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FinCEN analysis of BSA data on BEC fraud in real estate sector

FinCEN has announced its release of a Financial Trend Analysis on patterns and trends identified in Bank Secrecy Act (BSA) data relating to business email compromise (BEC) in the real estate sector (RE-BEC) in 2020 and 2021. The report contains relevant information for the public, particularly individual homebuyers and the multiple entities involved in real estate transactions.

The report includes recommended actions for financial institutions, entities within the real estate sector, and the general public to detect and mitigate RE-BEC and other types of BEC incidents.


Hedge fund trader charged by SEC

The Securities and Exchange Commission yesterday announced insider trading charges against Sean Wygovsky, a former trader at a Canadian asset management firm, and Christopher Matthaei, a former partner at a U.S. broker-dealer, for using nonpublic information in advance of at least seven merger announcements involving Special Purpose Acquisition Companies (SPACs) to earn illicit profits of more than $3.4 million.

The SEC’s complaint alleges that Wygovsky learned material non-public information about upcoming SPAC mergers from his employer’s involvement in transactions related to the mergers. The complaint further alleges that, from May 2020 through April 2021, Wygovsky used encrypted messaging to tip his close friend and trading client, Matthaei, about the upcoming mergers. Matthaei, who ran a trading and research group focused on SPACs during the relevant period, allegedly traded on Wygovsky’s tips.

Wygovsky and Matthaei are charged with violating the antifraud provisions of the federal securities laws and seeks permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties against Matthaei and Wygovsky, and an officer and director bar against Matthaei. Wygovsky has consented to a bifurcated settlement, subject to court approval, under which he will be permanently enjoined from violating the federal securities laws. The SEC previously charged Wygovsky with perpetrating a lucrative front running scheme, and Wygovsky consented to a bifurcated settlement in that matter as well.


CFPB issues final 'Section 1071' rule

Yesterday, the CFPB announced it has finalized a rule required by Congress to increase transparency in small business lending, promote economic development, and combat unlawful discrimination. The rule implements section 1071 of the Dodd-Frank Act, enacted in 2010.

Under the final rule, lenders will collect and report information about the small business credit applications they receive, including geographic and demographic data, lending decisions, and the price of credit. The rule will work in concert with the Community Reinvestment Act, which requires certain financial institutions to meet the needs of the communities they serve. The increased transparency will benefit small businesses, family farms, financial institutions, and the broader economy. The rule will:

  • Provide a comprehensive view of small business lending: The rule covers lenders making over 100 covered small business loans per year, which accounts for more than 95 percent of small business loans by banks and credit unions. As with mortgages, lenders will submit data points required by Congress, as well as additional data points that are typically already included in lender files.
  • Cover diverse forms of credit by all types of lenders: The rule covers closed-end loans, lines of credit, business credit cards, online credit products, and merchant cash advances by banks, credit unions, and other lenders. Non-depository financial institutions — a growing sector accounting for roughly $550 billion in financing to small businesses — will be required to collect and report data, as will banks, savings associations, and credit unions.
  • Use straightforward definitions and streamlined forms: To make it easy for lenders to know on which applications to collect data, the rule defines a small business as one with gross revenue under $5 million in its last fiscal year. The rule also includes a streamlined sample form for lenders to use, if they so choose, to collect demographic data from small business credit applicants.

After considering a wide range of feedback and thousands of public comments, the CFPB is finalizing the rule and planning for implementation in ways that will:

  • Phase in implementation for the largest lenders first: Lenders that originate at least 2,500 small business loans annually must collect data starting October 1, 2024. Lenders that originate at least 500 loans annually must collect data starting April 1, 2025. Lenders that originate at least 100 loans annually must collect data starting January 1, 2026.
  • Streamline and improve demographic and financial data collection: Small businesses will be able to self-identify as women-, minority-, or LGBTQI+-owned. Lenders will be able to rely on the financial and other information provided by the small business. Loan officers will not be required to make their own determinations of an applicant’s race, ethnicity, or any other demographic information.
  • Reduce duplicative reporting requirements: Loans reportable under the Home Mortgage Disclosure Act will not need to be reported under the small business lending rule. The rule is also designed to work in concert with rules under the Community Reinvestment Act’s reporting requirements. Under the regulators’ Community Reinvestment Act proposal, data submitted under the CFPB’s rule would satisfy the relevant Community Reinvestment Act requirements.
  • Allow for the use of new digital tools developed by industry and technology partners: The rule finalized today allows financial institutions to work with third parties, including industry consortia, to develop services and technologies that will aid in collecting and reporting data. While individual lenders are ultimately responsible for ensuring fair and accurate collection and reporting, the rule permits them to work with third parties, including industry consortia and other partners, to collect and report data in ways that are tailored to their business model. For example, the CFPB plans to provide Application Programming Interfaces in an open-source environment to spur the development of accurate and efficient data reporting tools.
  • Give extra time to lenders with strong records of service to meet the needs of the communities they serve: The CFPB intends to issue a supplementary proposal that would, if finalized, provide additional implementation time for small lenders that have demonstrated high levels of success in serving their local communities, as measured by their performance under relevant frameworks like the Community Reinvestment Act and similar state laws.

Related documents:


Facilitator sanctioned for attempted Russia-DPRK arms deal

OFAC has sanctioned an individual for attempting to facilitate arms deals between Russia and the Democratic People’s Republic of Korea (DPRK). Sanctions and export controls imposed by a coalition of over 30 countries have constrained Russia’s ability to replace lost military equipment and supplies with modern technology.

OFAC designated a Slovakian national, Ashot Mkrtychev under the authority of Executive Order 13551 for having attempted to, directly or indirectly, import, export, or reexport to, into, or from the DPRK any arms or related materiel.

For identification information on Mkrtychev, see this BankersOnline OFAC Update.


Wells Fargo fined by Fed and OFAC

The Federal Reserve Board on Thursday announced it has fined Wells Fargo & Co., of San Francisco, California, $67.8 million for the firm's unsafe or unsound practices relating to historical inadequate oversight of sanctions compliance risks at its subsidiary bank, Wells Fargo Bank, N.A. Wells Fargo & Co.'s deficient oversight enabled the bank to violate U.S. sanctions regulations by providing a trade finance platform to a foreign bank that used the platform to process approximately $532 million in prohibited transactions between 2010 and 2015.

The Board's action was in conjunction with OFAC's announcement of a $30 million settlement with Wells Fargo Bank, N.A. For further information, see "Wells Fargo fined for OFAC violations," in the BankersOnline Penalty pages.


