as part of trade-based money laundering conducted following the restrictions on U.S. currency transactions in Mexico. A funnel account is an individual or business account in one geographic area that receives multiple cash deposits, often in amounts below the cash reporting threshold, and from which the funds are withdrawn in a different geographic area with little time elapsing between the deposits and withdrawals.
FTC mails $3M to victims of mortgage relief scam
The FTC has announced the mailing of checks totaling nearly $3 million to over 6,300 consumers who were victims of a mortgage relief scheme. The defendants allegedly made false promises that they could help consumers save their homes from foreclosure or lower their mortgage payments.
Insured institutions earnings decrease
The FDIC has announced that insured commercial banks and savings institutions reported aggregate net income of $37.2 billion in the first quarter of 2014, down $3.1 billion (7.6 percent) from earnings of $40.3 billion a year earlier. Despite the decline in earnings, more than half of the 6,730 insured institutions reporting had year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable during the first quarter fell to 7.3 percent from 8.5 percent a year earlier.
Quarterly Banking Profile released
The FDIC has released the Quarterly Banking Profile for the First Quarter 2014, which includes a new section on the performance of community banks. The Profile reports:
Net income of $37.2 billion is $3.1 billion below year-ago level
Reduced mortgage activity contributed to decline in revenue
54 percent of banks report year-over-year improvement in earnings
Balances at Federal Reserve Banks account for almost half of asset growth
It's official—Fed Regs P and DD will go
The Federal Reserve Board has published its previously announced final rules repealing its Regulation P (GLBA privacy provisions) [79 FR 30708] and Regulation DD (Truth in Savings) [79 FR 30711] and amending its Regulation V (Identity Theft Red Flags) [79 FR 30709]. Each of the final rules will be effective June 30, 2014.
Mutilated currency rules amended
The Bureau of Engraving and Printing has published [79 FR 30724] an Interim Final Rule amending its regulations on exchange of mutilated paper currency in order to update mutilated currency procedures and eliminate references to obsolete practices and terms. The amendments will also serve to deter fraud and abuse in the mutilated currency redemption process. The rule is effective immediately, with comments accepted through July 28, 2014.
May 28, 2014
Iraq-related Executive Order revised
The President has executed an Executive Order terminating the prohibitions contained in Executive Order 13303 of May 22, 2003, as amended, on any attachment, judgment, decree, lien, execution, garnishment, or other judicial process with respect to the Development Fund for Iraq and Iraqi petroleum, petroleum products, and interests therein, and the accounts, assets, investments, and other property of the Central Bank of Iraq.
Discount rate meeting minutes
The Federal Reserve Board has released the minutes of its April 14 and 28, 2014, discount rate meetings.
House price index continues upward
The Federal Housing Finance Agency (FHFA) has announced that the U.S. house prices rose 1.3 percent in the first quarter 2014, the 11th consecutive quarter price increase in the purchase-only, seasonally adjusted index.
Ways to save featured in newsletter
The Spring 2014 issue of FDIC Consumer News has been released, featuring questions to ask plus money-saving tips and strategies to consider when banking and borrowing. The edition also includes a variety of simple suggestions for safe shopping, buying and ways to pay.
OFAC Iran TRA Designation
Treasury has announced sanctions against Morteza Tamaddon, an Iranian government official, for being involved in censorship and other activities that limit the freedom of expression and freedom of assembly of Iran's citizens. His name has been added to the SDN List with the TRA designation. Information regarding the designation has been posted in a BOL OFAC Update.
April housing sales
HUD and the Census Bureau have released the April 2014 residential housing sales report. The seasonally adjusted annual rate was above that of March but below that of April 2013.
CFPB Spring 2014 rulemaking agenda
The Consumer Financial Protection Bureau has posted the semi-annual update of its rulemaking agenda. The announcement includes a link to several agenda items in the pre-rule, proposed rule and final rule stages of completion.
Fed check adjustments changes
Federal Reserve Bank Services has announced the elimination of the minimum threshold for check adjustments on "not our item" (NOI) and "entry in error" (ERR) investigation types. The change will be effective June 23, 2014. Beginning on that date, no NOI or ERR entry will be too small.
Ohio bank closed
The FDIC has announced the closing of Columbia Savings Bank, Cincinnati, Ohio. All of the failed bank's deposits were assumed by United Fidelity Bank, fsb, Evansville, Indiana. This is the eighth FDIC-insured institution to fail this year, and the first in Ohio.
Virginia credit union closed
The NCUA has announced the closing of Life Line Credit Union, Inc., Richmond, Virginia, and the assumption of all member shares by Virginia Credit Union, Inc., North Chesterfield, Virginia. This is the fifth federally insured credit union liquidation in 2014.
NCUA merger guide
A new brochure for credit unions considering a merger, "Truth in Mergers: A Guide for Merging Credit Unions," has been released by the NCUA. The new brochure provides a framework for credit union managers and directors to begin discussions about the future direction of a credit union.
May 23, 2014
CFPB touts $70M remediation to consumers
The CFPB has announced the release of its Spring 2014 Supervisory Highlights, focusing on the illegal actions uncovered by its supervision of the payday, debt collection, and consumer reporting markets. More than $70 million in remediation to approximately 775,000 consumers resulted from the first time federal supervision of the activities of nonbank financial institutions.
Board pulls its Regs P and DD
The Federal Reserve Board has announced rules finalizing the repeal of its Regulation DD (Truth in Savings, 12 CFR Part 230)) and Regulation P (Privacy of Consumer Financial Information, 12 CFR Part 216) and the issuance of final amendments to the Identity Theft Red Flags rule in Regulation V (Fair Credit Reporting, 12 CFR Part 222). The repeal of Regs DD and P resulted from the Dodd-Frank Act transfer of rulemaking authority for several consumer protection laws from the FRB to the CFPB.
Reserve Banks to host town hall meetings
The Federal Reserve System has announced six “Payment System Improvement Town Halls” will be hosted during June 2014 at Reserve Banks in New York, Chicago, Atlanta, San Francisco, Dallas, and St. Louis.
Advance registration is required.
CUs to pay for late reports
The NCUA has announced the beginning of the process to assess civil money penalties (CMPs) for the late filing of 2014 first-quarter Call Reports.
FRB TDF offering
The Federal Reserve has announced it will conduct a fixed-rate offering of term deposits through its Term Deposit Facility (TDF) on May 27, 2014. Seven-day term deposits with an interest rate of 0.26000 percent and a maximum tender amount of $5,000,000,000 will be offered.
May 22, 2014
OCC licensing rules proposal OCC Bulletin 2014-22 has announced a Notice of Proposed Rulemaking (NPRM) that would integrate OCC rules for national banks and federal savings associations relating to policies and procedures for corporate activities and transactions (licensing rules). The integration is intended to create filing parity for national banks and federal savings associations for all activities and transactions addressed in the OCC's licensing rules. Comments on the proposal will be due within 60 days after the proposal is published in the Federal Register.
G.20 Finance Companies report
The Federal Reserve Board has released the March 2014 G.20 Owned and Managed Receivables Outstanding and Auto Loans: Terms of Credit report.
FOMC Statement and Minutes
The statement and minutes of the April 29–30, 2014, meeting of the Federal Open Market Committee (FOMC) have been released by the Federal Reserve.
FRB 100th Annual Report to Congress
The Board of Governors of the Federal Reserve System has issued its 100th Annual Report to Congress. The central bank was created by legislation enacted on December 23, 1913.
OFAC announces change to SDN and FSE downloads
Treasury's Office of Foreign Asset Control (OFAC) has announced the availability of a secure download capability for Specially Designation Nationals (SDN) and Foreign Sanction Evaders (FSE) lists via Secure Socket Layer (SSL) transmission. Users need only change the URL header to "https."
May 21, 2014
Magnitsky Act OFAC designations
OFAC has posted a notice listing twelve individuals who have been designated under the Magnitsky Sanctions Program, which represents the implementation of multiple legal authorities, including the Sergei Magnitsky Rule of Law Accountability Act of 2012 (Public Law 112-208) and the International Emergency Economic Powers Act (IEEPA) (50 U.S.C. §§ 1701-1706). Information regarding the designations has been posted to a BOL OFAC Update page.
New Mexico bank hit with flood CMP
The Federal Reserve Board has issued a New Mexico bank an Order of Assessment of a Civil Money Penalty for violations of the National Flood Act in the amount of $5,410. Details of the Order are available on BOL's Flood Penalties Watch page.
Treasury prices public offering of bank stock
Treasury has announced the pricing of a secondary public offering of the remaining 1,085,554 shares of common stock of CommunityOne Bancorp it holds, at $9.35 per share. The closing is expected to occur on or about May 23, 2014, subject to customary closing conditions.
FinCEN Advisory on SKN passport abuse
FinCEN Advisory FIN-2014-A004 has been issued
to alert financial institutions that certain foreign individuals are abusing the Citizenship-by-Investment program sponsored by the Federation of St. Kitts and Nevis (SKN) to obtain SKN passports for the purpose of engaging in illicit financial activity. The program offers citizenship to a non-citizen who either invests in designated real estate with a value of at least $400,000 US, or contributes $250,000 US to the St. Kitts and Nevis Sugar Industry Diversification Foundation.
CFPB Board meetings now open to public
The Bureau has announced that, beginning with the June 18, 2014, meeting of the Consumer Advisory Board in Reno, Nevada, the public may attend or view via livestream meetings of the Bureau's Consumer Advisory Board and Council meetings. A schedule of upcoming meetings was also posted.
Importance of summer jobs for students
The Bureau Blog also features an article on the impact a summer job can have on students between the ages of 16 and 24 who may be entering the workforce for the first time, particularly as an opportunity for students to acquire good money management skills.
CFPB releases consumer medical debt study results
The Consumer Financial Protection Bureau has announced the release of a research report that found consumers' credit scores may be overly penalized for medical debt that goes into collections and shows up on their credit report. The study, "CFPB Data Point: Medical Debt and Credit Scores," indicates credit scoring models may underestimate the creditworthiness of consumers who owe medical debt in collections. The scoring models also may not be crediting consumers who repay medical debt once in collection status.
May 20, 2014
Credit Suisse pleads guilty to criminal charges Violations trigger $2.6 billion in penalties
In actions coordinated with the Federal Reserve Board and the New York State Department of Financial Services, Attorney General Holder yesterday announced the filing of a criminal complaint against Credit Suisse AG on charges of conspiracy to help U.S. taxpayers evade taxes. Holder announced that the Swiss banking giant has agreed to pay a fine of over $1.13 billion and nearly $670 million in restitution to the IRS. The Federal Reserve Board announced its imposition of a consent order for a $100 million civil money penalty and order to cease and desist requiring the bank to address deficiencies in its oversight, management, and controls governing compliance with U.S. laws. Under the order, Credit Suisse agreed to terminate its relationship with, and not re-employ or otherwise engage, nine individuals who were involved in the actions that resulted in the violation of U.S. laws.
The New York Department of Financial Services announced its imposition of a $715 million penalty against the bank, and the installation of an independent monitor of the agency's choosing within the bank to further the department's investigation of the bank's activities. According to the Federal Reserve's press release, the combined monetary penalties against the bank total over $2.6 billion. Indictments against several individual bank official have been issued, and the agencies' investigations continue.
Payday loan collector settles
The Federal Trade Commission has announced a settlement with the owner of a Houston-based debt collection operation that the FTC charged used insults, lies, and false threats of imprisonment to collect on payday loans. The owner will surrender his assets, estimated to be worth $550,000, to pay restitution to consumers who were charged unauthorized fees. In addition, he is permanently bared from debt collection.
Cordray on consumer spending
In remarks at the 2014 Boulder Summer Conference on Consumer Financial Decision Making, Directory Cordray discussed observations of consumer financial decisions and how they impact the entire economic picture. He focused a portion of his presentation on student loan debt and the actions of the CFPB to address various problems.
2014 Change in Control letters
The Federal Reserve has posted links to all of the bank holding company/saving and loan holding company Change in Control letters issued by the Board so far in 2014.
The May 2014 issue of The NCUA Report has been published. This edition features articles on the stress testing rule for large credit unions, little known facts about risk-based capital, and the proposed common bond rule.
May 19, 2014
The OCC has released recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. The list includes one Cease and Desist Order, three Formal Agreements, and seven terminations of existing enforcement actions.
Residential construction report
HUD has released the April 2014 new residential construction statistics. Building permits and housing starts were above the March 2014 revised estimates, while housing completions were below.
Curry on cyberattack risks
In remarks before The New England Council, Comptroller Curry discussed what regulators are doing to meet the challenge of cyberattacks. He emphasized the need for banks to implement robust programs to mitigate cybersecurity risks, particularly those posed by over-reliance on third-party service providers.
Illinois bank closed
The FDIC has announced the closing of AztecAmerica Bank, Berwyn, Illinois, and the assumption of all of that bank's deposits by Republic Bank of Chicago, Oak Brook, Illinois. This was the seventh FDIC-insured institution to fail in 2014, and the second in Illinois.
Michigan CU under conservatorship
The NCUA has announced Health One Credit Union, Detroit, Michigan, has been placed into conservatorship by the Michigan Department of Insurance and Financial Services. The NCUA was named as agent to handle the credit union's day-to-day operations. An FAQ was also released regarding the conservatorship.
Marketer of stolen IDs gets 20 years
The Department of Justice has announced that David Ray Camez, a 22-year old Phoenix man, has been sentenced to 20 years and ordered to pay $20 million in restitution on RICO charges related to his participation in a network dealing in compromised credit card numbers and stolen identities.
May 16, 2014
OCC consolidates rules
The Office of the Comptroller of the Currency has published in today's Federal Register a final rule [79 FR 28393] combining certain rules originally issued jointly with the other Federal banking agencies by the OCC with respect to national banks and by the former Office of Thrift Supervision (OTS) with respect to savings associations. Specifically, the OCC is combining rules relating to—
consumer protection in insurance sales
Bank Secrecy Act (BSA) compliance
disclosure and reporting of Community Reinvestment Act (CRA)-related agreements
the Fair Credit Reporting Act (FCRA)
This rulemaking also makes technical amendments to the OCC's FCRA rule to conform to provisions of the Dodd-Frank Act. The rule will become effective on June 16, 2014.
More Kingpin Act designations
The U.S. Department of the Treasury has announced the designation of Mexican national Heriberto Zazueta Godoy (a.k.a. Capi Beto) for his material support to the narcotics trafficking activities of the Sinaloa Cartel and one of its leaders, Ismael Zambada Garcia (a.k.a. El Mayo), pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Two other individuals and three entities linked to Zazueta Godoy were also designated. Information regarding the individuals and entities can be found in BOL's May 15, 2014, OFAC Update.
The March 2014 Treasury International Capital (TIC) data have been released (scroll down on that page for detail). The sum total in March of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $126.1 billion. Of this, net foreign private outflows were $115.5 billion, and net foreign official outflows were $10.6 billion.
Term deposits offering scheduled
The Federal Reserve has announced a fixed-rate offering of term deposits through its Term Deposit Facility. On May 19, 2014, seven-day term deposits with an interest rate of 0.26000 percent and a maximum tender amount of $3,000,000,000 will be available.
Change in Control letters
The Fed has posted links to all of the bank holding company/saving and loan holding company change in control letters issued by the Board in 2013.
The May 15, 2014 issue of FedFlash has been posted. Articles regarding the following topics are featured: change in support for Microsoft Windows and Internet Explorer; new FedReceipts RTNs to be published; new originators with FedACH Risk Origination Monitoring Service; a recent change in the production of Federal Reserve notes; and changes to the customer testing schedule for Fedwire Services.
Six guilty in condo mortgage scam
The Department of Justice has announced that six Miami-area residents, including three former loan officers, pleaded guilty in the Southern District of Florida this week to participating in a fraudulent scheme designed to enrich real estate developers by selling condominium units to straw buyers. Sentencing for the sextet is scheduled for dates in July, August and September. Seven additional defendants in the case pleaded not guilty on March 31, and are scheduled to be tried beginning September 8, 2014.
May 15, 2014
Small issuer list for debit card interchange fees exemption
The Federal Reserve Board has published lists of institutions that are exempt and not exempt from the Regulation II interchange fee standards. The statute exempts any debit card issuer that, together with its affiliates, has assets of less than $10 billion. The lists have been generated from the set of institutions in existence on December 31, 2013, according to the available data.
Bureau extends Remittance Transfers comment period
In our April 16, 2014, Top Stories, we reported on the CFPB's proposal to relax somewhat the Remittance Transfers rule in subpart B of Regulation E. When that proposal was published, the deadline for comments was set at May 27. The Bureau has now extended the comment deadline by ten days to June 6, 2014.
Treasury has announced the imposition of sanctions on two al-Qa'ida supporters in Syria who have been named as Specially Designated Global Terrorists (SDGTs) pursuant to an Executive Order, for acting for or on behalf of al-Qa'ida and the Islamic State of Iraq and the Levant (ISIL). In addition, OFAC has designated numerous individuals and entities connected to Jorge Fadlallah Cheaitelly, the leader of a Panama-based drug trafficking and money laundering organization, as specially designated narcotics traffickers pursuant to the Kingpin Act. Information regarding the designations and other changes have been posted in a BOL OFAC Update.
Curry on dual banking system
In a presentation before the Conference of State Bank Supervisors, Comptroller Curry discussed the dual banking system. He commented on how difficult it is to be a bank supervisor; the strong, credible supervision of individual state and federal banks; the policy mandates of federal and state regulators and the threat that traditional banking activities will migrate to nonbank entities to escape prudential supervision.
May 14, 2014
Sallie Mae settles UDAP/SCRA allegations
The FDIC has announced a settlement with Sallie Mae Bank (Salt Lake City) and Navient Solutions, Inc. (formerly Sallie Mae, Inc.) (together, "Sallie Mae") for alleged unfair and deceptive practices related to student loans in violation of section 5 of the FTC Act and violations of the Servicemembers Civil Relief Act (SCRA). Sallie Mae agreed to orders for restitution of approximately $30 million to borrowers and for civil money penalties totaling $6.6 million, for allegedly
providing inadequate disclosures of its payment allocation practices and allocating payments across multiple loans such that it maximized any late fees
misrepresenting on its statements how borrowers could avoid late fees
unfairly conditioning receipt of SCRA benefits upon requirements not found in the Act
improperly advising servicemembers that they must be deployed to receive benefits under the SCRA
failing to provide complete SCRA relief to servicemembers after having been put on notice of these borrowers' active duty status
Sallie Mae also agreed to settle a suit brought by the Justice Department for allegedly violating the rights of servicemembers eligible for benefits and protections under the SCRA. Under that proposed settlement, Sallie Mae agreed to pay $60 million to provide remediation to an estimated 60,000 servicemembers.
VA ATR/QM requirements
The Department of Veterans Affairs has published an interim final rule [79 FR 26620] to amend its Loan Guaranty regulations at 38 CFR Part 36 to implement provisions of the Dodd-Frank Act requiring that VA define the types of VA loans that are "qualified mortgages" (QMs) for the purposes of the new Ability to Repay provisions of the Truth in Lending Act. This rule establishes which VA-guaranteed loans are to be considered QMs and have either safe harbor protection or the presumption that the borrower is able to repay a loan. Almost all VA loans meeting current VA underwriting standards will have safe harbor protection; some of the VA's Interest Rate Reduction Refinance Loan program loans will be "rebuttable presumption" QMs. The rule was effective May 9, 2014. Comments on the interim final rule are due by June 9, 2014.
Bank pays Flood Act CMP
The Federal Reserve Board has announced its order for a Civil Money Penalty (CMP) in the amount of $10,545 against the Bank of Gueydan, Gueydan, Louisiana for violation of provisions of Regulation H implementing the National Flood Insurance Act (Flood Act). A link to the details of the violations and the CMP has been posted on the BOL Flood Penalties Watch page.
Federal Advisory Council meeting minutes
The minutes of the May 9, 2014, meeting of the Federal Advisory Council (FAC) have been posted.
Executive Order adds five to OFAC list
An Executive Order has been signed by the President blocking property of five individuals who are contributing to the conflict in the Central African Republic. Their names have been added to the OFAC SDN List. Information regarding the additions has been posted on the BOL OFAC Page.
NMLS mortgage industry report
The NMLS has released its 2013 Mortgage Industry Report, which contains analysis of companies, branches, and mortgage loan originators (MLOs) who were licensed or registered through NMLS in order to conduct mortgage activities in 2013.
OCC Central District banks 2013 report
The OCC has released Fact Sheets on the financial condition of community national banks and federal savings associations (collectively, banks) in its nine-state Central District. The banks focused on strengthening risk management systems to help boost their performance. More than 85 percent of 491 banks located in the district are top-rated, 1 or 2 on the five-point CAMELS scale, a level not seen since early 2009.
May 13, 2014
Privacy notice proposal published
The CFPB has published in today's Federal Register its proposal [79 FR 27214] to amend Regulation P (12 CFR Part 1016) to provide an alternative method under limited circumstances for fulfilling the annual notice requirement of the regulation. Comments on the proposal will close in 30 days, on June 12, 2014.
Bank directors workshop
The OCC will host a three-day workshop, "Mastering the Basics: A Director's Challenge," for new and experienced bank directors on June 23–25, 2014, in St. Louis. The workshop is designed exclusively for directors of institutions supervised by the OCC and provides practical information on the roles and responsibilities of a community bank director. The fee is $99 and attendance is limited to the first 35 registrants. Additional information and online registration are available on the OCC's Workshops page.
FDIC to offer Community Affairs webinar FDIC FIL-27-2014 announces a webinar, "Innovation at Work: Financial Empowerment Programs," to be held on May 30, 2014, from 12:00 p.m. to 1:00 p.m. ET. The presentation is part of an ongoing series of webinars highlighting strategies institutions can use to promote community development and expand access to the banking system. Registration is required and must be completed by May 28.
CFPB provides Reg Z in eRegulation format
The CFPB has posted a Bureau Blog article announcing it has made Regulation Z available as the second addition to its eRegulations platform (Regulation E was the first rule included when the platform was introduced last year).
May 12, 2014
More early Savings Bond redemptions OK'd
Federal Reserve Financial Services has announced that more counties in Alabama, Arkansas, Florida, and Mississippi affected by recent severe weather have been added to the list of those eligible for early redemption of EE and I savings bonds.
Cordray reflects on post-crisis changes
In prepared remarks at the Federal Reserve Bank of Chicago, CFPB Director Cordray reflected on some of the changes that followed "the most damaging and frightening financial crisis of our lifetimes." He indicated the changes include the elimination of the former sharp divide between chartered banks and other nonbank firms when it comes to federal oversight for compliance with consumer financial law and the connection of safety and soundness of an institution with the protection of its customers. He concluded by saying that "good regulation is not about impeding market forces; it is about channeling those forces to make the marketplace work better. Good regulation supports strong markets that are more likely to deliver value to consumers over time."
GAO reviews of Flood Program
The Government Accountability Office has released an overview of its work on the National Flood Insurance Program over the past eleven years. The GAO reports that FEMA still needs to address provisions in both the Biggert-Waters Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014 that affect many aspects of NFIP, including its finances, rate setting, and participation.
EESA report to Congress
The Federal Reserve Board has submitted to Congress a report required by Section 129 of the Emergency Economic Stabilization Act (EESA) with an update on the EESA lending facilities that have been established by the Board that remain outstanding.
TDF offerings scheduled
The Federal Reserve has announced a series of eight consecutive operations offering seven-day term deposits through its Term Deposit Facility (TDF). Individual operations will be held on the first business day of each week beginning the week of May 19, 2014. Additional information is provided on the FRB TDF page.
May 9, 2014
Mortgage lead generator pays $225,000 CMP
The Federal Trade Commission has announced that GoloansOnline.com, a Houston-based online operation in the business of finding potential borrowers for mortgage companies, will pay a $225,000 civil money penalty (CMP) to settle charges that it deceived consumers about the terms of the mortgages. The FTC alleged the company advertised low interest-rate loans as fixed-rate mortgages, when in fact they were adjustable-rate mortgages that could become more expensive for borrowers over time. It also allegedly failed to include important disclosures, such as the annual percentage rate, amount of downpayment, and repayment terms that figure into the advertised payment amounts and interest rate.
The Treasury Department has announced actions to increase pressure on the Syrian regime and its supporters. Treasury designated Moscow-based Tempbank and Mikhail Gagloev, a senior executive of the bank, pursuant to Executive Order (E.O.) 13582, for providing material support and services to the Government of Syria, including the Central Bank of Syria and SYTROL, Syria's state oil-marketing firm. In addition, six senior officials of the Syrian Government were designated pursuant to E.O. 13573, including Brigadier General Bassam Al-Hassan, an advisor to President Bashar Al-Assad. The Banias Refinery Company and the Homs Refinery Company were also designated pursuant to E.O. 13582. More information concerning the designations has been posted in a BOL OFAC Update.
AIG OFAC settlement
OFAC has announced that American International Group, Inc. (AIG), an international insurance and financial services organization headquartered in New York City, has agreed to pay $279,038 to settle potential civil liability for 3,560 apparent violations of the Cuban Assets Control Regulations.
FRB proposes new Reg XX
A Federal Reserve Board press release has announced approval of a Notice of Proposed Rulemaking (NPR) inviting comments on a proposed rule (Regulation XX) that would implement section 622 of the Dodd-Frank Act. A financial sector concentration limit would be established that generally prohibits a financial company from merging or consolidating with, or acquiring, another company if the resulting company's liabilities upon consummation would exceed 10 percent of the aggregate liabilities of all financial companies as calculated under that section. In addition, the proposal would establish reporting requirements for certain financial companies. Comments must be received by July 8, 2014. [Editor's note:Federal Registerpublication date May 15, 2014.]
May 2014 FedFocus
Federal Reserve Bank Services has published the May 2014 issue of FedFocus. This edition includes articles on a focus on international payments customers, 100 years of Federal Reserve cash processing, and growing your FEDucation.
