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Top Story Compliance Related

11/01/2021

FDIC September enforcement actions announced

The FDIC has released a list of enforcement actions taken in September 2021.

  • Farmers and Merchants Bank, Milford, Nebraska, was ordered to pay a civil money penalty of $24,000 for violations of flood insurance regulations.
  • Liberty Bank, Inc., Salt Lake City, Utah, was issued a consent cease and desist order after the FDIC found the bank in violation of the Truth in Lending Act, the Real Estate Settlement Procedures Act, the Electronic Signatures Act, the Equal Credit Opportunity Act, the Community Reinvestment Act, and the Truth in Savings Act, and their respective implementing regulations.

11/01/2021

U.S. sanctions network and individuals aiding Iranian program

On Friday, OFAC designated members of a network of companies and individuals that have provided critical support to the Unmanned Aerial Vehicle (UAV) programs of Iran’s Islamic Revolutionary Guard Corps (IRGC) and its expeditionary unit, the IRGC Qods Force (IRGC-QF). OFAC also designated Saeed Aghajani, the commander of the IRGC Aerospace Force (IRGC ASF) UAV Command.

Friday's actions were taken pursuant to the counterterrorism authority Executive Order 13224, as amended, as well as E.O. 13382, which targets weapons of mass destruction proliferators and their supporters.

For identity information on the individuals and entities that OFAC designated on Friday, see BankersOnline's October 29, 2021 OFAC Update

10/29/2021

Revised booklet for Comptroller's Handbook

The Office of the Comptroller of the Currency has issued Bulletin 2021-52 to announce publication of version 2.0 of the “Retail Lending” booklet of the Comptroller’s Handbook. This booklet discusses risks associated with retail lending and provides a framework for examiners’ evaluations of risk management activities.

The revised booklet—

  • reflects changes to laws and regulations since this booklet was last updated.
  • reflects OCC issuances published and rescinded since this booklet was last updated.
  • includes clarifying edits regarding supervisory guidance, sound risk management practices, and legal language.
  • revises certain content for general clarity.

10/29/2021

OFAC targets three Lebanese nationals

On Thursday, Treasury announced that OFAC had designated two Lebanese businessmen and a member of Parliament whose actions have contributed to the breakdown of good governance and the rule of law in Lebanon. Jihad al-Arab, Dany Khoury, and Jamil Sayyed have each personally profited from the pervasive corruption and cronyism in Lebanon, enriching themselves at the expense of the Lebanese people and state institutions. These individuals, who are members of Lebanon’s business and political elite, are being designated pursuant to Executive Order 13441, which targets persons contributing to the breakdown of the rule of law in Lebanon.

Identification details can be found in BankersOnline's October 28, 2021, OFAC Update.

10/28/2021

Updated Reg Z exam procedures

The Federal Reserve Board has issued a Community Affairs Letter announcing the Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council recently developed updated interagency examination procedures for Regulation Z – Truth in Lending (TILA).

The revised procedures reflect amendments to Regulation Z published by the Consumer Financial Protection Bureau in 2020 and 2021: (1) implementing permanent changes to Regulation Z's qualified mortgage provisions, and (2) implementing an extension and phase-out for the GSE Patch, which had originally carried a January 10, 2021, sunset date under the Ability to Repay/Qualified Mortgage rule and which will now sunset on October 1, 2022.

10/27/2021

OCC takes enforcement action against mortgage subservicer

The OCC on Tuesday announced it had issued a Consent Cease and Desist Order against Cenlar FSB (Ewing, NJ), the largest mortgage sub-servicer in the country, performing servicing duties on behalf of financial institution clients throughout the United States, and the second largest mortgage servicer in the United States.

The OCC's action was based on the bank’s failure to establish effective controls and risk management practices related to its mortgage servicing and subservicing activities. The order requires the bank to take comprehensive corrective actions to address identified deficiencies and implement internal controls and risk management practices that are appropriate to the bank’s risk profile and the size of its mortgage subservicing operations.

The order also limits excessive growth and prioritizes remediation by requiring the bank to receive no supervisory objection from the OCC before adding new subservicing clients and prior to declaring or paying dividends to shareholders while the order is effective.

10/27/2021

FTC warns businesses about deceptive money-making claims

The Federal Trade Commission has announced that this week, the Commission put more than 1,100 businesses that pitch money-making ventures on notice that if they deceive or mislead consumers about potential earnings, the FTC won’t hesitate to use its authority to target them with large civil penalties.