FDIC guidance for Mississippi area financial institutions

FDIC FIL-12-2023, issued yesterday, provides guidance to help financial institutions and facilitate recovery in areas of Mississippi affected by severe storms, straight-line winds, and tornadoes that cause major property damage in that state March&nbsp24–25, 2023.

  • The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by severe storms, straight-line winds and tornadoes.
  • Banks that extend repayment terms, restructure existing loans, or ease terms for new loans 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 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.


OCC adding Office of Financial Technology

The OCC has established its Office of Financial Technology and the selection of Prashant Bhardwaj to lead the office as Deputy Comptroller and Chief Financial Technology Officer, effective April 10, 2023.

In October 2022, the OCC announced that it would expand upon its Office of Innovation and establish an Office of Financial Technology in early 2023 to bolster the agency’s expertise and ability to adapt to the rapid pace of technological changes in the banking industry. The Office of Financial Technology broadens the OCC’s focus in this area and ensures the agency’s leadership and agility in providing high-quality supervision of bank-fintech partnerships. It further enhances the agency’s knowledge and expertise of financial technology platforms and applications in support of the OCC’s mission.


Hsu on safety and soundness focus and fairness in banking

In remarks yesterday at the National Community Reinvestment Coalition's 2023 Just Economy conference, Acting Comptroller of the Currency Michael J. Hsu emphasized the OCC's continued focus on the safety, soundness and fairness of the federal banking system and its work to elevate fairness in banking.

In his remarks, Acting Comptroller Hsu highlighted the OCC’s close monitoring of the market and the condition of its supervised institutions. He discussed the OCC’s continued work to improve the fairness of bank overdraft protection practices by encouraging banks to make pro-consumer reforms. He also discussed efforts to address discrimination and bias in lending, appraisals and artificial intelligence, and the OCC’s focus on expanding inclusion and opportunity by strengthening and modernizing the Community Reinvestment Act and maturing Project REACh.


Private fund auditor and partner charged by SEC

The Securities and Exchange Commission has announced settled charges against Spicer Jeffries LLP, an audit firm based in Denver, and audit engagement partner Sean P. Tafaro, for their improper professional conduct in connection with audits of two private funds. According to the SEC’s order, during the audit planning stages, Spicer Jeffries and Tafaro assessed that valuation of investments was a significant fraud risk but did not implement the planned audit approach to respond to the risk. The order further finds that Spicer Jeffries and Tafaro failed to obtain sufficient audit evidence about the method of measuring fair value, the valuation models, and whether alternative valuation assumptions were considered. According to the order, due to these failures and others, Spicer Jeffries and Tafaro did not exercise due care, including professional skepticism. The order also finds that Spicer Jeffries’ deficient system of quality control led to failures to adhere to professional auditing standards.

Without admitting or denying the findings, Spicer Jeffries and Tafaro consented to the SEC’s order finding that they engaged in improper professional conduct. Spicer Jeffries agreed to be censured and to implement undertakings to retain an independent consultant to review and evaluate certain of its audit, review, and quality control policies and procedures. Tafaro agreed to be suspended from appearing and practicing before the SEC as an accountant, with a right to apply for reinstatement after one year.


Fannie and Freddie to enhance payment deferral policies

Yesterday, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac (the Enterprises) will enhance their payment deferral policies to allow borrowers facing financial hardship to defer up to six months of mortgage payments. The enhanced payment deferral policies will promote sustainable homeownership and will further support the safety and soundness of the Enterprises.

Payment deferral allows borrowers who are able to resolve a financial hardship to keep the same monthly mortgage payment by moving past-due amounts to the end of the loan as a non-interest bearing balance, due and payable at maturity, sale, refinance, or payoff. During the pandemic, the Enterprises’ payment deferral policies were expanded to allow borrowers with COVID-19 hardships to utilize this solution. Given the success of the COVID-19 payment deferral, FHFA and the Enterprises are enhancing the standard payment deferral policies available to borrowers experiencing other eligible hardships.

Borrowers facing financial hardship should contact their servicer to discuss whether this is an appropriate solution for their unique circumstances. Servicers may offer borrowers one of several solutions to resolve a delinquency, including the enhanced payment deferral, reinstatement, repayment plan, or loan modification, depending on their individual situations.

The Enterprises will work with servicers to implement the enhanced payment deferral policies, with a voluntary adoption date of July 1, 2023, and mandatory adoption by October 1, 2023.


SEC charges crypto trading platform

The Securities and Exchange Commission has announced it has charged the crypto asset trading platform (the Beaxy Platform) and its executives for failing to register as a national securities exchange, broker, and clearing agency. The SEC also charged the founder of the platform, Artak Hamazaspyan, and a company he controlled, Beaxy Digital, Ltd., with raising $8 million in an unregistered offering of the Beaxy token (BXY) and alleged that Hamazaspyan misappropriated at least $900,000 for personal use, including gambling. Finally, the SEC charged market makers operating on the Beaxy Platform as unregistered dealers.

According to the SEC’s complaint, since October 2019, Nicholas Murphy and Randolph Bay Abbott, through the company they managed, Windy Inc., maintained and provided the Beaxy Platform as a web-based trading platform that facilitated buying and selling of crypto assets that were offered and sold as securities. The complaint alleges that Windy, through the Beaxy Platform, violated the Securities Exchange Act of 1934 because it:Securities Exchange Act of 1934 because it:

  • Brought together the orders for securities of multiple buyers and sellers using established, non-discretionary methods under which such orders interacted, and the buyers and sellers entering such orders agreed to the terms of a trade, and thus should have registered as an exchange;
  • Acted as an intermediary in making payments and deliveries upon matching sell and buy orders and maintained custody of customer assets, and thus should have registered as a clearing agency; and
  • Was regularly engaged in the business of effecting transactions for the account of others in crypto assets that were offered and sold as securities, and thus should have registered as a broker.

The SEC’s complaint also alleges that, after Murphy and Abbott convinced Hamazaspyan to resign following the unregistered offering of BXY and the misappropriation of investor assets, the two continued the operation of the Beaxy Platform through Windy, and as such are also liable for operating an unregistered exchange, broker, and clearing agency.

Additionally, the complaint alleges that, in December 2019, Windy entered into an agreement with Brian Peterson and his companies — Braverock Investments LLC, Future Digital Markets Inc., Windy Financial LLC, Future Financial LLC (collectively, the Braverock Entities) — to provide market making services for BXY, and in May 2020, one of these companies entered into a similar market making agreement for another crypto asset security. By doing so, the complaint alleges that Peterson and the Braverock Entities acted as unregistered dealers.