Curry on efforts to enhance risk assessment
In remarks at the Risk Management Association's Governance, Compliance, and Operational Risk Conference, Comptroller Curry discussed the efforts of the OCC to enhance risk management in supervised banks.
New community development resource guide FDIC FIL-26-2014 announces the availability of a new resource guide, Strategies for Community Banks to Develop Partnerships with Community Development Financial Institutions. The guide informs FDIC-supervised institutions of strategies to meet community credit and development needs and receive consideration under the Community Reinvestment Act (CRA) through collaboration with community development financial institutions (CDFIs). It also contains information to help community banks identify and evaluate opportunities to collaborate with CDFIs in providing financial products and services to underserved markets. The guide describes the key characteristics of CDFIs and the types of investments that can support them. It also discusses steps to consider when assessing bank/CDFI partnerships and how these activities may enhance CRA performance.
May 8, 2014
Kingpin Act designations
OFAC has designated the members and entities of a synthetic drug trafficking organization as drug kingpins pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for their significant role in international narcotics trafficking. OFAC described the action as the "first-ever use of Treasury's financial sanctions tool against" such an organization. The action complemented U.S. law enforcement actions taken by the Drug Enforcement Administration (DEA) and other law enforcement officials under Project Synergy, the largest coordinated law enforcement strike against synthetic designer drugs. As a result of the action, all property and interests in property in the United States or in the possession or control of U.S. persons in which Daniel and Kevin Louie or the other persons or companies designated have an interest are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Information regarding this action has been posted in a BOL OFAC Update.
Four Oaks settlement approved
The Department of Justice (DOJ) has announced the approval of
a settlement with Four Oaks Fincorp, Inc. and Four Oaks Bank & Trust Company, Four Oaks, North Carolina, in connection with a complaint filed by DOJ alleging the bank knew or was deliberately ignorant of the use of its accounts and its access to the national banking system in furtherance of a scheme to defraud customers. According to the complaint, Four Oaks unlawfully allowed third party merchants to work through the bank to defraud consumers. Four Oaks' clients included a Texas-based third-party payment processor, a company that acts as an intermediary between a bank and a merchant in a financial transaction, and often provides access to the national payment system to a wide variety of merchants. It was also alleged that the bank allowed the third-party payment processor to originate $2.4 billion of debit transactions against consumers' bank accounts in exchange for more than $850,000 in fees that were paid to the bank. The consent order approved by the court requires Four Oaks Bank to pay $1 million to the U.S. Treasury as a civil monetary penalty and to forfeit $200,000 to the U.S. Postal Inspection Service's Consumer Fraud Fund. Four Oaks had agreed to settle the complaint shortly after it was filed in January.
FHA ARM rules change proposed
The Housing and Urban Development Department (HUD) has published in today's Federal Register a proposed rule that would make two revisions to FHA regulation governing its single-family ARM program, to align FHA interest rate adjustment and notification regulations with the ARM payment adjustment notice requirements in revised section 1026.20(c) and (d) of Regulation Z. Comments on the proposal are due by June 9, 2014.
CFPB on mortgage debt challenges for seniors
The Bureau has announced the publication of a report spotlighting the mortgage debt challenges faced by a growing number of older Americans. The challenges include more mortgage debt, less affordable housing, and greater risk of foreclosure. A Consumer Advisory was also published on the CFPB's Blog to remind older consumers approaching retirement to think about their mortgage pay-off date and to consider their retirement income and expenses.
Yellen on the economy
In testimony before the Joint Economic Committee of Congress, Chair Yellen discussed the current economic situation and outlook along with monetary policy and issues regarding financial stability. She stated, "Looking ahead, I expect that economic activity will expand at a somewhat faster pace this year than it did last year, that the unemployment rate will continue to decline gradually, and that inflation will begin to move up toward 2 percent. A faster rate of economic growth this year should be supported by reduced restraint from changes in fiscal policy, gains in household net worth from increases in home prices and equity values, a firming in foreign economic growth, and further improvements in household and business confidence as the economy continues to strengthen." She noted regarding monetary policy, "In light of the considerable degree of slack that remains in labor markets and the continuation of inflation below the Committee's 2 percent objective, a high degree of monetary accommodation remains warranted." Regarding financial security she remarked, "Looking forward, the Federal Reserve is considering whether additional measures are needed to further reduce the risks associated with large, interconnected financial institutions."
OFAC Ukraine-related sanctions regulations
OFAC has published a final rule with regulations (31 CFR Part 589) to implement Executive Orders 13660, 13661 and 13662 imposing Ukraine-related sanctions.
Regulatory relief for Florida FIL-25-2014 has been issued by the FDIC to announce steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Florida affected by severe weather.
FFIEC Cybersecurity webinar for CEOs
If senior managers in your institution missed yesterday's FFIEC cybersecurity webinar, a press release has announced the availability of the slides used in the presentation, which was viewed by approximately 5,000 chief executive officers and senior managers from community financial institutions. The FFIEC offered the webinar to raise awareness about the pervasiveness of cyber threats, discuss the role of executive leadership in managing these risks, and to share actions being taken by the FFIEC.
FSOC Annual Report
The Financial Stability Oversight Council (FSOC) has released its Fourth Annual Report, which describes significant financial market and regulatory developments, potential emerging threats to the financial stability of the United States, and the activities of the Council. Recommendations to promote market discipline, maintain investor confidence, and enhance the integrity, efficiency, competitiveness, and stability of U.S. financial markets are also included in the report.
May 7, 2014
South Sudan-related OFAC Designations
Treasury has announced it has sanctioned two individuals for being responsible for, or complicit in, or having engaged in actions or policies that threaten the peace, security, or stability of South Sudan. The names of the individuals have added to the OFAC SDN List with the SOUTH SUDAN designation. Information regarding the designations has been posted in a BOL OFAC Update.
OFAC enforcement actions
OFAC has announced the following settlements for alleged violations of sanctions programs:
A settlement with an individual who paid $29,340 for alleged violations of Iranian Transactions and Sanctions Regulations ("ITSR"). OFAC alleged that from on or about May 21, 2007, to on or about November 12, 2009, the individual exported, sold, and/or supplied unlicensed medical goods and/or related financial services from the United States to Iran, in violation of the ITSR. The alleged violations involved 19 separate transactions, valued at $49,341, in which the individual acted as a third-party recipient for goods destined for Iran and/or provided banking services to a person in Iran.
A settlement with Decolar.com, Inc., a non-financial corporation, which paid $2,809,800 for apparent violations of the Cuban Assets Control Regulations. OFAC alleged the corporation appears to have dealt in property in which Cuba or Cuban nationals had an interest when its foreign subsidiaries assisted 17,836 persons with flight reservations for travel between Cuba and countries other than the United States and/or hotel reservations for stays in Cuba.
Early savings bond redemptions authorized
Federal Reserve Financial Services has authorized savings bond agents serving Alabama, Arkansas, and Mississippi counties recently affected by severe weather to redeem EE and I savings bonds less than one year old presented during the months of May 2014 and June 2014. A list of the counties in each state was included in the authorization notice.
Alabama weather relief FDIC FIL-24-2014 has announced a series of steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Alabama affected by severe weather.
Bureau proposes relaxation of privacy notice rule
May 6, 2014
Cybersecurity training reminder
Financial institutions' senior management are reminded of tomorrow's FFIEC-hosted free webinar, Executive Leadership of Cybersecurity: What Today's CEO Needs to Know About the Threats They Don't See, described in FDIC FIL 21-2014. Registration remains open until midnight Central Time tonight.
Regulation Z proposal published
The Consumer Financial Protection Bureau has published in today's Federal Register its previously-announced proposed rule and request for public comment that would amend the 2013 mortgage rules under the Truth in Lending Act as implemented in Regulation Z. The proposal includes two changes that would help certain nonprofit organizations continue to provide mortgage credit and servicing to underserved populations. It also lays out limited circumstances where lenders that exceed the points and fees cap for Qualified Mortgages (QMs) can refund the excess amount to consumers and still have the loans be considered QMs. Comments on proposed amendments to benefit nonprofit lenders and provide a points and fees "cure" are due by June 5, 2014. Comments relating to a possible "cure" for debt-to-income errors and other matters are due by July 7, 2014. For more information, see our May 1, 2014, Top Stories.
FDIC Cyber Challenge videos
The FDIC has posted a series of four "Cyber Challenge" vignettes to its YouTube channel. Each of the short videos is designed to call attention to a potential cyber challenge facing financial institutions:
Vignette 1: Item Processing Failure
Vignette 2: Customer Account Takeover
Vignette 3: Bank Internal Error/Phishing and Malware Problem
Vignette 4: Technology Service Provider Problem
TDF report deadline approaching
FRB Financial Services has issued a reminder that the Term Deposit Facility (TDF) User Access Report is required by May 30, 2014. If your institution currently has individuals who have access to the Federal Reserve Bank systems via the Reserves Central—TDF application, each of them must have his or her access and authorization reviewed annually. Failure to respond will result in the revocation of access to the TDF application for all users at your institution.
April bank lending practices SLOOS release
The Federal Reserve Board has released the April 2014 Senior Loan Officer Opinion Survey (SLOOS) on Bank Lending Practices. The survey reports on changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months.
Federal Reserve changes Windows and Explorer support
A notice from Federal Reserve Financial Services announces that support for Windows Vista® and Internet Explorer 7 will be discontinued effective May 31, 2014. Support for other versions will be available.
CRA ratings released
The list of banks recently examined for CRA compliance and the ratings they received has been released by the FDIC. Four of the listed banks received an outstanding rating.
NCUA OFAC and FinCEN Compliance Webinar
The NCUA has announced it will offer two webinars that will provide an overview of OFAC's and FinCEN's programs, their enforcement authorities and their relationships with other financial services regulators. The first webinar, "How to Be in Compliance with OFAC and FinCEN," will be offered on May 21 at 2 p.m. ET. The second will take place on June 25 and will cover reporting requirements, emerging money laundering threats, and creating an effective anti-money laundering compliance program.
Syrian sanctions amended and reissued
Treasury's Office of Foreign Assets Control (OFAC) has published a Final Rule in the Federal Register amending and reissuing in their entirety the Syrian Sanctions Regulations (31 CFR Part 542). The Final Rule implements a series of executive orders issued to take additional steps with respect to the national emergency with respect to Syria. These new regulations implement the blocking prohibitions in these executive orders, and add numerous sections to the regulations, including prohibitions, definitions, interpretations, and licensing provisions.
FEMA to suspend communities
The Federal Emergency Management Agency (FEMA) has published a final rule identifying communities in California, Indiana, Iowa, Maryland, Massachusetts, Mississippi, Pennsylvania and Texas that are scheduled for suspension from the National Flood Insurance Program (NFIP) on June 9, 2014, because of noncompliance with the floodplain management requirements of the program. If FEMA receives documentation that a listed community has adopted the required floodplain management measures prior to June 9, the suspension will not occur and a notice of this fact will be provided by publication in the Federal Register on a subsequent date.
May 2, 2014
CFPB releases tools to help kids with credit report problems
The Consumer Financial Protection Bureau has announced the availability of three action letters for child welfare caseworkers to send to credit bureaus if errors are found on the credit reports of their client foster children. The Bureau also posted an article further explaining the problem of thefts of children's identities and the steps to take to correct errors that can result in credit reporting agency records.
FDIC Mississippi storm relief FDIC FIL-23-2014 has been issued to announce steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Mississippi affected by severe storms, tornadoes, and flooding.
NCUA urgent needs grants
The NCUA has issued a reminder to low-income credit unions in areas of the South and Midwest hit by the recent tornadoes that the Urgent Needs Initiative provides grants to help restore operations and repair facilities. Credit unions with a low-income designation can apply for emergency assistance grants of up to $7,500 to cover expenses related to natural disasters or other unexpected adverse events.
OCC Regulatory Capital final rule and proposals
The OCC has issued three Bulletins announcing an interagency Final Rule and two notices of proposed interagency rulemaking concerning regulatory capital:
Bulletin 2014-14-18— on the Enhanced Supplementary Leverage Ratio final rule, to strengthen the supplementary leverage ratio standards for the largest, most systemically significant U.S. banking organizations
Bulletin 2014-14-19— on a proposal to revise the calculation of total leverage exposure in a manner generally consistent with revisions to the international leverage ratio framework published by the Basel Committee on Banking Supervision in January 2014
Bulletin 2014-14-20— on a proposal to revise the advanced approaches risk-based capital rules by removing the requirement that only guarantees provided by certain counterparties are eligible for recognition as credit risk mitigants.
2014 hurricane season preparation
The Federal Reserve Bank of Atlanta has issued a letter with information sources for hurricane preparations and contingency instructions concerning any weather-related impacts to payment services (check, cash, and ACH), discount window, bank supervision and other vital information.
California banker charged with conspiracy
The Department of Justice has announced that a former senior vice president at a California branch of an Israeli bank has been charged with conspiracy to defraud the United States, the Justice Department and the IRS. The indictment alleges he conspired to conceal the existence of undeclared accounts owned and controlled by U.S. customers in Israel. The accounts were concealed from the IRS by opening them under pseudonyms, code names and the names of nominee entities set up in the British Virgin Islands and on the island of Nevis.
CRA ratings released
The OCC has released the ratings received by 41 national banks, federal savings associations and insured federal branches of foreign banks that were recently evaluated for compliance with the Community Reivestment Act (CRA). Five were rated outstanding, and 36 satisfactory.
Kingpin Act designations
OFAC has designated Afghan national Atiqullah Ahmady Mohammad Din as a specially designated narcotics trafficker under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for his significant role in international narcotics trafficking. OFAC also designated his brother, Sadiq Ahmady, and four entities in Afghanistan and the United Arab Emirates (UAE) that act for or on behalf of Mohammad Din and provide support to his narcotics trafficking activities. As a result of this action, all property and interests in property in the United States or in the possession or control of U.S. persons in which Mohammad Din, Sadiq Ahmady, or the companies have an interest are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. More information on this OFAC action can be found in a BOL OFAC Update.
Yellen on supervision of community banks
In a speech at the Independent Community Bankers of America 2014 Washington Policy Summit, Chair Yellen shared her views on—
key issues facing community banks and how she sees the community banking model fitting into the financial system in the years ahead
steps the Federal Reserve has taken to address the "too-big-to-fail" problem
how those steps affect community banks
how the Fed strives to improve its understanding of the unique role that community banks play in the economy
how the Federal Reserve is using this knowledge to better tailor its supervisory expectations and approaches to community banks
Daylight OD quarterly data
The Federal Reserve has released the First Quarter 2014 data on peak and average daylight overdrafts (OD) and related fees.
May 1, 2014
Bureau proposes mortgage rule tweaks
The Consumer Financial Protection Bureau has announced proposed adjustments to its mortgage rules to ensure access to credit. The proposal [85 page PDF] includes two changes that would help certain nonprofit organizations continue to provide mortgage credit and servicing to underserved populations. The proposal also lays out limited circumstances where lenders that exceed the points and fees cap can refund the excess amount to consumers and still have the loan be considered a Qualified Mortgage. The proposal would—
Add an alternative definition of a small servicer that would apply to certain 501(c)(3) nonprofit organizations so that they can continue to consolidate their servicing activities while maintaining their exemption from some of the servicing rules
Amend the ability-to-repay exemption in § 1026.43(a)(3)(v)(D) to allow certain 501(c)(3) nonprofit groups to continue to extend interest-free, forgivable loans ("soft seconds") without regard to the 200-loan limit
Add new paragraph 1026.43(e)(3)(iii) to provide a limited 120-day post-consummation opportunity for lenders to refund excess points and fees in order to meet Qualified Mortgage requirements, subject to certain policy and procedures requirements
Comments will be accepted for thirty days following publication in the Federal Register.
Counterfeit checks alerts
The OCC has issued two alerts concerning counterfeit official checks bearing the correct routing number of Old Florida National Bank, Orlando, FL and counterfeit cashier's checks bearing the correct routing number of The First National Bank of Weatherford, Weatherford, TX. Information on the counterfeit checks has been posted on the BOL Alerts & Counterfeits page.
First Horizon to pay $110M
The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, has announced a settlement for $110 million with First Horizon National Corporation, related companies and specifically named individuals. The settlement resolves claims in a Federal court lawsuit alleging First Horizon violated Federal and District of Columbia securities laws in connection with private-label mortgage-backed (PLM) securities purchased by Fannie Mae and Freddie Mac during 2005-2007. Pursuant to the agreement, First Horizon will pay $61.6 million to Fannie Mae and $48.4 million to Freddie Mac.
FDIC weather-related disaster relief guidance
FDIC FIL-22-2014 announces steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Arkansas affected by severe storms, tornadoes, and flooding on April 27, 2014:
A federal disaster for selected areas in Arkansas was declared on April 29, 2014. Additional designations may be made after damage assessments are completed in the affected areas. A current list of designated areas is available at www.fema.gov.
The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather.
Extending repayment terms, restructuring existing loans, or easing terms for new loans, if done in a manner consistent with sound banking practices, can contribute to the health of the local community and serve the long-term interests of the lending institution.
Banks may receive favorable Community Reinvestment Act (CRA) consideration for community development loans, investments, and services in support of disaster recovery.
The FDIC also will consider regulatory relief from certain filing and publishing requirements.
Mercury Network to waive fees
BOL advertiser the Mercury Network has announced it is waiving all transaction fees for Catastrophic Disaster Area Property Inspection Reports in the tornado-impacted areas to help lenders get an assessment of collateral in those areas. With that, closings for unaffected properties can proceed so those local economies move quickly towards recovery. In addition, they have published a relief line for any industry colleagues who may have been directly affected. They can reach out to email@example.com for supplies and financial help, advises Mercury Network EVP Molly Dowdy.
Fannie and Freddie stress test results
The Federal Housing Finance Agency has released Projections of the Enterprises' Financial Performance, a report providing updated information on possible ranges of future financial results of Fannie Mae and Freddie Mac under specified scenarios. The report reflects results of stress tests Fannie Mae and Freddie Mac are required to conduct under the Dodd-Frank Act.
GAO financial literacy report
The Government Accountability Office (GAO), with the assistance of the Financial Literacy and Education Commission (Commission), has released an overview of federal activities, programs, and challenges regarding the financial literacy programs and activities currently conducted by eleven federal agencies and the Bureau of Consumer Financial Protection (CFPB). GAO observed improvements or successes in four areas—coordination, partnerships, delineating CFPB's role, and evaluation tools—but significant work remains to be done in one major area—determining the most effective and efficient allocation of federal resources.
Coordination. Coordination among federal agencies has improved in recent years, largely due to the role of the Commission. Recent efforts include a research clearinghouse and a coordinated initiative on youth education.
Partnerships. The Commission has continued to build and promote partnerships. Several initiatives have partnered with academics, nonprofits, and other entities.
Delineating CFPB's role. To help avoid unnecessary overlap, CFPB has further delineated its role in financial literacy efforts, discussing respective roles with federal agencies that have overlapping responsibilities and signing agreements on cooperation and areas of focus.
Evaluation tools. The Commission and CFPB have helped develop and disseminate evaluation tools to assess outcomes and effectiveness of financial literacy programs. CFPB also contracted with a company to develop metrics and outcome measures and with a nonprofit to evaluate and report on financial education programs and activities.
TBAC minutes and report
Treasury has released the minutes of the April 29, 2014 meeting of the Treasury Borrowing Advisory Committee (TBAC) and the TBAC report to Treasury Secretary Lew.
The Federal Reserve Board has released the Statement of the Federal Open Market Committee concerning purchases of Treasury securities and agency mortgage-backed securities.
IFR payment agreements status report
An OCC News Release has provided a status report on Independent Foreclosure Review (IFR) Payment Agreements that required large mortgage servicers to provide $3.9 billion in payments to 4.4 million eligible borrowers and $6.1 billion in other loss mitigation and foreclosure prevention assistance.
The NCUA issued five orders in April 2014 prohibiting the following individuals from participating in the affairs of any federally insured financial institution:
Jayme Cather, aka Jayme Suiter
Aaron Kyle Harris
Bureau Blog on fair lending compliance
The CFPB Blog features an article reviewing the Bureau's actions to ensure that financial institutions are complying with federal consumer financial laws, including the Equal Credit Opportunity Act (ECOA) and the Home Mortgage Disclosure Act (HMDA).
Cordray on BMO Harris auto lending policy
CFPB Director Cordray issued a statement supporting BMO Harris Bank's plans to pay auto dealers a flat percentage of the loan amount to compensate dealers for originating indirect auto loans.
April 30, 2014
Storm assistance guidance
The OCC has issued a reminder to national banks and federal savings association of the following actions they can take to assist victims of extreme weather:
waiving or reducing ATM fees
temporarily waiving late payment fees or penalties for early withdrawal of savings for affected customers
restructuring borrowers' debt obligations, when appropriate, by altering or adjusting payment terms and providing payment extensions that reflect individual borrower situations and generally not exceeding 90 days
expediting lending decisions, consistent with safety and soundness principles
reassessing the current credit needs of the community and helping meet those needs by originating or participating in sound loans to rebuild damaged property
contacting state and federal agencies, as well as other financial institutions, to help mitigate the effects of the event
In addition, HUD has announced it will speed federal disaster assistance to the State of Arkansas and provide support to homeowners and low-income renters forced from their homes due to severe storms, tornadoes and flooding.
GAO foreclosure review transparency study
The Government Accountability Office (GAO) has issued a review of how regulators are managing the collection of funds and disbursements to borrowers who had foreclosures subject to the settlement payment of $3.9B. One of the recommendations by the GAO is that, to help ensure that foreclosure prevention principles are being incorporated into servicers' practices, the Comptroller of the Currency should direct examination teams to take additional steps to evaluate and test servicers' implementation of the foreclosure prevention principles. Transparency and public information on the process may increase as a result of this review. That may prompt some questions and a need for awareness at banks.
Stolen ID refund fraud scheme
The Department of Justice has announced the sentencing of an Alabama man .for his role in a stolen identity tax refund fraud scheme. The names of inmates were used to file federal and state tax returns that claimed fraudulent refunds.
CPA convicted in bogus tax return scam
A California CPA has been convicted of aiding and assisting the preparation and presentation of false tax returns. The CPA prepared false and fraudulent income tax returns for clients on which he fabricated deductible expenses, including gifts to charity, and other expenses. He also fraudulently included residential energy credits and education credits to which his clients were not entitled.
Banks used to violate sanctions
Li Fangwei, AKA "Karl Lee," has been charged with violating the International Emergency Economic Powers Act (IEEPA) by using U.S.-based financial institutions to engage in millions of dollars of transactions that were prohibited by U.S. economic sanctions. He is currently a fugitive.
FinCEN issues new rulings
FinCEN has announce five new rulings:
FIN-2014-R004 — Application of Money Services Business Regulations to a Company that Offers Escrow Services to a Buyer and Seller in a Given Internet Sale of Goods or Services
FIN-2014-R005 — Whether a Company that Offers Secured Transaction Services to a Buyer and Seller in a Given Sale of Goods or Services is a Money Transmitter
FIN-2014-R006 — Whether a Company that Provides Online Real-Time Deposit, Settlement, and Payment Services for Banks, Businesses and Consumers is a Money Transmitter
FIN-2014-R007 — Application of Money Services Business regulations to the rental of computer systems for mining virtual currency
FIN-2014-R008 — Whether a Company that Provides an Armored Car Coin and Currency Exchange Service is a Money Transmitter and Whether the Armored Car Service Exemption Would Apply to the Service
OFAC Designations and Removals
Treasury has announced the designation of two individuals and nine entities for aiding Iranian ballistic missile procurement and for support to the Government of Iran in evading oil sector sanctions pursuant to Executive Orders (E.O.) 13382 and 13645, respectively. Removals from the SDN List were also announced. Information regarding the changes has been posted in a BOL OFAC Update.
OCC workshop for bank directors
The OCC will host "Mastering the Basics: A Director's Challenge," a three-day workshop designed exclusively for directors of supervised institutions, in Nashville, Tennessee on June 2–4, 2014. The workshop provides practical information on the roles and responsibilities of a community bank director. The workshop fee is $99 and is limited to the first 35 registrants.
April 29, 2014
New Ukraine-related OFAC designations
Treasury has announced the designation of seven Russian government officials, including two key members of the Russian leadership's inner circle, and 17 entities pursuant to Executive Order 13661. The executive order authorizes sanctions on, among others, officials of the Russian Government and any individual or entity that is owned or controlled by, that has acted for or on behalf of, or that has provided material or other support to, a senior Russian government official. A statement on Treasury's action was also issued by Secretary Lew. Information regarding the designated individuals and entities has been posted in a BOL OFAC Update.
Marketable borrowing estimates
Treasury has announced its current estimates of net marketable borrowing for the April–June 2014 and July–September 2014 quarters.
Fake OCC correspondence OCC Alert 2014-22 has been issued with a warning about fictitious correspondence regarding funds purportedly under the control of the OCC, "Federal Reserve Bank," and possibly other government entities. The correspondence in question contains the name of a fictitious OCC employee, Bright L. Wong; includes a non-existent OCC mailing address; and may be distributed via e-mail, fax, or postal mail. Samples [Sample 1; Sample 2] of fake correspondence accompanied the Alert.
B of A required to resubmit capital plan
The Federal Reserve Board has announced it is requiring Bank of America Corporation (B of A) to resubmit its capital plan and to suspend planned increases in capital distributions. The decision relates to the B of A disclosure it incorrectly reported data used in the calculation of regulatory capital ratios and submitted as inputs for the most recent FRB stress tests.
April 28, 2014
FDIC releases enforcement actions
The FDIC has announced its release of administrative enforcement orders for actions taken against banks and individuals in March (and one in February). The list includes four consent orders, six removal and prohibition orders, two civil money penalties and one prompt corrective action directive.
