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Top Story Compliance Related

05/13/2022

FDIC Board to meet May 17

The FDIC has published [87 FR 29314] a notice of a meeting of its Board to be held at 10 a.m. on Tuesday, May 17, 2022. The meeting will be open to the public by webcast only, and available on-demand about one week later. Matters to be considered include:

  • a memorandum and resolution regarding amendments to the Guidelines for Appeals of Material Supervisory Determinations
  • a memorandum and resolution regarding a final rule on False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC's Name or Logo

05/12/2022

Revised interagency Q&As on flood insurance

Five federal agencies — the Federal Reserve Board, Farm Credit Administration, FDIC, NCUA, and OCC — on Wednesday announced jointly issued Questions and Answers Regarding Flood Insurance (Q&As) on federal flood insurance law and the agencies’ implementing regulations. These Q&As replace those originally published by the agencies in 2009 and 2011 and consolidate Q&As proposed by the agencies in 2020 and 2021. The revised Q&As reflect significant changes to the flood insurance requirements made by federal law in recent years.

The Q&As cover a broad range of technical flood insurance topics, including the escrow of flood insurance premiums, the detached structure exemption to the flood insurance purchase requirement, force placement procedures, and private flood insurance.

In addition, the agencies reorganized the Q&As by topic to make it easier for users to find and review information related to flood insurance.

05/12/2022

CFPB bans scammers and orders them to pay $11M+

The CFPB announced Wednesday it had finalized an enforcement action against debt-relief payment-processors RAM Payment and Account Management Systems (AMS), as well as AMS’s co-founders, Gregory Winters and Stephen Chaya, for collecting debt-relief fees from consumers, lying to consumers about when the fees would be paid to debt-relief companies, and sending illegal advance fees to debt-relief companies before they were legally allowed to do so. The Bureau also said AMS failed to return funds to consumers who cancelled student-loan debt relief agreements, as required by law. The CFPB is ordering RAM Payment, AMS, Winters, and Chaya to pay more than $11 million in consumer redress and civil money penalties.

Knoxville, Tennessee-based AMS and RAM Payment provided account maintenance and payment-processing services to about 270,000 consumers across the U.S. who were enrolled in debt relief programs. Winters and Chaya co-founded AMS. RAM Payment acquired AMS in 2019. After the acquisition, Winters and Chaya continued to manage AMS and RAM Payment, and they exercised substantial control over the companies’ business practices.

Providers of account-maintenance and payment-processing services to debt-relief companies are supposed to be independent, third-party companies that hold fees until debt-relief companies are entitled to them under the law. The CFPB’s investigation found that the respondents violated the Telemarketing Sales Rule and the Consumer Financial Protection Act. The respondents substantially assisted student-loan and traditional debt-relief companies in requesting or accepting advance fees for debt-relief services, misrepresented their payment-processing actions to consumers before disbursing fees to student-loan debt-relief companies, and unfairly disbursed unearned fees for student-loan debt-relief services after consumers had unenrolled from or canceled the services.

Additionally, Winters and Chaya sought to enrich themselves through illegal relationships with an affiliated financing company and debt-relief companies. Winters and Chaya owned a financing company, Account Connect Limited (ACL). For certain debt-relief companies, ACL advanced about 65% of the fees that the companies expected to receive from consumers. ACL recouped these advances from payments consumers made into accounts maintained by AMS and RAM Payment. The respondents deceived consumers by failing to disclose this conflict-of-interest between the respondents and ACL. Instead, the respondents falsely represented that AMS and RAM Payment provided services as independent third-party companies. They also illegally kept money held in consumers’ accounts when consumers cancelled or unenrolled from ACL-funded student-loan debt-relief services with companies.

The CFPB's consent order:

  • Requires the respondents to refund $8.7 million to consumers enrolled in student-loan debt-relief services
  • Issues industry bans against AMS, Winters, and Chaya and requires RAM Payment to stop providing services to both student-loan debt-relief companies and debt-relief companies receiving funding from or owned by an affiliated company, stop paying commissions to third-party marketing companies for consumer referrals, and consent to the CFPB’s supervisory authority.
  • Requires the respondents to pay a $3 million fine

05/10/2022

SEC extends comment period on climate-related disclosures proposal

The Securities and Exchange Commission has announced that it has extended the public comment period on the proposed rulemaking to enhance and standardize climate-related disclosures for investors until June 17, 2022. The proposal, originally published on April 11, 2022, had a comment period that would have ended on May 20.

