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Proposed guidelines for access to Fed accounts and services

The Federal Reserve Board is inviting public comment on proposed guidelines to evaluate requests for accounts and payment services at Federal Reserve Banks. Institutions with novel banking charters have requested access to the Reserve Banks system to facilitate provision and delivery of new financial products. The Board is proposing Account Access Guidelines for Reserve Banks to evaluate such requests, to help achieve the goal of applying a transparent and consistent process for all access requests, as well as considering the ramifications for the broader financial system.

Under the proposed guidelines, the Fed will consider:

  • whether the institution is legally eligible to maintain an account at a Federal Reserve Bank and has a “well-founded, clear, transparent and enforceable legal basis for its operations”
  • whether the provision of an account and services would present or create undue credit, operational, settlement, cyber or other risks to the Reserve Bank, or to the broader payments system
  • whether the provision of an account and services would create undue risk to U.S. financial stability
  • whether the provision of an account and services would create undue risk to the economy by facilitating illicit activities

Comments will be accepted for 60 days after publication in the Federal Register.


Federal Reserve CRA ratings

The Federal Reserve Banks publicly released the Community Reinvestment Act evaluations of 21 state-chartered member banks in March and April. Eighteen of those banks received "Satisfactory" ratings. We congratulate the three banks that earned "Outstanding" ratings:


New Jersey credit union chartered

The NCUA announced yesterday that it has issued a charter to the Maun Federal Credit Union, in Kendall Park, New Jersey, to serve a local Islamic community. The charter became effective April 26, and the credit union expects to open in June. Maun Federal Credit Union will be an Islamic-faith-based, no-interest credit union whose not-for-profit, cooperative business model will fill a need for affordable, federally insured financial services among members of its community. The credit union will serve employees and members of the New Brunswick Islamic Center in New Brunswick, New Jersey, and employees and members of the Islamic Society of Central Jersey in Monmouth Junction, New Jersey.


Victims of student loan debt relief scheme to receive refunds

The FTC is sending more than $273,500 in refunds to people who lost money to a student loan debt relief scheme that charged them illegal upfront fees and tricked them into believing their student loan payments would be permanently lowered or eliminated. A complaint filed by the Commission in September 2019 indicated Manhattan Beach Venture deceptively marketed payment relief and loan forgiveness programs to people looking for help with their student loans. Consumers were charged up to $1,400 in upfront fees and led to believe it went toward their student loans. MBV then funneled consumers into financing this fee through a high-interest loan with third-party lender Equitable Acceptance Corporation, another defendant in the scheme. The FTC is sending checks to 2,889 people, averaging about $95 each.


COVID-19 challenges for mortgage borrowers

The CFPB has released two reports showing that more work needs to be done to help mortgage borrowers coping with the COVID-19 pandemic and economic downturn. "Characteristics of Mortgage Borrowers During the COVID-19 Pandemic" documents that Black and Hispanic mortgage borrowers are much more likely to be delinquent or in a forbearance program than white borrowers. In its May 2021 "Complaint Bulletin," the CFPB reports that overall mortgage complaints to the CFPB have risen to their highest level in three years and complaints mentioning forbearance or related terms have reached their highest average since March and April of 2020.


Eighth batch of EIP3 payments disbursed

The IRS announced yesterday it has disbursed more than 1.1 million payments in the eighth batch of Economic Impact Payments from the American Rescue Plan. That brings the total disbursed so far to approximately 164 million payments, with a total value of approximately $386 billion. The eighth batch of payments began processing on Friday, April 30, with an official payment date of May 5, with some people receiving direct payments in their accounts earlier as provisional or pending deposits.


PPP funds nearly depleted

The ABA Banking Journal has reported that the Paycheck Protection Program ran out of funding on Tuesday afternoon and has stopped accepting most new applications. About $8 billion is still available through a set-aside in the law for community financial institutions, and those institutions will be permitted to process applications until that money has been exhausted. Other lenders should be receiving a message through the SBA origination portal that loans are no longer available. Sources have also reported that funds remain for lenders to finish pending applications that are "on hold."


TCH and core providers offer MDIs access to RTP Network has reported The Clearing House, Fiserv, FIS, and Jack Henry & Associates have announced they are jointly funding the onboarding fees of minority-owned depository institutions (MDIs) that agree to join the RTP Network in 2021. The fees will be covered for MDIs using Fiserv’s core processing solutions, Jack Henry’s JHA PayCenter or the FIS Open Payment Framework (OPF).