Cabela's bank to pay $1 million for UDAP violations
Included in the FDIC's newly released enforcement orders is a March 10 consent order for a $1 million civil money penalty against World's Foremost Bank, Sidney, Nebraska, for alleged deceptive and unfair acts and practices in violation of section 5 of the Federal Trade Commission Act, in connection with marketing, promotion and administration of consumer credit cards and related add-on products. The cards in question were private-label cards of Cabela's, Inc., a retail seller of sporting goods and the parent company of the bank. The consent order also requires restitution to cardholders injured by the bank's alleged section 5 violations, which appear to involve 12-month interest-free promotional offers; the offering of "LifeLock" services to cardholders; and the administration of a "points" program.
World's Foremost Bank was the target of a March 2011 $250,000 consent CMP order that also related to the bank's credit card operations. In that order, the bank was cited for debt collection abuses and its handling of overlimit and late fees, among other things, and was required to make restitution to harmed consumers.
Flood penalty ordered
Also included in the FDIC's March enforcement actions was one Flood Act civil money penalty in the amount of $15,065, against a Wisconsin bank. That order has been added to BOL's Flood Penalties Watch page.
South Carolina bank closed
The FDIC has announced the closing of Allendale County Bank, Fairfax, South Carolina, and the assumption of all that bank's deposits by Palmetto State Bank, Hampton, South Carolina.
FFIEC webinar: CEO and Cybersecurity
The FDIC has issued FIL-21-2014 announcing a free webinar, "Executive Leadership of Cybersecurity: What Today's CEO Needs to Know About the Threats They Don't See," will be hosted by the FFIEC on May 7, 2014, from 1–2:30 pm ET. Registration is required and ends at midnight CT on May 6, 2014.
OCC proposes fee changes
The Office of the Comptroller of the Currency (OCC) has published a proposal to increase assessments for certain national banks and Federal savings associations (FSAs), and to make certain other related changes. Under the proposal, assessment increases for banks and FSAs with assets of more than $40 billion would range between 0.32 percent and approximately 14 percent, depending on the total assets of the institution as reflected in its June 30, 2014, Call Report. The proposal would not increase assessments for banks or FSAs with $40 billion or less in total assets. Comments on the proposal are due by June 12, 2014.
Justice Department announcements
The Department of Justice has issued press releases announcing action taken against several individuals on Federal fraud charges—
Barclays pays $280M to settle FHFA PLS claims
The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, has announced a settlement agreement with Barclays Bank PLC, related companies and specifically named individuals for $280 million. The settlement resolves claims alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac during 2005-2007.
OFAC SDN updates
OFAC has announced the deletion of 23 SDNT listings (including several "a.k.a." entries) from its list of specially-designated nationals. Changes to two other existing designations were also announced. Information regarding the deletions and changes have been posted in a BOL OFAC Update.
FinCEN assesses $10,000 CMP for MSB's BSA/AML violations
A $10,000 civil money penalty (CMP) has been assessed by FinCEN against a money services business (MSB) and its president for violations of the Bank Secrecy Act (BSA). The business failed to register as an MSB, develop an effective AML program, conduct a BSA/AML risk assessment, designate a knowledgeable compliance officer. and retain required records of currency transactions. This enforcement action has been added to BOL's BSA/AML Penalties page.
NCUA Board action
A Board Action Bulletin has been issued by the NCUA announcing approvals of the following items at its April 24, 2014, board meeting:
a final rule to provide greater security for the credit union system by requiring capital planning and stress testing for credit unions with assets greater than $10 billion
a proposed rule to clarify requirements for associational common bond groups for federal credit union membership and streamline approval of recognized groups
an expansion of CME Federal Credit Union's community charter to serve eight counties in the vicinity of Columbus, Ohio
April 24, 2014
Bureau pursuing e-closing pilot
CFPB Director Richard Cordray announced plans for bringing technology to bear on the complexities and challenges of the home mortgage closing process in opening remarks at the CFPB Mortgage Closing Forum in Washington, D.C. yesterday. He reviewed the actions being taken by the Bureau to address problems in the mortgage market and protect consumers. He announced the release of guidelines for a new e-closing pilot program, an electronic closing process designed to be more efficient for consumers and reduce costs. In coordination with the Closing Forum event, an article was posted on the CFPB Blog listing the four major mortgage closing pain points identified by consumers who submitted comments to the Bureau:
Insufficient time to review documents
Overwhelming stacks of paperwork
Documents are hard to understand
Errors in documents that often lead to delays
In his comments, Director Cordray said the Bureau hopes to facilitate the use of technology to improve the closing process, without eliminating the "closing ceremony," suggesting that the Bureau understands the importance of the ceremonial nature of closings that helps emphasize the significance of the event for a consumer. The CFPB also released a report, Mortgage closings today, a "preliminary look at the role of technology in improving the closing process for consumers."
Residential sales and construction activity
HUD and the Census Bureau have released the March 2014 Residential Sales and Construction Activity reports. Sales of new single-family houses in March 2014 were 14.5 percent below the revised February rate and 13.3 percent below the March 2013 estimate. Single-family authorizations in March were 0.5 percent above the revised February figure. Single-family housing starts in March were 6.0 percent above the revised February figure. Single-family housing completions in March were 3.8 percent below the revised February rate.
April 23, 2014
FHFA house price index up
The Federal Housing Finance Agency has reported that U.S. house prices rose in February 2014, with an increase of 0.6 percent on a seasonally adjusted basis from January 2014, according to the agency's monthly House Price Index (HPI). The FHFA HPI is calculated using home sales price information from mortgages either sold to or guaranteed by Fannie Mae and Freddie Mac.
Counterfeit cashier's checks alert
The OCC has issued an alert on counterfeit cashier's checks bearing the correct routing number of Cumberland Federal Bank FSB, Cumberland, Wisconsin. The checks are being presented for payment nationwide in connection with various online purchase overpayment scams. Information regarding the counterfeit cashier's checks has been posted on the BOL Alerts & Counterfeits page.
Loan growth in OCC southern district
The OCC has announced that the average loan growth rate doubled among community national banks and federal savings associations located in the nine states that make up the regulator's Southern District from 2012 to 2013, reaching 4 percent in 2013. Some areas experienced even greater average loan growth, with as much as 11 percent in parts of Texas and Oklahoma, and 6 percent to 7 percent in some portions of Florida.
FDIC ComE-IN meeting scheduled
The FDIC Advisory Committee on Economic Inclusion (ComE-IN) will meet on Thursday, April 24, 2014, in Washington, D.C. to discuss Safe Accounts, mobile financial services, financial education opportunities and consumer demand for small dollar loans. The meeting, scheduled from 9:00 a.m. to 3:15 p.m. in the FDIC Board Room, is open to the public and also will be webcast live.
Bureau Ombudsman report on student lending
The CFPB Student Loan Ombudsman has released a report on complaints of "auto-defaults" in private student lending, often triggered by the death or bankruptcy of a co-signer, even when payments on the loan in question have been made on schedule.
April 22, 2014
Bureau cautions student borrowers
The Consumer Financial Protection Bureau has posted an article on its Blog announcing the release of its Mid-year update on student loan complaints, summarizing complaints received between October 1, 2013, and March 31, 2014. The article includes a consumer advisory concerning the potential for a lender to declare a private student loan in default if a co-signer on the loan dies or declares bankruptcy. The Bureau advised students in repayment to determine whether their lender allows the release of co-signers after a series of timely payments and a credit check. Obtaining such a release can protect the borrower from a surprise default, and also benefit the co-signer. The article provides information on how a borrower and co-signer can inquire about the availability of a release of the co-signer.
G.20 Finance Companies report
The Federal Reserve Board has released the February 2014 G.20 Owned and Managed Receivables Outstanding and Auto Loans: Terms of Credit report.
The April 2014 issue of The NCUA Report has been posted. This edition highlights important NCUA Board actions and key issues. It also includes articles from the chairman and each of the board members regarding their take on current topics.
April 21, 2014
Counterfeit checks alerts
The OCC has issued:
Alert 2014-18 – counterfeit official checks of Savings Institute Bank and Trust Company, Willimantic, CT
Alert 2014-19 – counterfeit official checks of Security National Bank, a branch of Park National Bank, Newark, OH
Alert 2014-20 – counterfeit cashier's checks of First Federal Savings & Loan, Lorain, Ohio
FDIC proposes to rescind regulations
The FDIC is today publishing in the Federal Register a proposed rule that would rescind and remove transitional regulations at 12 CFR Part 390, subparts B, C, D, and E, which were transferred from the OTS effective July 21, 2011, in accordance with Title III of the Dodd-Frank Act. The proposal would amend FDIC regulations at 12 CFR Part 308, subparts A, B, C, K and N to extend their scope to include State savings associations. In a separate proposed rule the FDIC would rescind and remove its regulations at 12 CFR Part 390 subpart U (Securities of State Savings Associations) and revise 12 CFR Part 335 to extend its applicability to State savings associations. Comments on these proposals will be accepted through Friday, June 20, 2014.
OFAC $6M CMP
A Netherlands company has agreed to pay $5,990,490 to settle potential civil liability for apparent violations of the OFAC Cuban Assets Control Regulations. OFAC's Cuba Penalty Schedule lists the base penalty for the apparent violations as $11,093,500. OFAC determined that the company voluntarily self-disclosed the apparent violations to OFAC, that the vast majority of the apparent violations occurred "prior to agency notice," and that a small portion of the apparent violations occurred "subsequent to agency notice," (after the filing of the self-disclosure).
Stolen IDs used for fake returns
The Department of Justice (DOJ) has announced the sentencing of two individuals for crimes relating to filing fraudulent income tax returns using stolen identities. The tax returns at issue were filed from internet protocol addresses assigned to one of defendants, and the fraudulent tax refunds were deposited onto prepaid debit cards that were mailed to addresses belonging to both of them. The stolen proceeds were used to make payments on the defendants' car loans and mortgages.
Board SR Letter
The Federal Reserve Board has issued Supervision and Regulation Letter SR 14-4 concerning examiner loan sampling requirements for State member banks and credit-extending nonbank subsidiaries with $10-$50 billion in total consolidated assets.
OCC enforcement actions
New enforcement actions recently taken by the OCC against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations have released. The actions, dated in March and April 2014, include five Cease and Desist Orders, four Civil Money Penalty Orders, a Formal Agreement, a Prompt Corrective Action Directive, two Removal/Prohibition Orders and two Restitution Orders.
FFIEC large institution CRA exam procedures
The FFIEC has posted an update for the large institution CRA examination procedures. The updates reflect the changes to the Interagency Q & A regarding community reinvestment published in November 2013. The OCC has published
Bulletin 2014-16 and the
Federal Reserve has released CA Letter 14-2 regarding the update.
Free FDIC deposit insurance coverage seminars FDIC FIL-17-2014 announces 12 free seminars on deposit insurance coverage for bank officers and employees between May 6, 2014, and December 4, 2014. Four sessions will be offered on each of the following topics:
Fundamentals of Deposit Insurance Coverage
Deposit Insurance Coverage for Revocable Trust Accounts
Advanced Topics in Deposit Insurance Coverage
The FIL includes a link for information on required advance registration and presentation links.
OFAC Zimbabwe designations and removals
OFAC has announced the designation of a Zimbabwean government official, an Angolan businessman, a Singaporean attorney, and a Zimbabwe-based entity pursuant to Executive Order (E.O.) 13469 for their roles in undermining Zimbabwe's democratic processes and institutions or facilitating public corruption through support to the Government of Zimbabwe, senior government officials, and/or Specially Designated Nationals (SDNs). As a result of Treasury's actions, any assets of the individuals or entity designated that are within U.S. jurisdiction must be frozen. Additionally, transactions by U.S. persons or with the United States involving these individuals and entity are generally prohibited. See the BOL OFAC Update Page for details.
The Federal Reserve Board has issued a Consent Order of Prohibition against an individual who was president and chairman of the board of directors of a Missouri bank holding company and the former chief financial officer and chairman of the board of directors of its subsidiary bank. He was involved in misusing TARP funds allocated to the holding company to purchase a luxury condominium.
NCUA Financial Literacy Twitter chat
The NCUA will host a Financial Literacy Twitter chat on April 23, 2014, from 11 am to noon ET. Credit unions and consumers can follow the conversation on @TheNCUA and join using the #NCUAChat hashtag. Participants can also submit questions before the chat to firstname.lastname@example.org.
Proposed NCUA risk-based capital rule Q&A
The NCUA has posted a two-part, 20-minute video on its YouTube channel regarding the agency's proposed Risk-Based Capital Rule. The video contains a Q&A which provides an in-depth review of why the rule is needed and how credit unions would fare under both the current risk-based net worth system and the proposed risk-based capital rule.
NCUA Board meeting agenda
The agenda for the April 24, 2014, meeting of the NCUA Board has been posted.
April 17, 2014
March residential construction report
HUD and the Census Bureau have released the new residential construction statistics for March 2014. Compared to February 2014, building permits and housings completions were down, but housing starts were up.
Yellen on monetary policy and economic recovery
In a presentation at the Economic Club of New York, Federal Reserve Board Chair Yellen reviewed the current economic outlook, and discussed the three big questions for the Federal Open Market Committee, policy challenges in an unprecedented recovery and recent changes to the Forward Guidance. She stated "The new guidance also reaffirms the FOMC's view that decisions about liftoff should not be based on any one indicator, but that it will take into account a wide range of information on the labor market, inflation, and financial developments."
Curry discusses cybersecurity
In remarks before a Consumer Electronics Show Government meeting, Comptroller Curry discussed the importance of cybersecurity and the OCC's recent guidance on managing third-party relationships.
April 16, 2014
Bureau proposes relaxing remittances rule
The CFPB has announced a proposal to amend subpart B of Regulation E to extend for an additional five years a temporary provision in § 1005.32(a) that permits insured institutions to estimate certain foreign remittance transfer pricing disclosures. The provision currently expires July 21, 2015. The proposal also—
Seeks comments on whether financial institutions on U.S. military installations abroad should be considered to be located "in a State" for the purposes of the rule
Would clarify that remittance transfers from an account that is not used primarily for personal, family, or household purposes will not be covered by the rule
Would provide broader application of the "conducted by telephone" provision allowing oral disclosures for certain transfers
Would treat faxed disclosures as written for the purposes of the rule.
Would provide an exception to certain error resolution requirements for delays required for security or other screening under BSA, OFAC or similar rules
Comments on the proposal will be accepted for 30 days following publication in the Federal Register.
Wyoming bank pays flood CMP
The Federal Reserve Board announced its imposition of a $9,985 civil money penalty on Uinta Bank, Mountain View, Wyoming, for Flood Act violations. Details have been posted to the BOL Flood Penalties Watch page.
FEMA to suspend communities
The Federal Emergency Management Agency has published a Final Rule identifying communities in Illinois, Indiana, Iowa, Louisiana, Minnesota, Nebraska, Ohio, and Wisconsin where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on May 19, 2014, for noncompliance with the floodplain management requirements of the program.
TIC data released
Treasury has released the February 2014 Treasury International Capital (TIC) data. The sum total of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $167.7 billion.
The minutes of the Federal Reserve Board's discount rate meetings from February 10–March 17, 2014, have been released.
Yellen on liquidity and capital
In a speech at the Federal Reserve Bank of Atlanta's 2014 Financial Markets Conference, Chair Yellen discussed the actions of the Federal Reserve Board to strengthen bank capital requirements through the adoption of the domestic rule implementing the Basel III capital requirements in the United States; and the development of new liquidity standards for global banking firms, the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR). She stated, "Federal Reserve staff are actively considering additional measures that could address these and other residual risks in the short-term wholesale funding markets. Some of these measures—such as requiring firms to hold larger amounts of capital, stable funding, or highly liquid assets based on use of short-term wholesale funding—would likely apply only to the largest, most complex banking organizations."
The Federal Reserve has posted the April 15, 2014, issue of FedFlash. Articles include discussion of the publication of new FedReceipts RTNs; the automated delivery of ACH return, NOC and payment information to Originators and Receivers; and a reminder to attend a local 2014 Fraud Symposium.
April 15, 2014
Lost cashier's checks and money orders OCC Alert 2014-17 warns of lost cashier's checks and money orders of MB Financial Bank, N.A., Chicago, Illinois. A courier has lost a shipment of the bank's cashier's checks and money orders, both of which include the bank's routing number of 071001737. The lost cashier's checks contain serial numbers ranging from 13045501 through 13045700. The lost money orders contain serial numbers ranging from 655401 through 655600. Stop payments have been placed on both the cashier's checks and money orders.
Conversion notice for Federal Reserve Financial Services customers
Federal Reserve Financial Services has announced the successful
completion of its conversion to the Enterprise Accounting System (EASy) distributed application. The EASy application replaced the mainframe-based Integrated Accounting System (IAS).
CFPB proposes new info gathering plan
The CFPB has published a Notice and Request for Comment [79 FR 20865] on a proposed new Generic Information Collection Plan, "CFPB Generic Information Collection Plan for Studies of Consumers using Controlled Trials in Field and Economic Laboratory Settings." Information from the Bureau's research will be used for developmental and informative purposes in order to increase the Bureau's understanding of consumer credit markets and household financial decision-making. Written comments must be received on or before June 13, 2014.
Bureau Blog warns of student loan rate increase
The CFPB has posted an "Explainer" blog article discussing an expected July increase in interest rates for new federal student loans. The Bureau's Paying for College tool has been updated with the new estimated rates.
April 14, 2014
Ukraine-related OFAC designations
OFAC has announced the designation of Crimean separatist leaders Pyotr Zima, Aleksei Chaliy, Rustam Temirgaliev, Yuriy Zherebtsov, Mikhail Malyshev, and Valery Medvedev, former Ukrainian official Sergey Tsekov, and Crimea-based gas company Chernomorneftegaz pursuant to Executive Order 13660. These individuals and this entity are being sanctioned for being responsible for or complicit in, or having engaged in, actions or policies that undermine democratic processes or institutions in Ukraine, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or misappropriation of state assets of Ukraine or of an economically significant entity in Ukraine; or having asserted governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine. Information regarding the designations has been posted in a BOL OFAC Update.
Payday lender pays up
The Federal Trade Commission has announced a South Dakota-based payday lending operation and its owner will pay $967,740 as part of a settlement resolving FTC charges that they used a tribal affiliation and unfair and deceptive tactics to collect on payday loans. Consumers, whose accounts were garnished, were forced to travel to South Dakota and appear before a tribal court that did not have jurisdiction over their cases.
FDIC tech alert FDIC FIN-16-2014 announces a Technology Alert regarding the OpenSSL "Heartbleed" vulnerability. See the BOL Tech Talk Page for a discussion.
Curry on risk management
In remarks during the American Bankers Association Risk Management Forum, Comptroller Curry discussed the important of risk management.
April 11, 2014
OFAC Kingpin Act designations and updates
OFAC has announced it has designated ten entities and five individuals with ties to the Sanchez Garza family as specially designated narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). The Sanchez Garza family is a money laundering organization based in Guadalajara, Mexico that began operating on behalf of major narcotics traffickers Rafael Caro Quintero and Juan Jose Esparragoza Moreno (a.k.a. El Azul) in the 1980s. This action prohibits U.S. persons from conducting financial or commercial transactions with these individuals or entities, and freezes any assets they may have under U.S. jurisdiction. Changes were also made to six existing listings. Information regarding the designations and changes has been posted in a BOL OFAC Update.
FFIEC alert – OpenSSL vulnerability
An FFIEC press release has announced an alert about the "Heartbleed" vulnerability to financial institutions using the OpenSSL cryptographic library. The FFIEC agencies expect financial institutions to incorporate patches on systems and services, applications, and appliances using OpenSSL, and upgrade systems as soon as possible to address the vulnerability. Financial institutions should consider replacing private keys and X.509 encryption certificates after applying the patch for each service that uses OpenSSL and consider requiring users and administrators to change passwords after applying the patch (not before). Financial institutions relying upon third-party service providers should ensure those providers are aware of the vulnerability and are taking appropriate mitigation action.
FDIC urges utilization of cyber resources
The FDIC urges financial institutions to actively utilize available resources to identify and help mitigate potential cyber-related risks. Financial institutions should ensure that their information security staff are aware of and subscribe to reliable and recognized resources that can help quickly identify cyber risks as they emerge. Government and government-sponsored resources that financial institutions should consider include the following organizations:
FRB issues PCA directive
The Federal Reserve Board has issued a Prompt Corrective Action directive against NBRS Financial Bank, Rising Sun, Maryland.
OCC San Diego workshops
The OCC will host two workshops in San Diego on May 6–7. The "Compliance Risk" and "Risk Assessment" workshops are designed exclusively for directors of institutions supervised by the OCC. The compliance risk workshop focuses on major compliance risks and consumer protection regulations, such as the Qualified Mortgage Rule and Bank Secrecy Act, along with key elements of an effective compliance risk management program. The risk assessment workshop discusses the OCC's approach to risk-based supervision, and best practices to identify, measure, monitor and control risk.
Bureau to help students choose a college
The CFPB Blog announces the launch of a new version of the CFPB "Paying for College" tool kit and the reintroduction of the Bureau's "GI Bill Calculator" tool. The agency is also working with the Department of Education to develop a tool to provide information that complements what schools are providing to students in their financial aid packages.
April 10, 2014
BofA hit with $727 M reimbursement order and CMP
The Consumer Financial Protection Bureau has announced it has ordered Bank of America and its FIA Card Services, N.A. subsidiary to provide relief to consumers harmed by B of A and FIA's practices related to card add-on products. Payments to consumers under the order are estimated to be $727 million. The Bureau has also ordered Bank of America to pay a $20 million civil money penalty. The CFPB found that B of A and FIA employed deceptive marketing of add-on credit insurance products, and illegally charged about 1.9 million consumer accounts for credit monitoring and credit reporting services they were not receiving. According to the Bureau's press release, the bank has already completed major portions of the consumer reimbursements required by the order. The Bureau's efforts followed up on work begun by the OCC, which announced its imposition of a separate $25 million CMP on B of A and FIA. [CFPB Consent Order; OCC Consent Order; OCC Consent Order for CMP]
The CFPB has posted an "Explainer" on its Blog to provide information about who is eligible for compensation under the Bureau's order, and in what amounts.
Counter Terrorism and Kingpin Act designations
Treasury has designated Carlos Arnoldo Lobo (a.k.a. "El Negro Lobo") under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for his significant role in international narcotics trafficking. As a result of Treasury's action, all property and interests in property in the United States or in the possession or control of U.S. persons in which Lobo has an interest is blocked, and U.S. persons are generally prohibited from engaging in transactions with him. An entity was also added to OFAC's SDN list. Details are available in a BOL OFAC Update.
provides guidance to bankers and examiners in identifying risks that are pertinent to oil and gas production lending
establishes supervisory expectations pertaining to risk management of oil and gas production loans
includes expanded examination procedures, an internal control questionnaire, and verification procedures for examiners
The following OCC publications were rescinded—
Banking Circular 215, "Guidelines for Collateral Evaluation and Classification of Troubled Energy Loans," June 18, 1986
Examining Circular 223, "Guidelines for Collateral Evaluation and Classification of Troubled Energy Loans," August 24, 1984
Examining Circular 223, Supplement #1, "Guidelines for Collateral Evaluation and Classification of Troubled Energy Loans," June 18, 1986
Call Report changes
FDIC FIL-15-2014 has been issued to highlight the following call report changes which take effect with the March 31, 2014, Call Report submission due by April 30, 2014:
Questions about international remittance transfers for all institutions and, for those institutions with more than 100 transactions per calendar year, the estimated number and dollar value of international remittance transfers. This information will be collected in Schedule RC-M, Memoranda, initially in March 2014 and semiannually thereafter each June and December.
The reporting in Schedule RC-M of trade names used to identify physical offices and addresses of public-facing Internet websites at which the reporting institution accepts or solicits deposits from the public
A question in Schedule RC-E, Deposit Liabilities, asking whether the reporting institution offers deposit account products primarily intended for consumers
For institutions with $1 billion or more in total assets that offer consumer deposit account products, the total balances of those products in Schedule RC-E
Banking study shows strength of community banks
The FDIC has released a the results of a research study on long-term consolidation in banking and the implications of this trend for community banks. A key finding of the study is that institutions with assets between $100 million and $10 billion, most of which can be considered community banks, have increased in both number and in total assets since 1985.
CFPB mortgage closing process forum
The Bureau will hold a mortgage closing process forum in Washington, D.C. on April 23 at 1:30 p.m. ET. The forum is open to the public, subject to an RSVP requirement. It can be viewed live on the Bureau Blog.
Treasury prices secondary public offering of TARP CPP stock
Treasury has announced a secondary public offering of the remaining 2,089,022 shares of common stock of Hampton Roads Bankshares, Inc., priced at $1.57 per share. The aggregate net proceeds to Treasury from the offering are expected to be approximately $3.3 million. The offering closing is expected to occur on or about April 14, 2014, subject to customary closing conditions.
Appraisal Management Company proposal published
The proposed rule by the CFPB, OCC, FDIC, FHFA and FRB that would establish Minimum Requirements for Appraisal Management Companies, previously announced in our Top Stories for March 25, has been published in today's Federal Register [79 FR 19521]. Comments on the proposal are due by June 9, 2014.
FRB CDIAC members for 2014
The Federal Reserve Board has released the names of the members of the 2014 Community Depository Institutions Advisory Council (CDIAC). The CDIAC was established in 2010 to provide input to the Board on the economy, lending conditions, and other issues of interest to community depository institutions. The record of the April 4, 2014 meeting of the CDIAC was also released.
FDIC Advisory Committee on Community Banking
The FDIC has announced a meeting of the Advisory Committee on Community Banking on April 9th. Topics for the meeting include an update from staff on the FDIC's community bank initiatives, and discussions about cyber security, the FDIC's ombudsman program and supervisory appeals process, customer due diligence and reporting requirements, and qualified and non-qualified mortgages.
Large Banks Leverage Ratio final rule and proposal
A joint press release has been issued by the Federal Reserve Board, the FDIC, and the OCC announcing the adoption of a final rule to strengthen the leverage ratio standards for the largest, most interconnected U.S. banking organizations with more than $700 billion in consolidated total assets or more than $10 trillion in assets under custody and their insured depository institution subsidiaries. A notice of proposed rulemaking was also issued that would modify the denominator calculation for the supplementary leverage ratio in a manner consistent with recent changes agreed to by the Basel Committee on Banking Supervision.
