Top Story Compliance Related

OCC Bulletin 2018=20, issued yesterday, announces a revision of the “Capital and Dividends” booklet of the Comptroller’s Handbook. The booklet provides guidance to examiners for assessing banks’ capital adequacy and compliance with capital and dividend regulations. The revised booklet:

• reflects changes to the regulatory capital rule.
• reflects the integration of the Office of Thrift Supervision into the OCC.
• includes expanded examination procedures for capital, dividends, and capital adequacy.
• includes an internal control questionnaire and verification procedures.
• incorporates the information in OCC Bulletin 2012-16, “Capital Planning: Guidance for Evaluating Capital Planning and Adequacy.”

The U.S. Department of State, with Treasury and Homeland Security, have issued an advisory to highlight the sanctions evasion tactics used by North Korea that could expose businesses – including manufacturers, buyers, and service providers – to sanctions compliance risks under U.S. or United Nations sanctions authorities. This advisory also assists businesses in complying with the requirements under the Korean Interdiction and Modernization of Sanctions Act of the Countering America’s Adversaries Through Sanctions Act (CAATSA).

The CFPB has announced the filing of a proposed settlement with TCF National Bank related to the bank's marketing and sale of overdraft services. TCF is headquartered in Wayzata, Minnesota, and operates approximately 318 retail branches across Minnesota, Wisconsin, Illinois, Michigan, Colorado, Arizona, and South Dakota.

Banks are required to obtain a consumer’s consent before they can lawfully charge overdraft fees on one-time debit purchases and ATM withdrawals. The Bureau alleged in its lawsuit that, when attempting to obtain this consent, TCF obscured the fees it charged and made consenting to overdraft fees seem mandatory for new customers to open an account. TCF has agreed to pay $25 million in restitution to customers who were charged overdraft fees and has agreed to an injunction to prevent future violations. The proposed order, filed Friday, would also impose a civil money penalty of $5 million. This penalty would be adjusted to account for a $3 million penalty imposed by the OCC in a separate order.

See also TCF paying $5 million CMP and restitution

The OCC has released a list of enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. Included were:

• A cease and desist order issued to UBS AG, Zurich, Switzerland, for failure to adopt and implement an adequate BSA/AML compliance program at U.S.branches in New York, Connecticut and Florida.
• Consent orders for a $15,000 civil money penalty (CMP) issued to a former senior vice president and a $35,000 CMP issued to an executive vice president of Gibraltar Private Bank & Trust Company regarding the opening and management of AML high-risk customer accounts.
• Three CMP orders totaling $30,000 against two current vice presidents and the former senior vice president of an Oklahoma bank’s Wealth Management Department for mishandling a default by one of the bank's municipal bond clients. The SVP was also issued a removal and prohibition order.
• A removal and prohibition order against the former lead teller of a Virginia bank who made unauthorized withdrawals from two bank customers’ accounts.

The Securities and Exchange Commission (“Commission”) is proposing for public comment [83 FR 34702] several amendments to the Commission's rules implementing its whistleblower program. The proposed rules would make certain changes and clarifications to the existing rules, as well as several technical amendments. The Commission included proposed interpretive guidance concerning the terms “unreasonable delay” and “independent analysis.” Comments are due by September 18.

Acting CFPB Director Mulvaney has announced the selection of Paul Watkins to lead its new Office of Innovation. The Office, created recently to focus on encouraging consumer-friendly innovation, is taking over work previously assigned to Project Catalyst.

The SEC has announced that New York-based broker-dealer BGC Financial has agreed to pay a $1.25 million penalty to settle charges that it failed to preserve audio files sought by the SEC and inaccurately recorded travel, entertainment, and other expenses.

For more information, see our Penalty page.

The Federal Trade Commission testified yesterday before the Senate Banking, Housing and Urban Affairs Committee that the enforcement of the Fair Credit Reporting Act remains a top priority, and outlined the agency’s efforts to educate consumers and businesses about the law's requirements.

FDIC FIL-38-2018, issued yesterday, announced that the FDIC is implementing revisions to currently approved interagency forms, based on the recommendations of an interagency working group comprising representatives from the FDIC, the Fed, and the OCC. The changes were made to improve the clarity of the requests, reflect new laws and other requirements, remove unneeded information and provide transparency for filers regarding the information required for consideration of a proposal. The updated forms can be used immediately for applicable future applications filed with the FDIC.

• Interagency Biographical and Financial Report
• Interagency Bank Merger Act Application
• Interagency Notice of Change in Control
• Interagency Notice of Change in Director or Senior Executive Officer

Secretary of State Pompeo has published a notice designating al-Ashtar Brigades (AAB), a/k/a Saraya al-Ashtar, a foreign terrorist organization under section 219 of the Immigration and Nationality Act. OFAC has added AAB to its SDN List.