Windy, Murphy, Abbott, and Peterson have agreed to perform certain undertakings, including ceasing all activities as an unregistered exchange, clearing agency, broker, and dealer; shutting down the Beaxy Platform; providing an accounting of assets and funds for the benefit of customers; transferring all customer assets and funds to each respective customer; and destroying any and all BXY in Windy’s possession.

Windy, Murphy, Abbott, Peterson, and the Braverock Entities have agreed to permanent injunctions prohibiting them from future violations of the securities laws alleged in the complaint and to pay civil penalties. Specifically, Windy, Abbott, and Murphy agreed to pay a total of $79,200 in civil penalties; Peterson agreed to pay a civil penalty of $6,600; and the Braverock Entities agreed to jointly and severally pay a penalty of $80,000. In addition, Windy agreed to pay $10,779 in disgorgement plus prejudgment interest, and the Braverock Entities agreed to jointly and severally pay $52,000 in disgorgement plus prejudgment interest. The penalty amounts reflect the cooperation the staff received from the settling parties during the investigation.

The SEC is litigating its charges against Hamazaspyan for securities fraud and against Hamazaspyan and Beaxy Digital for the unregistered offering of BXY.


House prices up 5.3 percent over last year

The Federal Housing Finance Agency reported yesterday that U.S. house prices rose in January, up 0.2 percent from December, according to the FHFA seasonally adjusted monthly House Price Index. House prices rose 5.3 percent from January 2022 to January 2023. The previously reported 0.1 percent price decline in December 2022 remained unchanged.

For the nine census divisions, seasonally adjusted monthly price changes from December 2022 to January 2023 ranged from -0.6 percent in the Pacific division to +2.0 percent in the New England division. The 12-month changes were -1.5 percent in the Pacific division to +9.6 percent in the South Atlantic division.

“U.S. house prices changed slightly in January, continuing the trend of the last few months,” said Dr. Nataliya Polkovnichenko, Supervisory Economist, in FHFA’s Division of Research and Statistics. “Many of the January closings, on which this month’s HPI is constructed, reflect rate locks after mortgage rates declined from their peak in early November. Inventories of available homes for sale remained low.”


CFPB determines certain state laws not preempted by TILA

The CFPB has announced it has determined that state disclosure laws covering lending to businesses in California, New York, Utah, and Virginia are not preempted by the federal Truth in Lending Act. The CFPB examined the state disclosure laws to determine if they were inconsistent with and preempted by the Truth in Lending Act. After analyzing public comments on its preliminary determination, the CFPB affirms there is no conflict because the state laws extend disclosure protections to businesses and entrepreneurs that seek commercial financing.

The Truth in Lending Act is intended to ensure that credit terms are disclosed in a meaningful way to consumers, so they can better compare lending options. In recent years, California, New York, Utah, and Virginia have enacted laws that require lenders to include disclosures in their commercial financing transactions with businesses. Commercial financing transactions are not covered by the federal Truth in Lending Act.

The Truth in Lending Act only preempts state laws under what is known as conflict preemption. The state laws reviewed by the CFPB concern protections for businesses to ensure they can understand the credit terms available to them. This is beyond the scope of the Truth in Lending Act’s statutory consumer credit purposes. The CFPB’s decision affirms that the four states’ commercial financing disclosure laws do not conflict with the Truth in Lending Act.


HUD awards $5.5M to HBCUs

The U.S. Department of Housing and Urban Development (HUD) yesterday announced awards totaling $5.5 million for historically Black colleges and universities (HBCUs) to Texas Southern University and North Carolina A&T University to establish or bolster existing Centers of Excellence that conduct housing and community development research.

Texas Southern University was awarded $3 million to expand the work of its Center of Excellence for Housing and Community Development Policy Research. The research conducted by the Center will focus on individual and community wealth building, and housing security and stability in addition to planning and infrastructure inequity affecting underserved communities.

North Carolina A&T University was awarded $2.5 million to establish a center with research that will focus on the production of affordable housing, homeownership, renewable energy, sustainable communities, and post-disaster recovery.


FSB statement on recent market developments

The Financial Stability Board (FSB) Plenary held a virtual regular meeting on March 28, and has issued a statement following discussion of recent developments in financial markets and their financial stability implications.

FSB members welcomed the policy measures taken by authorities in Switzerland, the United States and other jurisdictions to maintain global financial stability and the coordinated actions by central banks to enhance the provision of liquidity across borders.

Recent events have highlighted the importance of the G20 financial reforms adopted following the 2008 Global Financial Crisis, which have enhanced financial institutions’ resilience. These reforms included increasing capital and liquidity buffers in the banking system and strengthening cross-border regulatory and supervisory cooperation. The events have also underlined the importance of ongoing work by national authorities to complete the implementation of the agreed reforms in a full, timely and consistent manner. An open and resilient global financial system, grounded in agreed international standards, is crucial to support sustainable growth.

Members agreed to review the lessons to be learned from the recent actions by authorities to resolve financial institutions for the operation of the international resolution framework. FSB members remain vigilant and stand ready to take policy measures to maintain the resilience of the global financial system. The FSB will continue to promote international cooperation, closely monitor market developments, evaluate market functioning and assess financial vulnerabilities.


Fed amends Regs A and D to reflect interest rate increases

The Federal Reserve Board has published in the Federal Register for March 29, 2023, amendments to Regulations A and D to adjust interest rates in accordance with actions announced on March 22.

  • At 88 FR 18379, an amendment to section 201.51 of Regulation A to increase the interest rate charged on primary credit provided by the Federal Reserve Banks to 5 percent and for secondary credit to 5.50 percent.
  • At 88 FR 18380, an amendment to section 204.10 to increase the interest on reserve balances rate ("IORB" rate) to 4.9 percent.

The amendments, which have been posted to the BankersOnline Regulations pages, are effective on publication, with applicability from March 23, 2023.


Syrian and Lebanese actors sanctioned

The Treasury Department on Tuesday announced that OFAC has taken action in coordination with counterparts in the United Kingdom to designate key individuals supporting the regime of Syrian President Bashar al-Assad and the production or export of Captagon, a dangerous amphetamine. These designations, some of which are being implemented pursuant to the Caesar Syrian Civilian Protection Act of 2019 also highlight the important role of Lebanese drug traffickers — some of whom maintain ties to Hizballah — in facilitating the export of Captagon. OFAC's action also underscores the al-Assad family dominance of illicit Captagon trafficking and its funding for the oppressive Syrian regime.

As a result of Tuesday’s action, all property and interests in property of these persons that are in or come within the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. OFAC regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of designated or otherwise blocked persons.