Cordray discusses promotion of financial literacy
In prepared remarks at the Jump$tart Coalition awards dinner, Director Cordray discussed the importance of school districts' and public officials' direct engagement in the financial education of children. He indicated the CFPB is working to promote financial education at a new level and committed to engaging and supporting teachers and parents. He said, "The Bureau plans to continue to work cooperatively with other organizations, like Jump$tart, to promote financial education and capability by coordinating existing K-12 financial education efforts nationally, building on best practices, and, where appropriate, filling critical gaps."
April 8, 2014
OFAC updates Iranian Transactions rule
OFAC has published in the Federal Register a final rule [79 FR 18990] amending the Iranian Transactions and Sanctions Regulations by expanding an existing general license that authorizes the exportation or reexportation of food to individuals and entities in Iran to include the broader category of agricultural commodities; clarifying and adding certain definitions in OFAC regulations; and adding a new general license that authorizes the exportation or reexportation of certain replacement parts for certain medical devices. OFAC also issued an updated series of FAQs on Iran/TSRA General Licenses.
Volcker Rule CLO extensions authorized
The Federal Reserve Board has issued a press release and statement to announce its intention to exercise its authority to give banking entities two additional one-year extensions to conform their ownership interests in and sponsorship of certain collateralized loan obligations (CLOs) covered by section 619 of the Dodd-Frank Act (also known as the "Volcker rule"). CLOs are securitization vehicles backed predominantly by commercial loans.
CCP winds down
The Government Accountability Office (GAO) has issued a report on the progress being made by Treasury to wind down the Capital Purchase Program (CCP). As of January 31, 2014, Treasury has sold all or part of its CPP investment in 162 institutions, with investments in 83 remaining. CPP was the primary tool for restoring stability to the U.S. financial system under the Troubled Asset Relief Program. It involved Treasury investments of almost $205 billion in 707 eligible institutions, and a total of 624 of the original 707 institutions have exited the program.
Daylight overdrafts report
The Federal Reserve has released data on peak and average day daylight overdrafts and related fees.
G.19 Consumer Credit report
The February 2014 G.19 Report of consumer credit outstanding and terms of credit has been released.
Fed supports same-day ACH settlement
The Retail Payments Office of the Federal Reserve has issued a statement supporting the announcement by NACHA that it is taking steps toward same-day ACH settlement for ACH network transactions.
ID theft and refund fraud crackdown
The Department of Justice has reported it has charged more than 880 defendants in stolen identity tax refund cases in the past year, and that the IRS reports having resolved or closed about 963,000 cases involving identity fraud victims. Attorney General Holder, in a video message on the DOJ website, urged Americans to protect themselves by reporting suspicious activity and learning more at the IRS website, the Justice Department's Tax Division website, and STOPFRAUD.GOV.
The FDIC has issued FIL-13-2014, "Technology Outsourcing: Informational Tools for Community Banks"; and FIL-14-2014, "Consolidated Reports of Condition and Income for the First Quarter 2014."
April 7, 2014
Counterfeit cashier's checks
Alert 2014-16 has been issued by the OCC to warn of counterfeit cashier's checks bearing the correct routing number of Canon National Bank, Canon City, Colorado. Information regarding the counterfeit checks has been posted on the BOL Alerts & Counterfeits page.
March Housing Scorecard
Treasury published the Administration's March 2014 Housing Scorecard, a comprehensive report on the U.S. housing market. The release indicates the housing market continues to show signs of improvement.
Large Commercial Banks report
The list of insured U.S.-chartered commercial banks that have consolidated assets of $300 million or more, ranked by consolidated assets as of December 31, 2013, has been released by the Federal Reserve.
Prohibition letters issued
The Federal Reserve has released five letters prohibiting the recipients, each of whom has been convicted of a crime involving dishonesty or breach of trust under Section 19 of the Federal Reserve Act, and are automatically prohibited from becoming or continuing as an institution-affiliated party with respect to any federally insured banking organization or credit union.
CRA ratings released
The FDIC has released the ratings received by state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). Of the 91 banks examined, 5 received an Outstanding rating and 86 received a rating of Satisfactory.
Washington flood and mudslide recovery FDIC FIL-12-2014 has been issued to provide guidance to help financial institutions and facilitate recovery in areas of the State of Washington affected by flooding and mudslides.
NCUA Leadership Boot Camp Registration for the NCUA Leadership Boot Camp to be held in Baltimore, Maryland on April 12, 2014, is still open. Topics covered during the leadership boot camp will include:
Supervisory committee—your internal audit team
Bank Secrecy Act
Employment practice from CUNA Mutual
Succession planning and passing on the baton
Revisiting the allowance for loan and lease losses account
Communications for credit union management
NCUA Board meeting video
A video of the March 20, 2014 open meeting of the NCUA Board has been posted for viewing. The meeting's agenda included two items: (1) a proposed interagency rule on minimum requirements for appraisal management companies; and (2) the Temporary Corporate Credit Union Stabilization Fund quarterly report.
April 4, 2014
FEMA to suspend communities
The Federal Emergency Management Agency (FEMA) has published a notice [79 FR 18825] in today's Federal Register identifying communities in Georgia, Indiana, Kansas, Maryland, Mississippi and West Virginia where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on May 5, 2014, for their noncompliance with the floodplain management requirements of the program.
Homeowners Flood Insurance Affordability Act info
FEMA's Federal Insurance and Mitigation Administration has issued a memorandum providing an Overview of the Homeowner Flood Insurance Affordability Act of 2014 (beginning on page 3 of the PDF document). Additional information regarding the new law and its impact on the National Flood Insurance Program (NFIP) will be posted on FEMA's Flood Insurance Reform webpage.
South Sudan-related executive order
The U.S. Treasury's Office of Foreign Assets Control (OFAC) has posted a notice announcing a new Executive Order, "Blocking Property of Certain Persons with Respect to South Sudan." Property and interests in property of such persons in the U.S. (or within the possession or control of any U.S. person) are blocked. Individuals subject to the Order have not yet been identified.
create and update relevant policies and procedures
track and monitor examination processes for staffing examinations and producing examination products
finalize its examiner commissioning program
The report said that more than half of the 82 draft reports submitted by regional exam teams failed to meet Bureau requirements for submission within 30 days of fieldwork completion, and that several exams had been outstanding for more than a year. The OIG reports that CFPB officials have said that measures have been or will be taken to address the suggested improvements.
Disaster assistance for Washington mudslide victims
HUD has announced federal disaster assistance to the State of Washington to provide support to homeowners and low-income renters forced from their homes following flooding and mudslides beginning on March 22, 2014, and continuing.
IRS retirement plan rollover guidance
Treasury and the IRS have announced the issuance of guidance designed to help individuals accumulate and consolidate retirement savings by facilitating the transfer of savings from one retirement plan to another. Revenue Ruling 2014-9 simplifies the rollover process by introducing an easy way for a receiving plan to confirm the sending plan's tax-qualified status. The plan administrator for the receiving plan can now simply check a recent annual report filing for the sending plan on a database that is readily available to the public online.
March 2014 SCOOS
The FRB has released the Senior Credit Officer Opinion Survey (SCOOS) for March 2014. The survey provides information about the availability and terms of credit in securities financing and over-the counter (OTC) derivatives markets.
FRB economic models
The Federal Reserve Board has posted links to informative articles regarding two tools it utilizes to predict the economy. The FRB/US Model is a large-scale estimated general equilibrium model of the U.S. economy that has been in use at the Federal Reserve Board since 1996. The model is designed for detailed analysis of monetary and fiscal policies. The Estimated Dynamic Optimization (EDO) Model is a medium-scale New Keynesian dynamic stochastic general equilibrium (DSGE) model of the U.S. economy that has been used at the Federal Reserve Board since 2006.
April 2014 FedFocus
Federal Reserve Financial Services has posted the April 2014 issue of FedFocus. This edition features articles on key themes from consultation paper feedback and end-user research, mining the value of FedACH Services payment information, and FEDucation on taxes.
Cordray before the Bar
In prepared remarks at the American Bar Association, Directory Cordray discussed the day-to-day activities of the CFPB. He noted, "We are the first federal agency ever created with the sole purpose of protecting consumers and seeing that they are treated fairly in the financial marketplace." In conclusion, he added, "our rulemaking process is designed to produce rules that deliver tangible value to consumers and make the financial markets work better."
April 3, 2014
FFIEC joint statements on cyber-attacks
The FDIC has issued two Financial Institution Letters to distribute joint statements by the members of the FFIEC relating to the risks of cyber-attacks.
FIL-10-2014 includes an FFIEC statement describing risks related to recent cyber-attacks on ATMs and card authorization systems that have resulted in large dollar frauds, often called Unlimited Operations.
FIL-11-2014 transmits a statement notifying institutions of the risks associated with the continued distributed denial of service (DDoS) attacks on public-facing Web sites and the steps institutions are expected to take to address the risks posed by such attacks.
FHFA foreclosure prevention report
The Federal Housing Finance Agency (FHFA) has announced the publication of the Fourth Quarter 2013 Foreclosure Prevention Report, also known as the Federal Property Manager's Report. The report indicates more than 3.1 million foreclosure prevention actions taken by Fannie Mae and Freddie have helped more than 2.5 million borrowers stay in their homes, including nearly 1.6 million who received permanent loan modifications.
Federal Reserve Board meeting notice
The Federal Reserve has posted the notice of its April 8, 2014, Board of Governors meeting. The meeting may be attended in person or online.
OCC to host MSAAC meeting
The OCC has announced it will host a public meeting of the Mutual Savings Association Advisory Committee (MSAAC) on Tuesday, April 29, 2014. The meeting will begin at 8 a.m. (Eastern Daylight Time) at the OCC's offices at 400 7th Street, SW, Washington, D.C., and will be open to the public.
Marine antenna seller pays OFAC $85K
OFAC has announced that Sea Tel, Inc. has agreed to pay $85,113 to settle potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations. The apparent violations by Sea Tel occurred when it invoiced and exported marine antenna systems to a South Korean distributor, with knowledge or reason to know that they were intended specifically for re-exportation, directly or indirectly, to Iran.
FATCA agreements Treasury and the IRS have separately announced that jurisdictions that have reached agreements in substance with the United States on the terms of intergovernmental agreements (IGAs) under the Foreign Account Tax Compliance Act (FATCA) can be treated as having agreements in effect until the end of 2014. To date, the United States has signed 26 IGAs. The announcement provides that 19 additional jurisdictions will be treated as having IGAs in effect, bringing the total number of jurisdictions that are treated as having IGAs in effect to 45. This list is expected to continue to grow in the coming weeks as additional countries provide consent to having the status of their IGAs disclosed and additional agreements in substance are reached.
April 2, 2014
Bureau reports increased complaint volume
The CFPB has announced the publication of the agency's 2013 Consumer Response Annual Report. The agency reported that the volume of consumer complaints filed with the agency in 2013 increased by 80% over 2012 volumes. That increase reflects both the CFPB's gradual additions to the types of complaints it accepts and the public's growing awareness of the new agency's role in accepting and following up on consumer complaints concerning financial services and products.
establish procedures that financial institutions must follow when they receive a garnishment order against an account holder who receives certain types of federal benefit payments by direct deposit and
require financial institutions that receive such a garnishment order to determine the sum of such federal benefit payments deposited to the account during a two-month period and ensure that the account holder has access to an amount equal to that sum or to the current balance of the account, whichever is lower.
NCUA Small Dollar Lending webinar
A free webinar, "Small Dollar Lending," will be offered by the NCUA on April 16, 2014, at 2 p.m. EDT. The webinar will discuss how some credit unions have created short-term lending programs that work for their members and factors to consider before starting such a program, including:
The benefits short-term, small-dollar loans can bring to a credit union's portfolio mix
Regulatory concerns governing this type of product offering
The costs associated with developing or initiating short-term loans
CRA ratings released
The OCC has released the ratings received by twenty-eight national banks and federal savings associations recently evaluated for compliance with CRA. Three were rated outstanding and 25 received satisfactory ratings.
Seven indicted in mortgage scheme
The Department of Justice has reported that seven individuals have been indicted for alleged participation in a mortgage fraud scheme that operated in the Miami, Florida area. Five of those charged owned or controlled properties in the area, and allegedly enlisted brokers and others to recruit straw buyers to fraudulently purchase condos in those properties, using documents with false statements and representations.
OFAC updates SDN list
OFAC has announced a deletion from its SDN List. Details are included in a BOL OFAC Update.
Curry addresses CRA conference
In remarks at the 2014 National Interagency Community Reinvestment Conference, Comptroller Curry discussed the interagency effort to align the agencies' approaches to CRA evaluations, improve the evaluation procedures and provide effective training to CRA examiners. He stated "one of the most critical goals at the OCC is to develop and maintain the expertise of our examiners," to deal with the complexities of compliance and CRA requirements.
April 1, 2014
CFPB TILA-RESPA Rule Compliance Guide
The CFPB has released its Small Entity Compliance Guide for the TILA-RESPA Integrated Disclosure Rule. The guide highlights issues that financial institutions might find helpful to consider when implementing the rule. It may also be helpful to settlement service providers, software providers, secondary market participants, and other firms that serve as business partners to creditors. The Bureau also posted links to several other resources—including sample forms annotated with rule citations—designed to assist lenders and others in their compliance efforts.
FTC acts to stop scam raiding seniors' accounts
A federal court judge has issued a temporary order halting a scam by the defendants who targeted and called senior citizens, lied to them to get their bank account information, and used this information to withdraw money from their bank accounts. The FTC alleges that the defendants' conduct violated the FTC Act and the FTC's Telemarketing Sales Rule, and that the telemarketing scheme drew in over $20 million between May 2011 and December 2013. The defendants used a telemarketing boiler room in Canada to cold-call seniors claiming to sell fraud protection, legal protection, and pharmaceutical benefit services.
Yellen on support of recovery
In a speech at the 2014 National Interagency Community Reinvestment Conference in Chicago, Chairman Yellen discussed the actions taken by the Federal Reserve to help the recovery from the financial crisis and the Great Recession. She indicated the U.S. economy is still considerably short of the two goals assigned to the Federal Reserve by the Congress—maximum sustainable employment and stable prices—and "that there remains considerable slack in the economy and the labor market." She also said, "Earlier this month, the Fed reiterated its overall commitment to maintain extraordinary support for the recovery for some time to come."
NCUA prohibition order
An NCUA order has been issued prohibiting the former employee of a California credit union from participating in the affairs of any federally insured financial institution. He had been sentenced to five years of probation, with the first year served in county jail; ordered to stay away from the credit union; enter into a gambling addiction treatment program and pay restitution in the amount of $606,541.33.
Pennsylvania CU closed
The NCUA has announced the closing of Mayfair Federal Credit Union of Philadelphia, Pennsylvania, and the immediate assumption of its members and deposits as well as a portion of the loan portfolio and other assets by Freedom Credit Union of Warminster, Pennsylvania.
Bureau blogs on financial education
An article on the CFPB Blog reports on the recent field hearing in Atlanta of the Financial Literacy and Education Commission to talk about workplace financial education. Director Cordray discussed why the workplace is an ideal location for financial education and suggested it can be good business for employers to help relieve employees' financial stress.
OCC celebrates 150 years
A symposium commemorating the 150th anniversary of the OCC was opened by remarks from Comptroller Curry, who stressed the role that examiner "boots on the ground" supervision has played since its founding. The conference, jointly sponsored by the OCC and the Boston University Center for Finance, Law & Policy, featured prominent public and private sector leaders discussing the current state of domestic and international banking in the context of recent and historical events.
OFAC CMP report
OFAC has reported a payment of $157,500 from a private shipping and fuel supply company to settle potential civil liability for violations of sanction programs.
Treasury signs MOU with CFTC to improve data quality
Treasury has announced the signing of a Memorandum of Understanding (MOU) between the Commodity Futures Trading Commission (CFTC) and the Treasury Office of Financial Research (OFR). The CFTC and OFR will begin a joint project to enhance the quality, types and formats of data collected from registered swap data repositories.
March 31, 2014
Interchange ruling reversed
The U.S. District Court of Appeals for the District of Columbia District has reversed a July 31, 2013, district court ruling that would have required the Federal Reserve Board to revise portions of its debit card interchange rule (Regulation II, 12 CFR Part 235). The district court (see Top Stories for August 1, 2013) had found that the Board had ignored the intent of Congress in establishing its rules on "Reasonable and proportional interchange transaction fees" (§ 235.3) and "Prohibition on network exclusivity" (§ 235.7). The appeals court disagreed, holding that the Board's rules "generally rest on reasonable constructions of the statute," but required the Board to further explain its treatment of transaction-monitoring costs. See BankersOnline's Court Watch page for more information.
FDIC enforcement actions
The FDIC has released a list of 39 administrative enforcement actions taken in February against banks and individuals, including three consent orders, five removal and prohibition orders, five civil money penalties (CMPs), and three section 19 orders, together with various termination and amendment orders. There were three CMPs totaling $11,430 for Flood Act violations, each of which has been added to BOL's Flood Penalties Watch page. A New Jersey bank was assessed a $35,000 CMP for violating the UDAP prohibitions of the FTC Act by imposing burdensome requirements not in compliance with Regulation E on consumers in its EFT error resolution process, and not affording the required protections against liability for unauthorized EFTs. The fifth CMP order, for $40,000, was issued in connection with a removal and prohibition order against an individual formerly affiliated with a California bank, for unsafe or unsound banking practices and breaches of fiduciary duty.
Fourth quarter 2013 Trading Revenue report
The OCC has issued its quarterly report on Bank Trading and Derivatives Activities for the Fourth Quarter 2013. Insured U.S. commercial banks and savings institutions reported trading revenue of $2.9 billion in the fourth quarter of 2013, down $1.5 billion or 34 percent, from $4.5 billion in the third quarter. Trading revenues in the fourth quarter were $1.4 billion or 32 percent, lower than in the fourth quarter of 2012.
FTC settles unsecure mobile apps complaints
The Federal Trade Commission has announced that Fandango and Credit Karma have agreed to settle charges that they misrepresented the security of their mobile apps and failed to secure the transmission of millions of consumers' sensitive personal information. The FTC complaints alleged the companies disabled a critical default process, known as SSL certificate validation, which would have verified that the apps' communications were secure. The Credit Karma app allows consumers to monitor and evaluate their credit and financial status, and the Fandango app allows consumers to purchase movie tickets and view show times, trailers, and reviews. [Fandango Complaint; Settlement] [Credit Karma Complaint; Settlement]
March 28, 2014
Former BofA CEO barred in settlement
The New York State Attorney General's office has announced that the former Chairman and CEO of Bank of America, Kenneth D. Lewis, has been barred for three years from serving as an officer or director of a public company as part of a $25 million settlement with Bank of America Corporation relating to the bank's actions before its 2008 acquisition of Merrill Lynch & Co. in 2008. The bank allegedly failed to disclose forecasted losses at Merrill Lynch to shareholders before their vote on the proposed merger. Lewis also agreed to a payment—to be reimbursed by BofA— of $10 million as part of the settlement.
Addition to Comptroller's Handbook
OCC Bulletin 2014-11 has announced the addition of the "Asset-Based Lending" booklet to the Comptroller's Handbook. The booklet applies to all national banks and federal savings associations engaged in asset-based lending activities and
provides risk management guidance to examiners and bankers for asset-based lending (ABL) activities
expands and replaces prior ABL guidance
presents risk-rating examples
OCC Mortgage Metrics Report
The OCC Mortgage Metrics Report for the Fourth Quarter 2013 has been released. The percentage of early-stage delinquencies (mortgages that were 30-59 days past due) was 2.6 percent, down 8.7 percent from a year ago and at the lowest level at year-end since reporting began in January 2008. Seriously delinquent mortgages (60 or more days past due or held by bankrupt borrowers whose payments are 30 days or more past due) decreased to 3.5 percent compared with 3.6 percent at the end of the previous quarter and 4.4 percent a year earlier. In addition, 91.8 percent of mortgages were current and performing at the end of the quarter, compared with 91.4 percent at the end of the previous quarter and 89.4 percent a year earlier.
February mortgage rates decrease
The Federal Housing Finance Agency (FHFA) has reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.30 percent for loans closed in late February 2014, a decrease of 0.07 percent from January 2014.
Treasury offering Ally Financial stock
Treasury has announced the start of an underwritten initial public offering of Ally Financial Inc. (Ally) common stock. Treasury is selling 95,000,000 shares of Ally common stock and has granted the underwriters an option to purchase an additional 14,250,000 of Treasury's shares.
Treasury to sell TARP CPP investments Treasury intends to sell preferred stock and subordinated debt CPP investments in the following institutions:
Community First, Inc. (Columbia, TN)
Freeport Bancshares, Inc. (Freeport, IL)
Great River Holding Company (Baxter, MN)
Marine Bank & Trust Company (Vero Beach, FL)
Patriot Bancshares, Inc. (Houston, TX)
Treasury expects to start the auctions on or about March 31, 2014, and to close them at 6:00 p.m. ET on April 3, 2014.
G.20 Finance Companies Report
The January 2014 G.20 Finance Companies Report of owned and managed receivables outstanding has been released by the Federal Reserve.
NMLS system maintenance
NMLS and Consumer Access will be unavailable from 9:00 p.m. ET, Friday, March 28th until Saturday afternoon, March 29th, due to installation of system enhancements.
March 27, 2014
BofA pays $9.3B to settle claims
The Federal Housing Finance Authority (FHFA) has reached a $9.3 billion settlement in cases involving Bank of America (BofA), its subsidiaries Countrywide Financial and Merrill Lynch, and certain named individuals. The cases alleged violations of federal and state securities laws in connection with private-label, residential mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac between 2005 and 2007. Allegations of common law fraud were made in the Countrywide and Merrill Lynch cases.
Tax fraud conviction sends couple to prison
In another in a series of announcements about actions against tax fraudsters, the Department of Justice (DOJ) has announced the sentencing of Detrick and Natashia Tucker, a husband and wife who owned and operated a tax preparation business named T&T Express Tax located in Pine Mountain, Georgia. The Tuckers will serve 12 months and one day and 46 months in prison, respectively, for crimes relating to the preparation of false tax returns. The court documents indicate they conspired to fraudulently inflate refunds on their clients' tax returns in order to attract more business.
Afghan drug trafficker designated
Treasury has announced the designation of an Afghan national, Pahlawan Rozi, pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), for his significant role in international narcotics trafficking. Information regarding the designation has been posted in a BOL OFAC Update.
Fact sheet on Affordable Care Act for victims of Domestic Abuse
Treasury has announced the publication of a Fact Sheet that provides options for victims of domestic abuse to access the benefits of the Affordable Care Act.
The Federal Reserve Board has released the results of the Comprehensive Capital Analysis and Review (CCAR). The capital plans of 25 bank holding companies were approved, and those of the other five participating firms were objected to—four based on qualitative concerns and one because it did not meet a minimum post-stress capital requirement.
March 26, 2014
IRS issues virtual currency guidance
The IRS has issued IR-2014-36 to announce the publication of a Notice with answers to frequently asked questions (FAQs) on virtual currency, such as Bitcoin. The FAQs provide basic information on the U.S. federal tax implications of transactions in, or transactions that use, virtual currency. The notice indicates virtual currency is treated as property for U.S. federal tax purposes. In general, that means that:
Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.
The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
FinCEN Advisory on FATF-identified jurisdictions
FinCEN has issued Advisory FIN-2014-A003 on the recent update of the Financial Action Task Force (FATF) list of jurisdictions with strategic AML/CFT deficiencies. The changes may affect U.S. financial institutions' obligations and risk-based approaches with respect to the named jurisdictions.
OCC reminders of impending compliance dates The OCC has issued Bulletins 2014-9 and 2014-10 to remind its supervised institutions of the April 1, 2014, effective date of the final Volcker Rule regulations and interim final rule permitting banking entities to retain their investments in certain in collateralized debt obligations backed primarily by trust preferred securities (TruPS CDOs) notwithstanding the Volcker Rules. See BankersOnline's January 31, 2014, Top Stories for details.
FRB mobile banking survey
The Federal Reserve Board has issued a summary report of its most recent Survey of Consumers' Use of Mobile Financial Services. The first survey was conducted in December 2011 and the recent survey was conducted online during December 2013 with over 2,600 responding.
Residential sales decline
HUD and the Census Bureau have released their report of new residential sales in February 2014. Sales of new single-family houses were at a seasonally adjusted annual rate of 440,000. This is 3.3 percent below the revised January 2014 rate of 455,000 and is 1.1 percent below the February 2013 estimate of 445,000.
Home prices up
A news release from the Federal Housing Finance Agency (FHFA) reports U.S. house prices rose 0.5 percent in January 2014 on a seasonally adjusted basis from December 2013 according to the monthly House Price Index (HPI). The HPI is calculated using home sales price information from mortgages either sold to or guaranteed by Fannie Mae and Freddie Mac.
Term deposit sale results
The Federal Reserve Board has announced the results of its floating-rate offering of seven-day term deposits on March 24, 2014.
Fourth quarter 2013 FDIC State Profiles updated
The FDIC has updated the Fourth Quarter State Profiles to include employment data that was revised by the Bureau of Labor Statistics on March 17, 2014. All other data in the State Profiles remain unchanged from the original release on March 11, 2014.
