Top Story Compliance Related

Wells Fargo Bank, N.A., will pay civil money penalties totaling $185 million and make about $2.5 million in restitution payments for failing to monitor and control a cross-selling incentive program. The CFPB, OCC and the Office of the Los Angeles (California) City Attorney announced on Thursday that they have imposed monetary penalties of $100 million, $35 million and $50 million, respectively, on the bank. The bank encouraged sales of new accounts and services in a program that established sales goals and bonus incentives, and a widespread employee practice developed that boosted sales figures by opening deposit and credit card accounts without customer authorization. The bank determined that as many as two million accounts were opened that may not have been authorized, and stated that about 5,300 employees involved in the scheme have been fired "over the last few years."

The CFPB found the bank's actions to be unfair and abusive under the Consumer Financial Protection Act of 2010. The OCC found the actions to be unsafe and unsound practices. The City of Los Angeles settled a 2015 suit brought against the bank alleging violations of California's Unfair Competition Law.

For more on this story, see "Wells Fargo sales incentives lead to $185M in CMPs," in our Penalties pages.

The Federal Trade Commission has announced that two groups of debt collectors will be banned from the collection business under settlements with the regulator, and one of them will pay more than $4.4 million civil money penalty (CMP) to resolve charges that they conned people into paying debts they did not owe. A stipulated order resolves FTC charges brought in November 2015 against the businesses. See our January 8, 2016, Top Story, "Operation Collection Protection shuts down abusive collectors," for the details. The court had halted the operation, frozen the defendants’ assets, and appointed a receiver to control the business pending litigation.

OFAC has announced a $43,200 settlement with World Class Technology Corporation to settle potential civil liability for alleged violations of the Iranian Transactions and Sanctions Regulations. See "World Class Technology Corp settles OFAC liability," in our Penalties pages, for more information.

The FDIC has posted its September list of banks whose Community Reinvestment Act (CRA) evaluation ratings have recently become public. Three of the listed banks received ratings of "Outstanding." The remaining 57 institutions received ratings of "Satisfactory."

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public during August 2016. The list contains only national banks, federal savings associations, and insured federal branches of foreign banks that have received ratings. The possible ratings are outstanding, satisfactory, needs to improve, and substantial noncompliance. Seven on the list are rated outstanding, 22 are rated satisfactory and one is rated substantial noncompliance.

The OCC has issued its Community Reinvestment Act examination schedule for the fourth quarter of 2016.

OFAC has designated 37 individuals and entities under three Executive Orders (E.O.s) related to Russia and Ukraine. The action is part of OFAC’s ongoing efforts to counter attempts to circumvent sanctions on Russia, to assist the private sector with sanctions compliance, and to foster a diplomatic resolution to the conflict in Ukraine. These sanctions follow the recent extension of European Union sectoral sanctions, and together these steps demonstrate continued international unity in opposing Russia’s actions in Ukraine. Included in the entities added at a number of subsidiaries that are owned 50 percent or more by previously sanctioned Russian companies to provide additional information to assist the private sector with sanctions compliance.

The list includes a number of subsidiaries of Bank of Moscow, Gazprom and Gasprombank, each of which has been sanctioned since July 2014. Each of those subsidiaries is subject to the same sanctions as those imposed on its parent organization.

OFAC also issued a general license to authorize certain transactions for a limited period of time necessary to divest holdings in Mostotrest.

For additional information, see our OFAC Update.

The NCUA has announced it issued five notices of prohibition in August. The affected individuals, who had previously been convicted of crimes of dishonesty, are prohibited from participating in the affairs of any federally insured financial institution. They are former employees or institution-affiliated parties of:

• Portland Maine Police Department Federal Credit Union in Portland, Maine;
• Oshkosh Central Credit Union in Oshkosh, Wisconsin;
• HD York Federal Credit Union in York, Pennsylvania;
• Oil Country Federal Credit Union in Titusville, Pennsylvania; and
• Morehead Community Federal Credit Union in Morehead, Kentucky.

The FDIC has posted the public list of institutions that it has scheduled for a Community Reinvestment Act (CRA) examination during the fourth quarter of 2016. The list is published pursuant to revised CRA regulations published in May 1995 that require each federal bank and thrift regulator to publish a quarterly CRA examination schedule at least 30 days before the beginning of each quarter.

The Federal Trade Commission has published a final rule at 81 FR 59845 in the Federal Register, amending section 310.8 of its Telemarketing Sales Rule (16 CFR Part 310) to update the fees charged to entities accessing the National Do Not Call Registry. The amendment will be effective October 1, 2016.