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Banker's Toolbox, Inc., leaders in compliance solutions for financial institutions, announced the acquisition of Georgia-based MainStreet Technologies (MST). MST is an industry leader in the loan risk management space. This acquisition adds to a strong and growing portfolio of compliance-related solutions and will continue to enhance the value Banker's Toolbox brings to both their customers and the industry. (Read full press release here.)

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FDIC updates Compliance Examination Manual

The FDIC has updated five sections of its Consumer Compliance Examination Manual. The June 2019 updates include:

  • Consumer Compliance Examinations and Third Party Risk (II-1.1, 2.1, 3.1, and VII-4.1): Section was added and minor technical changes made to incorporate the Interagency Statement Clarifying the Role of Guidance
  • Appeals (II-11.1): Updates were made to procedures for the review and processing of requests for review of material supervisory determinations to reflect amendments to the FDIC’s Guidelines for Appeals of Material Supervisory Determinations
  • SOURCE Violation Codes (II-14.1): SOURCE violation codes were updated, added, or deactivated to reflect amendments to Regulations E related to the CFPB’s prepaid account rule and updates to the HMDA requirements
  • Home Mortgage Disclosure Act (V-9.1): The HMDA chapter was updated to incorporate revised interagency HMDA examination procedures, HMDA data validation instructions for FDIC examination staff, and tables listing the Designated Key HMDA Data Fields
  • Protecting Tenants at Foreclosure Act (V-16.1): New chapter includes procedures for assessing compliance with the Protecting Tenants at Foreclosure Act


FATF presidency changes

Xiangmin Liu of the People's Republic of China assumed the position of President of the Financial Action Task Force on July 1, 2019. He succeeded Marshall Billingslea of the United States. Mr. Liu currently serves as Director-General of the Legal Department at the People’s Bank of China, China’s central bank. In this role, he is responsible for developing many of China’s key financial sector laws, regulations and policies


Investment advisor faces fraud charges

The SEC has issued an Order charging Fieldstone Financial Management Group LLC and its principal Kristofor R. Behn, both of Foxboro, Massachusetts, with defrauding retail investment advisory clients by failing to disclose conflicts of interest related to their recommendations to invest in securities issued by affiliates of Oregon-based Aequitas Management LLC. Behn also fraudulently misused approximately $500,000 of one investor’s funds to pay personal expenses.


Financial companies consolidated liabilities

The Federal Reserve Board has released its annual determination of the aggregate consolidated liabilities of financial companies as required by section 622 of the Dodd-Frank Act. Section 622 prohibits a financial company from combining with another company if the resulting company's liabilities would exceed 10 percent of the aggregate consolidated liabilities of all financial companies. Effective July 1, 2019, aggregate consolidated liabilities equal $20,664,262,842,000. This number, which is the average of the year-end financial sector liabilities of the preceding two years, will be the measure of aggregate consolidated liabilities from July 1, 2019, through June 30, 2020.

Financial companies subject to the limit include insured depository institutions, bank holding companies, savings and loan holding companies, foreign banking organizations, and other companies that control insured depository institutions.

UPDATE: Also published 7/5/19 at 84 FR 32169.


OFAC reminder of blocked property reporting

OFAC has posted a reminder about the Annual Report of Blocked Property that banks hold as of June 30 each year. The report is due by September 30.

Starting with this year, the annual reports must be filed using the new spreadsheet form TD-F 90-22.50, and emailed to OFAC provides Guidance on Filing the Annual Report of Blocked Property.


OCC Bulletin for covered savings associations

The OCC has issued Bulletin 2019-31 describing the process for federal savings associations with total consolidated assets of $20 billion or less (on their Call Report as of December 31, 2017), to elect to operate as covered savings associations able to engage in national bank powers under the OCC's final rule published on May 24.


Maduro's son designated

A Treasury Department news release reports that OFAC has designated the son of Venezuela’s illegitimate regime leader Nicolas Maduro Moros. This action, taken under Executive Order 13692, targets Nicolas “Nicolasito” Ernesto Maduro Guerra for being a current or former official of the Government of Venezuela. Maduro Guerra is a member of Venezuela’s illegitimate National Constituent Assembly, also known as the Asamblea Nacional Constituyente or ANC. For further identification information on Maduro Guerra, see BankersOnline's OFAC Update.


FTC issues free credit monitoring rule for servicemembers

The Federal Trade Commission has published a final rule [84 FR 31180] to implement the credit monitoring provisions applicable to active duty military consumers in section 302 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amends the Fair Credit Reporting Act (“FCRA”). That section requires nationwide consumer reporting agencies (“NCRAs”) to provide a free electronic credit monitoring service to active duty military consumers, subject to certain conditions. The final rule defines “electronic credit monitoring service,” “contact information,” “material additions or modifications to the file of a consumer,” and “appropriate proof of identity,” among other terms. It also contains requirements on how NCRAs must verify that an individual is an active duty military consumer. Further, the final rule contains restrictions on the use of personal information and on communications surrounding enrollment in the electronic credit monitoring service.

The amendments are effective July 31, 2019. However, compliance is not required until October 31, 2019.


FDIC cleans out more transitional regs

The FDIC has published [84 FR 31171] in today's Federal Register a final rule to rescind and remove the “Lending and Investment” regulations because they are unnecessary, redundant, or duplicative of existing FDIC regulations; to amend certain sections of existing FDIC regulations governing real estate lending standards to make them applicable to all insured depository institutions for which the FDIC is the appropriate Federal banking agency; and to rescind and remove “Registration of Residential Mortgage Loan Originators” regulations because supervision and rulemaking authority in this area was transferred to the CFPB by the Dodd-Frank Act. The amendments will be effective July 31, 2019.


State Street pays $88M to settle SEC charges

The Securities and Exchange Commission has announced that State Street Bank and Trust Company has agreed to pay over $88 million to settle charges for overcharging mutual funds and other registered investment company clients for expenses related to the firm's custody of client assets. An Order filed by the Commission indicated the overcharges included a secret markup that State Street tacked on to the cost of sending secured financial messages through the SWIFT network.


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