March 25, 2014
Agencies propose appraisal management company requirements
The OCC, FRB, FDIC, CFPB, FHFA and NCUA have jointly announced a proposed rule that would implement minimum requirements for state registration and supervision of appraisal management companies (AMCs). The minimum requirements in the proposed rule would apply to states that elect to establish an appraiser certifying and licensing agency with the authority to register and supervise AMCs. The proposed rule would not compel a state to establish an AMC registration and supervision program, and there is no penalty imposed on a state that does not establish such a program. However, an AMC would be barred by section 1124 of FIRREA (as amended by the Dodd-Frank Act) from providing appraisal management services for federally related transactions in a state that has not established such a regulatory structure. Under the proposal, participating states would require that an AMC:
Register in the state and be subject to its supervision;
Use only state-certified or licensed appraisers for federally related transactions, such as real estate-related financial transactions overseen by a federal financial institution regulatory agency that require appraiser services;
Require that appraisals comply with the Uniform Standards of Professional Appraisal Practice;
Ensure selection of a competent and independent appraiser; and
Establish and comply with processes and controls reasonably designed to ensure that appraisals comply with the appraisal independence standards established under the Truth in Lending Act.
The proposal would provide a three-year period following the effective date of a final rule for states to implement the requirements. The 60-day comment period on the proposal will begin with its publication in the Federal Register, which is expected soon.
Payday lenders in Bureau's crosshairs
Lest there be any doubt that the Consumer Financial Protection Bureau has painted a target on the payday lending industry, the Bureau today issued a report finding that four out of five payday loans are rolled over or renewed within 14 days. The study also shows that the majority of all payday loans are made to borrowers who renew their loans so many times that they end up paying more in fees than the amount of money they originally borrowed. The report, CFPB Data Point: Payday Lending, is based on data gathered over a 12-month period studying more than 12 million storefront payday loans. The report was issued today in coordination with the Bureau's Nashville 11 a.m. Payday Field Hearing, at which Director Richard Cordray will deliver remarks released this morning by the Bureau's press office.
Comptroller's Handbook exam procedures update OCC Bulletin 2014-8 has been issued announcing the addition of supplemental examination procedures regarding end-user derivatives and trading activities to the "Risk Management of Financial Derivatives" booklet of the Comptroller's Handbook.
Fed issues stress test data again
Perhaps hoping that the "third try's the charm," the Federal Reserve Board has issued yet another press release to provide the "full corrected results" for the 2014 Dodd-Frank Act stress test.
Caribbean-based scheme to launder bank fraud proceeds halted
The Justice Department and IRS announced yesterday the indictment of one U.S. and two Canadian citizens based in the Caribbean on charges of laundering of $200,000 of supposed bank fraud proceeds. The defendants allegedly assisted undercover law enforcement agents, posing as U.S. clients, in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds' owners.
FATF to meet with private sector
The Financial Action Task Force (FATF) will meet with representatives of the private sector in Brussels on March 25–26, 2014, to discuss updates to the guidance on the application of the risk-based approach in their relevant sectors. The meeting will also discuss issues related to the use of virtual currencies.
OCC posts enforcement actions
The OCC has released a list of new enforcement actions taken against individuals currently and formerly affiliated with national banks and federal savings associations during February 2014. The six new orders are prohibition orders against:
a former Illinois bank manager found to have opened four fraudulent credit card accounts at his bank and used them for his personal benefit (loss to bank over $164,000)
a former vice president of a North Carolina bank found to have extended credit to customers without authorization and using false information, and to have misapplied assets of other bank customers and made false statements in attempts to cover up the loans
a former Ohio branch manager found to have misappropriated multiple customers' funds for her own use
a former CEO and chairman of a failed Oklahoma bank found to have been involved in making unauthorized payments totaling $1.67 million to his two adult children, both co-presidents and board members of the bank. Each of the former co-presidents was also issued a prohibition order and an order to make $100,000 restitution to the FDIC as receiver for the failed bank.
DOJ settles ADA suit over website and mobile apps
The Department of Justice (DOJ) recently proposed a consent decree with subsidiaries of H&R Block Inc., to remedy alleged violations of the Americans with Disabilities Act (ADA). The decree resolves the department's allegations that H&R Block failed to code its website and mobile apps in a manner that would make them accessible to individuals who have vision, hearing and physical disabilities, thus denying those individuals full and equal enjoyment of largely tax-preparation focused goods and services. The decree has been filed with the U.S. District Court for the District of Massachusetts for the court's approval. This action could hint at DOJ plans for rolling out ADA standards for websites and mobile apps.
Tax return preparer permanently barred
DOJ also announced a Florida tax return preparer has been permanently barred by a federal court from preparing federal tax returns. The preparer allegedly prepared returns for customers that inflated income or included fictitious income; claimed false tax credits, including phony education credits and residential energy credits; falsely claimed head of household status; and claimed false dependents.
FHFA settles with Credit Suisse
The Federal Housing Finance Agency (FHFA) has completed an $885 million settlement with Credit Suisse, related companies and specifically named individuals. The settlement regards alleged violations of federal and state securities laws in connection with private-label mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac during 2005–2007.
Corrected stress test results
A Federal Reserve Board press release has been issued with corrections to the previously announced results for the 2014 Dodd-Frank Act stress tests.
OCC directors workshops
A workshop for directors of national community banks and federal savings associations will be held by the OCC in Baltimore on April 28–30, 2014. The three-day workshop, "Mastering the Basics: A Director's Challenge," provides practical information on the roles and responsibilities of a community bank director. The fee is $99 and the workshop is limited to the first 35 registrants. Additional information and registration are available here.
ID theft schemers indicted
U.S. Immigration and Customs Enforcement (ICE) has announced three alleged members of an international cybercrime, money laundering and identity theft conspiracy have been indicted on federal charges for using information hacked from customer accounts at more than a dozen banks, brokerage firms, payroll processing companies and government agencies in an attempt to steal at least $15 million from American customers. The defendants were charged with conspiracy to commit wire fraud, conspiracy to commit access device fraud and identity theft, and with aggravated identity theft.
The National Credit Union Administration has announced the liquidation of Parsons Pittsburg Credit Union of Parsons, Kansas, and the immediate assumption of members, assets, shares and loans by Golden Plains Credit Union of Garden City, Kansas. Parsons Pittsburg Credit Union is the third federally insured credit union liquidated in 2014.
March 21, 2014
Ukraine-related Executive Orders and Designations
OFAC has announced the designation of sixteen Russian government officials, and members of the Russian leadership's inner circle, including a Russian bank, pursuant to Executive Order (E.O.) 13661, which was signed by President Obama on March 16, 2014 (see our March 17 OFAC Update). OFAC has also posted an announcement that President Obama has signed a new Executive Order "Blocking Property of Additional Persons Contributing to the Situation In Ukraine," expanding the scope of the national emergency declared in Executive Order 13660 of March 6, 2014, and expanded by Executive Order 13661. Treasury Secretary Lew issued a statement concerning the Executive Orders. Information regarding the latest designations and the Executive Orders has been posted in a BOL OFAC Update.
Bank stress test results
A press notice from the FRB has announced the release of the summary results of 2014 Dodd-Frank Act bank stress tests.
CFPB consumer complaint report
The CFPB has announced the availability of its 2014 Annual Debt Collection Practices Act Report on the more than 30,000 consumer complaints it has received about the debt collection market. The report finds that many consumers complain that they are being hounded by debt collectors about debts they do not owe. Top complaints also include debt collectors' use of aggressive communication tactics and threats of illegal actions.
OCC technical amendments
In a final rule published in today's Federal Register [79 FR 15639], the OCC has removed regulations on registration of mortgage loan originators, and regulations relating to privacy of consumer financial information. Rulemaking authority for those rules transferred to the Consumer Financial Protection Bureau on July 21, 2011, and the OCC rules are therefore no longer operative. The OCC also is amending its regulations to update its address to reflect its move to a new headquarters building, to update the address of its Freedom of Information Act web portal, and to update its website address to the current www.occ.gov.
NCUA Board action
An NCUA Board Action Bulletin has been issued to report that, at the March 20, 2014, meeting, an update on the Temporary Corporate Credit Union Stabilization Fund was received and the Board unanimously approved a joint agency proposed rule on minimum requirements for appraisal management companies.
NCUA listening sessions
Online registration is available for the NCUA's 2014 Listening Sessions. The sessions will be open to any topics related to NCUA and will take place before NCUA's proposed risk-based capital rule is finalized.
Term deposit offering announced
The Federal Reserve Board has announced that, on March 24, 2014, it will conduct a floating-rate offering of seven-day term deposits through its Term Deposit Facility.
March 20, 2014
Suit against tribal-affiliated payday lender to proceed
The Federal Trade Commission has announced a Federal District Court judge has affirmed a lower court ruling allowing the Commission to sue allegedly deceptive payday lenders who are affiliated with American Indian tribes. The lender argued the FTC lacked authority to enforce the FTC Act, the Truth in Lending Act (TILA), and Electronic Fund Transfer Act (EFTA) against tribes and tribal businesses. The judge found the FTC Act "grants the FTC authority to regulate arms of Indian tribes, their employees, and their contractors" and payday lenders cannot avoid key federal consumer protection statutes simply by aligning themselves with American Indian tribes.
FEMA to suspend communities
The Federal Emergency Management Agency has published [79 FR 15542] a notice in today's Federal Register announcing its intent to suspend, effective April 16, 2014, communities in Indiana, Iowa, Nebraska, Ohio, Texas, and Wisconsin where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP), because of noncompliance with the floodplain management requirements of the program.
FOMC Minutes and Fed Funds projections
The Federal Reserve Board has released the minutes and a statement regarding purchases of securities from the March 18–19, 2014, meeting of the Federal Open Market Committee (FOMC). The Board also release a table and charts summarizing economic and target federal funds rate projections.
March 19, 2014
CFPB unveils prepaid cards disclosure concepts
The Bureau has posted examples of disclosure concepts for the packaging of prepaid cards. The disclosures are being developed as part of a larger project that will provide a variety of protections for prepaid card users. Comments may be submitted online or via email, Twitter, or Facebook.
OFAC Sanctions Symposium
OFAC has announced that registration is open for the 2014 OFAC Sanctions Symposium to be held in Washington, D.C. on April 8, 2014.
FinCEN director discusses AML high profile issues
In prepared remarks at the Association of Certified Anti-Money Laundering Specialists (ACAMS) 19th Annual International AML and Financial Crime Conference, FinCEN Director Jennifer Shasky Calvery provided an update on some of the high profile and sensitive issues FinCEN has been working on in the past year. She commented on efforts to promote greater financial transparency in the marijuana industry, virtual currency issues, and the recent developments in Ukraine.
Cordray on the importance of consumer finance
In a speech at the National Association of State Treasurers, CFPB Director Cordray discussed the importance of consumer finance. He also reviewed the actions being taken by the Bureau to build a consumer financial marketplace involving the "Save Our Homes" program, the Consumer Response function, "Tell Your Story" consumer comments, "Paying for College" tools, and the "Your Money, Your Goals" initiative.
January TIC data
Treasury has released the Treasury International Capital (TIC) data for January 2014. The sum total in January of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows provided a monthly net TIC inflow of $83.0 billion.
Household debt and financial obligations ratios
The Federal Reserve Board has posted the Household Debt Service and Financial Obligations Ratios for the fourth quarter of 2013.
Sale of term deposits results
The results of the March 17, 2014, fixed-rate offering of term deposits through the Federal Reserve's Term Deposit Facility have been released.
March 18, 2014
Homeowner Flood Insurance Affordability Act
The Senate has passed legislation previously passed in the House (HR 3370) designed to delay the implementation of certain provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters). The bill is not yet on the White House calendar. The bill, if enacted, would reinstate lower rates for grandfathered properties that were repealed under Biggert-Waters and would extend the effective date for new escrow rules required under Biggert-Waters from July 6, 2014, to January 1, 2016. Language in the bill also clarifies that escrow requirements would apply prospectively to loans closed on or after the new effective date, and that certain loans would not have to have flood insurance escrows. Escrows would be optional on—
Second liens (if proper coverage is in place in connection with the first lien)
Condo and co-op loans (if the RCBAP is property covered with flood insurance)
Commercial purpose loans secured by a residence
Loans with a term under 12 months
As noted, the bill is not yet on the White House's Pending Legislation calendar. We will watch for developments and include an announcement here, in BOL's Top Stories.
HUD disaster recovery grants announced
HUD has issued press releases announcing a total of $436M in additional Disaster Recovery Grants will be provide to help communities in Oklahoma, Illinois, and Colorado recover from 2013 tornadoes, storms and flooding.
Ukraine-related executive orders and designations
OFAC has announced the designation of four Crimea-based separatist leaders Sergey Aksyonov and Vladimir Konstantinov, leader of Ukranian Choice Viktor Medvedchuk, and former President of Ukraine Viktor Yanukovych, under the March 10, 2014, Executive Order 13660 ("Blocking Property of Certain Persons Contributing to the Situation in Ukraine"). OFAC also posted an announcement that President Obama signed a subsequent Executive Order, "Blocking Property of Additional Persons Contributing to the Situation In Ukraine," which expands upon EO 13660 to provide the ability to target officials of the Government of the Russian Federation, any individuals or entities that operate in the arms or related materiel sector in the Russian Federation, and any individual or entity that is owned or controlled by, or provides material or other support to any senior official of the Government of the Russian Federation or any person designated pursuant to the latter order. Any assets of the individuals that are within U.S. jurisdiction must be frozen and U.S. persons are generally prohibited from conducting any transactions with them.
In addition, Treasury Secretary Lew issued a statement to underscore the serious nature of the designations. Information regarding the designations and the Executive Orders has been posted in a March 17, 2014, BOL OFAC Update.
The Federal Reserve Board has released the February 2014 G.17 Industrial Production and Capacity Utilization Report. Industrial production increased 0.6 percent in February after having declined 0.2 percent in January. In February, manufacturing output rose 0.8 percent and nearly reversed its decline of 0.9 percent in January, which resulted, in part, from extreme weather.
Curry on BSA/AML
In a speech at the Association of Certified Anti-Money Laundering Specials (ACAMS) AML and Financial Crimes Conference, Comptroller Curry discussed accountability and risk management as they relate to the Bank Secrecy Act and Anti-Money Laundering (AML) efforts.
The NCUA Report
The March 2014 issue of The NCUA Report has been posted, featuring articles on the 2013 Share Insurance Fund Report, the importance of good directors, board action on a voluntary liquidation proposal and the OIG Hotline for reporting fraud.
FATF issues mutual evaluation reports
The Financial Action Task Force (FATF) has issued follow-up reports on the mutual evaluations of Mexico and Canada. Both countries have made significant progress in addressing deficiencies and have been removed from FATF's follow-up review process.
March 17, 2014
Consumer compliance interagency exam bulletin OCC Bulletin 2014-7 has been issued on the interagency examination procedures for consumer compliance. The procedures were updated to reflect new mortgage rules requirements under the Dodd-Frank Act. The OCC is in the process of incorporating the new procedures into the Comptroller's Handbook "Consumer Compliance" series.
The March 2013 issue of FedFlash has been posted. It features articles on a processing update for image-enabled savings bonds, a next generation VPN Solution initiative update, new FedReceipts RTNs, the FedACH Risk RDFI Alert Service, and registration information for 2014 Fraud Symposiums.
FRB annual statements
The 2013 combined annual financial statements for the Federal Reserve Banks have been released, as well as statements for the 12 individual Federal Reserve Banks, and the consolidated variable interest entities (VIEs) that were created to respond to strains in financial markets.
March 14, 2014
OFAC adds to Kingpin list
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced yesterday the designation of Eduardo Mendoza Robles (a.k.a. Zeta 33) as a specially designated narcotics trafficker (SDNT) pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Mendoza Robles is responsible for transporting drugs, weapons, and cash across the U.S.-Mexico border on behalf of the Los Zetas cartel. This action prohibits U.S. persons from conducting financial or commercial transactions with Mendoza Robles, and freezes any assets he may have under U.S. jurisdiction. Additional details are available in BankersOnline's OFAC Update.
Bureau schedules Nashville event
The Consumer Financial Protection Bureau has posted a "Save the Date" announcement for a field hearing on payday loans scheduled for Tuesday, March 25, at 11 a.m. Central Time, at the Nashville Public Library Auditorium in Nashville, Tennessee.
Fed announces another TDF offering
The Federal Reserve Board has announced another in its series of small-value Term Deposit Facility operations designed to provide eligible institutions with an opportunity to gain familiarity with term deposit operations. The next offering, scheduled for March 17, 2014, will be for fixed-rate seven-day term deposits with an interest rate of 0.26 percent and a maximum tender amount of $1.25 billion.
FTC and court shut down debt collector
The Federal Trade Commission has announced that a U.S. District Court has approved an FTC-requested Temporary Restraining Order and Asset Freeze to halt the debt collection operations of Federal Check Processing, Inc., alleged to have misrepresented that they were with the government, falsely accused consumers of committing check fraud, and threatened consumers with arrest.
NCUA posts March Board agenda
The National Credit Union Administration has posted the agenda for the March 20, 2014, meeting of its Board of Directors. One of the items on the agenda is consideration of a proposed interagency rule on Minimum Requirements for Appraisal Management Companies.
March 13, 2014
New York to license virtual currency exchanges
The New York State Department of Financial Services (NYDFS) has announced it has issued a Public Order stating that the Department will consider proposals and applications in connection with the establishment of virtual currency exchanges located in the State of New York. The NYDFS is preparing a regulatory framework for such exchanges, due by mid-2014. Superintendent of Financial Services Benjamin M. Lawsky said there is an "urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security, and anti-money laundering compliance."
HUD proposes FHA prepayment rule changes
The Department of Housing and Urban Development has published in today's Federal Register a proposed rule [79 FR 14200] that would eliminate the practice of charging interest on a prepayment through the end of the month in which the mortgage is being prepaid (post-payment interest) with respect to FHA single-family mortgage loans consummated on or after the effective date of a final rule.
OCC releases more CRA evaluations
The OCC has released lists of 48 national banks, federal savings associations and insured federal branches of foreign banks whose CRA ratings were made public during the months of January and February 2014. Twelve of the institutions on those lists received outstanding ratings.
Agencies publish stress test guidance
The previously announced supervisory guidance by the OCC, FDIC and FRB on "Implementing Dodd-Frank Act Company-Run Stress Tests for Banking Organizations with Total Consolidated Assets of more than $10 Billion but less than $50 Billion" has been published [79 FR 14153] in today's Federal Register. The effective dates are April 1, 2014, for the Federal Reserve Board, and March 31, 2014, for the OCC and FDIC.
Curry on community reinvestment
In remarks at the National Community Reinvestment Coalition annual conference, Comptroller Curry discussed how national banks and federal savings associations can more effectively serve the credit needs of rural communities, especially in economically distressed areas.
March 12, 2014
CFPB proposes new information collection
The CFPB has published a Notice and Request for Comment (NRC) regarding a new information collection titled, "Debt Collection Survey from the Consumer Credit Panel." The CFPB plans to conduct a mail survey of consumers to learn about their experiences interacting with the debt collection industry. The survey will ask consumers about their experiences with debt collectors, whether they recognized the debt that was being collected, and about their interactions with the debt collectors. The survey will also ask consumers about their preferences for how they would like to be contacted by debt collectors, opinions about potential regulatory interventions in debt collection markets, and about their knowledge of their legal rights regarding debt collections. Written comments must be received on or before May 6, 2014.
CRA ratings released
The OCC has released the ratings received by 34 national banks and federal savings associations that were recently evaluated for compliance with CRA. Of the 34 evaluations, nine are rated outstanding, 23 are listed as satisfactory, and two were rated as needs to improve.
FDIC state profiles
The FDIC has posted the Fourth Quarter 2013 issue of FDIC State Profiles, a quarterly data sheet summation of banking and economic conditions by state.
FinCEN ruling on records of foreign exchange dealers
FinCEN has issued administrative ruling FIN- 2014-R003 to clarify circumstances in which a dealer in foreign exchange may accept alternative travel documents as identification for a non-resident alien.
FRB fixed-rate offering results
The results of the Federal Reserve Board's March 10, 2014, fixed-rate offering of term deposits through its Term Deposit Facility have been announced.
March 11, 2014
FINRA finds millennials struggle financially
The FINRA Investor Education Foundation has released the results of its recent study, The Financial Capability of Young Adults—A Generational View, reporting that millennials—individuals born between the early 1980s to the early 2000s, often referred to as "Generation Y"—display low levels of financial literacy, "engage in problematic financial behaviors" and are worried about their debt. The study was released at the inaugural meeting of the President's Advisory Council on Financial Capability for Young Americans.
Cordray on financial education
In a presentation to the President's Advisory Council, CFPB Director Cordray discussed the importance of financial education in allowing consumers to make sound financial choices. He noted, "The most obvious way to create a more financially capable nation is to insist on having financial education in every one of our schools." He also reviewed five steps that would promote youth financial education.
National Interagency Community Reinvestment Conference
The Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency and the Community Development Financial Institutions Fund have jointly announced their 2014 National Interagency Community Reinvestment Conference, to be held in Chicago March 31 through April 2, 2014. The registration deadline is March 14. An online agenda and registration information are available.
Treasury and the Department of Housing and Urban Development have announced the release of the February 2014 edition of the Obama administration's Housing Scorecard, a comprehensive report of the U. S. housing market. Purchases of new homes rose, foreclosure completions continued their downward trend, and house prices were stable.
G.19 consumer credit report
The January 2014 G.19 Consumer Credit Report has been released by the FRB. Consumer credit increased at a seasonally adjusted annual rate of 5¼ percent. Revolving credit decreased at an annual rate of ¼ percent, while non-revolving credit increased at an annual rate of 7½ percent.
Basel III amendments interim final rule OCC Bulletin 2014-6 has been issued announcing an interim final rule with request for comments. The rule, which is effective March 31, 2014, revises the OCC's regulatory capital rules, adding a new common equity tier 1 requirement, revising the definitions of tier 1 and tier 2 capital, and integrating federal savings associations into 12 CFR Parts 3 and 6 (Prompt Corrective Action).
Risk assessment and credit risk workshops
The OCC will host two workshops for directors of national community banks and federal savings associations in Atlanta on April 8–9, 2014. The "Credit Risk" and "Risk Assessment" workshops are $99 each, with participation limited to the first 35 registrants for each topic.
Matz and Cordray town hall webinar online
The NCUA has announced the February 12, 2014, town hall webinar hosted by Chairman Matz and featuring Director Cordray is available for registrants online.
FTC to review customer info security standards
The Federal Trade Commission has announced its intention to begin a review and solicit comments this year on Standards for Safeguarding Customer Information, 16 CFR Part 314, which implements Sections 501 and 505(b)(2) of the Gramm-Leach-Bliley Act.
March 7, 2014
FinCEN updates Ukrainian advisory
FinCEN has updated its February 25, 2014, Advisory to Financial Institutions on Recent Events Related to the Departure of Victor Yanukovych and Other Ukrainian Officials. [Update; Original]
CFPB reports on servicemember complaints
The CFPB has posted a Bureau Blog article and issued a press release on complaints received from servicemembers and their families concerning financial products or services and the Bureau's recovery of more than $1 million for the servicemembers. The article and release showcased the release of Complaints received from servicemembers, veterans, and their families, a summary report on about 14,000 complaints from military consumers received between July 21, 2011, and February 1, 2014.
OFAC issues $500K CMP
OFAC has announced a non-financial corporation has agreed to pay $504,225 to settle potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations.
New offering of 7-day term deposits
The Federal Reserve Board has announced a March 10, 2014, fixed-rate offering of term deposits through its Term Deposit Facility. The Federal Reserve will offer seven-day term deposits with an interest rate of 0.26000 percent and a maximum tender amount of $1,250,000,000.
March 2014 FedFocus
Federal Reserve Bank Services has posted the March 2014 issue of FedFocus. This edition features articles on how to connect with a FedLine access solution, maintaining a cash system in a changing landscape, and FEDucation meetings and conferences.
NCUA Board meeting video
A link to the video of the February 20, 2014, meeting of the NCUA Board of Directors have been posted on the NCUA Board's Web page.
March 6, 2014
Ukraine-related Executive Order
The OFAC Resource Center was updated this morning with an announcement of a new Executive Order responding to "threats to the peace, security, or stability of Ukraine, as well as efforts to assert governmental authority in the Crimean region without the authorization of the Government of Ukraine." The announcement reports that the "Executive Order allows the United States to sanction any individual or entity that is responsible for or complicit in actions or policies that undermine democratic processes or institutions in Ukraine or that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine. It further allows the United States to sanction persons who are involved in the misappropriation of state assets of Ukraine or have asserted governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine."
Counterfeit cashier's checks alert
The OCC has issued Alert 2014-15 on counterfeit cashier's checks bearing the routing number of Urban Trust Bank, Lake Mary, Florida. Information regarding the checks has been posted on the BOL Alerts and Counterfeits page.
Final Affordable Care Act reporting regs
A Fact Sheet has been released by Treasury and the IRS regarding final rules to implement the information reporting provisions of the Affordable Care Act for insurers and certain employers, which take effect in 2015.
New NMLS Ombudsman appointed
The Conference of State Bank Supervisors (CSBS) has appointed Robert Niemi as the new NMLS Ombudsman. The Ombudsman provides the financial services industries and other interested parties with a neutral venue to discuss issues or concerns regarding NMLS and state licensing.
Yellen at ceremonial swearing-in
The traditional ceremonial swearing-in of Janet Yellen as Chair of the Federal Reserve Board was conducted yesterday at the Board's headquarters in Washington. The Board published Chair Yellen's remarks to those attending the gathering.
DFA stress test guidance for medium-sized firms
The Federal Reserve System, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency have announced final Dodd-Frank Act stress test guidance for medium-sized firms (those with assets between $10 and $50 billion). The guidance confirms that companies with assets between $10 billion and $50 billion are not subject to the Federal Reserve's capital plan rule, the Federal Reserve's annual Comprehensive Capital Analysis and Review, Dodd-Frank Act supervisory stress tests, or related data collections, which apply to bank holding companies with assets of at least $50 billion.
March 5, 2014
FDIC CRA evaluations
The FDIC has issued a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA) for which ratings were assigned in December 2013. Of the 116 banks evaluated, four (in California, Colorado, Tennessee and Washington) earned an "outstanding" rating, one in Florida received a "needs to improve," and one Illinois bank was found to be in "substantial non-compliance."
