Top Story Compliance Related

The Federal Trade Commission has provided its 2015 Annual Enforcement Activities Report to the CFPB. The report covers enforcement and related activities regarding Regulations Z (Truth in Lending Act), M (Consumer Leasing Act), and E (Electronic Fund Transfer Act). It addresses, among other things, the Commission’s enforcement actions related to non-mortgage credit -- including automobile purchases and financing, car title loans, payday lending, and consumer electronics financing -- and mortgage-related credit such as forensic audit scams; rulemaking, research, and policy development related to truth in lending; and consumer and business education regarding truth in lending requirements. It also addresses consumer leasing enforcement actions, as well as negative option and other cases involving electronic fund transfers, and rulemaking related to electronic fund transfers.

The 2015 terror assets report has been released by OFAC. This is the twenty-fourth annual report to Congress on the assets in the U.S. relating to terrorist countries and international terrorism program designees.

The Federal Trade Commission has charged a nationally advertised gold and silver marketing operation with bilking millions from consumers. The FTC seeks to recover money from the defendants to return to their customers, many of whom allegedly lost thousands of dollars to the scheme. According to the FTC’s complaint, the defendants marketed gold and silver as investments, but often failed to deliver the goods. Operating as Discount Gold Brokers, the defendants offered gold and silver “at discounted prices,” with “zero commissions, fees, or expenses,” and at “zero percent above dealer cost.” In response, many consumers used their retirement savings to buy the precious metals, with individual orders ranging from $1,000 to $300,000. The complaint alleges that the defendants required up-front payment via check or wire and some consumers used their family trust or retirement accounts to pay.

The defendants—DiscountMetalBrokers Inc. (formerly known as Discount Gold Brokers Inc. and Discount Metal Brokers Inc., and doing business as Discount Gold Brokers and North American Discount Gold.com); Donald Lee Dayer; Katherina Dayer; and Michael Scott Berman—are charged with violating the FTC Act and the FTC’s Mail, Internet or Telephone Order Merchandise Rule, which requires sellers soliciting orders via mail, internet, or phone to have a reasonable basis to expect that they can ship merchandise within any advertised time frame, or within 30 days if no specific time frame is promised.

OFAC has announced the removal of an entity with an SDNTK designation from the SDN list. See our OFAC update for the details. OFAC also published a new Kingpin Act/Panama-related General License.

The FDIC has released the ratings received by 67 state nonmember banks recently evaluated for compliance with the Community Reinvestment Act. Three of the banks were rated outstanding, 63 were found to be satisfactory, and one obtained a needs to improve rating.

The Federal Reserve Board has announced it has approved an advance notice of proposed rulemaking (ANPR) inviting comment on conceptual frameworks for capital standards that could apply to systemically important insurance companies and to insurance companies that own a bank or thrift. The Board also approved a proposed rule that would apply enhanced prudential standards to systemically important insurance companies designated by the Financial Stability Oversight Council.

Update: The ANPR on Capital Requirements for Supervised Institutions Significantly Engaged in Insurance Activities was published at 81 FR 38631 on June 14, 2016. Comments are due August 17, 2016. The proposed rule on Enhanced Prudential Standards for Systemically Important Insurance Companies was published at 81 FR 38610 on June 14, 2016. Comments are due August 17, 2016.

Update: On 7/25/16, the Board announced an extension of the comment period through September 16, 2016.

The OCC has released a list of the CRA evaluation ratings received by 21 national banks and federal savings associations that became public during May. Five received an outstanding rating, fifteen were rated satisfactory and one garnered a needs to improve rating.

OFAC has announced the designation of two pro-government officials, Marius Ngendabanka and Ignace Sibomana, and one member of an armed opposition group, Edouard Nshimirimana, for engaging in actions or policies that threaten the peace, security, or stability of Burundi. See our OFAC Update for additional information

The SEC has announced an order charging Albert Fried & Company, a Wall Street based brokerage firm, with failing to sufficiently evaluate or monitor customers’ trading for suspicious activity as required under the federal securities laws. An SEC investigation found the firm failed to file SARs for more than five years despite red flags tied to its customers’ high-volume liquidations of low-priced securities. The firm agreed to pay a $300,000 CMP to settle the charges.

• SEC order

The OCC has released its schedule of Community Reinvestment Act (CRA) evaluations to be conducted in the third quarter of 2016.