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Remittance transfer providers settle with CFPB

The Consumer Financial Protection Bureau has announced settlements with Trans-Fast Remittance LLC and Sigue Corporation and its subsidiaries, SGS Corporation and GroupEx Corporation. Trans-Fast is a former remittance transfer provider based in New York City, and was licensed in over 30 states. Sigue and its subsidiaries, which are all headquartered in Sylmar, California, provide consumers with international money-transfer services, including remittance-transfer services.

The Bureau found that Trans-Fast and Sigue and its subsidiaries violated the Electronic Fund Transfer Act (EFTA) and the Remittance Transfer Rule, which implements EFTA. The Bureau also found that Trans-Fast violated the Consumer Financial Protection Act of 2010’s (CFPA) prohibition against deceptive acts or practices. The consent orders require the companies to pay civil money penalties and impose requirements to prevent future violations. Sigue and its subsidiaries must also pay consumer redress.

Details of the Bureau's findings, the settlements, and links to the settlement orders can be found in our BankersOnline Penalties page.


FDIC posts CRA exam schedules

The FDIC has released its CRA examination schedules for the fourth quarter of 2020 and first quarter of 2021. CRA regulations require each federal bank and thrift regulator to publish its quarterly CRA examination schedule at least 30 days before the beginning of each quarter.


FDIC July enforcement actions

The FDIC has released a list of Enforcement Decisions and Orders for the month of July 2020.

  • A consent cease and desist order was issued to Unity Bank, Clinton, New Jersey, relating to the bank's BSA/AML and OFAC compliance programs.
  • A former bookkeeper at Bank of Morton, Morton, Mississippi, was issued a consent order of prohibition from further participation, upon the FDIC's determination that she misappropriated bank funds by manipulating various accounts at the bank to make unauthorized fund transfers to benefit herself and her family members.


Herbalife pays $123M for FCPA violations

The Securities and Exchange Commission has announced that Herbalife Nutrition Ltd. has agreed to pay more than $67.3 million to settle SEC charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA). In a parallel action, the U.S. Department of Justice and the U.S. Attorney’s Office for the Southern District of New York announced that Herbalife will pay a criminal fine of more than $57 million for a total of more than $123 million paid in both actions.

The SEC’s order finds that Herbalife’s Chinese subsidiaries made payments and provided meals, gifts, and other benefits to Chinese officials in connection with obtaining sales licenses, curtailing government investigations of Herbalife China, and removing negative coverage of Herbalife China in state-owned media. As set forth in the order, Herbalife China managers asked employees to falsify expense documents in an effort to conceal the improper payments. The order finds that Herbalife executives received reports of high travel and entertainment spending in China and violations of Herbalife’s internal FCPA policies, but failed to detect and prevent improper payments and benefits and the falsified expense reports. The order further finds that the improper payments and benefits were recorded inaccurately in Herbalife’s books and records and that Herbalife failed to devise and maintain a sufficient system of internal accounting controls.


FDIC updates Risk Management Manual

The FDIC has issued updates to its Risk Management Manual of Examination Policies Section 22.1 (Examination Documentation Modules), with revisions to the Securities and Derivatives module, including changes for the Allowance for Credit Losses and other minor technical edits.


Iowa storm-related relief

FDIC FIL-81-2020 provides guidance concerning steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Iowa affected by severe storms on or about August 10, 2020.

A federal disaster for selected areas in Iowa was declared on August 17, 2020. Additional designations may be made after damage assessments are completed in the affected areas. A current list of designated areas is available at

The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather. Extending repayment terms, restructuring existing loans, or easing terms for new loans, if done in a manner consistent with sound banking practices, can contribute to the health of the local community and serve the long-term interests of the lending institution.

Banks may receive favorable Community Reinvestment Act consideration for community development loans, investments, and services in support of disaster recovery. The FDIC also will consider regulatory relief from certain filing and publishing requirements


Agencies finalize three interim rules

The Federal Reserve Board, FDIC, and OCC have finalized three rules, which are either identical or substantially similar to interim final rules currently in effect that were issued earlier this year. They include:

Press releases:


EBSA hearing on investment advice exemption proposal

The Employee Benefit Security Administration of the Department of Labor has announced a public hearing to consider issues attendant to adopting a proposed prohibited transaction class exemption on Improving Investment Advice for Workers and Retirees. The proposal, published [85 FR 40834] on July 7, 2020, would create a prohibited transaction exemption for investment advice fiduciaries that would provide relief that is broader and more flexible than the Department's existing exemptions, provide regulatory certainty and streamline regulatory requirements because investment advice fiduciaries could comply with one exemption for a variety of different types of transactions.

The hearing will be held on September 3 and (if necessary) September 4, 2020, beginning at 9 a.m. EDT. Requests to testify at the hearing on the proposed exemption should be submitted to the Department on or before August 28, 2020. Instructions for submitting a request to testify are included in the Federal Register hearing notice.


False info on hearing aids and stimulus payment claims

The Federal Trade Commission has announced that the Commission and the State of Wisconsin have sent warning letters to a company that placed newspaper advertisements and social media posts suggesting it could provide government stimulus money to customers to purchase their hearing aids.

The letters highlight claims included in the ads and posts that implied consumers were eligible for such a benefit, including language such as “COVID-19 HEALTHCARE STIMULUS PROGRAM” and “Receive up to $3000 through our HEALTHCARE STIMULUS PROGRAM. Must register by July 31.” The ads and posts also included an image of the Great Seal of the United States next to a headline reading “FREE HEARING AIDS.”

The letters warn the recipients to cease making all deceptive claims and instruct them to notify the FTC and State of Wisconsin within 48 hours about the specific actions they have taken to address the concerns raised in the letters.


CFPB settles with company over false loan ads

The Bureau has issued a consent order against Go Direct Lenders, Inc., a California corporation licensed as a mortgage broker or lender in about 11 states. The Bureau found that Go Direct sent consumers numerous mailers for VA-guaranteed mortgages that contained false, misleading, and inaccurate statements or that lacked required disclosures, in violation of the Consumer Financial Protection Act’s prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule (MAP Rule), and Regulation Z.

Specifically, the Bureau found that Go Direct advertisements:

  • misrepresented the credit terms of the advertised mortgage loan by stating credit terms that the company was not actually prepared to offer to the consumer, including advertising a lower annual percentage rate than it was prepared to offer
  • made misrepresentations about the applicable fees in connection with the advertised mortgage
  • misleadingly described variable-rate loans as “fixed” rate loans, when in fact the rate was adjustable and could increase over time
  • falsely stated or implied that an appraisal, assets, and income documentation were not required to qualify for certain loans and that consumers with FICO scores as low as 500 would qualify for the advertised rates
  • falsely represented that it had records showing that the value of the consumer’s property had increased over the past year by a specific percentage
  • created the false impression that Go Direct was affiliated with the government by using words, phrases, images, or design characteristics that are associated with the VA or the Internal Revenue Service
  • failed to properly disclose, when required by Regulation Z, credit terms for the advertised mortgage, such as the consumer’s repayment obligations over the full term of the loan.

The consent order requires Go Direct to pay a civil money penalty of $150,000 and imposes requirements to prevent future violations.


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