The RTP Network is the real-time payments network operated by The Clearing House. The Clearing House reports that the RTP Network's real-time payment capabilities reach approximately 60% of U.S. demand deposit accounts. The Federal Reserve System is developing a second real-time payments service that would compete with the RTP Network beginning in 2023.


FDIC and OCC release CRA evaluation ratings

The FDIC has released its May 2021 list of banks recently examined for CRA compliance. Of the 56 banks listed, one was rated "Needs to Improve," 52 were rated "Satisfactory," and three earned "Outstanding" ratings. Here are the banks that garnered the "Outstanding" ratings, with links to their evaluation reports:

The OCC also released CRA evaluations that became public in April for 15 national banks and federal savings associations. Twelve of these evaluations were rated "Satisfactory." The three banks listed below (with links to their evaluation reports) received "Outstanding" ratings:


SEC charges sports apparel manufacturer

Under Armor Inc., a sports apparel manufacturer, has been charged by the SEC. with misleading investors as to the bases of its revenue growth and failing to disclose known uncertainties concerning its future revenue prospects. Under Armour has agreed to pay $9 million to settle the action.

According to the SEC's order instituting cease-and-desist proceedings, by the second half of 2015, Under Armour's internal revenue and revenue growth forecasts for the third and fourth quarters of 2015 began to indicate shortfalls from analysts' revenue estimates. The order finds, for example, that the company was not meeting internal sales projections for North America, and warm winter weather was negatively impacting sales of Under Armour's higher-priced cold weather apparel. The order further alleges that in response, for six consecutive quarters beginning in the third quarter of 2015, Under Armour accelerated, or "pulled forward," a total of $408 million in existing orders that customers had requested be shipped in future quarters. The SEC found that Under Armour misleadingly attributed its revenue growth during this period to various factors without disclosing to investors material information about the impacts of its pull-forward practices. The Commission also found that Under Armour failed to disclose that its increasing reliance on pull-forwards raised significant uncertainty as to whether the company would meet its revenue guidance in future quarters. According to the order, using these undisclosed pull-forwards, Under Armour was able to meet analysts' revenue estimates.

Under Armour has also agreed to cease and desist from committing future violations.


CFPB and FTC alert landlords to tenants' pandemic rights

On Monday, CFPB Acting Director Dave Uejio and FTC Acting Chairwoman Rebecca Kelly Slaughter sent notification letters to the nation’s largest apartment landlords, which collectively own more than 2 million units. The letters reminded those landlords of federal protections in place to keep tenants in their homes and stop the spread of COVID-19. The Centers for Disease Control and Prevention (CDC) has extended until June 30 a temporary moratorium on evictions for non-payment of rent.

The letters also noted that the CFPB has issued an interim final rule, which took effect Monday, establishing new notice requirements under the Fair Debt Collection Practices Act (FDCPA). Landlords should ensure that any FDCPA-covered debt collectors (including attorneys) working on their behalf notify tenants of their rights under federal law (as required by the interim final rule).


$20M from HUD to fight housing discrimination

HUD has announced that it is making $20,229,156 available to fair housing organizations across the nation working to fight housing discrimination. The funds will support a variety of activities, including fair housing testing, education and outreach, and capacity building, and are being provided through the Department’s Fair Housing Initiatives Program (FHIP). Categories of grants include:

  • Education and Outreach Initiative (EOI) – $7,223,649 - EOI grants help groups develop and implement tester training and education and outreach programs.
  • Fair Housing Organizations Initiative (FHOI) – $2,250,000 - FHOI grants provide funds to non-profit fair housing organizations to build their capacity and effectiveness to conduct enforcement related activities.
  • Private Enforcement Initiative (PEI) – $10,755,507 - PEI grants help non-profit fair housing enforcement organizations carry out investigations and other enforcement activities to prevent or eliminate discriminatory housing practices.

Applicants who are interested in applying for funding should go to to obtain a copy of the specific Notice of Funding Opportunity, forms, instructions, and other application materials. Applications must be received by June 14, 2021.


FHFA final rule on GSE resolution planning

The Federal Housing Finance Agency has issued a final rule, published at 86 FR 23577 in the May 4 Federal Register, that requires Fannie Mae and Freddie Mac (the Enterprises) to develop credible resolution plans, also known as “living wills." These resolution plans would facilitate a rapid and orderly resolution of the Enterprises should FHFA in the future be appointed their receiver per the Housing and Economic Recovery Act of 2008 (HERA).

