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How to add predictive analytics into your risk program. Risk reports are often limited to historical insights and issues and do not provide guidance and insights into the future of the organization. Adding predictive analytics can allow your organization to detect emerging risks and create mitigation plans. This can be achieved by combining internal and external key risk indicators (KRIs) and key performance indicators (KPIs) with regulatory intelligence. This ensures that risk reports can detect more issues and highlight areas of concern. Click here to learn more.

Top Story Compliance Related


FDIC insurance and prepaid cards

The September 2019 issue of FDIC Consumer News features an article, "Is the Money on My Prepaid Card FDIC-Insured?" It explains that prepaid card funds may be insured as deposits if the card is eligible and properly registered, and specific deposit insurance requirements are met.

  • The account must be appropriately titled to name the owner or owners of the account and indicate that the prepaid account provider will act as the cardholder's agent
  • If the bank fails, the card issuer will need to provide the FDIC a list of each cardholder and balance on each card
  • The contract among the financial institution, card issuer and cardholders must indicate that the individual cardholders are the owners of the funds.


Labor issues final OT rule

The Department of Labor has announced a final rule updating its overtime pay rules under the Fair Labor Standards Act. Under the final rule, which becomes effective January 1, 2020, the Department is:

  • raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);
  • raising the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year;
  • allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices; and
  • revising the special salary levels for workers in U.S. territories and the motion picture industry.

Under the revisions made by the final rule, to be exempt from the requirement to receive overtime pay of at least 150% of their regular pay rate for hours worked in excess of 40 in a workweek, an employee must be salaried, be paid at least $684 per week, and primarily perform executive, administrative, or professional duties, as defined in DOL's regulations at 29 CFR 541.

UPDATE: The final rule was published at 84 FR 51230 on 9/27/2019.


OFAC adds Iran-related FAQ and designations

OFAC has published an Iran-related FAQ relating to a determination by the Secretary of State that COSCO Shipping Tanker (Dalian) Co. and COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co. met the criteria for the imposition of sanctions under Executive Order 13846, and designated five individuals and six entities in connection with that Order. For identity information on those designated, see BankersOnline's OFAC Update


TMC Bonds LLC pays $2.1M for failing to protect subscriber info

The Securities and Exchange Commission has announced that TMC Bonds LLC, operator of an alternative trading system for fixed-income securities, has agreed to pay $2.1 million to settle charges arising from TMC Bonds’ failure to protect confidential subscriber information. The SEC’s order finds that, between at least January 2016 and June 2018, TMC Bonds publicly touted its anonymous trading platform, but, in fact, disclosed to potential counterparties the identities of certain firms seeking to trade corporate bonds over 2,500 times during a two-and-a-half year period.


Belizean bank pays $23M and shuts down

The Federal Trade Commission reports it has issued a proposed consent order under which Belize’s Atlantic International Bank Limited will pay $23 million, representing approximately all of its U.S.-based assets, to settle Federal Trade Commission charges that it assisted various related entities (the Sanctuary Belize Enterprise, or SBE) in deceiving U.S. consumers as part of a scheme to sell property in Sanctuary Belize (also known as Sanctuary Bay and The Reserve), a massive planned community approximately the size of Manhattan located in remote southern Belize. The order requires the bank to cease all business activities permanently, aside from those involved with its liquidation.The FTC will use the settlement money to provide redress to more than 1,000 consumers injured by the Sanctuary Belize scheme.


IRS safe harbor for rental real estate

The IRS has announced the publication of Revenue Procedure 2019-38, which provides a safe harbor allowing certain interests in rental real estate, including interests in mixed-use property, to be treated as a trade or business for purposes of the qualified business income deduction under section 199A of the Internal Revenue Code (section 199A deduction).


FinCEN director addresses FedID Forum

In a presentation at the 2019 Federal Identity (FedID) Forum and Exposition in Tampa, FinCEN Director Blanco reviewed the role of FinCEN as a regulator of all financial institutions and the administrator of the Bank Secrecy Act, the primary laws in the area of money laundering and countering the financing of terrorism (AML/CFT) and as the Financial Intelligence Unit of the United States.


FDIC to hold 'listening sessions'

The FDIC has announced that, as part of its “Trust through Transparency” initiative, it will host a series of listening sessions regarding its supervisory appeals and dispute resolution processes for FDIC-supervised financial institutions. The sessions will offer an opportunity for bankers and other interested parties to provide individual input and recommendations regarding these processes, as well as to provide individual suggestions regarding the role of the Office of the Ombudsman in assisting in resolving disagreements. Attendees will be requested to provide suggestions on information that the agency could publish on these topics. The sessions are being held as part of the FDIC's efforts to enhance the agency's transparency, efficiency, and accountability.


FDIC Advisory Committee on Community Banking meeting

The FDIC has published a notice [84 FR 50448] of an open meeting of its Advisory Committee on Community Banking, to be held in the FDIC Board Room at 550 17th Street NW, Washington, DC, on Thursday, October 10, 2019, from 9:00 a.m. to 3:00 p.m. EDT. The committee provides advice and recommendations on a broad range of policy issues that have particular impact on small community banks throughout the United States and the local communities they serve, with a focus on rural areas.


CFPB Summer Supervisory Highlights

The CFPB has published [84 FR 49250] Issue 19 (Summer 2019) of its Supervisory Highlights, featuring findings in the areas of automobile loan origination, credit card account management, debt collection, furnishing of information to credit reporting companies, and mortgage origination identified in examinations that were generally completed between December 2018 and March 2019. More specifically, the report cites:

  • Automobile loan origination: Abusive acts or practices when selling add-on GAP products, such as selling such a product to consumers whose low loan-to-value meant they would not benefit from the product.
  • Credit card account management:
    • Failures to clearly and conspicuously provide disclosures required by triggering terms in online ads
    • offsets against consumers' deposit funds without sufficient documentation of the consumers' sufficient awareness of and intent to grant a security interest in those funds
    • deceptive threats of repossession or foreclosure in credit card collections
    • deceptive marketing of secured credit card accounts
  • Debt collection: False representation of the amount and legal status of debt
  • Furnishing credit information:
    • Failure to conduct an investigation or respond to a credit reporting company (CRC) after receipt of a dispute from the company
    • Failure to report to all applicable CRCs updates or corrections to information found to be incomplete following a dispute investigation
    • Failures to promptly send corrections or updates to all applicable CRCs after determining that previously furnished information about certain accounts was no longer accurate.
    • Failures of one or more furnishers of deposit account information to furnish updated information regard accounts that were paid in full or settled in full.
    • Failures by one or more furnishers of deposit account information to notify a nationwide specialty CRC that the information was disputed by consumers.
    • Failures to implement reasonable written policies and procedures regarding the accuracy and integrity of deposit account information it furnished to nationwide specialty CRCs
  • Mortgage origination: Inaccurate APR and Total Annual Loan Cost (TALC) disclosures in reverse mortgages


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