For the names and identification information of the designated parties, see this BankersOnline OFAC Update.


Proposed scoring notice for NSPIRE

HUD yesterday announced it had published [88 FR 18268] in the March 28, 2023, Federal Register the proposed scoring notice for the National Standards for the Physical Inspection of Real Estate (NSPIRE). The updated scoring notice is a critical step in HUD’s work to improve conditions in HUD assisted and insured housing by increasing standards for and frequency of inspections. NSPIRE strengthens HUD’s physical condition standards, formerly known as the Uniform Physical Condition Standard (UPCS) and the Housing Quality Standards (HQS). The proposed notice is part of HUD’s efforts to update its physical inspection model that is now more than 20 years old.

Comments on HUD's proposal will be accepted through April 27, 2023.


Credit card penalty fees proposal published

The CFPB announced on February 1 a proposed rule that would reduce the cap on late charges on credit card accounts to $8, eliminate the annual adjustment of that cap for inflation, and limit a late fee to 25 percent of the late required payment.

That proposal was finally published [88 FR 18906] in today's Federal Register with a comment period ending May 3, 2023.


Second Circuit rules CFPB funding not unconstitutional

A three-judge panel of the U.S. Court of Appeals for the Second Circuit has unanimously ruled, in CFPB v. Law Offices of Crystal Moroney, that the CFPB’s funding structure does not violate the Appropriations Clause of the U.S. Constitution. The panel said in its decision it does not follow the Fifth Circuit panel decision in Community Financial Services Association of America Ltd. v. CFPB that reached the opposite conclusion.

The matter under contention in the Second Circuit case involved the CFPB's petition to enforce a civil investigative demand (CID) that the Bureau issued to Moroney before the Seila Law decision that eliminated the limitation on the President's ability to remove the CFPB Director only "for cause." The CID was ratified by then Director Kraninger after the Seila Law decision.

The Supreme Court may review the Second Circuit's ruling when taking up the Fifth Circuit's determination that the CFPB's funding mechanism does violate the Appropriations Clause of the Constitution.


HUD announces Mississippi disaster relief

HUD has announced the implementation of federal disaster relief for the state of Mississippi to assist state, tribal, and local recovery efforts for areas affected by severe storms, straight-line winds, and tornadoes March 24 – 25, 2023. On March 26, 2023, President Biden issued a major disaster declaration for the counties of Carroll, Humphreys, Monroe, and Sharkey.

Effective immediately, HUD is:

  • Providing a 90-day moratorium on foreclosures of mortgages insured by the Federal Housing Administration (FHA) as well as foreclosures of mortgages to Native American borrowers guaranteed under the Section 184 Indian Home Loan Guarantee program. There is also a 90-day extension granted automatically for Home Equity Conversion Mortgages. The moratorium and extension are effective as of the President’s disaster declaration date. Homeowners affected by the disaster should contact their mortgage or loan servicer immediately for assistance. Conventional mortgage holders may also be eligible for additional relief through their mortgage holder.
  • Making mortgage insurance available - When homes are destroyed or damaged to an extent that required reconstruction or complete replacement, HUD’s Section 203(h) program provides FHA insurance to disaster victims. Borrowers from participating FHA approved lenders are eligible for 100 percent financing including closing costs.
  • Making insurance available for both purchase/refinancing and home rehabilitation - HUD's Section 203(k) loan program also allows individuals to finance the purchase or refinance of a house along with its repair through a single mortgage. Homeowners can also finance the rehabilitation of their existing homes if damaged.
  • Sharing information on housing providers and HUD programs - Information will be shared with FEMA and the State on housing providers that may have available units in the impacted counties, including Public Housing Agencies and Multi-Family owners. The Department will also connect FEMA and the State to subject matter experts to provide information on HUD programs and providers.
  • Providing flexibility to Community Planning and Development Grantees - Recipients of Community Development Block Grant (CDBG) Program, Housing Opportunities for Persons With HIV/AIDS (HOPWA) Program, Continuum of Care (CoC) Program, Emergency Solutions Grants (ESG) Program, HOME Program, and Housing Trust Fund (HTF) Program funds can apply for needed administrative flexibility in response to natural disasters.
  • Providing flexibility to Public Housing Agencies - Public Housing Agencies can apply for needed waivers and flexibilities for disaster relief and recovery. The Department also released PIH Notice 2021-34, which advises the public of HUD's expedited process for waivers and flexibilities from HUD regulatory and administrative requirements for various Public Housing and Voucher Programs.
  • Providing flexibility to Tribes - Tribes and their Tribally Designated Housing Entities can apply for needed administrative flexibility through regulatory waivers.
  • Ensuring HUD-approved housing counseling agencies are ready to assist
  • Assisting with housing discrimination challenges


    FDIC demands Utoppia Inc. stop its misleading deposit insurance statements

    Yesterday, the FDIC issued a letter demanding that Utoppia Inc. and certain of its officers stop making false and misleading statements about FDIC deposit insurance and take immediate corrective action to address these false or misleading statements.

    Based upon evidence collected by the FDIC, Utoppia and/or its officers made false representations in English and in Spanish, stating or suggesting that Utoppia is FDIC-insured and that FDIC insurance will protect customers’ cryptocurrency, and did not clearly and conspicuously identify an insured deposit institution for placement of deposits. These representations and material omissions are false and misleading.

    The Federal Deposit Insurance Act (FDI Act) prohibits any person from representing or implying that an uninsured product is FDIC-insured or from knowingly misrepresenting the extent and manner of deposit insurance. The FDI Act further prohibits companies from implying that their products are FDIC-insured by using “FDIC” in the company’s name, advertisements, or other documents. The FDIC is authorized by the FDI Act to enforce this prohibition against any person.


    FDIC releases Gruenberg testimony in advance

    The FDIC has released testimony of Chairman Martin J. Gruenberg scheduled for today before the Senate Committee on Banking, Housing, and Urban Affairs.

    Chairman Gruenberg's remarks review in detail the events surrounding the March 10, 2023, closing of Silicon Valley Bank (SVB), Santa Clara, California, the announcement on March 8 by Silvergate Bank that it would wind down operations and voluntarily liquidate, and the March 12 closure of Signature Bank, New York, New York. The Boards of the FDIC and Federal Reserve voted to recommend, and the Treasury Secretary, in consultation with the President, determined that the FDIC could use emergency system risk authorities under the Federal Deposit Insurance (FDI) Act to full protect all depositors in winding down SVB and Signature Bank. Both institutions were allowed to fail — shareholders lost their investment, unsecured creditors sustained losses, the directors and senior executives of both banks were removed. Any losses to the Deposit Insurance Fund as a result of uninsured deposit coverage at those banks will be repaid by a special assessment on banks as the law requires, taking into consideration the types of entities that benefit from any action taken or assistance provided.