Under the final rule, the Enterprises must demonstrate how core or important business lines would be maintained to ensure continued support for mortgage finance and stabilize the housing finance system, without extraordinary government support, to prevent an Enterprise from being placed in receivership, indemnify investors against losses, or fund the resolution of an Enterprise.

The FHFA also released a Fact Sheet on the rule. The rule will be effective July 6, 2021.


Nine public housing authorities in new HUD program

HUD has announced awards to nine lead public housing authorities that will participate in HUD’s new Housing Choice Voucher Mobility Demonstration, which will receive $45.7 million in total funding. Through this demonstration, the PHAs will provide over 10,000 families with children better access to low-poverty neighborhoods with high-performing schools and other strong community resources. Participating regions represent diverse housing markets, population sizes, local laws regarding source-of-income nondiscrimination, and experiences implementing housing mobility programs.


CA mortgage mod service charged with fair housing violations

HUD has announced that it is charging the owners and employees of a business known as The House Lawyer, which operated in Redwood City, California, with violating the Fair Housing Act by targeting Hispanic homeowners with illegal and unfair mortgage modification services. HUD’s charge alleges, among other things, that the company collected fees from Hispanic borrowers for loan modification services prior to the completion of those services, in violation of California law, while encouraging them to withhold their mortgage payments, putting them at risk of foreclosure.


Alabama and Kentucky severe storms relief

The FDIC has issued two financial institution letters announcing steps to provide regulatory relief to financial institutions and facilitate recovery.

  • FIL-31-2021 concerning areas of Kentucky affected by severe storms, slooding, landslides, and mudslides
  • FIL-32-2021 with regard to areas of Alabama affected by severe storms, straight-line winds, and tornadoes


FDIC March enforcement actions released

The FDIC has released a list of enforcement actions taken against banks and individuals in the month of March. Among the 12 administrative actions listed were five prohibition orders and three civil money penalty orders.

  • A civil money penalty of $40,500 was assessed on Oriental Bank, San Juan, Puerto Rico, for 27 violations of flood insurance requirements
  • FirstBank, Nashville, Tennessee, was assessed a $172,500 civil money penalty for 196 violations of flood insurance requirements
  • William Derek Martin, formerly a vice president and loan officer of Anderson Brothers Bank, Mullins, South Carolina, was ordered to pay a civil money penalty of $15,000 and issued an order of prohibition
  • Orders of prohibition were issued to:
    • William Weisbrod, a former of Lincoln 1st Bank, Lincoln Park, New Jersey
    • Erica E. Franklin, former treasury services supervisor of Bank of Labor, Kansas City, Kansas
    • Mark Wong, formerly employed by Bank of the West, San Francisco, California
    • Gina Champion-Cain, formerly a director of Endeavor Bank, San Diego, California


MoneyGram and SAP settle with OFAC

OFAC has announced settlements with MoneyGram and SAP SE:

  • MoneyGram Payment Systems, Inc., a global payments company based in Dallas, Texas, that allows people to send money in more than 200 countries and territories, agreed to remit $34,328.78 to settle its potential civil liability for 359 apparent violations of multiple sanctions programs. MoneyGram provided services to blocked individuals incarcerated in U.S. federal prisons without a license from OFAC, processed transactions on behalf of an additional blocked person, and processed transactions for individuals who initiated commercial transactions involving Syria.
  • SAP SE, a software company located in Walldorf, Germany, has agreed to settle its potential civil liability for 190 apparent violations of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560, by remitting $2,132,174 to OFAC. Between approximately 2013 and 2018, SAP engaged in the export, re-export, sale, or supply of technology or services from the United States to companies in third countries with knowledge or reason to know the software or services were intended specifically for Iran, and sold cloud-based software subscription services accessed remotely through SAP’s cloud businesses in the United States to customers that made the services available to their employees in Iran. OFAC determined that SAP voluntarily self-disclosed the apparent violations, and that these apparent violations constitute a non-egregious case.
  • 04/30/2021

    FDIC 'Office Hours' launched

    The FDIC has announced the launch of Office Hours, which offer an opportunity for bankers, fintechs, and other interested parties to have one-on-one conversations with FDIC staff about current and evolving technological innovations related to the business of banking. The first round of Office Hours will focus on artificial intelligence and machine learning.


