Top Story Compliance Related

A joint press release from the Federal Reserve, OCC and FDIC has announced the final revisions to "Interagency Questions and Answers Regarding Community Reinvestment." The guidance addresses questions raised by bankers, community organizations, and others regarding the agencies' CRA regulations in the areas of:

• Availability and effectiveness of retail banking services
• Innovative or flexible lending practices
• Community development-related issues, including: (i) economic development; (ii) community development loans and activities that revitalize or stabilize underserved nonmetropolitan middle-income geographies; and (iii) community development services
• Responsiveness and innovativeness of an institution's loans, qualified investments, and community development services

The CFPB has announced that Santander Bank, N.A., headquartered in Wilmington, Delaware, has been ordered to pay a $10 million fine for illegal overdraft service practices. The Bureau said that Santander’s telemarketing vendor deceptively marketed the overdraft service and signed certain bank customers up for the service without their consent. See "Santander to pay $10M for overdraft practices" in the BOL Penalty Pages for the details.

The Federal Trade Commission has announced that two debt collectors and three companies charged with using false threats and other illegal collection tactics are banned from the debt collection business under a settlement with the Commission. The corporate and individual defendants were previously charged by the FTC with extracting payments from consumers through intimidation, lies and other unlawful debt collection tactics. A court order subsequently halted the operation and froze the defendants' assets pending litigation. The defendants have now agreed to a stipulated final order that bans them from debt collection activities and prohibits them from misrepresenting material facts about financial-related products and services. The order also bars them from profiting from consumers' personal information and failing to dispose of it properly. The order imposes a $4,802,646 judgment that will be partially suspended upon the surrender of certain assets and requires payment of $59,207 by the debt collectors. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The Federal Reserve Board has published Consumer Affairs (CA) letter 16-4 on the repeal of Regulation AA (12 CFR Part 227) and the publication of revised exam procedures for section 5 of the Federal Trade Commission Act. The Dodd-Frank Act repealed the Board's authority to write rules that address unfair or deceptive acts or practices, which were contained in Reg AA, including the "credit practices rule," which prohibited banks from using certain practices to enforce consumer credit obligations and from including these practices in their consumer credit contracts.

OFAC has updated the SDN Lists with the addition of the names of two individuals who were designated SDGTs. See our OFAC Update for the details.

Treasury’s Federal Insurance Office (FIO) has announced and published a notice in the Federal Register of the adoption of a methodology for monitoring the affordability of automobile insurance. The Dodd-Frank Act authorizes the FIO to monitor the extent to which traditionally underserved communities and consumers, minorities, and low- and moderate-income persons have access to affordable insurance products regarding all lines of insurance other than health insurance.

The Securities and Exchange Commission has announced that Citigroup Global Markets has agreed to pay a $7 million penalty and admit wrongdoing to settle charges that a computer coding error caused the firm to provide the agency with incomplete “blue sheet” information about trades it executed for fifteen years. See "Citigroup to pay $7 million for 15 years of errors" in our Penalties pages for further information.

Credit unions can learn how to use social media to increase their web traffic, improve their brand identity and boost their lending during the National Credit Union Administration’s upcoming webinar, "Marketing – Effective Use of Social Media," on August 10, starting at 2 p.m. EDT. During the free webinar, a panel will discuss how to create a social media plan, define the credit union’s target audience, determine what messages the CU wants to send to its audience, and how to have meaningful interactions with them.

The OCC has released its Semiannual Risk Perspective for Spring 2016, which reports that strategic, credit, operational, and compliance risks remain top concerns. Highlights from the report include:

• Strategic risk remains high as banks struggle to execute their strategic plans and face challenges in growing revenue.
• Credit risk is increasing because of strong loan growth combined with easing in underwriting standards. An increase in concentrations and risk layering continues as banks strive for yield in an increasingly competitive environment. This is particularly evident in indirect auto, commercial and industrial, and commercial real estate.
• Operational risk concerns include increasing cyber threats, reliance on third-party service providers, and resiliency planning.
• Banks face challenges meeting the integrated mortgage disclosure requirements and amended Military Lending Act regulatory requirements, the latter of which takes effect on October 3, 2016, and managing Bank Secrecy Act risks.
• Low energy prices, the potential for rising interest rates, and risks associated with banks partnering with marketplace lending firms are of concern and being monitored, as they may develop into broader system-wide issues.

The Office of Foreign Assets Control has updated its Cuba-related FAQs to add questions about the use of the U.S. dollar in certain transactions.