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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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Reg CC inflation, EGRRCPA amendments finalized

The Federal Reserve Board and the Consumer Financial Protection Bureau announced Monday they have jointly issued final amendments to Regulation CC that implement a statutory requirement to adjust for inflation every five years the amount of funds depository institutions must make available to their customers. The amendments apply in circumstances ranging from next business day withdrawal of certain check deposits to setting the threshold amount for determining whether an account has been repeatedly withdrawn. The first set of adjustments have been finalized, and will be effective July 1, 2020, to allow institutions adequate time for implementation:

  • The $100 amount (changed in 2011 by the Dodd-Frank Act to $200) in § 229.10(c)(1)(vii) of deposits of non next-day checks to be available by the next business day will increase to $225
  • The $400 amount in § 229.12(d) (Time period adjustment for withdrawal by cash or similar means) will increase to $450
  • The $5,000 amounts in §§ 229.13(a) (New accounts), 229.13(b) (Large deposits) and 229.13(d) (Repeated overdrafts) will increase to $5,525
  • The $1,000 and $500,000 amounts in § 229.21(a) (Civil liability) will increase to $1,100 and $552,500, respectively

The final rule also implements the EFA Act amendments made by the Economic Growth, Regulatory Relief, and Consumer Protection Act, which include extending coverage of the EFA Act to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam; it also makes non-substantive changes to Regulation DD affecting cross references to Regulation CC. These changes will be effective 60 days after publication in the Federal Register.

Still uncertain is the fate of proposed amendments to "clean up" the regulation to eliminate references to nonlocal checks and other outdated wording related to the Fed's pre-2010 multiple check processing regions. As originally proposed several years ago, these amendments would revise consumer notices and disclosures and could make other substantive changes.

UPDATE: published at 84 FR 31687 in the Federal Register on 7/3/19. Effective 9/3/10, except for the inflation-related amendments, which are effective 7/1/20.

John Burnett will present a special BOL Learning Connect one-hour webinar briefing on the Reg CC amendments on August 5, 2019.


OCC enforcement actions announced

The OCC has released a list of enforcement actions taken in May against OCC-supervised institutions and individuals affiliated with them. Among those actions were:

  • A Notice of Charges for an order of prohibition was issued against a former personal banking representative at Massachusetts branches of Santander Bank, N.A., Wilmington, Delaware, who misappropriated $46,027 of bank customer funds and created false bank entries. The Notice announces the OCC's intention to issue the order of prohibition, subject to the respondent's right to an administrative hearing of the OCC's charges.
  • A Notice of Prohibition was issued against a former Chief Executive Office and Chairman of the Board of Directors of The Federal Savings Bank, FSB, Chicago, Illinois, who has been indicted and charged with commission or participation in a crime involving dishonesty and breach of trust. The former banker is charged with using his position to issue $16 million in loans to a borrower whom the banker expected would, in return, assist the banker in obtained a senior position with an incoming presidential administration. When the borrower defaulted on the loans, the bank suffered a multi-million dollar loss.
  • An Order of Prohibition was issued against a former New York Branch Manger of JPMorgan Chase Bank, National Association, Columbus, Ohio, for theft of $4,992 from his teller drawer.
  • An Order of Prohibition was issued against a former Store Manager of Wells Fargo Bank, N.A., who inappropriately processed temporary memo credits to falsely inflate the balance of her personal account.


    Fake credit repair scheme assets frozen

    The Federal Trade Commission has announced that a federal court has issued a temporary restraining order halting the operations and freezing the assets of Grand Teton Professionals LLC, an alleged credit repair scheme that charged illegal upfront fees and falsely claimed to repair consumers' credit. The company and other defendants are charged with violating the Federal Trade Commission Act and several provisions of the Credit Repair Organizations Act, the Telemarketing Sales Rule, the Consumer Review Fairness Act, the Truth in Lending Act, and the Electronic Funds Transfer Act. A complaint filed by the FTC alleges that, since at least 2014, two of the defendants, Douglas Filter and Marcio G. Andrade, have operated an unlawful credit repair scam that bilked consumers out of at least $6.2 million.