05/10/2022

OFAC targets network supporting ISIS in Syria

Treasury has announced that OFAC has designated a network of five Islamic State of Iraq and Syria (ISIS) financial facilitators operating across Indonesia, Syria, and Turkey. For names and identification information, see our May 9, 2022, OFAC Update.

05/10/2022

OCC Customer Assistance Group address change

The OCC has issued Bulletin 2022-15 announcing a final rule to update the mailing address of its Customer Assistance Group (CAG) in the appendix of 12 CFR Part 14.

The final rule amends Appendix A to 12 CFR 14 by removing the prior physical mailing address for the OCC’s CAG (1301 McKinney Street, Suite 3450, Houston, Texas 77010-3031) and replacing it with the current mailing address (P.O. Box 53570, Houston, Texas 77052).

The OCC's Bulletin 2021-35, issued August 5, 2021, updated the CAG address information with respect to the Community Reinvestment Act, Fair Housing Act, and Equal Credit Opportunity Act. No change was made at that time to 12 CFR Part 14, which governs consumer protection in sales of insurance.

05/10/2022

CFPB Advisory Opinion on coverage of ECOA

On Monday, the CFPB published an advisory opinion to affirm that the Equal Credit Opportunity Act (ECOA) bars lenders from discriminating against customers after they have received a loan, not just during the application process.

ECOA bans credit discrimination on the basis of race, color, religion, national origin, sex, marital status, and age. It also protects those who are receiving money from any public assistance program or exercising their rights under certain consumer protection laws. The CFPB issued Monday’s advisory opinion and accompanying analysis to clarify that ECOA protects people from discrimination in all aspects of a credit arrangement. The advisory opinion is consistent with a recent legal brief filed by the CFPB, the Federal Trade Commission, the Federal Reserve Board of Governors, and the U.S. Department of Justice.

05/09/2022

Federal Reserve posts Supervision and Regulation Report

The Federal Reserve System has posted its May 6, 2022, Supervision and Regulation Report, which summarizes banking conditions and the Federal Reserve’s supervisory and regulatory activities, in conjunction with semiannual testimony before Congress by the Vice Chair for Supervision.

05/09/2022

FTC shuts down 'The Credit Game' as scam

At the request of the Federal Trade Commission, a federal court has temporarily halted a bogus credit repair scheme known as The Credit Game for promoting a series of lies and deceptions. The FTC alleged the scheme’s operators lied to credit reporting agencies regarding information on consumers’ credit reports and pitched consumers a supposed business opportunity that was essentially starting their own bogus credit repair scheme.

In a complaint filed against The Credit Game and its owners, Michael and Valerie Rando, the FTC alleged that the company has illegally charged consumers hundreds and even thousands of dollars for credit repair services of little to no value and told consumers to “invest” their COVID-19 governmental benefits on their unlawful services. In some cases, the company’s “services” included filing false identity theft reports with the FTC and encouraging consumers to take actions that were unlawful. The FTC asked the court to immediately halt the company’s illegal operations, appoint a receiver, and freeze the defendants’ assets. The court issued a temporary restraining order doing so on May 3, 2022.

In addition to the core credit repair scheme, the defendants have also taken advantage of the ongoing pandemic by telling consumers to “invest” pandemic tax benefits into their credit repair schemes. One advertisement used the headline “Free Credit Repair From The Government.”

05/09/2022

Agencies schedule CRA update webinar

On Wednesday, May 11, 2022 3:00 p.m. ET, policy experts from the FDIC, OCC, and Federal Reserve System will host a special Ask the Regulators webinar on their notice of proposed rulemaking to strengthen and modernize CRA regulations. During the webinar, the agencies will provide an overview of the proposal and its objectives. Topics will include assessment areas, qualified activities, evaluation framework, ratings, and data collection and reporting.

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