Top Story Compliance Related

A joint press release by the OCC, Fed, FDIC, NCUA, Conference of State Bank Supervisors and the California Department of Business Oversight published a statement on supervisory practices regarding financial institutions and their customers affected by California wildfires. The agencies will provide appropriate regulatory assistance and flexibility to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities.

On Thursday, OFAC designated Saud al-Qahtani, his subordinate Maher Mutreb, Saudi Consul General Mohammed Alotaibi, and 14 other members of an operations team for having a role in the killing of Jamal Khashoggi. These individuals were designated pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, to target perpetrators of serious human rights abuse and corruption.

As a result of these designations, any property or interests in property of the individuals designated today within or transiting U.S. jurisdiction is blocked. Additionally, U.S. persons are generally prohibited from engaging in transactions with blocked persons, including entities 50 percent or more owned by designated persons. For identity information on the 17 individuals, see our OFAC Update.

• Treasury Department Press Release

FinCEN announced Thursday the issuance of revised Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate. The purchase amount threshold, which previously varied by city, is now set at $300,000 for each covered metropolitan area. FinCEN is also requiring that covered purchases using virtual currencies be reported. FinCEN posted a copy of the GTO and an FAQ about the orders. The order covers the period from November 17, 2018, through May 15, 2019.

The GTOs' coverage has been expanded to include 12 metropolitan areas, defined as follows:

• Texas counties of Bexar, Tarrant and Dallas
• Florida counties of Miami-Dade, Broward and Palm Beach, in Florida
• Boroughs of Brooklyn, Queens, Bronx, Staten Island and Manhattan, in New York City
• California counties of San Diego, Los Angeles, San Francisco, San Mateo and Santa Clara
• City and County of Honolulu in Hawaii
• Washington county of King
• Massachusetts counties of Suffolk and Middlesex
• Illinois county of Cook.

Note that the orders do not affect banks or credit unions directly, although they should be aware of them in case they detect activity that may signal attempts to avoid the GTO. The orders are addressed to title insurance companies and their subsidiaries or agents.

The Office of Foreign Assets Control has published [83 FR 57308] a final rule amending the Democratic Republic of the Congo Sanctions Regulations to implement Executive Order 13671 of July 8, 2014 (“Taking Additional Steps to Address the National Emergency With Respect to the Conflict in the Democratic Republic of the Congo”). The rule also incorporates other technical and conforming changes. The amendments are effective immediately.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action Tuesday to target four Hizballah-affiliated individuals who lead and coordinate the group’s operational, intelligence, and financial activities in Iraq.

See our OFAC Update for identifying information on these four designees and other additions to OFAC's SDN List.

The OCC's Bulletin 2018-41 was issued Tuesday to announce the agency's Policies and Procedures Manual, Institution-Affiliated Party Enforcement Actions and Related Matters. This manual generally sets forth the OCC’s existing policies and procedures for taking enforcement actions against a current or former institution-affiliated party (IAP) in response to violations of laws, regulations, final agency orders, conditions imposed in writing, or written agreements; unsafe or unsound practices; or breaches of fiduciary duty. The OCC also updated its policies and procedures manuals (PPMs) regarding bank enforcement actions and related matters and civil money penalties, primarily to ensure consistency with its policies and procedures for enforcement actions against IAPs. These PPMs are effective upon issuance.

This bulletin rescinds OCC Bulletin 2016-5, Civil Money Penalties, issued February 26, 2016, and OCC Bulletin 2017-48, Bank Enforcement Actions and Related Matters, issued October 31, 2017.

• PPM 5000-7, Civil Money Penalties
• PPM 5310-3, Bank Enforcement Actions and Related Matters
• PPM 5310-13, Institution-Affiliated Party Enforcement Actions and Related Matters

The IRS has published [83 FR 56763] in today's Federal Register proposed amendments to the regulations relating to hardship distributions from section 401(k) plans. The amendments reflect statutory changes affecting section 401(k) plans, including recent changes made by the Bipartisan Budget Act of 2018. These regulations would affect participants in, beneficiaries of, employers maintaining, and administrators of plans that contain cash or deferred arrangements or provide for employee or matching contributions. Comments and requests for a public hearing must be received by January 14, 2019.

The Office of the Comptroller of the Currency announced Tuesday that it has issued a proclamation allowing institutions it supervises affected by wildfires and high winds in California to close, and reminded those institutions of the OCC's Bulletin 2012-28, "Supervisory Guidance on Natural Disasters and Other Emergency Conditions."

The announcement also included a link to the OCC's Major Disaster News Center page, which includes information for consumers and other bank customers impacted by disasters.

The Federal Reserve has released its November 2018 Supervision and Regulation Report, which summarizes banking conditions and the Federal Reserve’s supervisory and regulatory activities, in conjunction with semiannual testimony before Congress by the Vice Chairman for Supervision. The report does not reflect the full extent of tailoring of regulations and supervision--required by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA)--which is in varying stages of implementation. Supervisory portfolios are described in their pre-EGRRCPA form. Changes to regulatory thresholds adopted to reflect EGRRCPA are underway and will be reflected in the next report.

OFAC has announced the extension of the expiration date of certain general licenses related to EN+ Group plc (EN+), United Company RUSAL PLC (RUSAL), and GAZ Group (GAZ). A Treasury spokesperson stated "EN+, RUSAL, and GAZ are proposing substantial corporate governance changes that could potentially result in significant changes in control of these sanctioned entities. As the review of these complex proposals is ongoing, OFAC is extending the expiration date of related licenses until January 7."