The FTC is deploying its Penalty Offense Authority to remind businesses of the law and deter them from breaking it. By sending a Notice of Penalty Offenses to the companies, the agency is placing them on notice they could incur significant civil penalties—up to $43,792 per violation—if they or their representatives make claims about money-making opportunities that run counter to prior FTC administrative cases. The Notice of Penalty Offenses allows the agency to seek civil penalties against a company that engages in conduct that it knows is unlawful, and that has been found unlawful in a previous FTC administrative order, other than a consent order.

Companies receiving the Notice also received a copy of the recently issued Notice of Penalty Offenses concerning endorsements and testimonials [see "FTC warns advertisers: honest opinions only"], as companies frequently use testimonials to advertise money-making opportunities. Together, the notices make clear that it is illegal to use testimonials to mislead consumers about the rewards of participating in a money-making opportunity.

Related link

10/27/2021

OCC FAQs on proposal to rescind CRA rule

With Bulletin 2021-50, issued yesterday, the Office of the Comptroller of the Currency has issued responses to frequently asked questions about a notice of proposed rulemaking soliciting comments on the proposal to rescind the OCC’s Community Reinvestment Act (CRA) rule issued on June 5, 2020. The notice, which was published in the Federal Register on September 17, 2021, proposes that the June 2020 CRA rule largely be replaced with the rules adopted jointly by the OCC, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation in 1995, as revised.

The FAQs provide information on the rulemaking process and the OCC’s consideration of potential CRA transition issues, including:

  • the impact of the proposed rule on CRA bank type.
  • qualifying activities and the qualifying activity confirmation request system.
  • the transition period.
  • examination administration.
  • assessment areas.
  • targeted geographic areas.
  • strategic plans.
  • public comments.

Related Links

10/27/2021

Treasury sanctions Libyan national

The Treasury Department on Tuesday announced that OFAC, acting in coordination with an action by the United Nations Security Council, sanctioned Libyan national Osama Al Kuni Ibrahim (Al Kuni), who is responsible for serious human rights abuse against migrants in Libya. Al Kuni is designated pursuant to Executive Order 13726 for being involved in, or having been involved in, the targeting of civilians through the commission of acts of violence, abduction, forced displacement, or attacks on schools, hospitals, religious sites, or locations where civilians are seeking refuge, or through conduct that would constitute a serious abuse or violation of human rights or a violation of international humanitarian law.

As a result of yesterday’s action, all property and interests in property of the designated individual that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.

Al Kuni was designated by the UN Security Council’s Libya Sanctions Committee. Pursuant to that designation, all UN Member States are obligated to impose an asset freeze and travel ban.

For more information on Al Kuni, see the BankersOnline October 26, 2021, OFAC Update.

10/27/2021

FATF lists jurisdictions with AML/CTF/CPF deficiencies

FinCEN has issued a press release to inform U.S. financial institutions that the Financial Action Task Force (FATF), an intergovernmental body that establishes international standards to combat money laundering, counter the financing of terrorism, and combat weapons of mass destruction proliferation financing (AML/CFT/CPF), has issued public statements updating its lists of jurisdictions with strategic AML/CFT/CPF deficiencies following its plenary meeting this month. U.S. financial institutions should consider the FATF’s stance toward these jurisdictions when reviewing their obligations and risk-based policies, procedures, and practices.

On October 21, 2021, the FATF added Jordan, Mali, and Turkey to its list of the Jurisdictions under Increased Monitoring and removed Botswana and Mauritius.

The FATF’s list of High-Risk Jurisdictions Subject to a Call for Action remains the same with Iran and the Democratic People’s Republic of Korea still subject to the FATF’s countermeasures.

FATF issued two statements:

  1. Jurisdictions under Increased Monitoring, which publicly identifies jurisdictions with strategic deficiencies in their AML/CFT/CPF regimes that have committed to, or are actively working with, the FATF to address those deficiencies in accordance with an agreed upon timeline
  2. High-Risk Jurisdictions Subject to a Call for Action, which publicly identifies jurisdictions with significant strategic deficiencies in their AML/CFT/CPF regimes and calls on all FATF members to apply enhanced due diligence, and, in the most serious cases, apply counter-measures to protect the international financial system from the money laundering, terrorist financing, and proliferation financing risks emanating from the identified countries.

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