    Fed announces enforcement actions

    The Federal Reserve Board has announced the execution of two enforcement actions:

    • Consent order to cease and desist and pay a $25,000 civil money penalty against Peter Little, a former employee of Barclays Bank PLC, New York, New York, for engaging in manipulative and collusive foreign exchange trading practices
    • Consent order of prohibition against Raul Cavazos, a former employee of Texas Community Bank, Laredo, Texas, for misappropriation of bank funds


    Comptroller’s Handbook booklet revised

    The OCC has issued Bulletin 2021-22 announcing the revision of the “Credit Card Lending” booklet of the Comptroller’s Handbook. The revised booklet—

    • reflects the adoption of the current expected credit loss methodology by some banks and the increased use of models in credit card originations and risk management
    • reflects changes to OCC issuances published and rescinded since this booklet was last issued
    • includes clarifying edits regarding supervisory guidance, sound risk management practices, or legal language
    • revises certain content for general clarity


    Company pays $20M to settle FTC charges

    The Federal Trade Commission has announced that smart-home security and monitoring company Vivint Smart Homes Inc. has agreed to pay $20 million to settle Federal Trade Commission allegations that the Utah-based firm misused credit reports to help unqualified customers obtain financing for the company’s products and services. Vivint will pay a $15 million civil penalty and an additional $5 million to compensate injured consumers. The complaint filed by the Department of Justice on behalf of the FTC alleged that Vivint violated the Fair Credit Reporting Act by improperly obtaining credit reports in order to qualify potential customers for financing for its smart home monitoring and security products.


    FinCEN renews GTOs

    FinCEN yesterday announced the renewal of its Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate. The GTOs are identical to those issued in November 2020. The purchase amount threshold remains $300,000 for each covered metropolitan area. The terms of this Order are effective beginning May 5, 2021 and ending October 31, 2021.


    House prices continue to rise

    The Federal Housing Finance Agency has reported that house prices rose nationwide in February, up 0.9 percent from the previous month, according to the latest FHFA House Price Index. House prices rose 12.2 percent from February 2020 to February 2021. The previously reported 1.0 percent price change for January 2021 remained unchanged.

    For the nine census divisions, seasonally adjusted monthly house price changes from January 2021 to February 2021 ranged from +0.3 percent in the Middle Atlantic division to +1.6 percent in the Mountain division. The 12-month changes ranged from +10.5 percent in the West North Central division to +15.4 percent in the Mountain division.


    Landlord charged for rental refusal due to assistance animal

    HUD has announced that it is charging an owner of an apartment complex in Florence, Alabama, with violating the Fair Housing Act by refusing to rent a unit to a prospective tenant with disabilities who uses an assistance animal. According to the HUD charge, a woman who uses an assistance animal filed a complaint with HUD after she was denied the opportunity to rent an apartment she saw online because of the owner’s “no-pets” policy. When the woman called to inquire about the unit, the owner allegedly asked if she had a pet, and when the woman stated she had an assistance animal, the owner told her that she did not allow pets or animals and terminated the call.


    FOMC statement issued - Fed Funds rate unchanged

    The Federal Reserve Board issued the Federal Open Market Committee statement following yesterday's FOMC meeting. In the statement, the committee said it:

    "... seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time...."


    IRS releases 7th EIP3 batch

    The IRS has announced it disbursed nearly 2 million payments in the seventh batch of Economic Impact Payments from the American Rescue Plan. In total, this batch included nearly 2 million payments with a value of more than $4.3 billion.

    • More than 1.2 million payments, with a value of over $3 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.
    • This batch also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included more than 730,000 of these "plus-up" payments, with a value of over $1.3 billion.
    • The batch includes about 1.1 million direct deposit payments (with a total value of $2.5 billion) and about 850,000 paper check payments (with a total value of more than $1.8 billion), with an official payment date of April 28.


    CFPB issues consumer complaint bulletin

    The CFPB announced it has issued a Complaint Bulletin with a county-level demographic overview of consumer complaints.

    Among other key findings in this bulletin:

    • From 2019 to 2020, consumer complaints increased across all demographic groups. Complaints increased at a greater rate in predominantly minority counties compared to predominantly white, non-Hispanic counties.
    • Consumers living in predominantly minority counties submitted more complaints on a per capita basis in nearly every one of the 11 product categories about which the Bureau accepts complaints.
    • Credit or consumer reporting appears to cause significantly more issues for consumers in predominantly minority counties.

    The Bureau plans to enhance its complaint form to give consumers the option to provide household size and household income when submitting a complaint. It will also begin exploring what additional information it may need to help better understand the experiences of diverse communities that submit complaints.


