Wednesday, June 20, 2018

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

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

HUD reviewing its implementation of disparate impact standard
The Department of Housing and Urban Development has published an advance notice of proposed rulemaking to invite public comment on possible amendments to HUD's 2013 final rule implementing the Fair Housing Act's disparate impact standard, as well as the 2016 supplement to HUD's responses to certain insurance industry comments made during the rulemaking. HUD is reviewing the final rule and supplement to determine what changes, if any, are appropriate following the Supreme Court's 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., which held that disparate impact claims were cognizable under the Fair Housing Act and discussed standards for, and the constitutional limitations on, such claims. Comments are due by August 20, 2018.

New FFIEC Exam Procedures for CDD
Webinar — 1 CAMS Credit
The updated FFIEC Exam Procedures for Customer Due Diligence mean that FIs must have appropriate risk-based CDD procedures to understand the nature and purpose of their customer relationships. Join us on June 26, as we walk through the requirements and provide key considerations for your BSA/AML program as you prepare for meet examiner expectations for CDD.
— Verafin

Fed amends Regs A and D
The Federal Reserve Board has published amendments to Regulation A to increase the interest rates for primary and secondary credit at Reserve Banks, and Regulation D to revise the rate of interest paid on balances maintained to satisfy reserve balance requirements and on excess balances maintained at Reserve Banks. The amendments to both regulations are effective today, and applicable as of June 14.

BSA/AML Summer Workshop Series: Mitigating Customer Risk
Multiple dates and Locations
The new Customer Due Diligence (CDD) Rule deadline has passed, and with heightened regulatory expectations, properly managing higher-risk customers has never been more important. During this free workshop, former OCC examiner will cover best practices for identifying and quantifying risk, conducting enhanced due diligence and re-assessing high-risk accounts to improve your approach to risk mitigation.
— Banker's Toolbox

Merrill Lynch pays $42M to settle SEC charges
The Securities and Exchange Commission has announced it has charged Merrill Lynch with misleading customers about how it handled their orders. Merrill Lynch has agreed to settle the charges, admit wrongdoing, and pay a $42 million penalty.

According to the SEC's order, Merrill Lynch falsely informed customers that it had executed millions of orders internally when it actually had routed them for execution at other broker-dealers, including proprietary trading firms and wholesale market makers. Merrill Lynch called this practice "masking." Masking entailed reprogramming Merrill Lynch's systems to falsely report execution venues, altering records and reports, and providing misleading responses to customer inquiries. By masking the broker-dealers who had executed customers' orders, Merrill Lynch made itself appear to be a more active trading center and reduced access fees it typically paid to exchanges.

[Guide] Beneficial Ownership Tracking
Learn best practices for tracking the beneficial owners of the legal entities your bank serves.
— AccuSystems

$102M Ponzi scheme shut down
The Securities and Exchange Commission has announced it has filed charges and obtained an asset freeze against individuals and companies behind a $102 million Ponzi scheme that bilked investors throughout the U.S. According to the SEC's complaint, the defendants defrauded more than 600 investors through sales of securities in issuers they controlled, including First Nationle Solution LLC, United RL Capital Services, and Percipience Global Corp. The complaint alleges that investors were told that their funds would be used for the companies and some were guaranteed dividends or double-digit returns. However, the defendants spent at least $20 million to enrich themselves, paid $38.5 million in Ponzi-like payments, and transferred much of the remainder in transactions that appear unrelated to the issuers' purported businesses.

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