Top Story Compliance Related

In FIL-56-2018. the FDIC has announced it will discuss consumer compliance topics related to the Economic Growth, Regulatory Relief, and Consumer Protection Act. The teleconference is scheduled for Thursday, October 25, 2018, from 2:00 p.m. to 3:30 p.m. Eastern Time. Advance registration is required.

The FDIC has issued FIL-58-2010 offering FDIC-supervised institutions the ability to receive a notification when the agency's examination manuals are updated on the agency's website. This service will help community banks remain current on changes in instructions provided to examination staff.

The federal financial institution prudential regulators -- Fed, FDIC, NCUA and OCC -- and the Conference of State Bank Supervisors issued a joint statement on Wednesday regarding supervisory practices for financial institutions affected by Hurricane Michael. The regulators intend to provide appropriate regulatory assistance to affected institutions.

The statement lists ways in which the regulators will work with affected institutions in the areas of lending; the use of temporary facilities during recovery; publication of closings, relocations and temporary facilities; and regulatory reporting requirements, as well as the possibility of CRA consideration for institution efforts that revitalize or stabilize designated disaster areas. Institutions were also cautioned to monitor municipal securities and loans that may be affected by the storm.

The OCC, Fed, FDIC, FCA and FHFA have published final rules amending their margin and capital requirements for covered swap entities, as announced last month. The amendments will become effective November 9, 2018.

The NCUA has announced that ten federally insured credit unions subject to civil monetary penalties for filing late Call Reports in the first quarter of 2018 have agreed to penalties totaling $4,133.

The FDIC has released a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in July 2018. Of the 66 banks listed, two were rated "outstanding," 63 were rated "satisfactory," and one received a "needs to improve" rating. The banks receiving outstanding ratings were:

• Iowa State Bank, Des Moines, IA, which has received "outstanding" ratings since 1995
• Security Bank and Trust Co., Maysville, KY, which received its first "outstanding" rating

OFAC has announced that JPMorgan Chase Bank, N.A. (JPMC) has agreed to remit $5,263,171 to settle its potential civil liability for apparent violations involving the processing of 87 net settlement payments with a total value of $1,022,408,149, of which approximately $1,500,000 (0.14%) appears to have been attributable to interests of sanctions-targeted parties, and which therefore appear to have violated one or more of the following sanctions programs administered by OFAC: the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR); the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (ITSR); and the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F.R. Part 544 (WMDPSR).

OFAC determined that JPMC voluntarily self-disclosed the apparent violations, and that the apparent violations constitute a non-egregious case. The total base penalty amount for the apparent violations is $7,797,290.

Separately, OFAC issued a Finding of Violation to JPMC for violations of the Foreign Narcotics Kingpin Sanctions Regulations, 31 C.F.R. part 598 (FNKSR), and the Syrian Sanctions Regulations, 31 C.F.R. part 542 (SSR). There is no monetary penalty associated with a Finding of Violation.

HUD has announced it is charging a McAllen, Texas property owner and management company with discriminating against families with children. HUD alleges the owners of El Patrimonio Apartments and its management company, Texas Regional Asset Management, LLC, threatened to fine a family $250 because their two children played in the community area of the complex. The charge also states that the apartment owners enacted a policy that required children under the age of 18 to be supervised by an adult family member while on the property, including the pool area. In one instance, a couple was threatened with the fine because their two children were playing in the community area while being supervised by adults who were not blood relatives.

The Treasury Department has announced that OFAC acted yesterday to disrupt Hizballah’s financial support networks by designating Muhammad ‘Abdallah al-Amin (al-Amin) as a Specially Designated Global Terrorist (SDGT) under Executive Order 13224. OFAC designated al-Amin for providing material support to Hizballah insider and financier Adham Husayn Tabaja. In addition to al-Amin, OFAC designated seven Lebanon-based companies that are owned or controlled by al-Amin.

Treasury also announced that OFAC made North Korea-related designations of a Turkish company, SIA Falcon International Group, for attempts to circumvent sanctions on goods that have long been prohibited by UN Security Council (UNSC) resolutions, as well as three individuals involved in those attempts.

For identity information on the designated parties in these two OFAC actions, and 422 OFAC administrative SDN List changes, see our OFAC Update.

FinCEN has announced it issued an advisory (FIN-2018-A005) Wednesday to alert U.S. financial institutions of the increasing risk that proceeds of political corruption from Nicaragua may enter or traverse the U.S. financial system. FinCEN stated in its press release that it expects that senior foreign political figures connected to the regime of Nicaraguan President Daniel Ortega could react to the perceived threat of further unrest, potential sanctions, or other factors by moving assets out of their accounts in Nicaragua or elsewhere. These assets could be the proceeds of corruption, and they may be directed into U.S. accounts, or laundered through the U.S. financial system. FinCEN requests that financial institutions file Suspicious Activity Reports (SARs), consistent with their existing Bank Secrecy Act (BSA) obligations, when they identify potential misuse of Nicaraguan public funds or potential proceeds of political corruption associated with senior foreign political figures connected to the Ortega regime.