    GSEs offer new refi option for low-income borrowers

    The FHFA announced on Wednesday that Fannie Mae and Freddie Mac will implement a new refinance option this summer for low-income borrowers with Enterprise-backed single-family mortgages. Eligible borrowers will benefit from a reduced interest rate and lower monthly payment. The FHFA estimates that borrowers who take advantage of the new refinance option could save an average of between $100 and $250 a month.

    The new refinance option includes:

    • A requirement that the lender provides a savings of at least $50 in the borrower’s monthly mortgage payment, and at least a 50-basis point reduction in the borrower’s interest rate;
    • A maximum $500 credit from the lender for an appraisal if the borrower is not eligible for an appraisal waiver (the Enterprises will provide the lender a credit of $500 upon the loan’​s sale to an Enterprise); and A waiver of the 50 basis point up-front adverse market refinance fee for borrowers with loan balances at or below $300,000.

    To qualify, a borrower must:

    • Have an Enterprise-backed 1-unit single-family mortgage that is owner-occupied;
    • Have an income at or below 80% of the area median income;
    • Have not missed a payment in the past six months, and no more than one missed payment in the past 12 months; and
    • Not have a mortgage with a loan-to-value ratio greater than 97%, a debt-to-income ratio above 65%, or a FICO score lower than 620.


    CFPB responds to claims of Mr. Cooper unauthorized withdrawals

    CFPB Acting Director Dave Uejio has issued a statement in response to apparent unauthorized withdrawals made by a mortgage servicer, Nationstar Mortgage LLC, d/b/a Mr. Cooper. Unauthorized duplicate-payment drafts by Mr. Cooper appear to have resulted in hundreds of thousands of consumers’ bank accounts being debited for multiples of their mortgage payments. Affected consumers have reported being charged overdraft fees and likely suffered additional harm as a result of these unauthorized withdrawals.

    “The CFPB is taking immediate action to understand and resolve the situation that has affected hundreds of thousands of consumers. The CFPB will use all appropriate tools at our disposal to help ensure harmed consumers receive relief. Consumers affected by the incident should monitor their accounts and may contact Mr. Cooper directly. Consumers can submit complaints to the CFPB at or call toll-free at 855-411-2372."

    National Mortgage News reported on Monday that Mr. Cooper was working on reversing unauthorized payment drafts from some of its borrowers' bank accounts. Mr. Cooper said in a blog post that "All duplicate transaction requests have been stopped. We are actively working with the banks involved and the payments vendor [where the errors reportedly originated] to correct the issue and prevent recurrence."

    [Financial institutions holding deposit accounts affected by the apparent unauthorized transactions are likely to receive error claims under Regulation E, and must follow the requirements of the regulation in processing those claims. Part of their investigation of these claims should be checking to see if the duplicate debits have been reversed. Any bank-imposed fees (such as overdraft and return item fees) triggered by the duplicate debits will have to be reversed. - Editor]


    CFPB action against reverse mortgage lender

    The Consumer Financial Protection Bureau has taken action against Nationwide Equities Corporation for sending deceptive loan advertisements to hundreds of thousands of older borrowers. The Bureau found that advertisements from Nationwide Equities misled consumers concerning how much money they could receive from a reverse mortgage, the fees and costs associated with the products, and the consequences of nonpayment. The advertisements violated the Mortgage Acts and Practices Advertising Rule (MAP Rule), the Truth in Lending Act (TILA), and the Consumer Financial Protection Act of 2010 (CFPA). The CFPB is ordering the company to—

    • pay a $140,000 civil money penalty,
    • cease its illegal conduct, and
    • implement a compliance plan to affirmatively review every advertisement to ensure they do not violate federal law.

    Nationwide Equities is a mortgage broker and direct lender that offers and originates reverse mortgage loans, primarily home equity conversion mortgage loans and private jumbo reverse mortgage loans. The company, headquartered in Mahwah, New Jersey, is one of the largest reverse mortgage lenders in the United States, is licensed in 17 states and the District of Columbia, and operates three retail branches across the country.


    SBA Restaurant Revitalization Fund registration information

    The SBA has announced it will begin registrations on Friday, April 30, 2021, at 9 a.m. EDT and open applications on Monday, May 3, 2021, at noon EDT for the Restaurant Revitalization Fund. The online application will remain open to any eligible establishment until all funds are exhausted.

