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Top Story Compliance Related

12/23/2020

OFAC targets Syrian officials and Central Bank of Syria

A Treasury Department press release reports that OFAC has sanctioned a high-ranking official in the Syrian government; her husband, a member of the Syrian People’s Assembly; and their business entities. Further, OFAC added the Central Bank of Syria to the Specially Designated Nationals and Blocked Persons List (SDN List), underscoring its status as a blocked person, and additionally identified the property of other previous blocked persons. In total, OFAC added two individuals, nine business entities, and the Central Bank of Syria to the SDN List, pursuant to Syria sanctions authorities.

The press release also announced that the State Department has designated six Syrian persons in accordance with Executive Order 13894, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria.”

For identification information on the individuals and entities that were designated, and for links to three new Syria-related FAQs, see the BankersOnline OFAC Update.

12/22/2020

Remittance transfer provider to pay $750,000 CMP

The CFPB has issued a Consent Order to Envios de Valores la Nacional Corp. ("La Nacional"), a remittance transfer provider incorporated in New York, headquartered in Colorado, and licensed 33 states and the District of Columbia. La Nacional provides remittance transfers from the U.S. to designated recipients primarily in the Dominican Republic, Mexico, Guatemala, El Salvador, Ecuador, Colombia, Peru, Nigeria, Honduras, and Nicaragua. The Bureau found that, since the Remittance Transfer Rule's effective date in 2013, La Nacional has engaged in thousands of violations of the Remittance Transfer Rule.

The Bureau found that La Nacional violated Regulation E by failing to provide refunds for cancellations and error claims when funds did not reach designated recipients on time, provide consumers reports of investigative findings, and treat international bill payment services as remittance transfers, among other infractions.

Under the Order, La Nacional will pay a $750,000 civil money penalty and correct its policies and practices. For additional details, see Remittance transfer provider settles with CFPB, in BankersOnline's penalty pages.

12/22/2020

Stimulus bill sent to president

Congress has approved and sent to the president for enactment the long-anticipated $900 billion coronavirus relief package in a record-breaking 5,500 plus-page bill. Key provisions affecting banks include:

  • An additional $284 billion in funding for the Paycheck Protection Program, included an option for prior PPP borrowers to obtain additional funds. Fifteen billion dollars were set aside for PPP loans by community financial institutions.
  • A hold-harmless provision for lenders from penalties related to borrower or applicant certifications for PPP loans
  • A simplified forgiveness process for PPP loans up to $150,000
  • A second round of economic impact payments (stimulus checks) for eligible recipients, that will not be subject to garnishment. Treasury Secretary Mnuchin predicts direct deposits of these payments could start next week.
  • An extension of federally-enhanced unemployment insurance payments
  • Extension until January 1, 2022, of the troubled debt restructuring provisions in the CARES Act
  • A delay of CECL implementation until January 1, 2022.

12/22/2020

OCC updates Comptroller's Handbook booklet

OCC Bulletin 2020-109, issued yesterday, introduced version 2.2 of the updated “Foreword” booklet of the Comptroller’s Handbook. The booklet describes the overall organization and format of the Handbook and explains the OCC’s process for issuing new booklets, updating booklets, and fully revising booklets. The updated booklet—

  • clarifies the OCC’s methods for identifying updated content in Comptroller's Handbook booklets
  • revises content for consistency with the Examination Process series of Handbook booklets
  • includes information about the OCC’s adoption of interagency examination procedures and Federal Financial Institutions Examination Council handbooks and manuals

12/22/2020

Bureau Advisory Opinion on special-purpose credit programs

The CFPB has announced it has issued an advisory opinion to address regulatory uncertainty regarding Regulation B, which implements the Equal Credit Opportunity Act, as it applies to certain aspects of special purpose credit programs (SPCPs).

Under Regulation B, discrimination is prohibited on certain prohibited bases in any aspect of a credit transaction, but it is not discrimination for a for-profit organization to provide SPCPs designed to meet special social needs. The creditor offering the SPCP must determine the status of its own program in that regard. The regulation provides general guidance on compliance.

