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OCC makes Licensing Manual change

OCC Bulletin 2017-4 announced an update of the “Management Interlocks” booklet of the Comptroller’s Licensing Manual, which replaces the booklet of the same title issued in October 2009. The revised booklet incorporates updated requirements following the integration of the Office of Thrift Supervision into the OCC in 2011 and clarifies guidance for both national banks and federal savings associations.


Labor posts new FAQs on Fiduciary Rule

The Department of Labor has posted a second set of FAQs on its Fiduciary Conflict of Interest rule. This group of questions focuses particularly on technical questions raised by financial service providers, generally limited to investment advice concerning ERISA-covered plans, IRAs, and other plans covered by section 4975(e)(1) of the Internal Revenue Code.


New HUD test program for low-income seniors

HUD has announced awards totaling approximately $15 million to select owners of HUD-assisted senior housing developments to help their low-income senior tenants to age in their own homes and delay or avoid the need for nursing home care. HUD will cover costs related to hiring a full-time Enhanced Service Coordinator and a part-time Wellness Nurse to connect the elderly with the supportive services they need to maintain independent living and age-in-place.


Canadian bank pays $0.5M to settle OFAC violations

OFAC has announced that Toronto-Dominion Bank (“TD Bank”), a financial institution headquartered in Toronto, Ontario, has agreed to remit $516,105 to settle its potential civil liability for 167 apparent violations of the Cuban Assets Control Regulations (CACR), and of the Iranian Transactions Sanctions Regulations (ITSR). OFAC also has issued a Finding of Violation to TD Bank, the parent company of wholly owned subsidiaries Internaxx Bank SA and TD Waterhouse Investment Services for 3,491 violations of the CACR and ITSR.


January 2017 FedFlash available

Federal Reserve Financial Services has posted the January 2017 issue of FedFlash.


ANPR comments extended on enhanced cyber risk management standards

The Federal Reserve, FDIC and OCC have announced the extension through February 17, 2017, of the comment period for their advance notice of proposed rulemaking on enhanced cyber risk management standards for large and interconnected entities under their supervision and those entities’ service providers. The agencies are considering five categories of cyber standards: cyber risk governance, cyber risk management, internal dependency management, external dependency management, and incident response, cyber resilience, and situational awareness. This announcement extends the comment period by one month.


New Jersey bank closed

The FDIC has announced that Harvest Community Bank, Pennsville, New Jersey, has been closed by the New Jersey Department of Banking and Insurance, which appointed the FDIC as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits of Harvest Community Bank. Harvest Community Bank is the first FDIC-insured institution to fail in 2017.


CFPB updates student loan Payback Playbook prototype

The CFPB has announced an update of its student loan Payback Playbook prototype.


New York issues updated cybersecurity regs

The New York State Department of Financial Services (DFS) has announced that it has updated its proposed first-in-the-nation cybersecurity regulation to protect New York State from the ever-growing threat of cyber-attacks. The proposed regulation, which will be effective March 1, 2017, will require banks, insurance companies, and other financial services institutions regulated by DFS to establish and maintain a cybersecurity program designed to protect consumers and ensure the safety and soundness of New York State’s financial services industry. The updated proposed regulation, which was submitted to the New York State Register on December 15, and published on December 28, will be finalized following a 30-day notice and public comment period.


OFAC adds non-proliferation and Syria designations

OFAC has announced it has taken action in response to the Organization for the Prohibition of Chemical Weapons (OPCW) - United Nations (UN) Joint Investigative Mechanism (JIM) findings that the Syrian regime used industrial chlorine as a weapon against its own people. OFAC is designating 18 senior regime officials connected to Syria’s weapons of mass destruction program and identifying five Syrian military branches as part of the Government of Syria. Any property or interest in property of the identified persons in the possession or control of U.S. persons or within the United States must be blocked. Additionally, transactions by U.S. persons involving these persons are generally prohibited. See our OFAC Update for more information.


OFAC guidance on provision of services under sanctions laws

OFAC has announced the publication of guidance on the provision of certain services relating to the requirements of U.S. sanctions laws (the “Compliance Services Guidance”). The Compliance Services Guidance does not reflect a change in OFAC’s policy with respect to the provision of these types of legal and compliance services. The Compliance Services Guidance responds to numerous inquiries received by OFAC, many from foreign companies at outreach events, relating to whether U.S. persons, including U.S. attorneys and compliance personnel, may provide certain services described in that guidance. OFAC is also publishing a number of new Frequently Asked Questions pertaining to the Compliance Services Guidance.