    The Fund was established under the American Rescue Plan and provides a total of $28.6 billion in direct relief funds to restaurants and other hard-hit food establishments that have experienced economic distress and significant operational losses due to the COVID-19 pandemic. This program will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. Funds must be used for allowable expenses by March 11, 2023.


    REAL ID deadline delayed

    Due to the COVID-19 pandemic, the Department of Homeland Security has extended the REAL ID full enforcement date by 19 months, to May 3, 2023, when every air traveler 18 years of age and older will need a REAL ID-compliant driver’s license or identification card, state-issued enhanced driver’s license, or another TSA-acceptable form of identification at airport security checkpoints for domestic air travel. All 50 U.S. states, the District of Columbia, and four of five U.S. territories covered by the REAL ID Act and related regulations are now compliant with REAL ID security standards and are issuing REAL ID-compliant driver’s licenses and identification cards. DHS has pushed back the full enforcement date to allow issuing authorities to catch up following the disruptions of the pandemic.


    FATF risk-based supervision webinar

    The Financial Action Task Force (FATF) has announced it will hold a webinar on Risk-Based Supervision on May 6, 2021, from 12:00-13:00 CEST/GMT-2 [6 - 7 a.m. EDT]. The session will be held on Zoom and will also be live streamed.


    Somalia sanctions regulations amended

    OFAC has amended and reissued in their entirety the Somalia Sanctions Regulations, replacing regulations that were published in abbreviated form on May 5, 2010. The final rule was published at 86 FR 22346 in today's Federal Register.


    CFPB delays compliance date for General QM rule

    The CFPB announced Tuesday afternoon that it has delayed the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021, to October 1, 2022.

    The CFPB said it is taking this action to help ensure access to responsible, affordable mortgage credit, and preserve flexibility for consumers affected by the COVID-19 pandemic and its economic effects. Delaying the mandatory compliance date of the General QM final rule allows lenders more time to offer QM loans based on the homeowners’ debt-to-income (DTI) ratio, and not solely based on certain pricing thresholds.

    Delaying the final rule’s compliance date would also give lenders more time to use the Government-Sponsored Enterprise (GSE) Patch, which provides QM status to loans that are eligible for sale to Fannie Mae or Freddie Mac. However, the availability of the GSE Patch after July 1, 2021, may be limited by recent revisions to the Preferred Stock Purchase Agreements entered into by the Department of the Treasury and the Federal Housing Finance Agency.

    The changes are reflected in the BankersOnline Regulations page for § 1026.43 of Regulation Z.

    • Tuesday's final rule delaying the mandatory compliance date
    • Summary of Tuesday's final rule
    • PUBLICATION AND EFFECTIVE DATE UPDATE: This rule will be effective 6/30/2021. Published at 86 FR 22844 on 4/30/2021.


    FEMA to suspend communities in four states next week

    The Federal Emergency Management Agency has published [86 FR 22357] in today's Federal Register a notice that it has scheduled communities in Mississippi, New York, Ohio, and South Carolina for suspension from the National Flood Insurance Program on Tuesday, May 4, 2021, for noncompliance with the floodplain management requirements of the program. The listed communities include:

    • Mississippi: Byhalia, Holly Springs, and unincorporated areas of Marshall and Tunica Counties
    • New York: Lewiston (Town), Lewiston (Village), Niagara Falls, Porter, Somerset, Wilson, and Youngstown
    • Ohio: Eastlake, Fairport Harbor, Grand River, Lake County (unincorporated areas), Lakeline, Mentor, Mentor-on-the-Lake, North Perry, Timberlake, Willoughby, and Willowick
    • South Carolina: Duncan, Greenville County (unincorporated areas), Lyman, Spartanburg, Spartanburg County (unincorporated areas), Union, and Union County (unincorporated areas)

    If FEMA receives documentation that a listed community has adopted the required floodplain management measures prior to May 4, 2021, the community will not be suspended.


    FDIC to terminate receiverships

    The FDIC has published at 86 FR 22204 in today's Federal Register an April 21, 2021, notice of intent to terminate seven receiverships no sooner than May 21, 2021:

    • Georgia Bank, Atlanta, GA (receivership date 9/25/09)
    • First Regional Bank, Los Angeles, CA (1/29/10)
    • Frontier Bank, Everett, WA (4/30/10)
    • Hillcrest Bank, Overland Park, KS (10/22/10)
    • Community Banks of Colorado, Greenwood Village, CO (10/21/11)
    • The Bank of Union, El Reno, OK (1/24/14)
    • Resolute Bank, Maumee, OH (10/25/19)


    OFAC sanctions two Guatamalans for corruption

    The Treasury Department on Monday announced that OFAC had sanctioned one current and one former Guatemalan government official for their roles in corruption in Guatemala. This action targets Gustavo Adolfo Alejos Cambara, the former Chief of Staff for the Alvaro Colom presidential administration, and Felipe Alejos Lorenzana, an elected delegate to the Congress of the Republic of Guatemala.