    The Chairman's remarks also describe the events leading up to the failure of SVB and Signature Bank and the facts and circumstances that prompted the decision to utilize the authority in the FDI Act to protect all depositors in those banks following these failures. They also discuss the FDIC’s assessment of the current state of the U.S. financial system, which remains sound despite recent events, and include some preliminary lessons learned as we look back on the immediate aftermath of this episode.

    Chairman Gruenberg's remarks will also announce the FDIC will undertake a comprehensive review of the deposit insurance system and will release a report by May 1, 2023, that will include policy options for consideration related to deposit insurance coverage levels, excess deposit insurance, and the implications for risk-based pricing and deposit insurance fund adequacy. In addition, the FDIC’s Chief Risk Officer will undertake a review of the FDIC’s supervision of Signature Bank and will also release a report by May 1, 2023. Further, the FDIC will issue in May 2023 a proposed rulemaking for the special assessment for public comment.


    HUD adds $3.4M in ARP funding

    The U.S. Department of Housing and Urban Development has announced that it is making an additional $3,385,353 in American Rescue Plan (ARP) funding available to help HUD’s Fair Housing Initiatives Program (FHIP) agencies combat housing discrimination related to the COVID-19 pandemic. The funds constitute the fourth round of ARP funding that focuses on COVID-19 related housing discrimination.

    To date, more than $16 million in ARP funding has been awarded to FHIP agencies working to address the unequal impact the COVID-19 pandemic has had on communities of color, low-income communities, and other vulnerable populations through projects that encourage a more just, inclusive, and sustainable society. The funding is being awarded through FHIP’s Education and Outreach Initiative (EOI). Organizations that qualify for the funding will be able to use the money to develop, implement, and coordinate education and outreach programs designed to inform members of the public of their rights and obligations under the Fair Housing Act.


    FHFA to host public hearing on appraisal bias

    The Federal Housing Finance Agency will host the FFIEC Appraisal Subcommittee for its second public hearing on appraisal bias. The meeting will be held on May 19, 2023, at FHFA Headquarters (400 7th Street SW, Washington, DC) from 10 a.m. to 1 p.m. EDT. It will also be live-streamed for those who cannot attend in person.

    Additional details will be announced at a later date.


    SEC obtains emergency relief against investment advisor

    The Securities and Exchange Commission has announced it has charged former broker Surage Kamal Roshan Perera and his firm, Janues Capital Incorporated, with defrauding at least one investor out of millions by lying about investment opportunities and strategies, concealing trading losses, and using funds received from others to give the victim the promised returns in Ponzi-like fashion. The SEC has obtained emergency relief in court, including a temporary restraining order and an asset freeze.

    According to the SEC’s complaint, from February 2022 until March 2023, Perera, a Long Island, NY resident, falsely told an investor, not named in the complaint, that Janues had access to specific restricted securities at discounted prices through connections with large, institutional investors. He allegedly claimed to also exercise a trading strategy, which he referred to as ‘Options Straddles,’ that would not only prevent any trading losses but also guarantee returns on some of the investments of up to 9 percent with the potential for returns of 50 percent.

    The complaint also alleges Perera and Janues misappropriated at least $3.5 million of the investor’s funds to engage in highly speculative and leveraged trading. In total, Perera engaged in more than $2.5 billion in securities transactions, with nearly $3 million in trading losses. Perera then allegedly concealed the misappropriation and losses by providing the investor with phony confirmations and account statements that falsely showed the expected returns. The complaint also alleges that Perera further attempted to hide the losses by using funds received from other sources to make Ponzi-like payments to the investor.


    Fed Vice Chair Barr to testify before Senate committee

    The Federal Reserve Board has released scripted testimony on the Federal Reserve's supervisory and regulatory oversight of Silicon Valley Bank (SVB) by Vice Chair for Supervision Michael S. Barr before the Senate Committee on Banking, Housing, and Urban Affairs at a hearing scheduled for 10:00 a.m. this morning.

    Barr's remarks state that SVB failed because the bank's management did not effectively manage its interest rate and liquidity risk, and the bank then suffered a devastating and unexpected run by its uninsured depositors in a period of less than 24 hours. Barr will detail the SVB management decisions leading up to the failure, the speed at which news of the bank's liquidity problems surged through social media, and the panic of the bank's depositors.

    Barr's remarks also relate the response by the FDIC, Federal Reserve, and Treasury as they addressed concerns that SVB's collapse and that of Signature Bank's closing could trigger questions about the overall safety and soundness of the U.S. commercial banks. Barr will also relate the Federal Reserve Board's review of the circumstances leading up to SVB's failure. The California Department of Financial Protection and Innovation is also conducting a review of its oversight and regulation of SVB. The Federal Reserve is looking at SVB's growth and management, the Fed's supervisory engagement with the bank, and the regulatory requirements that applied to the bank.


    Small business investment companies of the year

    SBA Administrator Isabella Casillas Guzman has announced that Stonehenge Community Impact Fund, LP of Columbus, Ohio, and Balance Point Capital Partners, LLC of Westport, Connecticut, have been named the 2023 Small Business Investment Companies (SBICs) of the Year as part of National Small Business Week.

    The two funds, with other national winners and finalists for the National Small Business Person of the Year, will be recognized on Sunday, April 30, and Monday, May 1, during the National Small Business Week awards ceremony in Washington, D.C.


    SBA disaster assistance for Mississippi

    Low-interest disaster loans from the U.S. Small Business Administration (SBA) are available to businesses and residents in Mississippi following the announcement of a Presidential disaster declaration due to damages from severe storms, straight-line winds and tornadoes on March 24–25.

    The disaster declaration covers Carroll, Humphreys, Monroe and Sharkey counties in Mississippi, which are eligible for both Physical and Economic Injury Disaster Loans from the SBA. Small businesses and most private nonprofit organizations in the following adjacent counties are eligible to apply only for SBA Economic Injury Disaster Loans (EIDLs): Attala, Chickasaw, Clay, Grenada, Holmes, Issaquena, Itawamba, Lee, Leflore, Lowndes, Montgomery, Sunflower, Washington, and Yazoo in Mississippi; and Lamar and Marion in Alabama.

    Businesses and private nonprofit organizations of any size may borrow up to $2 million to repair or replace disaster-damaged or destroyed real estate, machinery and equipment, inventory, and other business assets.


