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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

09/19/2019

FTC staff comments on CFPB proposed FDCPA rules

The Federal Trade Commission staff has submitted comments to the CFBP regarding proposed rules that implement the Fair Debt Collection Practices Act (FDCPA). Their comments included:

  • changes that would improve the types of information debt collectors are required to provide to people from whom they are attempting to collect and how, when, and where collectors are allowed to make contact with consumers
  • issues around debt that has passed the statute of limitations, the sale and transfer of debt, the collection of debts involving people who are deceased, and restrictions on the disclosure of information about debt to third parties

09/18/2019

SEC proposes update of bank disclosure rules

The SEC has announced that it has proposed rules to update the statistical disclosures that bank and savings and loan registrants provide to investors, and eliminate disclosures that overlap with Commission rules, U.S. GAAP or IFRS. The proposed rules would replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies, with updated disclosure in a new subpart of Regulation S-K. The proposed rules would apply to bank holding companies, banks, savings and loan holding companies, and savings and loan associations. The proposed rules would require disclosure about:

  • Distribution of assets, liabilities and stockholders’ equity, the related interest income and expense, and interest rates and interest differential;
  • Weighted average yield of investments in debt securities by maturity;
  • Maturity analysis of the loan portfolio including the amounts that have predetermined interest rates and floating or adjustable interest rates;
  • An allocation of the allowance for credit losses and certain credit ratios; and
  • Information about bank deposits including amounts that are uninsured.

The proposal will have a 60-day public comment period following its publication in the Federal Register.
UPDATE: Published on 10/3/2019 with a comment deadline of 12/2/2019.

09/18/2019

Raymond James pays $15M to settle SEC charges

The SEC has announced has issued a settled order against three Raymond James entities for improperly charging advisory fees on inactive retail client accounts and charging excess commissions for brokerage customer investments in certain unit investment trusts (UITs).

The order finds that Raymond James & Associates, Inc., and Raymond James Financial Services Advisors, Inc., failed to consistently perform promised ongoing reviews of advisory accounts that had no trading activity for at least one year. According to the order, because they did not conduct the reviews properly, they failed to determine whether the client’s fee-based advisory account was suitable. The order further finds that the entities also misapplied the wrong pricing data to certain UIT positions held by advisory clients, causing them to overpay fees.

Under the order, the Raymond James entities will pay disgorgement of $11.1 million, prejudgment interest of $1.1 million and a civil money penalty of $3 million, for a total of $15.2 million.

09/18/2019

FDIC finalizes changes to capital rules

The FDIC has announced it has finalized a rule that introduces an optional simplified measure of capital adequacy for qualifying community banking organizations (i.e., the community bank leverage ratio (CBLR) framework), as required by the Economic Growth, Regulatory Relief and Consumer Protection Act. The CBLR framework is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of greater than 9 percent, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. the CBLR framework will be available for banks to use in their March 31, 2020, Call Report.

The FDIC also finalized a rule that permits non-advanced approaches banking organizations to use the simpler regulatory capital requirements for mortgage-servicing assets, certain deferred tax assets arising from temporary differences, investments in the capital of unconsolidated financial institutions, and minority interest when measuring their tier 1 capital as of January 1, 2020. Banking organizations may use this new measure of tier 1 capital under the CBLR framework.

In addition, the FDIC finalized a rule that makes technical changes to incorporate the CBLR framework into the deposit insurance assessment system. A bank that uses the CBLR framework will not have any changes to how its assessment rate is calculated.

The agency also posted a Fact Sheet with an overview of the Community Bank Leverage Ration (CBLR) Framework.

09/18/2019

Treasury proposes FIRRMA regs

The Treasury Department announced yesterday it has issued two proposed regulations to comprehensively implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) and to better address national security concerns arising from certain investments and real estate transactions. The regulations strengthen and modernize the Committee on Foreign Investment in the United States (CFIUS), an interagency committee authorized to review certain transactions involving foreign investment in the United to determine the effect of such transactions on the national security of the United States.

Comments on the proposed rules will be accepted through October 17, 2019. Treasury intends to issue final rules to take effect no later than February 13, 2020.

09/18/2019

OFAC targets Alex Saab network in Venezuela

The Treasury Department announced yesterday that OFAC has designated three individuals and 16 entities for their connections to Alex Nain Saab Moran (Alex Saab) and his business partner, Alvaro Enrique Pulido Vargas (Alvaro Pulido), who have enabled former President Nicolás Maduro (Maduro) and his illegitimate regime to corruptly profit from imports of food aid and distribution in Venezuela. The individuals designated include Alex Saab’s two brothers, Amir Luis Saab Moran (Amir Saab) and Luis Alberto Saab Moran (Luis Saab), as well as Alvaro Pulido’s son, David Enrique Rubio Gonzalez (Rubio). The 16 entities designated are owned or controlled by the aforementioned individuals or Alex Saab himself.

As a result of these actions, all property and interests in property of the individuals and entities designated yesterday, and of any entities that are owned, directly or indirectly, 50 percent or more by those individuals or entities, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property of blocked or designated persons. For identity information on the designated individuals and entities, see BankersOnline's September 17, 2019, OFAC Update.

09/18/2019

CFPB seeking Tech Sprint opportunities

The CFPB has published in today's Federal Register a notice and request for information to identify opportunities to utilize Tech Sprints as a means to encourage regulatory innovation and collaborate with stakeholders in developing viable solutions to regulatory compliance challenges. Tech Sprints have been used successfully by the Financial Conduct Authority in the United Kingdom to gather regulators, technologists, financial institutions, and subject matter experts from key stakeholders for several days to work together to develop innovative solutions to clearly-identified challenges.

Tech Sprints have also been used by the U.S. Census Bureau, where tech companies, universities, government and communities together worked to translate U.S. government open data into useful digital products over the course of a 12-week sprint. At the end of the sprint, products launched and often moved on to full development as tools for the public.

Comments are due by November 8, 2019.

09/17/2019

Prudential subs charged with disclosure violations

The SEC has filed an Order charging two subsidiaries of Prudential Financial Inc. with failing to disclose conflicts of interest and making misleading disclosures to the boards for 94 funds they advised. Prudential affiliates AST Investment Services, Inc. (a Connecticut corporation) and PGIM Investments LLC (a New York limited liability company) self-reported their violations and cooperated with the SEC's investigation. Under the Order, ASTIS and PI were ordered to cease and desist from further violations, and censured. They were also ordered jointly and severally to pay disgorgement of $27.6 million and a civil money penalty of $5 million.

09/17/2019

October 5 deadline for CDFI applications

The NCUA has posted a reminder notice that federally insured, low-income credit unions that want to become certified Community Development Financial Institutions (CDFIs) have until October 5 to apply to use the NCUA’s qualification process for streamlined CDFI certification.

09/17/2019

Maryland insurer settles Kingpin Act violations claims

OFAC has announced that Atradius Trade Credit Insurance, Inc. of Hunt Valley, Maryland, a trade credit insurer licensed to operate in the state of Maryland and a subsidiary of Atradius N.V. ATCI, has agreed to remit $345,315 to settle its potential civil liability for two apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations by dealing in property or interests in property of a specially designated narcotics trafficker.

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