    OCC moving to electronic fingerprinting

    OCC Bulletin 2019-29, issued Friday, announces that the OCC is moving to electronic fingerprinting to facilitate background checks performed in connection with applications and notices submitted to the OCC, including applications for charters, notices of acquisition of control, and notices to replace board members or senior management in certain institutions. The OCC will begin using the new process in July 2019.

    In coordination with these changes, the OCC has issued revisions to the “Background Investigations” and “Changes in Directors and Senior Executive Officers” booklets of the Comptroller’s Licensing Manual to incorporate updated procedures and requirements for electronic fingerprinting.


    Fed releases bank stress test results

    The nation's largest and most complex banks have strong capital levels that would allow them to stay well above their minimum requirements after being tested against a severe hypothetical recession, according to the results of supervisory bank stress tests released Friday by the Federal Reserve Board. The most severe hypothetical scenario projects $410 billion in total losses for the 18 participating bank holding companies. This scenario featured a global recession with the U.S. unemployment rate rising by more than 6 percentage points to 10 percent, accompanied by a large decline in real estate prices and elevated stress in corporate loan markets. The firms' aggregate common equity tier 1 capital ratio, which compares high-quality capital to risk-weighted assets, would fall from an actual level of 12.3 percent in the fourth quarter of 2018 to a minimum level of 9.2 percent. Since 2009, the common equity capital at the 18 firms has increased by more than $680 billion.


    Ortega’s advisors designated

    Treasury has announced OFAC's designation of four Nicaraguan government officials -- Gustavo Eduardo Porras Cortes, Orlando Jose Castillo Castillo, Sonia Castro Gonzalez, and Oscar Salvador Mojica Obregon -- under Executive Order 13851. Additionally, Sonia Castro Gonzalez and Gustavo Eduardo Porras Cortes have been designated under the Nicaragua Human Rights and Anticorruption Act of 2018 (NHRAA). The action targets Nicaraguan government officials who persecute Nicaraguan citizens exercising their fundamental freedoms, enact repressive laws, silence news media, and deny medical care to the Nicaraguan people. For further identification information on the four designated individuals, see BankersOnline's OFAC Update.


    Lead paint, dust and soil exposure standards strengthened

    The Environmental Protection Agency has announced new, tighter standards for lead in dust on floors and window sills to protect children from the harmful effects of lead exposure. The strengthened standards become effective 180 days after publication in the Federal Register.


    Minnesota landlords face discrimination charges

    HUD has announced that it is charging the owners of several rental homes in Ottertail, Minnesota, with housing discrimination. According to HUD, the owners allegedly refused to allow a single mother to live with an assistance animal, a cat, for her oldest daughter, who has mental disabilities, and terminated her lease agreement in response to her reasonable-accommodation request.


    MLA website changes scheduled this week

    The Defense Manpower Data Center (DMDC) has announced that on June 27, 2019, it will make significant changes to the Military Lending Act (MLA) website to enhance security of the site and better protect the personal information of servicemembers. All users of the site will be required to create user accounts, which will be required to access both the Single Record Request and the Multiple Record Request capabilities of the site. In addition to the username, password, company name, and challenge questions currently required to create a user account, beginning June 27, 2019, new MLA website users will be required to supply the user's first name, last name, address, and e-mail address in order to create an account. Starting around mid-August 2019, existing MLA website users will be required to update their accounts with the additional fields.


    Walmart pays $282M for FCPA violations

    The SEC has charged Walmart with violating the Foreign Corrupt Practices Act (FCPA) by failing to operate a sufficient anti-corruption compliance program for more than a decade as the retailer experienced rapid international growth. Walmart agreed to pay more than $144 million to settle the SEC’s charges and approximately $138 million to resolve parallel criminal charges by the U.S. Department of Justice for a combined total of more than $282 million.

    According to the SEC’s order, Walmart failed to sufficiently investigate or mitigate certain anti-corruption risks and allowed subsidiaries in Brazil, China, India, and Mexico to employ third-party intermediaries who made payments to foreign government officials without reasonable assurances that they complied with the FCPA. The SEC’s order details several instances when Walmart planned to implement proper compliance and training only to put those plans on hold or otherwise allow deficient internal accounting controls to persist even in the face of red flags and corruption allegations.


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