    Mississippi disaster declaration

    The White House has announced that, early Sunday morning, President Biden declared that a major disaster exists in the State of Mississippi and ordered Federal aid to supplement State, tribal, and local recovery efforts in the areas affected by severe storms, straight-line winds, and tornadoes from March 24 to March 25, 2023.

    The president’s action makes federal funding available to affected individuals in the counties of Carroll, Humphreys, Monroe, and Sharkey. Assistance can include grants for temporary housing and home repairs, low-cost loans to cover uninsured property losses, and other programs to help individuals and business owners recover from the effects of the disaster.

    Federal funding also is available to state, tribal, and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for emergency work in the counties of Carroll, Humphreys, Monroe, and Sharkey. Lastly, federal funding is available on a cost-sharing basis for hazard mitigation measures statewide.

    Damage assessments are continuing in other areas, and more counties and additional forms of assistance may be designated after the assessments are fully completed.

    Residents and business owners who sustained losses in the designated areas can begin applying for assistance at, by calling 800-621-FEMA (3362), or by using the FEMA App. Anyone using a relay service, such as video relay service (VRS), captioned telephone service or others, can give FEMA the number for that service.


    OFAC targets Burma fuel suppliers and Belarusian enterprises

    Revised Belarus Sanctions regulations also republished today

    On Friday, the Treasury Department announced that OFAC had designated two individuals and six entities that are connected to Burma’s military and that have enabled the military regime’s continuing atrocities, including through the importation, storage, and distribution of jet fuel to Burma’s military. The two individuals and six entities are being designated pursuant to Executive Order 14014. OFAC also published a Burma Jet Fuel Sanctions Alert, to inform individuals, businesses, and other persons of the sanctions risks associated with providing jet fuel to Burma’s military regime.

    Treasury also announced that OFAC designated three entities and nine individuals, and identified one presidential aircraft as blocked property, pursuant to Executive Order 14038. These designations build on sanctions imposed on individuals and entities in Belarus in response to the ongoing brutal crackdown against the pro-democracy movement and civil society surrounding the fraudulent August 2020 presidential election. These actions also underscore the United States’ willingness to hold the regime in Minsk to account for its complicity in the Russian Federation’s ongoing unjustified war of choice against Ukraine.

    For the names and identification information of the designated parties and aircraft and a link to revised and today's republished Belarus Sanctions regulations, see this BankersOnline OFAC Update.


    Lifetime ban for operators of auto warranty scam

    The Federal Trade Commission on Friday announced that, as a result of a Commission lawsuit, the operators of a telemarketing scam that called hundreds of thousands of consumers nationwide to pitch them expensive “extended automobile warranties” will face a lifetime ban from the extended automobile warranty industry and from all outbound telemarketing.

    Under the terms of proposed court orders, three companies and their owners that were charged by the FTC with running the operation that scammed consumers out of millions of dollars would be permanently banned from participating in the extended automobile warranty market, as well as from any further involvement in outbound telemarketing.

    The orders also include a monetary judgment of $6.6 million, which is largely suspended based on their inability to pay. If the defendants are found to have lied to the FTC about the financial status, the full judgment would be immediately payable.

    American Vehicle Protection Corp., CG3 Solutions, Inc., and Tony Gonzalez Consulting Group,Inc., along with individual defendants Tony Allen Gonzalez and his brother, Charles Gonzalez, have agreed to the terms of the proposed court orders. The FTC’s case against the remaining defendants in the case, Kole Consulting Group, Inc. and its owner and manager, Daniel Kole, will continue.

    The FTC first charged the owners and operators of American Vehicle Protection Corporation (AVP) with violating the FTC Act and the Telemarketing Sales Rule in February 2022. In its complaint, the FTC charged that AVP made unsolicited calls in which it claimed to be affiliated with vehicle makers, and deceptively claimed their products, which cost thousands of dollars, offered “bumper to bumper” protection.


    Fed Board publishes Custodia Bank, Inc. order

    The Federal Reserve Board on Friday published its order denying the application by Custodia Bank, Inc., of Cheyenne, Wyoming, to be supervised by the Federal Reserve. The denial of the application was announced on January 24, 2023, and the order is now available after a review for confidential information.


    First-Citizens assumes last of SV Bridge Bank deposits and loans

    On Sunday, the FDIC announced it had entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank, National Association, with First-Citizens Bank & Trust Company, Raleigh, North Carolina.

    The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First-Citizens Bank & Trust Company on Monday, March 27, 2023. Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First-Citizens Bank & Trust Company that systems conversions have been completed to allow full-service banking at all of its other branch locations.

    Depositors of Silicon Valley Bridge Bank, National Association, will automatically become depositors of First-Citizens Bank & Trust Company. All deposits assumed by First-Citizens Bank & Trust Company will continue to be insured by the FDIC up to the insurance limit.

    Sunday's transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank, National Association's assets at a discount of $16.5 billion. Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC. In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million.

    The FDIC and First-Citizens Bank & Trust Company entered into a loss-share transaction on the commercial loans it purchased of the former Silicon Valley Bridge Bank, National Association. The FDIC as receiver and First-Citizens Bank & Trust Company will share in the losses and potential recoveries on the loans covered by the loss-share agreement. The loss-share transaction is projected to maximize recoveries on the assets by keeping them in the private sector. The transaction is also expected to minimize disruptions for loan customers. In addition, First-Citizens Bank & Trust Company will assume all loan-related Qualified Financial Contracts.

    The FDIC now estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion. The exact cost will be determined when the FDIC terminates the receivership.


    FinCEN guidance on Beneficial Ownership Info Reporting

    On Friday, the Financial Crimes Enforcement Network (FinCEN) published its first set of guidance materials to aid the public, and in particular the small business community, in understanding upcoming beneficial ownership information (BOI) reporting requirements taking effect on January 1, 2024. The new regulations require many corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners—the persons who ultimately own or control the company—to FinCEN.

    The following materials are now available on FinCEN’s beneficial ownership information reporting webpage,

    FinCEN will not be accepting any beneficial ownership information before January 1, 2024. Information on how to submit beneficial ownership information to FinCEN will be forthcoming.


    SEC charges StraightPath Venture Partners sales agents

    The Securities and Exchange Commission has announced charges against Scott Hollender, Gabriel Migliano, Jr., and Frank Vecchio for selling interests in shares of pre-IPO companies on behalf of StraightPath Venture Partners LLC, despite not being registered broker-dealers, and for misleading investors about the fees associated with those investments. The Commission previously charged StraightPath Venture Partners, StraightPath Management LLC, and its four principals in May 2022 in connection with a $410 million fraud.

