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The FDIC released on Friday a list of orders of administrative enforcement actions taken against banks and individuals in December. The FDIC issued a total of 29 orders, including one from November 2016, and two notices. The administrative enforcement actions in those orders consisted of five consent orders; five removal and prohibition orders; twelve Section 19 orders; four civil money penalties; two terminations of consent orders and cease and desist orders; one termination of insurance; one modification; and two notices.

• First State Bank of Illinois, Peoria, was assessed a civil money penalty of $32,500 for multiple flood insurance rules violations.
• A Camargo, Oklahoma, bank owner and his wife, a director, received a Notice of the FDIC's intention to prohibit them from further participation, intent to order restitution, and to assess penalties totaling $210,000 in connection with a complex overdraft scheme in violation of Regulation O that allegedly cost the bank $1.7 million, misappropriation of over $650,000 in bank fees, and $600,000 in unauthorized dividends from the bank.
• The EVP and Chief Banking Officer of a North Carolina bank was issued a Notice of Charges and Hearing with the FDIC's intent to prohibit him from further participation and to assess a $70,000 civil money penalty for his involvement in a fraudulent loan to a nominee borrower, the proceeds of which benefited a third party and ended with a charge-off of over $105,000.

The Securities and Exchange Commission has announced its issuance of an order requiring Citigroup Global Markets to pay $18.3 million to settle charges that it overbilled investment advisory clients and misplaced client contracts. The SEC’s order finds that at least 60,000 advisory clients were overcharged approximately $18 million in unauthorized fees because Citigroup failed to confirm the accuracy of billing rates entered into its computer systems in comparison to fee rates outlined in client contracts, billing histories, and other documents. Citigroup also improperly collected fees during time periods when clients suspended their accounts. The billing errors occurred during a 15-year period, and the affected clients have since been reimbursed.

The FDIC has announced that Kathy L .Moe has been named the agency's San Francisco Regional Director.

Nonghyup Bank, Seoul, Korea, and its New York City branch have executed a written agreement with the Federal Reserve Bank of New York. A recent examination of the branch identified deficiencies relating to the branch’s risk management and compliance with applicable federal and state laws, rules, and regulations relating to anti-money laundering compliance, including the Bank Secrecy Act rules and regulations.

The Department of Housing and Urban Development has announced agreements with two insurance companies, McGowan and Company, Fairview Park, Ohio, and Mack, Mack & Waltz Insurance Group, Deerfield Beach, Florida, settling allegations the companies violated the Fair Housing Act by denying insurance coverage to properties that include "subsidized housing" and "low-income housing." The agreements stemmed from a Secretary-Initiated complaint HUD filed after receiving reports the insurance companies’ policies and practices had a discriminatory effect based on race and national origin. Specifically, HUD’s complaint alleged that the companies refused to provide umbrella coverage, which provides additional liability coverage when an insured’s other primary policy limits have been reached, to properties containing subsidized or low-income housing.

The Securities and Exchange Commission has reported that Morgan Stanley Smith Barney and Citigroup Global Markets have each agreed to pay more than $2.96 million to settle charges that they made false and misleading statements about a foreign exchange trading program they sold to investors. The Commission found that Morgan Stanley and Citigroup violated the Securities Act of 1933, which prohibits obtaining money or property by means of any material misstatement or omission in the offer or sale of securities. Without admitting or denying the SEC’s findings, Morgan Stanley and Citigroup each agreed to pay disgorgement of $624,458.27 plus interest of $89,277.34 and a penalty of $2.25 million for a total of more than $5.9 million combined.

The Federal Trade Commission has announced the issuance of a stipulated final order resolving charges the Commission and the State of Florida brought in April 2016 against Chastity Valdes and her companies, Consumer Assistance LLC, Consumer Assistance Project Corp., and Palermo Global LLC. The defendants allegedly lured borrowers with false promises of eliminating their student loan debts and repairing their credit, and then charged illegal up-front fees; and posted positive online reviews of their services to appear as if customers wrote them.

The OCC has issued Bulletin 2017-7 on examination procedures supplementing OCC Bulletin 2013-29, “Third-Party Relationships: Risk Management Guidance,” issued October 30, 2013. The supplemental procedures promote consistency when examining national banks and federal savings associations' risk management of third-party relationships. These procedures are designed to help examiners:

• tailor the examination of each bank commensurate with the level of risk and complexity of the bank’s third-party relationships
• assess the quantity of the bank’s risk associated with its third-party relationships
• assess the quality of the bank’s risk management of third-party relationships involving critical activities
• determine whether there is an effective risk management process throughout the life cycle of the third-party relationship

The federal banking agencies (FRB,FDIC, and OCC) have levied a $65M civil money penalty on ServiceLink Holdings, LLC (ServiceLink Holdings), for improper actions by its predecessor company, Lender Processing Services, Inc. (LPS) that resulted in significant deficiencies in the foreclosure-related services that LPS provided to mortgage servicers. See "ServiceLink Holdings LLC fined $65M" in our Penalties pages for additional information.

The CFPB has announced it has taken separate actions against CitiFinancial Servicing and CitiMortgage, Inc.. subsidiaries of Citigroup, Inc., for giving the runaround to struggling homeowners seeking options to save their homes. The mortgage servicers kept borrowers in the dark about options to avoid foreclosure or burdened them with excessive paperwork demands in applying for foreclosure relief, according to the Bureau's press release. The CFPB is requiring CitiMortgage to pay an estimated $17 million to compensate wronged consumers, and pay a civil penalty of $3 million; and requiring CitiFinancial Services to refund approximately $4.4 million to consumers, and pay a civil penalty of $4.4 million. For additional information, see "Citigroup subs pay for mortgage servicing practices," in our Penalties pages.