OCC CRA exam schedule
The Office of the Comptroller of the Currency has issued its schedule of CRA examinations for the second quarter of 2014.
Auction of TARP CPP securities update
The Department of the Treasury has issued an update on the previously announced sale of preferred stock of five financial institutions. As announced, the sale commenced on March 3 and will close at 6:00 pm ET tomorrow, March 6. The original sale announcement was included in the February 28 BOL Top Stories.
Term deposits offering results
The FRB has announced the results of its March 3, 2014, offering of seven-day term deposits.
Curry and Gruenberg on community banking
In presentations at the annual convention of the Independent Community Bankers of America, Comptroller Curry discussed the importance of community banking, its supervision, and resources available from the OCC; and Chairman Gruenberg spoke on the importance, future and role of community banking.
March 4, 2014
NCUA 2013 Q4 Call Report data
The NCUA has released the data from fourth quarter 2013 credit union Call Reports. Chairman Matz noted several key indicators reported growth but some trends were less favorable. Loans, membership and net worth saw continued positive growth, but net interest margins continued to decline.
March 3, 2014
Virginia and Pennsylvania banks closed
The FDIC has announced the closing and assumption of all deposits of Millennium Bank, National Association, Sterling, Virginia, and Vantage Point Bank, Horsham, Pennsylvania. The banks were the 4th and 5th FDIC-insured institutions to fail in 2014.
FRB prohibition order
The Federal Reserve Board has released a letter addressed to an individual currently in federal prison after having pleaded guilty to bank fraud, informing him of an order under Section 19 of the Federal Deposit Insurance Act and Section 205 of the National Credit Union Act prohibiting him from becoming or continuing as an institution-affiliated party with respect to any federally insured banking organization or credit union.
FDIC enforcement actions
The FDIC has released a list of administrative enforcement actions taken in January 2014 by the agency against banks and individuals. This list includes two civil money penalties (CMPs) totaling $24,605 issued against banks in California and Illinois for violations under the Flood Disaster Protection Act of 1973, further information on which has been posted on BankersOnline's Flood Penalties Watch page. There were also six CMPs against individuals relating to an Oklahoma bank in FDIC receivership, and eight removal/prohibition orders against individuals formerly affiliated with banks in Arkansas, Massachusetts, New Jersey, Oklahoma and Pennsylvania.
NCUA prohibition orders
The NCUA has announced the issuance of orders prohibiting four individuals from participating in the affairs of any federally insured financial institution. The four individuals had separately been ordered to pay a combined $1,876,782 in restitution for their various crimes as former employees of credit unions in California, Massachusetts and Oregon.
NCUA economic update
The latest video in the NCUA Economic Update YouTube series has been posted.
NCUA proposes amendment
The NCUA has published a proposed rule [79 FR 11714] in today's Federal Register that would amend its voluntary liquidation regulation to reduce administrative burdens on voluntarily liquidating federal credit unions (FCUs) and recognize technological advances by: Permitting liquidating FCUs to publish required creditor notices in either electronic media or newspapers of general circulation; increasing the asset-size threshold for requiring multiple creditor notices; requiring that preliminary partial distributions to members not exceed the insured limit for any member share account; specifying when liquidating FCUs must determine member share balances for the purposes of distributions; and permitting liquidating FCUs to distribute member share payouts either by wire or other electronic means or by mail or personal delivery.
February 28, 2014
Kingpin Act Designations
Treasury has announced the designation of Hugo Cuellar Hurtado, a dual Colombian-Mexican national, for his material support to the narcotics trafficking activities of the Sinaloa Cartel and one of the organization's leaders, Juan Jose Esparragoza Moreno (a.k.a. El Azul), under the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Six other individuals and ten entities linked to Cuellar Hurtado were also designated. As a result of this action, all property and interests in property in the United States, or in the possession or control of U.S. persons in which the individuals and entities designated today have an interest, are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Information regarding the designations has been posted in a BOL OFAC Update.
OCC publishes Basel III conforming amendments
The OCC has published in today's Federal Register [79 FR 11300] an interim final rule (and request for comments) making technical and conforming amendments to its regulations governing national banks and Federal savings associations to make those regulations consistent with the recently adopted Basel III Capital Framework. As part of these technical amendments, the OCC is revising and clarifying its regulations governing subordinated debt applicable to national banks and Federal savings associations. The rule will become effective on, and comments are due by, March 31, 2014.
$122M settlement announced by FHFA
The Federal Housing Finance Agency, as conservator of Fannie Mae and Freddie Mac, has announced a settlement with Société Générale, related companies and specifically named individuals for $122 million. The settlement resolves claims in a lawsuit alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities (PLS) purchased by
Fannie Mae and Freddie Mac during 2006. A copy of the settlement agreement was included with the FHFA news release.
ID theft still at top of consumer complaint list
The Federal Trade Commission has released its annual report on consumer complaints. Identity theft continues to top the national ranking, with American consumers reporting losses over $1.6 billion to fraud overall in 2013.
Credit report error tips
The Consumer Financial Protection Bureau Blog features an article explaining that more options are now available to consumers trying to correct errors on their credit reports. Supporting documentation can now be uploaded, mailed, or faxed to explain the errors in a credit report. The Bureau also posted prepared remarks by Director Cordray at the Bureau's Consumer Advisory Board Meeting and a news release about the credit reporting complaints received by the Bureau.
FDIC consumer tips
The FDIC will issue, in observance of National Consumer Protection Week (March 2–8, 2014), a series of consumer tips on selected banking topics related to saving and protecting money.
Intent to sell TARP CPP stock announced
The Treasury Department has announced its intent to sell several preferred stock Capital Purchase Program (CPP) investments under the Troubled Asset Relief Program (TARP). The auctions, which will be offered principally to domestic qualified institutional buyers and certain domestic institutional accredited investors, will begin on or about Monday, March 3, 2014.
January mortgage interest rates increase
A Federal Housing Finance Agency (FHFA) news release reports that the January 2014 FHFA Index of contract interest rates increased 0.11 percent from December 2013 to January 2014. The index is calculated using FHFA's Monthly Interest Rate Survey.
Reminder of removal of OFAC archives
Treasury has issued a reminder of its previous announcement that OFAC will on or about March 5, 2014, cease to issued certain ".exe" self-extracting archives.
FRB Federal Advisory Council minutes
The minutes of the February 7, 2014, meeting of the Federal Reserve Board Federal Advisory Council have been released.
NPR comment period extended
The Federal Reserve System has extended for an additional 30 days, the public comment period on an advance notice of proposed rulemaking on physical commodity activities conducted by financial holding companies. Comments are now due April 16, 2014.
CRA ratings released
The OCC has released the ratings received by national banks and federal savings associations that were evaluated for compliance during October and November 2013.
CFPB files suit against ITT Educational Services
The CFPB has issued a press release and blogged to announce the filing of a lawsuit against ITT Educational Services, Inc., accusing the for-profit college chain of predatory student lending. Bureau Director Cordray offered comments on the CFPB action at a press conference on Wednesday.
January residential sales up
HUD and the Census Bureau have announced that sales of new single-family houses in January 2014 were at a seasonally adjusted annual rate of 468,000, 9.6 percent above the revised December rate of 427,000 and 2.2 percent above the January 2013 estimate.
NCUA proposes revised PCA regulations
The National Credit Union Administration has published in today's Federal Register a proposed rule [79 FR 11183] that would amend the agency's regulations regarding prompt corrective action (PCA) to restructure the regulations and make various revisions, including replacing the agency's current risk-based net worth requirements with new risk-based capital requirements for federally insured "natural person" credit unions. The proposed risk-based capital requirements would be more consistent with NCUA's risk-based capital measure for corporate credit unions and the regulatory risk-based capital measures used by the other Federal banking regulatory agencies. Comments on the proposal are due by May 28, 2014.
Insured institutions earn $40.3B in fourth quarter
An FDIC press release has announced that insured commercial banks and savings institutions reported aggregate net income of $40.3 billion in the fourth quarter of 2013, a $5.8 billion (16.9 percent) increase from the $34.4 billion reported in 2012. This is the 17th time in the last 18 quarters that earnings have registered a year-over-year increase.
Quarterly net income of $40.3 billion is 17 percent higher than a year ago
Lower loss provisions remain key to earnings growth
Full-year net income of $154.7 billion represents a 10 percent increase
Loan growth remains modest, as mortgage lending declines
Two failures in fourth quarter are fewest since second quarter 2008
The FDIC also made available remarks from Chairman Gruenberg and a video of yesterday's FDIC press conference.
Former bank VP pleads guilty to ICE charges
The U.S. Immigration and Customs Enforcement (ICE) has announced that a former Bank of America vice president pleaded guilty Tuesday to charges of attempted coercion and enticement of a minor.
Bureau extends application deadlines for advisory councils
The deadlines for submission of applications for membership on the CFPB Credit Union Advisory Council (CUAC) and Community Bank Advisory Council (CBAC) have been extended two weeks, to March 14, 2014.
February 26, 2014
FinCEN Ukrainian advisory
FinCEN has issued an Advisory to U.S. financial institutions to remind them of their responsibility to take reasonable, risk-based steps regarding the potential suspicious movement of assets related to Viktor Yanukovych departing Kiev, Ukraine, and abdicating his responsibilities and other senior officials resigning from their positions or departing Kiev.
Counterfeit cashier's checks alert
OCC Alert 2014-14 warns of counterfeit cashier's checks bearing the name of First National Bank, Lenoir City, Tennessee. Information regarding the checks will be posted on the BOL Alerts & Counterfeits page.
NMLS conference blog
The sixth annual NMLS Conference and Training concluded on February 21. The conference featured popular general sessions, breakouts by industry type, and training opportunities. The Conference Blog provides highlights, along with interviews and commentary from speakers and guests.
House prices continue to rise
The Federal Housing Finance Agency (FHFA) announced that U.S. house prices rose 1.2 percent in the fourth quarter of 2013, according to the House Price Index (HPI). This is the tenth consecutive quarterly price increase in the purchase-only, seasonally adjusted index.
FRB discount rate meeting minutes
The minutes of the January 27, 2014, meeting of the Federal Reserve Board discount rate meeting have been released.
Stress test results release dates
The Federal Reserve Board has announced March 20 and March 26 as release dates for the latest supervisory stress tests results and related results from the Comprehensive Capital Analysis and Review.
OCC state fact sheets releases
The OCC has released fact sheets on the performance and condition of 87 community national banks and federal savings associations in Iowa, Nebraska and South Dakota. Ninety-seven percent of banks are rated 1 or 2 on the five-point CAMELS scale, up from the low point of 82 percent in 2011.
FDIC Consumer News
The winter issue of the FDIC Consumer News features tips on choosing and using credit cards. Other topics include; ways to protect personal information, money and banking tips for the tax season, testing one's deposit insurance IQ, and preparing for rising home equity line payments.
CFPB financial planning worksheet
The CFPB Blog features instructions for the use of the CFPB My New Money Goal financial planning worksheet.
Cordray on financial education
In his presentation at the Bureau's Financial Literacy and Education Commission meeting, Director Cordray discussed the importance of financial education, the role of employers, and the actions of the CFPB.
February 25, 2014
CFPB assesses CMP for fee splitting
The Consumer Financial Protection Bureau has issued a Consent Order under which a Connecticut mortgage lender has agreed to pay an $83,000 civil money penalty (CMP) for violating federal law by illegally splitting real estate settlement fees. The violations were self-reported. The lender admitted liability and voluntarily provided information to the Bureau.
FRB to publish banking application data and guidance
The Federal Reserve Board has announced that it will publish a semi-annual report with aggregate data and other information regarding banking applications (for example, those involving a planned acquisition or new branch office). The report will include statistics on the length of time taken to process applications and notices, the number of approvals, denials, and withdrawals, and the primary reasons for withdrawals.
In connection with the Board's announcement (see previous story), SR 14-2/CA 14-1 was issued to describe common issues that have led to recent withdrawals of applications. The purpose of the letter is to provide financial institutions and the general public with a better understanding of the Federal Reserve's approach to applications and notices that may not satisfy statutory requirements for approval of the proposal or otherwise raise supervisory or regulatory concerns.
FinCEN publishes Housing GSE SAR requirements
FinCEN has published its previously announced final rule [79 FR 10365] imposing AML program and SAR filing requirements upon Housing Government Sponsored Entities (Fannie Mae, Freddie Mac, and the Federal Home Loan Banks), replacing current, less stringent, requirements that they report suspicious activity to the Federal Housing Finance Agency.
February 24, 2014
OCC enforcement actions
New enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with such institutions have been released by the Office of the Comptroller of the Currency. The orders included a $500,000 Civil Money Penalty assessed against an Indiana bank for inadequacies in its BSA/AML compliance program, and a $43,120 Civil Money Penalty assessed against a Pennsylvania bank for a pattern or practice of violations of the Flood Disaster Protection Act and implementing regulations. The BSA/AML and Flood CMPs will be added to BOL's BSA/AML Penalties and Flood Penalties Watch pages, respectively.
FEMA to suspend communities
The Federal Emergency Management Agency (FEMA) has published a final rule [79 FR 10014] identifying communities in Maryland, Texas, Virginia and Wisconsin where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on April 2, 2014, because of noncompliance with the floodplain management requirements of the program.
ATM skimmers get 5 years
U.S. Immigration and Customs Enforcement (ICE) has announced that two Romanian natives now residing in Queens, New York, were sentenced to nearly five years in federal prison Thursday for their roles in a scheme that stole $985,000 from bank customers in New Jersey, New York and Connecticut by installing secret card-reading devices on ATMs that stole account information when customers swiped their cards.
The Federal Reserve Board has released the list of bank holding companies that have elected as of February 21, 2014, to be treated as financial holding companies.
'Advanced approaches' risk-based capital requirements
The Office of the Comptroller of the Currency and the Federal Reserve Board have announced the "Advance Approaches" capital framework will permit certain banking organizations to begin using an additional approach to determine their risk-based capital requirements. The framework applies to large, internationally active banking organizations, generally those with at least $250 billion in total consolidated assets or at least $10 billion in total on-balance sheet foreign exposure, and includes the depository institution subsidiaries of those firms. The FRB also issued a final rule clarifying that bank holding companies using the Advanced Approaches framework will incorporate those changes into the capital planning and stress testing cycles that begin October 1, 2015.
FRB schedules 7-day term deposit operations
The FRB plans to conduct a series of seven-day term deposit operations under its Term Deposit Facility (TDF) as part of the ongoing program of small-value offerings designed to ensure the operational readiness of the TDF and to provide eligible institutions with an opportunity to gain familiarity with term deposit procedures. The operations will be held on March 3, March 10, March 17, and March 24, 2014. Additional information is posted on the FRB Term Deposit Facility Resource Center page.
Matz promotes America Saves Week
An NCUA press release has conveyed a message from Chairman Matz urging credit unions to educate their members and their communities about the importance of saving during America Saves Week and Military Saves Week, which runs February 24 to March 1. In addition, NCUA announced its first Twitter chat, the first of a two-part series focusing on financial literacy, on Wednesday, February 26, at 11 a.m. ET. Credit unions and consumers are encouraged to follow the conversation and contribute using the #NCUAChat hashtag on Twitter.
February 21, 2014
Counterfeit checks alerts
Two Alerts have been issued by the OCC regarding counterfeit treasurer's checks bearing the name of United Bank, West Springfield, Massachusetts and counterfeit official checks bearing the name of The First National Bank of Bellevue, Bellevue, Ohio. Information regarding the counterfeit checks has been posted on the BOL Alerts & Counterfeits page.
Iran Sanctions Act removal
OFAC has announced the deletion of two SDN List entries for an entity previously designated pursuant to Iran Sanctions Act. Information regarding the removals has been posted in a BOL OFAC Update.
FATCA rules updated
Treasury and the IRS have released the last substantial package of regulations necessary to implement the Foreign Account Tax Compliance Act (FATCA). FATCA seeks to obtain information on accounts held by U.S. taxpayers in other countries. It generally requires U.S. financial institutions to withhold a portion of certain payments made to certain foreign financial institutions (FFIs) that do not agree to identify and report information on U.S. account holders. The proposed and temporary regulations released make additions and clarifications to previously issued FATCA regulations and provide guidance to coordinate FATCA rules with preexisting due diligence, reporting, and withholding requirements under other provisions of the Internal Revenue Code. A Fact Sheet was also released.
Finance Companies Owned and Managed report
The Federal Reserve Board has released the December 2013 G.20 Finance Companies Owned and Managed Receivables Outstanding and Auto Loans: Terms of Credit report.
CRA ratings released
The OCC has released a list of ratings received by forty-two national banks and federal savings associations recently evaluated for compliance with CRA.
SAR filings change for Housing GSEs
FinCEN has issued a Final Rule that will require that Housing GSEs (Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks) file SARs directly with FinCEN instead of filing less detailed reports through their regulator, the Federal Housing Finance Agency (FHFA). This rule is effective 60 days after publication in the Federal Register.
Calvery on marijuana, virtual currency and CDD
In remarks at the Florida International Bankers Association Anti-Money Laundering Conference, Director Calvery discussed FinCEN's activities regarding the BSA obligations of financial institutions that bank marijuana-related businesses, virtual currency, and customer due diligence (CDD).
NCUA listening sessions
The NCUA will host three "Listening Sessions" in San Francisco, Chicago and Washington D.C, in July 2014. Registration for all Listening Sessions will be free and available online. Participation will be open to the first 150 people who register.
NCUA Board Action Bulletin
A Board Action Bulletin has been posted by the NCUA regarding the action taken at the February 20, 2014, meeting of the NCUA Board.
CFPB complaint report
The CFPB Blog features an article on the over 300,000 complaints received by the CFPB since July 2011. The type of complaints accepted, how they are submitted and what happens after submission are discussed.
February 20, 2014
Kingpin designations and Counter Narcotics removals
Treasury has announced the designation of eight individuals and five entities pursuant to the Kingpin Act, the addition of their names and the deletion the names of four individuals and three entities from the SDN List. In addition, a change has been made to one existing listing. Information regarding the designations, deletions and change has been posted in a BOL OFAC Update.
January residential construction report
HUD and the Census Bureau have released the new residential construction statistics for January 2014. Building permits, housing starts and housing completions declined from December 2013.
FOMC minutes and statement
The minutes and statement of the January 28–29, 2014, meeting of the Federal Open Market Committee (FOMC) have been released by the Federal Reserve Board.
OCC directors workshops in Virginia
The OCC will host two workshops in Richmond, Virginia, on March 25–26, for directors of national community banks and federal savings associations. The fee for the "Compliance Risk" and "Credit Risk: A Director's Focus" workshops is $99 for each workshop, with registration limited to 35 attendees per session. Online registration is available.
February 19, 2014
Final rule on large banks prudential standards
A press release has been issued by the Federal Reserve Board to announce its approval of a final rule, pursuant to the Dodd-Frank Act, establishing a number of enhanced prudential standards for U.S. bank holding companies and foreign banking organizations with total U.S. consolidated assets of $50 billion or more. The standards include liquidity, risk management, and capital. U.S. bank holding companies subject to the rule will need to comply by January 1, 2015.
Commercial and government checks reports
The FRB has also released the reports of fourth quarter and annual 2013 commercial checks collected and returned, government checks, and postal money orders processed:
Fourth quarter loan/leases charge-off and delinquency rates
The report of fourth quarter 2013 charge-off and delinquency rates on loans and leases at commercial banks has been released by the Board.
SPOE comment period extended
The FDIC has extended the comment period by 30 days for the Single Point of Entry (SPOE) strategy for the resolution of Systemically Important Financial Institutions. The original request for comments was published in the Federal Register and reported in the December 11, 2013, BOL Top Stories. All comments must be received on or before March 20, 2014.
The NCUA Report
The January 2014 issue of The NCUA Report has been posted. Each issue contains articles from the NCUA Chairman and Board Members.
February 18, 2014
FinCEN guidance on banking marijuana-related businesses
FinCEN, in coordination with the U.S. Department of Justice, has issued guidance [FIN-2014-G001] that clarifies customer due diligence expectations and Bank Secrecy Act (BSA) reporting requirements for financial institutions seeking to provide services to marijuana businesses. The guidance suggests that financial institutions can provide services to marijuana-related businesses in a manner consistent with their obligations to know their customers and to report possible criminal activity.
[Editor's Note: FinCEN's Guidance was discussed at BOL's BSA•AML Top Gun Conference, Wednesday and Thursday of this week in Scottsdale, Arizona.]
Kingpin Act designations
Treasury has announced that OFAC has designated Juanita del Carmen Rios Hernandez and her medical supply company, Distribuidora e Importadora de Productos Medicos del Norte, as specially designated narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Juanita del Carmen Rios Hernandez is the spouse of Mexican drug lord Miguel Angel Trevino Morales, a leader of Los Zetas drug cartel, who is jailed in Mexico and faces multiple federal indictments in the United States for narcotics and money laundering violations. Information regarding the designations has been posted in a BOL OFAC Update.
OCC expectations—Bankruptcy discharge of secured debt OCC Bulletin 2014-4 has been issued as guidance to clarify the agency's supervisory expectations for national banks and federal savings associations regarding secured consumer debt discharged in Chapter 7 bankruptcy proceedings. The guidance discusses:
the analysis necessary to "clearly demonstrate and document that repayment is likely to occur," which would preclude any charge-off as required by the Uniform Retail Credit Classification and Account Management Policy
when a bank may consider post-discharge payment performance as evidence of collectability and when this performance demonstrates both capacity and willingness to repay the full amounts due.
Minnesota CU closes
The NCUA has announced the closing of St. Francis Campus Credit Union of Little Falls, Minnesota, and the assumption of members, assets, shares and loans by Central Minnesota Credit Union of Melrose, Minnesota. This was the second federally insured credit union liquidation in 2014.
Agenda posted for NMLS Ombudsman meeting
The NMLS has posted the agenda for the February 18, 2014, Ombudsman meeting to be held in Miami.
G.17 Industrial Production report
The Federal Reserve Board has released the January 2014 G.17 Industrial Production and Capacity Utilization report.
February 2014 FedFlash
Federal Reserve Financial Services has released the February 2014 issue of FedFlash. The issue features articles on the address change for paper items sent to Atlanta, new FedReceipt RTNs, a check adjustments tip, and automatic delivery of payment information to health care providers.
February 14, 2014
GAO college debit card report
The Government Accountability Office (GAO) has released the results of a study of college and university debit or prepaid card service agreements. The report [63 pages, PDF] examines the functions of college cards, the characteristics of schools and card providers offering the cards, and benefits and concerns related to them. The GAO recommends that—
Congress consider requiring that financial firms providing debit and prepaid card services to colleges file their agreements for public review and provide other relevant information
The Department of Education—
specify what constitutes convenient access to ATMs or bank branch offices for students receiving federal student aid funds
develop requirements for schools and card providers to present neutral information to students about their options for receiving federal student aid funds
NCUA board meeting agenda
The NCUA has posted the agenda for the February 20, 2014, meeting of its Board.
Regulation P proposal published
The Federal Reserve Board's proposal to rescind its Regulation P (12 CFR Part 216), described in yesterday's Top Stories, has been published in the Federal Register [79 FR 8904]. Comments are due by April 15, 2014.
February 13, 2014
FRB proposes repeal of Regs DD and P and changes to V
The Federal Reserve Board has requested comment on notices of proposed rulemaking (NPR) to repeal Regulation DD (Truth in Savings) and Regulation P (Privacy of Consumer Financial Information) and to amend the Identity Theft Red Flags rule in Regulation V (Fair Credit Reporting). Because the CFPB has already issued interim final rules that are substantially identical to the Board's Regulation DD and Regulation P, the Board is proposing to repeal its versions of those regulations. The proposed amendment to Regulation V would reflect legislation that amended the Fair Credit Reporting Act (FCRA) to clarify that the ID Theft Read Flags provisions apply only to creditors that regularly extend credit or obtain consumer reports in the ordinary course of their business. The amendments to the FCRA were intended to narrow the scope of the law so that it would not be applied to professionals, such as doctors or lawyers, who sometimes allow consumers to delay payment. Comments on the proposals must be submitted within 60 days from the date of publication in the Federal Register.
Paper check processing weather delays
Federal Reserve Bank Services has issued a notice that weather conditions in the Atlanta area may cause some delays in paper check presentments and paper return items.
CRA ratings released
The OCC has released the ratings http://www.occ.gov/static/cra/aug13.html received in August 2013 by twenty-six national banks and federal savings associations recently evaluated for compliance with CRA. Four banks on the list received "outstanding" ratings.
OCC directors workshop
The OCC will host a workshop, "Mastering the Basics: A Director's Challenge," in Denver on March 31–April 2, 2014, for new and experienced directors of national community banks and federal savings associations. The three day workshop provides practical information on the roles and responsibilities of a community bank director. The workshop fee is $99 and registration is limited to 35 individuals.
updates examination procedures and groups them by risk. The expanded examination procedures supplement the core assessment standards in the "Large Bank Supervision" and "Community Bank Supervision" booklets of the Comptroller's Handbook
updates references and adds a list of abbreviations
adds references to recent significant U.S. Department of Labor regulations and policy issuances
adds a discussion of Bank Secrecy Act/anti-money laundering and Regulation R
adds a discussion of board and senior management responsibilities regarding oversight of risk management
Cordray at FLEC meeting
In prepared remarks at the public meeting of the Financial Literacy and Education Commission (FLEC) in Washington, D.C., CFPB Director Cordray discussed the importance for school districts, as well as state and local officials, of being directly involved in the financial education of children. He also reviewed the activities of the CFPB through its "Paying for College" tools and the "Ask CFPB" database to provide information to consumers.