    The current SEC complaint alleges that, between November 2017 and November 2021, Hollender, Migliano, and Vecchio actively solicited investments for interests in funds that were set up as series LLCs, each of which purported to acquire shares of a single pre-IPO company. The defendants allegedly provided investors with marketing materials, advised investors on the supposed merits of the investments, and received transaction-based compensation, all hallmarks of a broker, despite not being registered as brokers. As alleged in the complaint, defendants collectively solicited at least $13 million in investments from at least 115 investors, and, even though each of the defendants received upfront commissions of approximately 10 percent on investments they successfully solicited, the defendants falsely told investors that there were no upfront fees associated with their investments. According to the complaint, the defendants collectively received at least approximately $3.7 million in transaction-based compensation.


    CFPB orders Portfolio Recovery Associates to pay $24M

    The CFPB on Thursday announced it has filed a complaint and a proposed stipulated final judgment and order against Portfolio Recovery Associates, LLC, one of the largest debt collectors in the United States.

    On September 9, 2015, the Bureau issued an order against Portfolio Recovery Associates (2015 Order) to address the Bureau’s findings that Portfolio Recovery Associates violated the Consumer Financial Protection Act of 2010 (CFPA) and the Fair Debt Collection Practices Act (FDCPA) in connection with Portfolio Recovery Associates’ debt collection practices.

    The Bureau's complaint alleges that Portfolio Recovery Associates violated the 2015 Order, the CFPA, the FDCPA, and the Fair Credit Reporting Act (FCRA) and its implementing Regulation V. Specifically, the Bureau alleges that Portfolio Recovery Associates violated the CFPA and, in some instances, the FDCPA, when it violated multiple conduct provisions from the 2015 Order, including prohibitions on (1) representing the amount or validity of unsubstantiated debt; (2) collecting on debt without offering to provide necessary documentation to consumers; (3) misrepresenting that it would provide the offered documents within thirty days; (4) collecting on time-barred debt without making required disclosures; (5) initiating debt collection lawsuits without possessing required documentation; and (6) suing to collect time-barred debt.

    The Bureau also alleges that several of Portfolio Recovery Associates’ practices for resolving disputes about information it furnished to consumer reporting agencies (CRAs) violated FCRA, Regulation V, and the CFPA. Specifically, the Bureau claims that Portfolio Recovery Associates failed to (1) timely resolve disputes submitted by consumers directly to Portfolio Recovery Associates; (2) properly respond to disputes that Portfolio Recovery Associates deemed frivolous; (3) conduct reasonable investigations of consumer’s disputes; and (4) maintain reasonable policies and procedures regarding the accuracy and integrity of consumer information that it furnished to CRAs.

    The Bureau alleges that Portfolio Recovery Associates illegally collected millions of dollars through its unlawful conduct, and that its illegal dispute resolution practices impacted at least tens of thousands of consumers. If entered by the court, the proposed order would require Portfolio Recovery Associates to pay at least $12.18 million in redress to harmed consumers and a $12 million civil money penalty. It would also impose broad injunctive relief designed to prevent Portfolio Recovery Associates from violating the law in the future.


    Financial advisor for NBA players charged by SEC

    The Securities and Exchange Commission has announced charges against Darryl Matthew Cohen, a former investment adviser at a large financial institution, alleging he misappropriated more than $1 million from three current and former NBA players over a period of two and a half years.

    According to the SEC’s complaint, from October 2017 through April 2020, Cohen used client funds, without their understanding or authorization, for personal expenditures including to support his son’s amateur basketball program, for a home gym, and to pay back another client whose funds Cohen had misappropriated. Cohen also allegedly sold life insurance settlements to the clients for kickbacks to fund his home improvements.


    FHFA to replace FICO credit score model

    The Federal Housing Finance Agency has announced plans for stakeholder input on proposed milestones as Fannie Mae and Freddie Mac (the Enterprises) work to replace the Classic FICO credit score model with the FICO 10T and the VantageScore 4.0 credit score models, and transition from requiring three credit reports (or “tri-merge”) to requiring two credit reports (or “bi-merge”) for single-family loan acquisitions. The Enterprises will solicit public input on the projected implementation process to inform further refinement of the proposed plans. FHFA and the Enterprises will work with stakeholders to ensure a smooth transition to the new credit scores and the new credit report requirements that minimizes complexity and avoids unnecessary costs.

    While FHFA currently estimates that the bi-merge credit report implementation could occur by the first quarter of 2024, implementation of the new credit score models is expected to occur over two phases in 2024 and 2025. Phase 1, estimated to begin in the third quarter of 2024, will include delivery and disclosure of the additional credit scores. Phase 2, estimated to occur in the fourth quarter of 2025, will include incorporation of the new credit score models into pricing, capital, and other processes.


    FTC proposes updates for Negative Option Rule

    The Federal Trade Commission is issuing a Notice of Proposed Rulemaking (NPRM) that would include a "click to cancel" provision requiring sellers to make it as easy for consumers to cancel their enrollment as it was to sign up. The new click to cancel provision, along with other proposals, would go a long way to rescuing consumers from seemingly never-ending struggles to cancel unwanted subscription payment plans for everything from cosmetics to newspapers to gym memberships.

    The NPRM is part of the FTC’s ongoing review of its 1973 Negative Option Rule, which the agency uses to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs. The proposal also includes new requirements before making additional offers, and would require an annual reminder to consumers enrolled in negative option programs involving anything other than physical goods, before they are automatically renewed.

    Comments will be accepted for 60 days following the publication of the NPRM in the Federal Register.


    SBA Women’s Business Summit announced

    In honor of Women’s History Month, the SBA will hold its 2023 Women’s Business Summit March 28–29, 2023. The two-day hybrid summit will feature virtual panels, “Ask an Expert” workshops, and fireside chats to help women-owned small businesses build, scale, and grow. In-person salon/listening sessions will also be held by local and regional hosts. The event will be held in collaboration with the National Women’s Business Council and co-sponsored by the Nasdaq Entrepreneurial Center, Wells Fargo, and the Association of Women’s Business Centers. Additional speakers and schedule details will be announced at a later date.


    $11M for victims of illegal student loan debt-relief operation

    The CFPB has allocated $11 million for 2,600 people charged illegal upfront fees for student-loan debt-relief services provided by Amanda Johnson, David Mize, Jacob Slaughter, or Daniel Ruggiero, working with GST Factoring, Inc. Payments were sent on March 23, 2023, through RUST Consulting.