FOMC releases 2011 files

The Federal Open Market Committee has posted links to the Beige Book, agenda, statement, minutes, transcripts, and presentation material from its 2011 meetings and conference calls.


Payment system risk information available

The Federal Reserve has posted its first quarter 2016 peak and average daylight overdrafts and related fees plus the quarterly data updates.


OCC to host compliance workshops in Miami

The OCC will host two workshops in Miami, Florida, on February 7-8, for directors of national community banks and federal savings associations supervised by the OCC. The Risk Governance workshop will be offered on February 7 and the Compliance Risk workshop on February 8.


OCC to fine and bar two FOREX traders

The OCC has issued notices of charges for prohibition and notices of assessment of civil money penalty against Richard Usher, former Head of G10 Spot Trading at JPMorgan Chase Bank, N.A., and Rohan Ramchandani, former Head of European Spot Trading at Citibank, N.A. The OCC also fined Usher and Ramchandani $5 million each for violating the Sherman Antitrust Act, engaging in unsafe or unsound practices, and breaching their fiduciary duties related to their conduct in the foreign exchange (FOREX) market. Concurrent with the OCC’s enforcement action, the Department of Justice also issued indictments against Usher and Ramchandani for violations of the Sherman Antitrust Act. In addition, the Federal Reserve announced enforcement actions against another trader in the Cartel chat room. Usher and Ramchandani may request a hearing challenging their respective notice of charges for prohibition and notice of assessment of civil money penalties. For additional details, see our Penalty page concerning the OCC's announcement.


OFAC sanctions North Korean officials and agencies

OFAC has designated seven individuals and identified as blocked two entities of the North Korean regime in response to the regime’s ongoing and serious human rights abuses and censorship activities. Treasury is taking this action in conjunction with the State Department’s “Report on Serious Human Rights Abuses or Censorship in North Korea,” which is being submitted in accordance with the North Korea Sanctions and Policy Enhancement Act of 2016. As a result of these actions, any property or interest in property of those designated by OFAC within U.S. jurisdiction is frozen. Additionally, transactions by U.S. persons involving the designated persons are generally prohibited. The identifications of two entities as blocked were issued pursuant to E.O. 13722, which, among others, blocks the property and interests in property of the Government of North Korea and the Workers’ Party of Korea, including those two entities. See our OFAC Update for additional information.


Bureau publishes annual CMP inflation adjustments

The CFPB has published at 82 FR 3601 in today's Federal Register a final rule adjusting for inflation the maximum amount of each civil penalty within the Bureau's jurisdiction. These adjustments are required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment Act), as amended by the Debt Collection Improvement Act of 1996 and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The amendments will be made to the Bureau's Adminstrative regulation, "Civil Penalty Adjustments," at 12 CFR Part 1083. The rule is effective January 15, 2017.


CFPB releases debt collection reports

In an early morning news release coordinated with its Debt Collection forum today in Washington, the CFPB released two documents and a copy of remarks to be delivered at the forum by Bureau Director Cordray. Consumer Experiences with Debt Collection, "provides an in-depth analysis of consumers’ encounters with the debt collection industry," according to the press release. It reports that over 40 percent of consumers who said they were approached about a debt in collection requested that a creditor or collector stop contacting them. Of these consumers, three in four report that debt collectors did not honor their request to cease contact.

The second document, Market Snapshot: Online Debt Sales, was described as "a study of potential risks in the online debt marketplace, where consumer debts and personal information are for sale for fractions of pennies on the dollar."

The Bureau also announced the start of a series of personal debt collection stories from consumers as part of an ongoing effort to highlight issues in the debt collection marketplace and inform consumers of their rights.


2017 Schedule of OCC Directors Workshops

The OCC has released the 2017 schedule of workshops for directors of national community banks and federal savings associations. The agency will offer five workshops at a cost of $99 each:

  • Building Blocks for Directors
  • Risk Governance
  • Compliance Risk
  • Credit Risk
  • Operational Risk

Each workshop is limited to 35 participants.