Shedding light on student financial products
A CFPB Blog article has been posted on information uncovered in a review of financial institution arrangements with colleges and universities to market bank account, prepaid cards, debit cards and other financial products to students. Some of the arrangements included—
direct payments for the use of school logos in marketing (a practice that Congress restricted for student loans)
bonuses for recruiting students to sign up for financial products
discounted bank services to colleges in exchange for permission to market to their students
February 12, 2014
Afghan heroin trafficker and organization tagged
Treasury announced the designation of Afghan national Lahore Jan under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for his significant role in international narcotics trafficking. Lahore Jan is a known narcotics trafficker in Jalalabad, Afghanistan. He is involved in moving money for the Taliban and other narcotics traffickers using his hawala, a value transfer system, called the Lahore Jan Shanwari Exchange. His name and that of the transfer system have been added to the SDN list with the SDNTK designation. For additional details see our BOL OFAC Update.
Yellen delivers Monetary Policy Report to Congress
Chairman Yellen presented the Federal Reserve Board's semiannual Monetary Policy Report to Congress and testified before the House Committee on Financial Affairs. She reviewed the current economic situation and outlook, monetary policy, and an update of the agency's progress on regulatory reforms and supervisory actions to strengthen the financial system. She emphasized she expects a great deal of continuity in the FOMC's approach to monetary policy.
CFPB Consumer Advisory Board meeting
The Bureau has issued an invitation to attend a meeting of its Consumer Advisory Board (CAB) to be held at 10:00 a.m. ET on February 27 in Washington D.C. The event is open to the public but an email RSVP is required. Director Cordray will offer remarks, and the Consumer Advisory Board will listen to consumer groups, community and industry representatives, and members of the public. An agenda for the meeting was also provided. The two-hour session is the only portion of the full two-day CAB meeting scheduled for February 26–27 that will be open to the public.
Cordray comments suggest HMDA changes
In prepared remarks for a recent Bureau HMDA press call, CFPB Director Cordray discussed the actions being taken by the Bureau to improve access to information about the residential housing market. But much of the Director's focus was on the possibility of substantial change in the data to be collected under the Home Mortgage Disclosure Act (HMDA) and the methods for submitting the data. A Small Business Review Panel will be convened to receive feedback from industry and consumer groups regarding potential improvements to the HMDA data collection and disclosure process as well new proposed rules, including changes mandated under Dodd-Frank Act.
Final Affordable Care Act employer regs
The Treasury Department has announced that Treasury and the IRS have approved final regulations implementing employer responsibility provisions under the Affordable Care Act (ACA) that take effect in 2015. The rules address a number of questions about how plans can comply with the employer shared responsibility provisions; ensure that volunteers such as firefighters and emergency responders do not count as full-time employees; and phase in provisions for businesses with 50 to 99 full-time employees and those that offer coverage to most but not yet all of their full-time workers. A Fact Sheet was also issued.
Over 3M HARP refinances
The Federal Housing Finance Agency (FHFA) has issued a news release to announce that more than 3 million homeowners have now refinanced their mortgages through the Home Affordable Refinance Program (HARP).
Currency and coin data
The Federal Reserve Board has released currency and coin data for 1993–2013 including value, volume, calendar year totals, Federal Reserve expenses, cost of new currency and $1 coin inventories.
CFPB tax tips
A Bureau Blog article, "Getting a grip on income tax season," provides solutions for filing tax returns, with tips on where to get free help, preparing one's own return, whether filing is even required, and how to handle a refund. The article also identifies organizations that provide services to taxpayers.
February 10, 2014
Morgan Stanley settles suit for PLS violations and fraud
The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddies Mac, has announced a settlement agreement with Morgan Stanley, related companies and specifically named individuals for $1.25 billion. The settlement resolves claims in a Federal Court lawsuit filed by FHFA alleging violations of Federal and State securities laws and common law fraud in connection with private-label mortgage-backed securities (PLS) purchased by Fannie and Freddie between 2005 and 2007.
Balkans designation removals
Treasury has announced that the names of three individuals with the BALKANS designation have been removed from the OFAC SDN List. Details have been posted in a BOL OFAC Update.
January Housing Scorecard
HUD has announced that the Obama Administration has released the January 2014 edition of its Housing Scorecard. HUD Deputy Assistant Secretary for Economic Affairs Kurt Usowski said, "In 2013, the number of U.S. properties which started the foreclosure process was down 33 percent from 2012, while sales of previously owned homes rose by 9.1 percent. With foreclosures down, home sales up, and equity continuing to grow, the housing market continues to make slow, but steadily improving progress."
G.19 Consumer Credit report
The Federal Reserve Board has released the December 2013 G.19 Consumer Credit outstanding and Terms of Credit Report.
OCC schedules Texas workshops
An OCC News Release has announced two workshops in Houston to be held on March 11–12, 2014. The "Compliance Risk" and "Risk Assessment" workshops are designed exclusively for directors of institutions supervised by the OCC. The fee is $99 for each workshop, with attendance limited to 35 participants per session. Additional information and online registration are available.
Comptroller's Handbook updated
OCC Bulletin 2014-2 has been issued to announce the update of the "Mortgage Banking" booklet of the Comptroller's Handbook. The booklet—
provides updated guidance to examiners and bankers on assessing the quantity of risk associated with mortgage banking and the quality of mortgage banking risk management
includes wholesale changes to the functional areas of production, secondary marketing, servicing, and mortgage servicing rights to incorporate recent lessons learned and regulatory changes
addresses recent amendments to Regulation X and Regulation Z issued by the Consumer Financial Protection Bureau (CFPB), as well as other statutory and regulatory changes, including those directed by the Dodd-Frank Act
MSB closes after FinCEN BSA CMP
FinCEN has announced the assessment of a civil money penalty (CMP) against Saleh H. Adam, doing business as Adam Service, a money services business (MSB). A FinCEN investigation determined that, since November 2007, Adam Service committed serious and willful violations of the Bank Secrecy Act's (BSA) program, recordkeeping, and reporting requirements. Saleh H. Adam also agreed to cease operating as a money services business and immediately surrender the MSB's registration to FinCEN.
CFPB updates mortgage data tool
The CFPB Blog has announced updates to the Bureau's web-based tool for mortgage statistics for counties and cities. The new features allow a user to choose custom filters, create custom summary tables, download the data, and save and share results. Tools for developers are also provided.
February 7, 2014
Treasury targets networks linked to Iran
Treasury has announced actions targeting a diverse set of 9 entities and 12 individuals located around the world for evading U.S. sanctions
against Iran, aiding Iranian nuclear and missile proliferation, and supporting terrorism. The entities and individuals are located in Turkey, Spain, Germany, Georgia, Afghanistan, Iran, the United Arab Emirates, and Liechtenstein. Information regarding the designations has been posted in a BOL OFAC Update.
Foreign Sanctions Evaders list
The Foreign Sanctions Evaders List (FSE List) has been introduced by OFAC to identify foreign persons sanctioned under Executive Order (E.O.) 13608, "Prohibiting Certain Transactions With and Suspending Entry Into the United States of Foreign Sanctions Evaders With Respect to Iran and Syria." The persons sanctioned will be identified with the program tags [FSE-IR] and [FSE-SY]. The FSE List will be available in almost all of the same file formats as the SDN List. The initial FSE List contains four individuals and nine entities. Information regarding the designations has been posted in a BOL OFAC Update.
The February 2014 issue of FedFocus has been posted by Federal Reserve Bank Services. This edition features public comments on U.S. payment system improvements. Other articles discuss the next generation VPN Solution, cross-border payments, updated FedComplete packages, and FEDucation.
Curry and Gruenberg on Dodd-Frank
Comptroller Curry presented a statement and written testimony and Chairman Gruenberg provided a statement before the U.S. Senate Committee on Banking, Housing and Urban Affairs. Messrs Curry and Gruenberg discussed what their respective agencies are doing to improve the security of consumer financial information held by the institutions they supervise, to implement provisions of the Dodd-Frank Act.
GAO comments on housing programs
The Government Accountability Office (GAO) has issued a report suggesting that more efforts are needed in fair housing controls and toward improved access for non-English speakers in a key government housing program. The Home Affordable Modification Program (HAMP) offshoot, MHA Outreach and Borrower Intake Project, includes a Treasury Department requirement that servicers monitor compliance with fair lending laws, but no assessment has yet been made of the extent to which servicers are meeting that requirement. Also, notwithstanding a 2000 Executive Order and a 2011 Attorney General's memorandum, says the report, Treasury has only recently developed guidelines and procedures for MHA programs relating to improving access for limited English proficiency persons.
February 6, 2014
Securities firm fined $8M for AML and SAR violations
A news release from the Financial Industry Regulatory Authority (FINRA) has announced the assessment of an $8 million fine against New York-based Brown Brothers Harriman & Co. (BBH) for substantial anti-money laundering (AML) compliance failures and other related violations. The fine, the largest levied by FINRA for AML violations, resulted from a failure to have an adequate anti-money laundering program in place to monitor and detect suspicious penny stock transactions; failing to sufficiently investigate potentially suspicious penny stock activity brought to the firm's attention; the failure to file SARs; and the lack of an adequate supervisory system to prevent the distribution of unregistered securities. As part of the FINRA action, BBH's former Global AML Compliance Officer Harold Crawford was also fined $25,000 and suspended for a month.
New FEMA community suspensions
The Federal Emergency Management Agency (FEMA) has published a final rule [79 FR 7087] identifying communities in Indiana, Kentucky , New York and Pennsylvania where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on March 3, 2014, because of noncompliance with the floodplain management requirements of the program.
OFAC counter terrorism designations
Treasury has targeted the financial and support networks of the Haqqani Network leadership by designating Saidullah Jan, Yahya Haqqani, and Muhammad Omar Zadran as Specially Designated Global Terrorists (SDGTs) under Executive Order (E.O.) 13224. All three are being designated for acting for or on behalf of the Haqqani Network while Muhammad Omar Zadran is also being designated for acting for or on behalf of the Taliban. Information regarding the designations has been posted in a BOL OFAC Update.
Curry and Gruenberg on the Volker rule
Comptroller Curry presented a statement and written testimony, and Chairman Gruenberg a statement, on the Volcker Rule before the House Committee on Financial Services.
OCC Risk Governance Framework proposal OCC Bulletin 2014-1, issued yesterday, announced a January 27, 2014, notice of proposed rulemaking (NPR) [79 FR 4282] that would establish minimum standards for the design and implementation of a risk governance framework for large insured national banks, insured federal savings associations, and insured federal branches of foreign banks with average total consolidated assets of $50 billion or more. Comments on the proposal will be accepted through March 28, 2014.
Counterfeit checks alerts
The OCC has issued two Alerts regarding counterfeit cashier's checks with the routing number of The First National Bank of Wellston, Wellston, OH and counterfeit official checks with the routing number of LifeStore Bank, West Jefferson, NC. Information regarding the counterfeit checks has been posted on the BOL Alerts & Counterfeits page.
Health care credit cards
The Bureau Blog features an article explaining health care credit cards and four things consumers need to know about how the deferred interest credit cards work.
February 5, 2014
Flood participation suspensions
The Federal Emergency Management Agency (FEMA) has published a notice [79 FR 6833] of its intent to suspend certain communities in Alaska, California, Florida, Georgia, Indiana, Oregon, Texas and Wisconsin from participation in the National Flood Insurance Program, because of their noncompliance with the floodplain management requirements of the program. The suspensions will be effective March 17, 2014, unless FEMA receives documentation of a community's corrective action.
Industry thanked for response to payment system paper
The Financial Services Policy Committee of the Conference of Presidents of the Federal Reserve System has issued a press release thanking payment system participants for their feedback to the Reserve Banks' September 2013 consultation paper, "Payment System Improvement – Public Consultation Paper." Responses were received from individual financial institutions, businesses, payment networks and processors, software vendors, payment innovators, consultants, and consumers, as well as from trade groups representing financial institution and business members. The Reserve Banks also announced they are exploring the need for faster retail payments and for identifying gaps and opportunities related to payment system security. Updates on the payments system improvements efforts can be seen at FedPaymentsImprovement.org.
The FDIC has released the ratings received by state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). Of the 99 institutions listed, four garnered "outstanding" ratings, and one received a "needs to improve."
Recordkeeping requirements reminder FIL-7-2014 has been issued to remind FDIC-supervised institutions of the Final Rule published on December 19, 2013, consolidating separate recordkeeping and confirmation requirements for securities transactions that they conduct. The Rule rescinded a transitional rule for state savings associations and expanded the coverage of Part 344 to cover all FDIC-supervised institutions, while increasing to 500 transactions the threshold of the rule's Small Transaction Exception. The Final Rule was effective January 21, 2014.
Reg CC revised proposal published
The Federal Reserve Board's December 2013 revisions to its March 25, 2011 [76 FR 16862] proposed rule that would amend Regulation CC has finally been published in today's Federal Register [79 FR 6673]. The current proposed revisions would affect only subsections C (Collection of Checks) and D (Substitute Checks) of the regulation, to encourage depositary banks to receive and paying banks to send returned checks electronically. The proposal includes two alternative approaches to that goal. The Board is also requesting comment on applying Regulation CC's existing check warranties to checks that are collected electronically and on new warranties and indemnities related to checks collected electronically and to electronically-created items. The Board has asked for comments on the current revised proposal by May 2, 2014. The current proposal does not affect the part of the 2011 proposal addressing funds availability and disclosures (subpart A), which now requires the concurrence of the CFPB before a final rule can be issued. The involvement of the CFPB is not required for amendments to subparts C and D of the regulation.
Yellen assumes Chair
Janet L. Yellen has taken the oath of office as Chair of the Board of Governors of the Federal Reserve System.
Lew on 2014 economic outlook
In remarks at the Bipartisan Policy Center, Secretary of the Treasury Lew stated "this can and should be a breakthrough year for our economy." He noted it is imperative that Congress move right away to increase the government's borrowing authority. He commented that progress in Washington around the budget and the farm bill can mark the beginning of a productive period of bipartisan action.
NCUA updates share insurance booklet
The NCUA has released an updated Your Insured Funds booklet, which provides consumers and credit unions with the latest share insurance coverage information in a new, easy-to-read format.
FTC Data Security Statement to Senate Banking Committee Testimony was presented by the Federal Trade Commission (FTC) before the Subcommittee on National Security and International Trade and Finance of the Senate Committee on Banking, Housing & Urban Affairs. The ongoing efforts of the agency to promote data security through civil law enforcement, education, and policy initiatives were discussed.
Students respond to CFPB
An article on the CFPB Blog discusses some of the responses received from private student loan borrowers regarding their experiences and problems.
February 3, 2014
FDIC enforcement actions
A list of 54 orders for administrative enforcement actions taken against banks and individuals in December 2013 has been released by the FDIC.
Idaho bank closed
The FDIC has announced the closing of Syringa Bank, Boise, Idaho. All of the bank's deposits were assumed by Sunwest Bank, Irving, California. The closing was the first of an FDIC-insured institution in Idaho since April 24, 2009.
Registration of Municipal Advisors rule FIL-6-2014 has been issued by the FDIC regarding a final rule requiring municipal advisors to register with the SEC. The FIL applies to any FDIC-supervised financial institution that meets the Dodd-Frank definition of "municipal advisor."
NCUA prohibition orders Five orders have been issued by the NCUA prohibiting designated individuals from participating in the affairs of any federally insured financial institution.
G.20 Finance Companies report
The Federal Reserve Board has released the January 31, 2014, G.20 Owned and Managed Receivables Outstanding and Auto Loans: Terms of Credit Report, which includes data through November 2013.
FHC data updated
The Federal Reserve has released the list of bank holding companies that have elected as of January 31, 2014, to become or be treated as financial holding companies.
January 31, 2014
Underwriting standards continue to ease
The OCC has announced the release of its 19th Annual Survey of Credit Underwriting Practices, which shows that underwriting standards are continuing to ease for both commercial and retail products. The OCC cautions banks to pay appropriate attention to underwriting, loan structures, and loan administration as competition and the quest for earnings can lead to the assumption of heightened risk.
FHA to accept e-signatures on some loan documents
A press release and Mortgagee Letter 14-03 have been issued by HUD to announce the grant of expanded authority to lenders to accept electronic signatures on documents associated with mortgage loans. Current FHA policy allows for electronic signatures only on third party documents not controlled by the lender. The new policy allows e-Signatures on origination, servicing, and loss mitigation documents, as well as FHA insurance claims, REO sales contracts and related addenda.
Calvery discusses FinCEN focus
In a presentation at the Securities Industry and Financial Markets Association Anti-Money Laundering and Financial Crimes Conference, FinCEN Director Calvery discussed the focus of FinCEN on securities fraud, market manipulation, and computer intrusion. The importance of information sharing, the value of BSA data, and FinCEN's partnerships with other agencies and governments were also reviewed.
New FinCEN virtual currency rulings
FinCEN has published two administrative rulings regarding certain persons involved in the "mining" of or investments in virtual currency. Ruling FIN-2014-R001 states that, to the extent a user creates or "mines" a convertible virtual currency solely for the user's own purposes, the user is not a money transmitter under the BSA. Ruling FIN-2014-R002 states that a company purchasing and selling convertible virtual currency as an investment exclusively for the company's benefit is not a money transmitter. The rulings provide further interpretation of FinCEN's March 18, 2013, Guidance, "Applications of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies."
CFPB report highlights mortgage servicing problems
The CFPB has announced the issuance of a Supervisory Highlights report highlighting unfair and deceptive practices in the mortgage servicing market uncovered through the Bureau's supervision program in 2013. The report discusses servicer violations such as unfair practices with servicing transfers, waivers of consumer rights, poor payment processing, and failing to provide correct information to consumer reporting agencies.
Agencies publish proprietary trading rules
The OCC, FRB, FDIC and SEC ("Agencies") have published in today's Federal Register two rules relating to Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds.
A Final Rule [79 FR 5535] to implement section 13 of the BHC Act, which was added by section 619 of the Dodd-Frank Act. Section 13 contains certain prohibitions and restrictions on the ability of a banking entity and nonbank financial company supervised by the Board to engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund.
An Interim Final Rule [79 FR 5223] carves out an exception to the Final Rule described above to permit banking entities to retain investments in certain pooled investment vehicles that invested their offering proceeds primarily in certain securities issued by community banking organizations of the type grandfathered under section 171 of the Dodd-Frank Act.
Both rules are effective April 1, 2014. Comments on the Interim Final Rule will be accepted through March 3, 2014.
NCUA publishes derivatives rule
The NCUA has published [79 FR 5228] a final rule permitting Federal credit unions only to engage in limited derivatives activities for the purpose of mitigating interest rate risk. This rule is effective March 3, 2014.
January 30, 2014
CFPB files mortgage kickback enforcement action
The Consumer Financial Protection Bureau has announced the filing of an administrative proceeding Notice of Charges against PHH Corporation and its affiliates (PHH). The Notice alleges that PHH used mortgage reinsurance arrangements to solicit and collect illegal kickback payments and unearned fees in exchange for the referral of private mortgage insurance business. This administrative proceeding follows the Bureau's settlements in 2013 with five mortgage insurers who participated in similar schemes.
January FOMC statement
The Federal Reserve Board has issued a press release on the January 29, 2014, statement of the Federal Open Market Committee (FOMC). The Committee affirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. The FOMC also reaffirmed its expectation that the current exceptionally low target range for the federal funds rate of 0 to ¼ percent will be appropriate at least as long as the unemployment rate remains above 6½ percent. In addition, the FOMC issued a statement that beginning in February 2014, it will add to its holdings of agency mortgage-backed securities at a pace of $30 billion per month rather than $35 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $35 billion per month rather than $40 billion per month.
Weather may delay FRB paper check service
Federal Reserve Financial Services has issued a notice that, due to the weather conditions in the Atlanta area, check presentments and paper return items may be delayed.
FINRA fines NY securities firm for AML lapses
The Financial Industry Regulatory Authority (FINRA) has announced that it has fined Banorte-Ixe Securities International, Ltd., a New York-based securities firm that services Mexican clients investing in U.S. and global securities, $475,000 for not having adequate anti-money laundering systems and procedures in place and for failing to register approximately 200 to 400 foreign finders who interacted with the firm's Mexican clients. FINRA also suspended Banorte Securities' former AML Officer and Chief Compliance Officer, Brian Anthony Simmons, for 30 days in a principal capacity, as he was responsible for the firm's AML procedures and for monitoring suspicious activities. FINRA stated that, as a result of the firm's AML compliance failures, Banorte Securities opened an account for a corporate customer owned by an individual with reported ties to a drug cartel, and did not detect, investigate or report the suspicious rapid movement of $28 million in and out of the account.
January 29, 2014
GAO SCRA study
The Government Accountability Office (GAO) has released the results of a limited study (using data obtained from three mortgage servicers and a credit union) of the effectiveness of the Servicemembers Civil Relief Act (SCRA) in protecting eligible active duty military personnel in the event that their military service prevents them from meeting financial obligations. The report examined—
available information on changes in the financial well-being of servicemembers who received foreclosure-prevention and mortgage-related interest rate protections under SCRA, including the extent to which they became delinquent and the impact of protection periods; and
Department of Defense's (DOD's) partnerships with public- and private-sector entities to provide financial education and counseling about SCRA mortgage protections to servicemembers and views on the effectiveness of these partnerships.
The GAO announcement includes links to a one-page synopsis of the study and to the full 30-page report, both in PDF format.
BankersOnline's Read A Reg update
BankersOnline's Read A Reg pages for CFPB regulations B, X and Z have been updated to incorporate all of the Bureau's amendments through January 18, 2014. Affected sections include a link near the top of the page to our older versions of the same sections, showing pre-2014 provisions, with the amendments shown as pending. If you come across a current page that still refers to one of those amendments (other than appraisal rule and integrated disclosure amendments pending for 2015), we'd appreciate hearing from you in an email to John Burnett with information on the regulation and section we missed.
January 28, 2014
Counterfeit cashier's checks alerts
Two Alerts have been issued by the OCC about counterfeit cashier's checks issued in the name of Lubbock Nation Bank, Lubbock, Texas and First Federal Savings and Loan Association of Lakewood, Lakewood, Ohio. Information concerning the counterfeit cashier's checks have been posted on the BOL Alerts & Counterfeits page.
Russian bank pays $9.5M OFAC CMP
OFAC has announced that Joint-Commercial Bank ("Bank of Moscow"), Moscow, Russian Federation, will pay $9,492,525 to settle potential civil liability for 69 alleged violations of an Executive Order and Weapons of Mass Destruction Proliferators Sanctions Regulations. The total base penalty amount for the alleged violations was $14,063,000. OFAC considered the following mitigating factors in agreeing to the reduced penalty agreement:
No penalties or violations within five years
Remedial action was taken by the bank
The bank cooperated with OFAC's investigation.
150 Years of National Banking symposium
An OCC press release has announced the agency will co-host with the Boston University Center for Finance, Law & Policy a symposium in Boston on March 31 to commemorate the 150th anniversary of the founding of the OCC and the national banking system. Breakfast and registration will begin at 7 a.m. and the symposium will run through 5 p.m. Additional information on the gathering and online registration is available on the Boston University website.
Message for consumer hacking victims
The Consumer Financial Protection Bureau has posted a Blog article listing four steps consumers can take to determine if fraudulent charges or debits have been made on their accounts. The Bureau also released a Consumer Advisory to help consumers protect themselves in the wake of the recent breaches of payment card and other data.
January 27, 2014
Fictitious cashier's checks alert
The OCC has issued Alert 2014-5 concerning fictitious cashier's checks issued in the name of The Bank of Crossville, a branch of the First National Bank of Pikeville, Tennessee, that are being presented for payment nationwide in connection with an online job opportunity scam. Information regarding the counterfeit checks will be added to the BOL Alerts & Counterfeits page.
Bureau proposes supervision of nonbank money transfers
The Consumer Financial Protection Bureau has proposed a rule that would allow it to supervise certain nonbank international money transfer providers for the first time. The proposed rule would bring new oversight to larger nonbank international money transfer providers, to make sure they are adhering to the CFPB's new protections for consumers sending money abroad. The Bureau released a fact sheet on the proposal with its announcement.
Expectations for large holding companies
Federal Reserve SR Letter 14-1 has been issued to provide additional information on that agency's expectations for the recovery and resolution preparedness of certain large domestic bank holding companies.
Paper items address change
Federal Reserve Financial Services has announced that beginning February 4, 2014, all paper items currently sent to the Federal Reserve Bank of Atlanta (via mail, courier, or overnight delivery) should be sent to a new address.
Oklahoma bank closed
The FDIC has announced the closing of The Bank of Union, El Reno, Oklahoma. All of the bank's deposits have been assumed by BancFirst, Oklahoma City, Oklahoma.
Kansas CU in conservatorship
NCUA has announced that the Parsons Pittsburg Credit Union, Parsons, Kansas, has been placed into conservatorship and the NCUA named as agent to handle its day-to-day operations.
FDIC Community Affairs webinar
FDIC FIL- 5-2014 has been issued to announce a webinar, "Saving Strategies During America Saves Week 2014," to be held on February 4, 2014 from 2:30 p.m. to 3:30 p.m. ET. Potential strategies and approaches for institutions to consider pursuing to promote savings during America Saves Week will be highlighted. Registration must be completed by January 31.
Call Report revisions
The FDIC has issued FIL-4-2014 announcing the approval of several revisions to the Consolidated Reports of Condition and Income (Call Report) for implementation as of March 31, 2014, and March 31, 2015. Additional revisions were also approved to the FFIEC 101, Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework, that will take effect March 31, 2014.
January 24, 2014
FEMA to suspend communities
The Federal Emergency Management Agency (FEMA) has published in today's Federal Register a notice identifying communities in California, Florida, Michigan, North Carolina, Pennsylvania, West Virginia, Wisconsin and Wyoming where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on February 19, 2014, because of noncompliance with the floodplain management requirements of the program.
Counter Terrorism designation
Treasury has announced the designation of a Palestinian national as a Specially Designated Global Terrorist (SDGT) and addition of his name to the OFAC SDN List. Information regarding the individual has been posted in a BankersOnline OFAC Update.
Securities firm in $152M OFAC settlement
OFAC has announced the payment of $152 million by Clearstream Banking, S.A, a financial institution registered and organized under the laws of Luxembourg, under an agreement to settle potential civil liability for apparent violations of Iranian Transactions and Sanctions violations. The civil money penalties were the first issued for violations regarding a securities firm's use of an omnibus account with a U.S. financial institution as a conduit to hold securities on behalf of the Central Bank of Iran.