    In 2020, the CFPB filed a complaint in the federal district court for the Central District of California against GST Factoring, Inc., which runs a student-loan debt-relief business in Texas, and two of its owners, Rick Graff and Gregory Trimarche, as well as Champion Marketing Solutions, LLC, a customer service and marketing company, and its owner, Scott Freda. The CFPB also filed suit against four attorneys who provided the debt-relief services in connection with GST Factoring and Champion Marketing: Amanda Johnson, David Mize, Jacob Slaughter, and Daniel Ruggiero. The CFPB alleged that the companies, their owners, and the attorneys were part of a nationwide student-loan debt-relief operation that charged approximately $11.8 million in illegal upfront fees to thousands of consumers saddled with private student-loan debt. The Telemarketing Sales Rule (TSR) states that it is illegal to request or receive any fees for debt-relief services sold through telemarketing before the debt is settled or renegotiated.


    SEC charges crypto entrepreneur with securities law violations

    The Securities and Exchange Commission has announced charges against crypto asset entrepreneur Justin Sun and three of his wholly-owned companies, Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent), for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT). The SEC also charged Sun and his companies with fraudulently manipulating the secondary market for TRX through extensive wash trading, which involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership, and for orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation.

    The SEC simultaneously charged eight celebrities — Lindsay Lohan, Jake Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), and Aliaune Thiam (Akon) — for illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation.


    Fed and FOMC announce 25 percentage point increase

    The Federal Reserve has issued the Statement of the Federal Open Market Committee following its meeting of March 21–22, 2023. An excerpt:

    "The U.S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.

    "The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-3/4 to 5 percent [an increase of 1/4 percentage point]. The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective."

    The Implementation Note released with the FOMC statement indicates that:

    • The Board of Governors votes unanimously to raise the interest rate paid on reserve balances to 4.9 percent, an increase of 1/4 percentage point, effective March 23, 2023.
    • The Board of Governors also voted unanimously to approve a 1/4 percentage point increase in the primary credit rate to 5 percent, effective March 23, 2023.


    FTC to hold hearing on anti-impersonation rule

    The Federal Trade Commission reports it will hold an informal hearing on its proposed rule prohibiting government and business impersonation at 1 p.m. on May 4, 2023. A Federal Register Notice will be published shortly.

    Any member of the public wishing to speak at the informal hearing must request to speak by April 14, 2023. Requests can be made in response to the Federal Register Notice on, where it will also be posted shortly.

    The informal hearing will be held virtually and livestreamed on


    FTC seeks info on cloud computing provider practices

    The Federal Trade Commission announced yesterday that its staff are seeking information on the business practices of cloud computing providers including issues related to the market power of these companies, impact on competition, and potential security risks.

    In a Request for Information, FTC staff are seeking information about the competitive dynamics of cloud computing, the extent to which certain segments of the economy are reliant on cloud service providers, and the security risks associated with the industry’s business practices. In addition to the potential impact on competition and data security, FTC staff are also interested in the impact of cloud computing on specific industries including healthcare, finance, transportation, e-commerce, and defense.

    Comments will be accepted through May 22, 2023.


    SEC proposal to modernize information collection

    The Securities and Exchange Commission has proposed rules amendments designed to modernize its information collection and analysis methods by, among other things, proposing that a number of filings be submitted to the Commission electronically on EDGAR using structured data where appropriate.

    Under current rules, registrants are required to file or otherwise submit many Exchange Act forms, filings, or other submissions in paper form. During the COVID-19 pandemic, many submissions were made in electronic rather than paper form, which was generally well received. As part of its efforts to modernize the methods by which it collects and analyzes information from registrants, the proposed amendments would require registrants to make these submissions to the Commission electronically.

    The proposed amendments would require the electronic filing, submission, or posting of certain forms, filings, and other submissions that national securities exchanges, national securities associations, clearing agencies, broker-dealers, security-based swap dealers, and major security-based swap participants make with the Commission. The proposed amendments would also make certain amendments regarding the Financial and Operational Combined Uniform Single (“FOCUS”) Report to harmonize it with other rules, make technical corrections, and provide clarifications. In addition, the proposed amendments would require withdrawal of notices filed in connection with an exception to counting certain dealing transactions toward determining whether a person is a security-based swap dealer in specified circumstances.

    The public comment period will remain open for 30 days after publication in the Federal Register or until May 22, 2023, whichever is later.


    IRS warning about scammers offering help

    The Internal Revenue Service yesterday warned taxpayers to watch out for scammers who try to sell or offer help setting up an online account on that puts their tax and financial information at risk of identity theft.

    The IRS Online Account provides valuable tax information for people. But this information in the wrong hands can provide important information to help an identity thief try to submit a fraudulent tax return in the person's name in hopes of getting a big refund. People should watch out for these scam artists offering to help set up these accounts because these are identity theft attempts to run off with the taxpayer's personal or financial information.


    Iran's UAV and weapons procurement network sanctioned

    OFAC, in coordination with the FBI, has designated four entities and three individuals in Iran and Turkey for their involvement in the procurement of equipment, including European-origin engines of unmanned aerial vehicles (UAV) in support of Iran’s UAV and weapons programs. This procurement network operates on behalf of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which oversees several firms involved in UAV and ballistic missile development.

    For the names and identification information of the designated parties, see this BankersOnline OFAC Update.


    CFPB updates credit card issuer survey

    The CFPB has announced the launch of an improved survey of credit card issuers that can help consumers and families compare interest rates and other features when shopping for a new credit card. Upgrades to the CFPB’s terms of credit card plans (TCCP) survey are designed to increase price competition in the credit card market by allowing people to comparison shop for the best prices and products. The survey will also help smaller credit card issuers, who often offer the lowest rates, reach comparison shoppers.

    The improvements to the CFPB’s semiannual terms of credit card plans survey are intended to create a neutral data source to help consumers find the best interest rates and products. Currently, consumers can run into many obstacles when shopping for credit cards, including that many big issuers make it difficult for consumers to estimate the interest rate they will pay. The data from the survey also can power digital tools and websites that people can use to find the best products for them, regardless of company size or marketing budget.

    For the terms of credit card plans survey, the CFPB collects and makes public the product data on credit cards from the largest 25 issuers and from a sample of at least 125 additional issuers. The goal of the refreshed survey is to provide people with more realistic and practical information to use when comparison shopping for a credit card. The survey will also expand the number of issuers included. Specifically, financial institutions that are not part of the top 25 nor are part of the 125 sampled issuers will be able to voluntarily submit information about their credit card products.


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