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Top Story Compliance Related

03/05/2021

FATF guidance on risk-based approach to AML/CFT supervision

The Financial Action Task Force (FATF) has issued "Guidance for a Risk-Based Approach" to AML/CFT supervisors to help them address the full spectrum of risks and focus resources where the risks are highest. A risk-based approach is less burdensome on lower risk sectors or activities, which is critical for maintaining or increasing financial inclusion.

03/05/2021

Comptroller’s Handbook revised

The OCC has issued Bulletin 2012-11 announcing a revised “Servicemembers Civil Relief Act” booklet for the Comptroller’s Handbook. This booklet provides information and procedures for examiners in connection with the consumer protections that servicemembers are eligible for under the Act.

03/04/2021

FDIC releases strategic plan for diversity, equity and inclusion

The FDIC has released the agency’s latest strategic plan to incorporate and promote diversity, equity, and inclusion (DEI) in every aspect of its mission and operations, and among the financial institutions it supervises.

03/04/2021

Winter storm relief for Oklahoma financial institutions

FDIC FIL-13-2021, issued yesterday, announced guidance on steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Oklahoma affected by severe winter storms. The Federal Emergency Management Agency (FEMA) declared a federal disaster for selected areas affected in Oklahoma on February 24, 2021. FEMA may make additional designations after damage assessments are completed in the affected areas. A current list of designated areas is available at www.fema.gov.

The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe winter storms. Banks that extend repayment terms, restructure existing loans, or ease terms for new loans 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.

03/04/2021

CFPB sues third-party payment processor

The Consumer Financial Protection Bureau announced on Wednesday it has filed a lawsuit against BrightSpeed Solutions Inc. and its founder and former chief executive officer, Kevin Howard, for knowingly processing payments for companies engaged in internet-based technical-support fraud. Chicago-based BrightSpeed was a privately owned, third-party payment processor founded and operated by Howard in 2015. It wound down business operations in March 2019.

In its complaint, the Bureau alleges that, between 2016 and 2018, Howard and BrightSpeed knowingly processed payments for client companies that purported to offer technical-support services and products over the internet, but instead tricked consumers, often older Americans, into purchasing expensive and unnecessary antivirus software or services. The CFPB alleges that Howard’s and BrightSpeed’s actions were unfair practices in violation of the Consumer Financial Protection Act of 2010 and deceptive telemarketing practices in violation of the Telemarketing Sales Rule. The complaint seeks injunctions against BrightSpeed and Howard, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.

BrightSpeed and Howard processed remotely created check payments for more than 100 client companies totaling more than $71 million. The CFPB alleges that many of BrightSpeed’s client companies purported to provide antivirus software and technical-support services to consumers, but instead scammed them into purchasing unnecessary and expensive computer software and services for amounts sometimes as high as $2,000. BrightSpeed’s clients sold their products and services through telemarketing and received payment through remotely created checks. The CFPB alleges that BrightSpeed and Howard continued to process the scammers’ remotely created check payments for months and, in some cases, years. BrightSpeed and Howard did so despite being aware of nearly 1,000 consumer complaints, several inquiries from police departments around the country, and return rates averaging more than 20%.

03/04/2021

OFAC targets drug cartel facilitator

The Treasury Department has announced that OFAC has designated Mexican national Juan Manuel Abouzaid El Bayeh as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). OFAC designated Abouzaid El Bayeh for his high-level role in facilitating drug shipments and money laundering for the Cartel de Jalisco Nueva Generacion (CJNG), a violent Mexican drug trafficking organization that is responsible for trafficking a significant proportion of the fentanyl and other deadly drugs that enter the United States. Identification information on Abouzaid El Bayeh can be found in yesterday's BankersOnline OFAC Update.

Since June 2000, more than 2,200 entities and individuals have been sanctioned pursuant to the Kingpin Act for their role in international narcotics trafficking. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,503,470 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

03/03/2021

OFAC sanctions Yemeni militants and Russian officials

The Treasury Department announced yesterday that OFAC has sanctioned two key militants of the Iranian-backed Ansarallah, sometimes referred to as the Houthis, whose actions have prolonged Yemen’s civil war and exacerbated the country’s humanitarian crisis. Treasury said that Mansur Al-Sa’adi and Ahmad ‘Ali Ahsan al-Hamzi are responsible for orchestrating attacks by Houthi forces impacting Yemeni civilians, bordering nations, and commercial vessels in international waters. Those actions, which were done to advance the Iranian regime’s destabilizing agenda, have fueled the Yemeni conflict, displacing more than one million people and pushing Yemen to the brink of famine.

Treasury also announced that OFAC joined the U.S. Departments of State and Commerce in imposing sanctions in response to Russia’s poisoning and subsequent imprisonment of Russian opposition figure Aleksey Navalny. Specifically, OFAC designated seven Russian government officials: Federal Security Service (FSB) Director Aleksandr Bortnikov, Chief of the Presidential Policy Directorate Andrei Yarin, First Deputy Chief of Staff of the Presidential Executive Office Sergei Kiriyenko, Deputy Minister of Defense Aleksey Krivoruchko, Deputy Minister of Defense Pavel Popov, Federal Penitentiary Service (FSIN) director Alexander Kalashnikov, and Prosecutor General Igor Krasnov pursuant to Executive Order 13661 for serving as officials of the Russian government. OFAC also designated Bortnikov pursuant to E.O. 13382 for acting or purporting to act for or on behalf of, directly or indirectly, the Federal Security Service (FSB).

Identify information for those designated by these two OFAC actions can be found in yesterday's BankersOnline OFAC Update.

03/03/2021

OCC issues three Outstanding CRA ratings

The OCC has released a list of 13 Community Reinvestment Act performance evaluations that were made public in February. Nine of the evaluations listed were rated satisfactory and one was rated needs to improve. Our congratulations to these three banks whose evaluations received outstanding ratings:

03/02/2021

Whistleblowers awarded over $500,000

The Securities and Exchange Commission has announced an award of over $500,000 to two whistleblowers whose tips revealed an ongoing fraud and resulted in multiple SEC actions and a related action from another government agency. Both whistleblowers provided substantial, ongoing assistance that conserved the agencies’ time and resources.

Approximately $753 million has been awarded to 140 individuals since the SEC issued its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the Commission by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the Commission with original, timely, and credible information that leads to a successful enforcement action. Awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

03/02/2021

FEMA schedules community suspensions from flood program

FEMA has published [86 FR 12117] in the March 2, 2021, Federal Register a notice that communities in Florida, Minnesota, Missouri and Ohio have been scheduled for suspension from the National Flood Insurance Program on March 9, 2021, for noncompliance with the floodplain management requirements of the program. The communities listed are:

  • Florida: Port St. Joe and unincorporated areas of Gulf County
  • Minnesota: Plummer and unincorporated areas of Red Lake County
  • Missouri: Unincorporated areas of St. Charles County
  • Ohio: Amherst, Avon Lake, Defiance, Lorain, Sheffield, Sheffield Lake, Vermilion, and unincorporated areas of Lorain County

If FEMA receives before March 9 the required documentation that a listed community has adopted the floodplain management requirements, the community will not be suspended.

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