NCUA board action bulletin
A Board Action Bulletin has been issued by the National Credit Union Administration to announce actions taken at its January 23, 2014, board meeting. The actions included:
Approval of a proposed rule to better protect all credit unions and the Share Insurance Fund by strengthening risk-based capital requirements for federally insured credit unions.
Approval of a final rule to modernize regulations by giving approved federal credit unions limited authority to mitigate interest rate risk by allowing the purchase of specified, "plain vanilla" derivatives.
Renewal of the current 18 percent interest rate cap for most loans, and 28 percent for consumer-friendly alternatives to predatory payday loans, at federal credit unions through September 10, 2015.
The agency's 2014–2017 Strategic Plan and 2014–2015 Annual Performance Plan describing NCUA's strategic goals in the areas of safety and soundness, consumer protection and financial literacy, regulation and transparency, and workforce development and diversity, as well as the steps to be taken in the coming year to reach those objectives.
NCUA risk-based capital calculator
A new Risk-based Capital Calculator is available from the NCUA to help federally insured credit unions better understand how the proposed changes to the Prompt Corrective Action rule may affect their risk-based capital ratios.
January 23, 2014
First quarter Call Report revisions FDIC FIL-3-2014 has been issued to announce revisions to the Consolidated Reports of Condition and Income (Call Report) that will take effect March 31, 2014, and March 31, 2015. The Call Report revisions include certain reporting changes proposed by the FFIEC's member agencies in FIL-8-2013 dated March 8, 2013. The FFIEC and the agencies have modified those proposed reporting changes in response to comments received on the proposal, including concerns about reporting burden.
The Federal Reserve Board has updated its list of bank holding companies whose elections to become or be treated as financial holding companies (FHCs) were effective as of January 21, 2014.
OCC schedules LA directors workshop
The OCC will host a workshop February 10–12, 2014, in Los Angeles for directors of national community banks and federal savings associations. The "Mastering the Basics: A Director's Challenge" session is designed exclusively for directors of institutions supervised by the OCC and provides practical information on the roles and responsibilities of board participation. The workshop is limited to the first 35 registrants.
Cordray reviews CFPB accomplishments
In prepared remarks at the 82nd Winter Meeting of the U.S. Conference of Mayors in Washington, Director Cordray reviewed the accomplishments of the Bureau and personal stories submitted by consumers.
GAO report on flood insurance strategies
The Government Accountability Office has issued a report on "Flood Insurance: Strategies for Increasing Private Sector Involvement." According to the stakeholders with whom GAO spoke, several conditions are needed:
Insurers need to be able to accurately assess risk to determine premium rates
Insurers need to be able to charge premium rates that reflect the full estimated risk of potential flood losses while still making a profit, and to decide which applicants they will insure
Insurers need sufficient consumer participation to properly manage and diversify their risk, although many property owners do not buy flood insurance because they may have an inaccurate perception of their risk of flooding
January 22, 2014
FCA withdraws proposed rural investment rule
The Farm Credit Administration (FCA) has published a notice [79 FR 3543] withdrawing its proposed rule published [73 FR 33931] on June 16, 2008, that would have authorized Farm Credit System institutions to make certain investments in rural communities. With today's notice, the FCA is terminating that rulemaking.
Chicago CU liquidated
The National Credit Union Administration has announced the liquidation of Bagumbayan Credit Union of Chicago. Great Lakes Credit Union of North Chicago, Illinois, has assumed Bagumbayan's members and deposits.
NCUA posts regs to be reviewed
In other NCUA news, the agency posted a list of regulations it will review in 2014. Public comments on the substance and clarity of each rule are now being accepted through August 4, 2014.
January 21, 2014
Flood Act CMPs
The OCC has announced four orders of assessment of civil money penalties (CMPs) for violations of the Flood Act with the largest of these being $51,765 against Mutual of Omaha Bank, Omaha, Nebraska. The four CMPs total $84,850. The links for details regarding the CMPs have been posted on the BOL Flood Penalties Watch page.
Other OCC enforcement actions
The Flood Act CMPs were included in the OCC's list of new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.
Illinois bank closed
The FDIC has announced the closing of DuPage National Bank, West Chicago, Illinois, and the assumption of all deposits by Republic Bank of Chicago, Oak Brook, Illinois. This is the first bank failure for 2014.
Bank pays $32,400 OFAC CMP
OFAC has announced the payment of $32,400 by HSBC Bank USA, N.A. (HSBC) to settle potential civil liability for three apparent violations of the Global Terrorism Sanctions regulations. OFAC concluded that the apparent violations were not the result of willful or reckless conduct. The total base penalty amount for the apparent violations was $20,083. The settlement amount was increased due to OFAC's findings that HSBC employees were aware or had reason to be aware of the violations which resulted in an economic benefit to the bank; an incomplete response was initially provided to an administrative subpoena; and the transactions were not screened for potential OFAC matches.
OCC workshops for bank directors
The OCC will host two workshops in Miami, Florida, on February 4–5, for directors of national community banks and federal savings associations. The "Compliance Risk" and "Credit Risk: A Director's Focus" workshops are designed exclusively for directors of institutions supervised by the OCC. The fee is $99 for each of the workshops, which are limited to the first 35 registrants.
Residential construction activity
HUD and the Census Bureau have released residential construction statistics for December 2013. Building permits, housing starts, and housings completions all were lower than the November 2013 levels but above those of December 2012.
OFAC guidance on JPOA for Iran sanctions relief Guidance and FAQs have been issued by OFAC concerning the implementation of United States commitments under the Joint Plan of Action (JPOA) by the United States, United Kingdom, Germany, France, Russia, and China regarding Iranian sanctions.
G.17 Industrial Production report
The Federal Reserve Board has released the December 2013 and 2013 year-end G.17 Industrial Production and Capacity Utilization report.
January 17, 2014
Mortgage lender pays $81K for kickbacks
A CFPB press release has announced the agency has issued a consent order requiring a Missouri mortgage lender, Fidelity Mortgage Corporation, and its former owner and current president, to pay $81,076 for funneling illegal kickbacks to a bank in exchange for real estate referrals.
OCC counterfeit checks alert
OCC Alert 2014-3 has been issued concerning counterfeit cashier's checks in circulation that are purportedly issued by the First National Bank, Vandalia, Illinois. The bogus checks appear to have been used in a nationwide online job opportunity scam. Details of the alert have been added to BankersOnline's Alerts and Counterfeits page.
Kingpin Act designation
Treasury has announced the designation of Jose Guadalupe Tapia Quintero, a Culiacan, Sinaloa, Mexico-based senior lieutenant of the Sinaloa Cartel as a Specially Designated Narcotics Trafficker (SDNTK) pursuant to the provisions of the Kingpin Act. Information regarding the designation has been posted in a BOL OFAC Update.
TeleCheck to pay $3.5M for FCRA violations
The FTC has announced that TeleCheck Services, Inc., one of the nation's largest check authorization service companies, and its associated debt-collection entity, TRS Recovery Services, Inc., have agreed to pay $3.5 million to settle charges that they violated the Fair Credit Reporting Act (FCRA). The complaint filed by the FTC alleged TeleCheck did not follow proper dispute procedures, failed to follow reasonable procedures to ensure the maximum possible accuracy of the information it provided to its merchant clients, and failed to promptly correct errors on consumers' reports.
SC2 program adds seven cities
HUD has announced the Obama Administration's expansion of the Strong Cities, Strong Communities (SC2) Initiative to include Brownsville, Texas; Flint, Michigan; Gary, Indiana; Macon, Georgia; Rockford, Illinois; St. Louis, Missouri; and Rocky Mount, North Carolina. The SC2 Initiative was developed through engagement with mayors, congressmen, foundations, non-profits and other community partners who are committed to addressing the challenges facing local governments as they work to create economic opportunity for all residents.
OCC proposes 'Heightened Expectations' guidelines
The OCC has announced a Notice of Proposed Rulemaking (NPR) of formal guidelines for its heightened expectation program for large national banks and federal savings associations. The program was developed to strengthen the governance and risk management practices and to enhance the agency's supervision of those institutions.
Treasury to sell Ally stock
The U.S. Treasury Department plans to sell 410,000 shares of Ally Financial, Inc. common stock in a private offering at $7,375 per share. The stock was acquired under the Troubled Asset Relief Program (TARP).
Fake OCC correspondence OCC Alert 2014-4 warns of fictitious correspondence in circulation that allegedly was issued by the OCC regarding funds purportedly under the control of the agency and possibly other government entities. Correspondence may be distributed via e-mail, fax, or postal mail. Samples of the fraudulent documents, which include a solicitation as well as an invoice, are listed below. This material is being sent to consumers in an attempt to elicit funds from them and to gather personal information to be used in possible future identification theft.
Mortgage protection message for servicemembers
A CFPB Blog article reviews ways in which recent new mortgage rules can assist servicemembers with troubled mortgages and problems resulting from Permanent Change of Station orders.
NCUA Board meeting agenda
The agenda for the January 23, 2014, meeting of the NCUA Board of Directors has been posted.
OCC directors workshops for 2014
The 2014 schedule for workshops for directors of national community banks and federal savings associations has been released by the OCC.
The January 15, 2014, issue of FedFlash has been posted. This edition features articles on new features and options available for the FedTransaction Analyzer tool, changes to the E-Payments Routing Directory, new Fedreceipts RTNs, and a Check Adjustments tip.
Flood insurance program GAO report
The Government Accountability Office (GA0) has issued a report on a study of the National Flood Insurance Program. The report indicates progress has been made on contract management, but monitoring and reporting could be improved.
January 15, 2014
Agencies approve TruPS CDOs interim final rule
A joint press release has been issued by five federal agencies (FRB, CFPB, FDIC, OCC, and SEC) announcing the approval of an interim final rule to permit banking entities to retain interests in certain collateralized debt obligations backed primarily by trust preferred securities (TruPS CDOs) notwithstanding the investment prohibitions of the Volcker rule.
Mortgage relief scammers pay $3.5 M
The FTC has announced that, pursuant to the terms of an almost $3.6 million settlement, the defendants in an alleged mortgage relief scam will surrender their assets and be banned permanently from providing mortgage relief and debt relief services to consumers. A $25.1 million judgment, reflecting the total amount of fees taken in by the scheme, was imposed on the defendants. The judgment will be suspended when they surrender their assets -- an estimated $3.5 million. The settlement represents the FTC's largest judgment to date against a purported mortgage assistance relief provider.
Call Report FIL
FDIC FIL-1-2014 has been issued with instructions for the fourth quarter 2013 Call Report. The Call Report forms and instructions are available on the FFIEC and FDIC websites.
Term deposits offering results
The Federal Reserve Board has released the results of its January 13, 2014, fixed-rate offering of term deposits through its Term Deposit Facility.
Proposal on FHC commodities activities
A notice of proposed rulemaking (NPR) has been issued by the Federal Reserve Board seeking comments on whether additional restrictions would help ensure that physical commodities activities authorized for financial holding companies (FHCs) are conducted in a safe and sound manner and do not pose a threat to financial stability. Comments are due March 15, 2014.
Discount Rate Meetings minutes
The minutes of the discount rate meetings for November 12–December 16, 2013, have released by the Federal Reserve Board.
Bureau publishes openings on Advisory Board and Councils
The Consumer Financial Protection Board has published in today's Federal Register a solicitation of applications [79 FR 2636] for membership on its Consumer Advisory Board, Community Bank Advisory Council, and Credit Union Advisory Council. Completed application packets are due by February 28, 2014.
January 14, 2014
Bureau extends Debt Collection ANPRM
The CFPB has published in today's Federal Register a notice [79 FR 2384] extending through February 28, 2014, the comment period on its November 12, 2013, Advance Notice of Proposed Rulemaking [78 FR 67847] on debt collection practices. The comment period was originally set to close on February 10.
Counterfeit cashier's checks alerts
The OCC has issued alerts for counterfeit cashier's checks bearing the names of—
Chinese bank branches approved
The Federal Reserve Board has issued an order approving the application of Wing Lung Bank Limited, Hong Kong, People's Republic of China, to establish a federal branch in San Francisco, California, and to upgrade its existing limited federal branch in Alhambra, California, to a full-service branch.
Changes to E-Payments Routing Directory
before they can access any of the directory's Fedwire® or FedACH® participant search or download functions. This change may affect institutions accessing those functions using automated means.
NCUA webinar reminder
The NCUA has issued a reminder that it is not too late to register for its free January 15 webinar, "Profiling Products and Services for Underserved Members." The session is a follow-up to its January 23, 2013, "Strategic Uses of the Low-Income Designation" webinar.
January 13, 2014
OFAC Counter Terrorism designations
Treasury has designated three individuals and three entities under its Specially Designated Global Terrorist (SDGT) program, and added their names to the SDN List. Information on the designations has been posted in a BOL OFAC Update.
December Housing Scorecard
HUD and Treasury have released the December 2013 Housing Scorecard, the Obama Administration's comprehensive report of the U.S. housing market. The agencies noted that since the beginning of 2012, the number of homeowners underwater has declined by 5.7 million and homeowners' equity has risen by 55 percent to $9.7 trillion, both "encouraging signs that the housing market recovery is providing millions of American homeowners with more economic security."
State agencies adopt NMLS MLO test
The NMLS and the Conference of State Bank Supervisors (CSBS) have announced that effective January 1, 2014, agencies in Nevada, New Mexico, U.S. Virgin Islands, and Puerto Rico will no longer require mortgage loan originators (MLOs) to take a second specific test component when seeking licensure with their agencies. Thirty-nine state and territorial agencies have now adopted the new national SAFE Act MLO test.
Banks' resolution plans released
The Federal Reserve Board and the FDIC have announced the availability of the public portions of resolution plans for 116 institutions that generally had less than $100 billion in qualifying nonbank assets, which submitted plans for the first time in December 2013, the latest group to file resolution plans with the agencies.
CRA/HMDA Reporter newsletter
The FFIEC has announced the availability of the 2014 CRA/HMDA Reporter newsletter, which contains information on collecting accurate CRA and HMDA data and guidance on completing data submissions.
Reserve Banks pay $77.7B to Treasury
A press release issued by Federal Reserve Board has announced that preliminary unaudited results indicate that the Reserve Banks provided for payments of approximately $77.7 billion of their estimated 2013 net income to the U.S. Treasury.
CFPB—Taking control of mortgage payments
The Bureau's Blog features an article with tips for consumers on taking control of their mortgage payments.
January 10, 2014
Bureau updates consumer booklets
The Consumer Financial Protection Bureau has published in today's Federal Register a notice of availability of three revised consumer publications, including a consumer information brochure and two booklets required under the Real Estate Settlement Procedures Act (RESPA), Regulation X, the Truth in Lending Act (TILA), and Regulation Z. The CFPB is making technical and conforming changes to each of the three publications in conjunction with the January 2014 effective dates for many provisions of the Bureau's rulemakings that regulate practices in mortgage origination and servicing. Those who provide these publications may use earlier versions until existing supplies are exhausted. However, when reprinting these publications, the most recent version should be used.
What You Should Know About Home Equity Lines of Credit (HELOC Brochure)
Consumer Handbook on Adjustable-Rate Mortgages (CHARM Booklet)
Shopping for Your Home Loan, Settlement Cost Booklet
FRB Consumer Compliance Handbook updated
The Federal Reserve Board has published the November 2013 update to the Consumer Compliance Handbook. [Full Manual (711-page PDF); Links to sections] A summary of changes was also released.
FRB Flood Act enforcement actions
The Federal Reserve has announced two orders of assessment of civil money penalty (CMP) for violations of the Flood Act against Tioga State Bank, Spencer, NY ($4,180) and TransPecos Bank, Pecos, TX ($2,710). The links for details regarding the CMPs have been posted on the BOL Flood Penalties Watch page.
Federal Reserve Bank Services has posted the January 2014 issue of FedFocus, which features the results of the 2013 Federal Reserve Payments Study. Other articles discuss the FedTransaction Analyzer tool, the continuation of the America the Beautiful quarters program, business continuity, and new check adjustment webinars.
Read a Reg pages updated
Today is the effective date for several of the major CFPB mortgage-related amendments to Regulations X and Z. We burned the midnight oil (well, not quite, but it was late) last night to ensure that our Read a Reg pages were current this morning, with all the January 10 changes melded into the rules. At the top of each affected page is a link back to the earlier version of the page with the old verbiage, with then-pending amendments noted. We'll be doing the same job to blend in the interagency HPML and Bureau ECOA Appraisal Rules for January 18. That will leave our Read a Reg pages annotated with further HPML Appraisal Rule amendments effective July 18, 2015, and Regulation X and Z amendments effective August 1, 2015, implementing the Bureau's Integrated RESPA/TILA Loan Estimate and Closing Disclosure Rule.
January 9, 2014
OFAC Kingpin Act designation
Pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), OFAC has announced the designation of Jose Rodrigo Arechiga Gamboa, a.k.a. Chino Antrax, a Culiacan, Sinaloa, Mexico-based senior lieutenant of the Sinaloa Cartel. Gamboa was designated for his role in controlling Los Antrax, an extremely violent arm of the Ismael "Mayo" Zambada Garcia organization and for playing a significant role in international drug trafficking. Information regarding the designation has been posted in a BOL OFAC Update.
Freddie and Fannie to delay guarantee fee changes
The FHFA has announced agency direction to Fannie Mae and Freddie Mac to delay the previously announced plans to increase the base guarantee fee for all mortgages by 10 basis points, update the up-front fee grid, and eliminate the up-front 25 basis point adverse market fee that has been assessed on all mortgages. Those changes had been scheduled for implementation in March and April 2014. FHFA said it would give at least 120 days' notice before implementing any changes.
Fed schedules TDF offering
The Federal Reserve Board has announced a fixed-rate offering of term deposits with full allotment of tenders through its Term Deposit Facility (TDF) will be conducted on January 13, 2014. Twenty-eight-day term deposits with an interest rate of 0.26 percent and a maximum tender amount of $1,250,000,000 will be offered.
The minutes of the December 17–18, 2013, meeting of the Federal Open Market Committee have been released by the Federal Reserve Board.
G.19 Consumer Credit report
The Federal Reserve has released the November 2013 G.19 Consumer Credit Outstanding and Terms of Credit report.
Matz and Cordray to host meeting
NCUA Director Matz and CFPB Director Cordray will host a free town hall meeting on February 12, beginning at 3 pm ET. During the webinar, participants will be able to pose questions about any topic relating to the credit union industry or the work of CFPB. Online registration is required.
CFPB explains new mortgage rules
The Consumer Financial Protection Bureau has posted a CFPB Blog article and released a USAToday.com opinion editorial by Director Cordray explaining what the new CFPB mortgage rules mean to consumers who are shopping for a home loan and while they own their homes.
January 8, 2014
JPMorgan admits BSA violations
FinCEN has distributed a news release announcing that it has fined JPMorgan Chase Bank, N.A., $461 million for willfully violating the Bank Secrecy Act (BSA) by failing to report suspicious transactions arising out of Bernard L. Madoff's decades-long, multi-billion dollar fraudulent investment scheme. "In consenting to the assessment of a civil money penalty, JPMorgan admitted to the facts set forth by FinCEN and that its conduct violated the Bank Secrecy Act," said the release. FinCEN said that the bank attempted to protect itself when it became suspicious of Madoff's fraud, but failed to file required Suspicious Activity Reports with FinCEN which might have "saved thousands of other fraud victims untold misery and loss." FinCEN's notice stated that the OCC will collect a $350 million payment under a Civil Money Penalty Order against JPMorgan Chase Bank, N.A., JPMorgan Bank and Trust Company, N.A., and Chase Bank USA, NA. The U.S. Attorney's Office for the Southern District of New York (SDNY) has approved a deferred prosecution agreement under which JPMorgan will forfeit $1.7 billion (which will be contributed to the recovery funds for Madoff victims). FinCEN agreed to consider its penalty satisfied by JPMorgan's payment to the SDNY. The combined payments agreed to by the JPMorgan banks total $2.05 billion.
OFAC has announced the designation of a citizen of Afghanistan as a SDGT and the addition of his name to the SDN List. Information regarding the designation has been posted in a BOL OFAC Update.
NMLS Ombudsman meeting announced
An open meeting with the NMLS Ombudsman will be held on Tuesday, February 18, 2014, from 2:00 to 5:00 p.m. ET, prior to the NMLS Annual Conference in Miami, Florida. Conference registration is not required to attend the meeting. The meeting will be in-person only; there will be no dial-in available.
NCUA insurance coverage estimator improved
The NCUA has announced the release of the Share Insurance Estimator, a new, improved insurance coverage estimator which replaces the NCUA E-Calculator.
Examination modernization webinar
The NCUA will host a free webinar, “NCUA Examination Modernization,” on Wednesday, January 22, 2014, at 2 p.m. ET. The webinar is open to credit unions of all asset sizes.
Consumer resources for mortgage rules
The CFPB has announced the release of additional resources for consumers regarding the new protections provided by the Bureau's mortgage rules. The new materials include sample letters that consumers can send to their mortgage servicers, mortgage tips, answers to questions, consumer tools, and fact sheets. Print copies of the materials are available in seven languages.
Rise in equity valuation ratios examined
The results of an examination of the rise in equity valuation ratios and how it could reflect changes in discount rates used by investors is discussed in a FEDS Notes article. FEDS Notes are articles in which Board economists offer their own views and present analysis on a range of topics in economics and finance. These articles are shorter and less technically oriented than FEDS Working Papers.
December 2013 SCOOS released
The Federal Reserve Board has released the December 2013 Senior Credit Officer Opinion Survey on Dealer Financing Terms (SCOOS). The quarterly survey provides information about the availability and terms of credit in securities financing and over-the counter (OTC) derivatives markets.
New Director at FHFA
The Federal Housing Finance Agency (FHFA) has announced the swearing in of its new Director, Melvin L. Watts, a former North Carolina congressman. He is the first Senate-confirmed Director of the agency.
January 6, 2014
$8 billion recovered by FHFA
The Federal Housing Finance Authority (FHFA) has announced its recoveries have reached nearly $8 billion through settlements with seven financial institutions that sold private-label securities (PLS) to Fannie Mae and Freddie Mac between 2005 and 2007. In 2011, the FHFA initiated litigation against 18 financial institutions involving allegations of securities law violations and, in some instances, fraud in the sale of private-label securities (PLS) to Fannie Mae and Freddie Mac.
The FDIC has released the ratings received by state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). Five of the 102 banks listed received an Outstanding (O) rating and three received a Needs to Improve (NI) rating.
CFPB schedules mortgage servicing rule training
A reminder has been posted on the Bureau Blog of the January 10, 2014, effective date for the new mortgage rules. On that date, the CFPB will host “Protecting homeowners: New tools for empowering consumers and advocates,” a training program on the new servicing rule for housing counselors, legal aid attorneys, and other advocates.
New number for NMLS
The NMLS has announced that its Call Center has a new toll-free number - 855-NMLS-123 (855-665-7123).
In a presentation at the annual meeting of the American Economic Association in Philadelphia, Ben Bernanke reflected on his eight-year term as Chairman of the Federal Reserve Board of Governors. His remarks covered the Federal Reserve's commitment to transparency and accountability; financial stability and financial reform; monetary policy; and the prospects for the U.S. and global economies.
Regulation A proposal published
The Federal Reserve Board has published in today's Federal Register [79 FR 615] its proposed rule to amend Regulation A (12 CFR Part 201—Extensions of Credit by Federal Reserve Banks) to implement provisions of the Dodd-Frank Act that amend the emergency lending authority of the Federal Reserve Banks under section 13(3) of the Federal Reserve Act, and require the Board, in consultation with the Secretary of the Treasury, to establish by regulation certain policies and procedures with respect to emergency lending under that section.
January 3, 2014
FRB posts Section 19 prohibition letters
The Federal Reserve Board has released seven Section 19 letters issued during December 2013. The recipients are prohibited from becoming or continuing as an institution-affiliated party with respect to any insured depository institutions, including, but not limited to, any bank, savings association or credit union, and their holding companies, as well as Edge corporations and Agreement corporations. Scroll down on the linked page for the links to the letters.
Bureau asks for mortgage closing 'pain points'
The Consumer Financial Protection Bureau has published in today's Federal Register a request for information on key consumer “pain points” associated with mortgage closing and how those pain points might be addressed by market innovations and technology. The request marks the beginning of the next phase of the Bureau's Know Before You Owe initiative, which will attempt to identify ways to improve the mortgage closing process for consumers. Comments are due by February 7, 2014.
January 2, 2014
2014 NMLS renewal period ends
The NMLS has announced the closing of Renewal Period for 2014 and the beginning of the Reactivation Period. Information on reactivation is posted on the NMLS's Renew/Reactivate page.
FDIC technical assistance videos
The FDIC has released four new technical assistance videos in its third installment of videos to provide useful information to bank directors, officers, and employees on regulatory issues and proposed regulatory changes. The videos cover the following topics:
Municipal securities—supervisory expectations, investment policies, and basic and expanded pre-purchase analysis and on-going monitoring of municipal securities
ALLL (allowance for loan and lease losses)—overview of applicable interagency policy statements, discusses pertinent accounting standards, reviews measuring impairment and estimating credit losses, and illustrates an effective loss migration analysis
TDR (troubled debt restructuring)—how to identify a TDR, the related accounting and regulatory treatment, and the multiple note concept
Managing fair lending risk—summarizes the fair lending laws, discusses the concepts of disparate treatment and disparate impact, and reviews fair lending risk indicators, mitigation strategies, and the components of an effective compliance management system
The NCUA has issued an order prohibiting a former employee of a Louisiana federal credit union from participating in the affairs of any federally insured financial institution. The individual had entered a pretrial intervention program relating to charges of felony theft in connection with her employment at the credit union.
Country Exposure Lending Survey
The FFIEC has posted the September 30, 2013, E.16 Country Exposure Lending Survey.
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