NCUA webinar on new field-of-membership rule

The NCUA has announced that a 90-minute webinar on NCUA's new field-of-membership rule, which takes effect on February 6, will begin at 2 p.m. ET on February 1.


NCUA December board meeting video

The video of the December 15, 2016, open meeting of the NCUA Board is now available on the agency’s website.


Operator of mortgage relief scheme banned

The Federal Trade Commission has announced that Damian Kutzner, one of the operators of a mortgage relief scheme that bilked millions of dollars from financially distressed homeowners, has agreed to a court order banning him from the debt relief business. The court order resolves the Federal Trade Commission's complaint and the contempt charges against Kutzner. It also bans him from providing certain financial products and services, and from making misrepresentations about any products or services. In addition, the order imposes a judgment of more than $18.3 million, representing the amount of consumer harm.


OFAC targets ISIL financing and support

Treasury’s Office of Foreign Assets Control (OFAC) has acted to disrupt the Islamic State of Iraq and the Levant’s (ISIL) global fundraising and support network by designating four individuals – Neil Christopher Prakash, Khaled Sharrouf, Bachrumsyah Mennor Usman, and Oman Rochman – as Specially Designated Global Terrorists (SDGTs) pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. The individuals designated today include ISIL members based in Iraq, Syria, and Indonesia who are involved in ISIL’s propaganda, recruitment, and support networks in Southeast Asia and Australia. As a result of these actions, all property and interests in property of Prakash, Sharrouf, Usman, and Rochman subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.

OFAC also announced that the State Department has designated Jamaah Ansharut Daulah (JAD) and Alexanda Amon Kotey pursuant to E.O. 13224. JAD is a terrorist group based in Indonesia that was formed in 2015 and is composed of almost two dozen Indonesian extremist groups that pledged allegiance to ISIL leader Abu Bakr al-Baghdadi. Kotey, a British national, is one of four members of the ISIL execution cell known as “The Beatles.”

For links and further information, see our OFAC Update.


Discount rate meeting minutes available

The Federal Reserve Board has released the minutes of its discount rate meetings from November 14 to December 14, 2016.


Checking credit before shopping for a home

The CFPB has posted a blog article encouraging consumers who are considering buying a home to first check their credit history and scores. A link to a downloadable credit report checklist is also provided.


Material for Q4 Call Report

The FDIC, OCC and Federal Reserve have, via FIL-4-2017, delivered materials pertaining to the Consolidated Reports of Condition and Income (Call Report) for the December 31, 2016, report date. Except for certain institutions with foreign offices, completed Call Reports must be received by Monday, January 30, 2017. No extensions of time for submitting Call Report data are granted. The FIL includes a link to supplemental instructions.


Reserve Banks 2016 income and expense data

The Federal Reserve Board has released preliminary results indicating that the Reserve Banks provided for payments of approximately $92.0 billion of their estimated 2016 net income to the U.S. Treasury. The 2016 audited Reserve Bank financial statements are expected to be published in March and may include adjustments to these preliminary unaudited results. The Federal Reserve Banks' 2016 estimated net income of $92.7 billion represents a decrease of $7.6 billion from 2015, primarily attributable to a decrease of $2.5 billion in interest income from changes as a result of the composition of securities held in the Federal Reserve System Open Market Account and an increase of $5.2 billion in interest expense associated with reserve balances held by depository institutions. In addition, the Reserve Banks were assessed $700.7 million for the costs related to producing, issuing, and retiring currency, $709.0 million for Board expenditures, and $596.2 million to fund the operations of the Consumer Financial Protection Bureau.


Fintech edition of Consumer Compliance Outlook

The Philadelphia Federal Reserve Bank has posted a special fintech edition of Consumer Compliance Outlook with these articles:

  • Perspectives on Fintech: A Conversation with Governor Lael Brainard
  • Fintech: Balancing the Promise and Risks of Innovation
  • Fintech for the Consumer Market: An Overview
  • Fintech Resources: Laws, Regulations, and Supervisory Guidance


HSBC Bank USA, N.A. pays $32.5M for violating servicing order

The Office of the Comptroller of the Currency has issued HSBC Bank USA, N.A., McLean, Virginia, a consent order for a civil money penalty of $32.5 million for failing to make timely corrections to deficiencies identified in a 2011 consent order relating to the bank's mortgage servicing practices, and for failing to file payment change notices in compliance with bankruptcy rules. For additional information, see "OCC levies $32.5M CMP on HSBC Bank USA, N.A.," in our Penalties pages.