    These individuals were designated pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. These sanctions reinforce actions taken last year by the U.S. Department of State to publicly designate both individuals, and their immediate family members, under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act due to their involvement in significant corruption.

    Identification information for Alejoz Cambara and Alejos Lorenzana can be found in this BankersOnline OFAC Update.


    IP Protect launched to protect intellectual property rights

    U.S. Immigration and Customer Enforcement has reported that the National Intellectual Property Rights Coordination Center (IPR Center), in partnership with Michigan State University’s Center for Anti-Counterfeiting and Product Protection (A-CAPP), U.S. Chamber of Commerce, and the Better Business Bureau have launched “IP Protect.” This joint initiative provides resources – free of charge – to aid small to mid-size businesses in protecting themselves against intellectual property theft and fraud and in gaining cyber security awareness. IP Protect will provide small businesses with the following resources:

    • Direct points of contact for assistance or reporting tips related to IP theft, fraud, cyber intrusions, website fraud and trade secret violations
    • Cyber-attack security and data breach protection and response guidance
    • Brand protection best practices
    • Image and content rights protection guidance (video, image, music)
    • Software development protection
    • Guidance on trademark registration steps and resources

    A small sample of the resources and educational materials available to small to mid-size businesses through the IP Protect initiative can be found on the A-CAPP Center’s website.


    New home sales decline

    HUD and the Census Bureau have reported that the March 2021 sales of new single-family homes declined by 20.7 percent below the revised February rate of 846,000 but were 66.8. percent above the March 2020 estimate of 612,000. The median sales price of new houses sold in March 2021 was $330,800. The average sales price was $397,800. The seasonally adjusted estimate of new houses for sale at the end of March was 307,000, a supply of 3.6 months at the current sales rate.


    SEC emergency action stops Ponzi scheme

    The Securities and Exchange Commission has reported it has taken emergency action to obtain a temporary restraining order and an asset freeze to stop an alleged Ponzi scheme and misappropriation of investor proceeds perpetrated by Melbourne, Florida, resident Jonathan P. Maroney through several entities he controls.

    According to the SEC's complaint filed in federal court in the Middle District of Florida, since about May 2015, Maroney and his companies raised at least $17.1 million from more than 100 investors in a series of fraudulent securities offerings. The complaint alleges that Maroney, his company Harbor City Capital Corp., and his various other entities told investors that offering proceeds would be used to finance the defendants' online "customer lead generation campaigns," and promised investors annual returns ranging from 10% to 60% from the resale of those leads to other businesses. In fact, according to the complaint, little if any investor funds actually went to the lead generation business. Instead, Maroney allegedly misappropriated at least $4.48 million in investor funds to enrich himself and his family, including the purchase and maintenance of his waterfront home and a Mercedes Benz, and to pay for his extensive credit card bills and renovation-related expenses on the house.

    Maroney is also alleged to have misused investor money by making payments to other entities unrelated to the supposed purpose of the offerings, and to have fraudulently used investor funds to make monthly interest payments and other payouts to investors in classic Ponzi scheme fashion.


    HUD to resume housing inspections

    HUD Secretary Fudge has announced that HUD will substantially increase housing inspections beginning on June 1, 2021. Thirteen months ago, in response to the COVID-19 pandemic and in line with public health guidance, HUD took many steps to protect HUD-assisted households and the people who provide that assistance from exposure to COVID-19. Among those steps was the suspension of most in-person housing inspections by the Real Estate Assessment Center (REAC) last year along with waivers that enabled Public Housing Authorities (PHAs) and Multifamily housing owners and managers to reduce activities that could contribute to COVID-19 transmission.

