Top Story Compliance Related

The Consumer Financial Protection Bureau has announced the release of a plan to assess the effectiveness of the Remittance Rule. The CFPB is requesting public comment, including information that would help the assessment. Comments on the plan will be due 60 days after it is published in the Federal Register.

Update: The Bureau's request for public comments is scheduled for publication on 3/24/17. Comments will be accepted through Tuesday, 5/23/17.

The Office of the Comptroller of the Currency has released a list of enforcement actions taken from late January through the end of February 2017 against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. Among those actions were:

• the $1 million CMP (combined with a $7 million penalty ordered by FinCEN) announced earlier against Merchants Bank of California, N.A.
• a cease and desist order and a $1 million CMP for UDAP violations of Section 5 of the Federal Trade Commission Act against First Tennessee Bank, N.A., in connection with billing and marketing, with a third party vendor, of an identity protection product
• a $5,000 CMP and prohibition order issued to a former Tulsa, Oklahoma, banker for misconduct with regard to 15 municipal bond accounts for which the banker's employer served as trustee
• a $5,000 CMP and cease and desist order issued to a former Ohio loan officer for providing false documents and making false or misleading statement in connection with a fraudulent loan, and for misrepresenting to a potential borrower that the Ohio bank had approved a $500,000 line of credit

The Office of the Comptroller of the Currency has released a draft Licensing Manual supplement for evaluating charter applications form financial technology companies. A summary of comments and explanatory statement were also released. Comments will be accepted through April 14, 2017.

The Consumer Financial Protection Bureau announced Wednesday that it has ordered Nationstar Mortgage LLC, of Coppell, Texas, to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014, and to take the necessary steps to improve its compliance management and prevent future violations. According to 2014 data, Nationstar was the ninth-largest HMDA reporter by total mortgage originations, the sixth largest by applications received, and the 13th largest by money lent. From 2010 to 2014, Nationstar’s number of HMDA mortgage loans increased by nearly 900 percent.

The Bureau reported that, in its supervision process, it found that Nationstar’s HMDA compliance systems were flawed, and generated mortgage lending data with significant, preventable errors. Nationstar also failed to maintain detailed HMDA data collection and validation procedures, and failed to implement adequate compliance procedures. It also produced discrepancies by failing to consistently define data among its various lines of business. The Nationstar reporting samples reviewed by the CFPB showed substantial error rates in three consecutive reporting years, even after a settlement with the Massachusetts Division of Banks over faulty HMDA reporting was reached in 2011. In the samples reviewed, the CFPB found error rates of 13 percent in 2012, 33 percent in 2013, and 21 percent in 2014.

See "Nationstar Mortgage pays $1.75M HMDA penalty" in our Penalties section, for additional information.

The CFPB's previously announced proposal to delay for six months the effective date of its Prepaid Accounts rule was published in this morning's Federal Register. The 21-day comment period ends on April 5, 2017.

OFAC has announced it has taken action against al-Nusrah Front (ANF) and al-Qa'ida (AQ) facilitator Muhammad Hadi al-'Anizi (al-'Anizi). The Kuwaiti-based terrorist financier is being designated as a Specially Designated Global Terrorist (SDGT) pursuant to Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. As a result of today’s action, all property and interests in property of al-'Anizi subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with him. See our OFAC Update for additional information.

The FDIC has announced enhancements to its Money Smart for Older Adults curriculum that provide new information and resources to help older adults and their caregivers avoid financial exploitation through fraud and scams. Money Smart for Older Adults identifies common types of elder financial exploitation, such as imposter scams and identity theft, and is designed to inform adults age 62 or older and their caregivers about ways to prevent, identify, and respond to financial exploitation. Also included is information on how older adults can plan for a secure financial future and make informed financial decisions. Money Smart for Older Adults was developed jointly by the FDIC and the Consumer Financial Protection Bureau (CFPB) in response to the financial exploitation of senior citizens.

In remarks at the Institute of International Bankers’ Annual Washington Conference, Comptroller Curry discussed the value of international collaboration and professional bank supervision. He also stressed the importance of maintaining safeguards that have helped restore health and confidence to the federal banking system since the crisis of 2008.

In remarks delivered as part of the Distinguished Banking and Finance Lecture Series at Central Connecticut State University, Comptroller of the Currency Thomas J. Curry discussed the condition of the federal banking system, highlighted the importance of diversity in the federal banking system and what the Office of the Comptroller of the Currency has done to support community banking. The Comptroller also discussed proposals to exempt community banks from the Volcker Rule and ways to make it easier for thrifts, including mutuals, to expand their business models without changing their governance structures.

The CFPB has announced the selection of thirty organizations to join the Your Money, Your Goals cohort. These organizations will receive training and technical assistance on how to use the Bureau's Your Money, Your Goals financial empowerment materials. The new cohort includes federal, state, and local government agencies, organizations working in native communities, social services, legal aid, faith-based, and worker organizations, as well as organizations serving people with disabilities.