CFPB penalizes two Oklahoma debt collection firms

The Consumer Financial Protection Bureau (CFPB) has taken action against two medical debt collection law firms and their president for falsely representing that letters and calls were from attorneys attempting to collect on a debt when no attorney had yet reviewed the account. The law firms also did not ensure the accuracy of the consumer information they furnished to credit reporting companies and used improperly notarized affidavits in lawsuits filed against consumers. The practices affected thousands of individuals. The CFPB is ordering Works and Lentz, Inc. (Oklahoma City), Works and Lentz of Tulsa, Inc., and their president, Harry A. Lentz, Jr., to provide $577,135 in relief to harmed consumers, correct their business practices, and pay a $78,800 penalty. For more information, see "OK law firms and president pay $78.8K for debt collection practices."


OFAC designates seven for SDN List

OFAC has posted an SDN List Update adding five individuals under Magnitsky Sanctions and two under Counter Terrorism Sanctions. For additional information, see our OFAC Update.


FHA reduces mortgage premiums

HUD Secretary Castro has announced that, as the nation’s housing market continues to improve, the Federal Housing Administration (FHA) will reduce the annual premiums most borrowers will pay by a quarter of a percent. FHA’s new premium rates are projected to save new FHA-insured homeowners an average of $500 this year. Mortgage Letter 2017-1, containing a schedule of the new premium rates, was also released.


Diversity self-assessment template posted

The Federal Reserve Board has made available a self-assessment template for regulated institutions in support of the Interagency Policy Statement Establishing Joint Standards for Assessing Diversity Policies and Practices of Regulated Entities. Under the Policy Statement, a self-assessment by an institution is voluntary. An institution that conducts a self-assessment of its diversity policies and practices using the standards contained in the Statement of Policy may utilize this template or its own assessment tool.


November consumer credit report

The Federal Reserve System has released November 2016 G.19 consumer credit data. Consumer credit increased at a seasonally adjusted annual rate of 8 percent. Revolving credit increased at an annual rate of 13-1/2 percent, while nonrevolving credit increased at an annual rate of 6 percent.


New FDIC Inspector General

The FDIC has reported that Jay N. Lerner has been sworn in as the Inspector General of the agency. Mr. Lerner oversees the Office of Inspector General, which conducts investigations of potential fraud and other crimes related to insured financial institutions and closed banks. The office also works to detect and deter waste, fraud, and abuse at the FDIC, while promoting economy and efficiency at the agency.


CUSO registry reaffirmation period announced

The NCUA has announced that credit union service organizations will have from February 1 to March 31 to complete their annual required reaffirmation with the National Credit Union Administration's CUSO Registry. CUSOs can complete this free required process online through the registry.


Fake payday loan debt scam stopped

A Kansas man and his companies have been charged by the Federal Trade Commission with selling portfolios of fake payday loan debts that debt collectors used to get people to pay on debts they did not owe. The Commission has filed a complaint and a federal court has halted the operation pending a ruling on the complaint.


OFAC announces Cuba updates

Treasury's Office of Foreign Assets Control has updated its FAQs regarding Cuba to add five new FAQs regarding vessel transactions with Cuba. OFAC also updated its Specially Designated Nationals List to remove 28 CUBA-designated listings. For identification information on the individuals and entities removed, see OFAC's SDN List Update.


Housing survey results

HUD and the Census Bureau have announced the release of the results of the 2015 American Housing Survey focusing on 25 metropolitan areas across the country. The data released today includes detailed information on everything from monthly housing costs, hunger, and neighborhood characteristics including crime and the prevalence of rodents and cockroaches. The national report, released in November 2016, focused on nationwide data.