    Multifamily housing owners and property managers were informed on Friday that HUD has developed detailed protocols guiding all aspects of the inspection process. HUD, in collaboration with the CDC, will implement additional protocols and associated safety measures, including:

    • The inspection of high priority/risk properties for both the Public Housing and Multifamily portfolios before other properties;
    • Evaluation of known property-specific health conditions prior to the inspection;
    • Regular COVID-19 testing of inspectors and efforts to facilitate the vaccination of inspectors;
    • Travel and quarantine guidelines for inspectors;
    • Detailed operational protocols for inspectors pre-inspection, during the inspection, and post-inspection reviewed by the CDC;
    • Ability for residents to opt-out of unit inspections when inspectors arrive on-site.


    OCC conditionally approves national trust bank

    The OCC has announced preliminary conditional approval of the application to charter Paxos National Trust, New York. The national trust bank charter was conditionally awarded to Paxos after a thorough review of the company and its current operations.


    SEC awards whistleblowers over $3 million

    The SEC has announced awards totaling more than $3 million to two whistleblowers in separate enforcement proceedings. In the first order, the SEC awarded approximately $3.2 million to a whistleblower who alerted SEC staff to violations, identified key issues for staff to focus on, and provided subject matter expertise to the staff that conserved SEC resources. In the second order, the SEC awarded a whistleblower more than $100,000 for significant information and ongoing assistance. The whistleblower’s information and cooperation helped the SEC detect and stop an ongoing fraud preying on investors.


    Former race car team owner/Investment advisor charged by SEC

    The SEC has announced it has filed a complaint charging Andrew T. Franzone, former owner of a race car team, and investment adviser FF Fund Management, LLC (FFM) with fraudulently raising and misappropriating tens of millions of dollars from the sale of limited partnership interests in a private fund, FF Fund I LP.

    The complaint alleges that Franzone, the sole owner and principal of FFM, defrauded investors by making misrepresentations regarding the fund's strategy and investments, failing to eliminate or disclose conflicts of interest, misappropriating fund assets, and falsely representing the fund would be audited annually. According to the complaint, from August 2014 through Sept. 24, 2019, Franzone told potential and existing investors that his investment strategy for the fund was to maintain a highly liquid portfolio primarily focused on options and preferred stock trading. Franzone allegedly raised more than $38 million for the fund from approximately 90 investors through these representations.


    HOME-ARP grantees announced

    HUD Secretary Fudge on Friday held a Zoom call to discuss the nearly $5 billion in American Rescue Plan funds allocated by HUD to help communities across the country create affordable housing and services for people experiencing or at risk of experiencing homelessness. The supplemental funding, known as HOME-ARP, was provided by the American Rescue Plan and is allocated through the HOME Investment Partnerships Program to 651 grantees, including states, insular areas, and local governments.


    Federal Reserve enforcement orders

    The Board of Governors of the Federal Reserve System has announced the execution of two enforcement orders against state-chartered member banks.

    • The Yellowstone Bank, Laurel, Montana, was ordered to pay a $9,500 civil money penalty for a pattern or practice of unspecified violations of Federal Reserve Board Regulation H section 208.25, which implements the National Flood Insurance Act.
    • Iowa Prairie Bank, Brunsville, Iowa, entered into a written agreement with the Federal Reserve Bank of Chicago and the Iowa Division of Banking addressing matters of board oversight, credit risk management, asset improvement, the allowance for loan and lease losses, capital planning, a business plan and budget, regulatory reporting, dividends, and compliance with laws and regulations.


    FDIC proposes rule on false deposit insurance ads

    The FDIC has issued a proposed rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo. This statutory authority allows the FDIC to bring formal enforcement actions, such as cease and desist orders or civil money penalties, against individuals or entities for violations.

    The proposed rule describes the process by which the FDIC would identify and investigate potential violations, and the procedures it would follow, when formally and informally enforcing the statutory prohibitions. The proposed rule would also create a central point-of-contact where the public could report or make inquiries about potential violations.

    Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.


    Cash advance firm settles with FTC

    The Federal Trade Commission has announced that Yellowstone Capital, a provider of merchant cash advances, will pay more than $9.8 million to settle Commission charges that it took money from businesses’ bank accounts without permission and deceived those businesses about the amount of financing business owners would receive and other features of its financing products. Under the terms of the settlement, Yellowstone, Fundry Inc., Yitzhak (a/k/a Isaac) Stern, and Jeffrey Reece will be required to surrender $9,837,000 to the FTC to be used in providing refunds to affected businesses. In addition, the settlement permanently prohibits the defendants from misleading consumers about the terms of their financing, including the amount and timing of any fees and whether business owners are required to be personally liable for the financing. The defendants will also be prohibited from making withdrawals from consumers’ bank accounts without their express informed consent.


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