BofA charged with discriminatory lending

HUD has announced that it has charged Bank of America, N.A. and two of its employees with violating the Fair Housing Act by discriminating against prospective Hispanic mortgage borrowers in Charleston, South Carolina. The National Fair Housing Alliance (NFHA) filed a complaint with HUD claiming the bank discriminated against prospective borrowers who are Hispanic by failing to provide them with information about loan products or by offering them loan products with less attractive terms, as compared to prospective borrowers who are not Hispanic. Prior to filing its complaint, NFHA conducted a series of tests comparing the treatment of Hispanic and non-Hispanic testers who posed as prospective borrowers at a Bank of America branch in Charleston, South Carolina. HUD's charge alleges that these tests showed that the bank discriminated because of national origin by treating the Hispanic testers less favorably than the non-Hispanic testers.


Bank resolution plans available

The Federal Reserve Board has posted links to the public sections of the resolution plans submitted by 86 financial institutions.


Inauguration Day schedule for FR bank services

Federal Reserve Bank Services has announced it will operate on a normal schedule on Inauguration Day, January 20, 2017, which is a federal holiday in the District of Columbia, only.


OCC issues two Bulletins

Two bulletins have been issued by the OCC.

  • Bulletin 2017-2 announces that a revised booklet, "Changes of Corporate Title and Address," has been issued for the Comptroller's Handbook.
  • Bulletin 2017-3 is a reminder of a final rule on expanded examination cycle eligibility.


CFPB senior leadership changes

The Bureau has announced the following leadership appointments:

  • Leandra English – Chief of Staff
  • Jerry Horton – Chief Information Officer
  • Paul Kantwill – Assistant Director for Servicemember Affairs
  • John McNamara – Assistant Director of Consumer Lending
  • Elizabeth (Eli) Reilly – Chief Financial Officer


OFAC counter terrorism designations

Treasury's Office of Foreign Assets Control has added two individuals to its SDN List, with the SDGT designation.


Fedfocus on FedTransaction Analyzer tool

Federal Reserve Financial Services has posted the January 2017 issue of Fedfocus, which features the advantages of the FedTransaction Analyzer tool. Other articles discuss the America the Beautiful Quarters Program, the refocus on FEDucation, and 80 years of Fed Facts.


OCC adds sales practices to financial institutions risks

The OCC has released its Semiannual Risk Perspective for Fall 2016. which reports on the strategic, credit, operational, and compliance risks facing national banks and federal savings associations. The report includes an added focus on sales oversight, in the aftermath of the Wells Fargo scandal. Other highlights of the report include:

  • Strategic risk remains high as banks consider business model changes and face challenges in growing revenue. Strategic planning remains important as banks adopt innovative products, services, and processes in response to the evolving demands for financial services and the entrance of new competitors, such as out-of-market banks and financial technology firms.
  • Banks continue to ease underwriting practices to boost loan volume and to respond to competition from bank and non-bank lenders. These actions are evident in commercial, commercial real estate and auto lending. The level of risk is increasing due to increased risk layering, rising loan policy exceptions, increasing loan-to-value ratios, and weaker covenant protection.
  • Operational risk remains a concern as banks face changing cybersecurity threats, increased reliance on third-party relationships, and the need for sound governance over sales practices.
  • Banks face challenges meeting the integrated mortgage disclosure requirements and amended Military Lending Act regulatory requirements, and managing Bank Secrecy Act risks.

Comptroller Curry offered remarks during the press call on the report.


Highlights of FDIC community banking conference

The FDIC has issued FIL-3-2017 with highlights from the Community Banking Conference held April 6, 2016, themed Strategies for Long-Term Success. Four conference panels discussed the community banking model; regulatory developments; managing technology challenges; and ownership structure and succession planning. In addition, the FDIC shared information about steps taken to-date in response to issues raised at the Conference.


Small CUs to receive NCUA consulting services

The NCUA has announced it will provide consulting services to 153 small, federally insured credit unions during the first half of 2017. All the credit unions selected for the consulting program have assets of less than $100 million, and nearly half have assets of less than $10 million.


CFPB issues warning and tips for older student loan borrowers

The Consumer Financial Protection Bureau has issued a press release warning older borrowers that student loan servicing problems can jeopardize their long-term financial security. According to a Bureau report, Snapshot of older consumers and student loan debt, older borrowers struggling to make payments complain about obstacles to enrolling in income-driven payment plans and accessing their protections as cosigners. In the last decade, the number of older student loan borrowers has quadrupled and the amount of debt per older borrower has roughly doubled, as many take out loans for children or grandchildren. The CFPB Blog also provided four tips to help older borrowers address common problems with their student loans.


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