The CFPB has issued its advisory opinion with the hope that more creditors will offer SPCPs and increase access to credit to underserved groups. Specifically, the Bureau seeks to clarify the content that a for-profit organization must include in a written plan that establishes and administers a SPCP under Regulation B. The advisory opinion also clarifies the type of research and data that may be appropriate to inform a for-profit organization’s determination that a SPCP would benefit a certain class of people.

12/22/2020

OFAC adds six to SDN List

Treasury has reported that OFAC has designated the Vice President of the Nicaraguan Supreme Court of Justice, Marvin Ramiro Aguilar Garcia; a Deputy of the National Assembly, Walmaro Antonio Gutierrez Mercado; and a Chief of the Nicaraguan National Police in Leon, Fidel De Jesus Dominguez Alvarez, in an effort to target government officials that continue to assist the Ortega regime’s effort to undermine Nicaragua’s democracy. Those actions were taken under Executive Order 13851, “Blocking Property of Certain Persons Contributing to the Situation in Nicaragua.”

Treasury also reported that OFAC has targeted three entities controlled by the Cuban military with strategic roles in the Cuban economy. Two of the entities, Financiera Cimex S.A. and Kave Coffee, S.A., are subsidiaries of the third entity, the large Cuban government enterprise Grupo de Administración Empresarial S.A., and use their Panamanian incorporation to subvert international trade restrictions. These entities were targeted under the Cuban Assets Control Regulations.

For identification details on the three individuals and three entities targeted by OFAC's actions, see BankersOnline's OFAC Update.

12/21/2020

Bureau issues second piece of FDCPA final rule

On Friday, the CFPB announced a final rule to implement Fair Debt Collection Practices Act (FDCPA) requirements regarding certain disclosures for consumers. The rule requires debt collectors to provide, at the outset of collection communications, detailed disclosures about the consumer’s debt and rights in debt collection, along with information to help consumers respond. The rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers, orally, in writing, or electronically, before reporting information about the debt to a consumer reporting agency (CRA). The rule prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt.

The rule will become effective on November 30, 2021, with the rule reissuing Regulation F published on November 30, 2020.

12/21/2020

Mortgage servicer settles with CFPB

The Bureau has issued a consent order against Seterus, Inc. (Seterus) and Kyanite Services, Inc. (Kyanite), as Seterus’s successor in interest, based on the Bureau’s finding that Seterus violated the Consumer Financial Protection Act of 2010 (CFPA) and Regulation X. The Bureau found that Seterus’s actions resulted in delaying or depriving some borrowers of a reasonable opportunity to get their loss mitigation applications completed and evaluated and in some borrowers' failing to timely receive protections against prohibited foreclosure activities to which they were legally entitled.

The order requires Kyanite to pay $4,932,525 in total redress to approximately 11,866 of the consumers to whom Seterus sent a defective acknowledgment notice. The order also imposes a $500,000 civil money penalty and includes injunctive relief that would apply in the event Kyanite engages in mortgage servicing. At its height, Seterus, a former mortgage servicer based in North Carolina, serviced approximately 500,000 residential mortgage loans. Seterus is no longer operating. On February 28, 2019, after the relevant period covered by the Bureau’s investigation, Seterus was sold and its entire mortgage servicing portfolio was transferred to Nationstar Mortgage LLC, doing business as Mr. Cooper (with which the Bureau reached a separate settlement earlier this month.

12/21/2020

The Bahamas improves AML/CFT standing

The Financial Action Task Force (FATF) has announced The Bahamas has made significant progress in improving its AML/CFT regime. The Bahamas has strengthened the effectiveness of its AML/CFT system and addressed related technical deficiencies to meet the commitments in its action plan and remedy the strategic deficiencies identified by the FATF in October 2018.

12/21/2020

FinCEN proposes virtual currency and digital assets rules

The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has issued a proposed rule to be published Wednesday in the Federal Register that would require banks and money services businesses (MSBs) to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving CVC/LTDA wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.

The proposed rule complements existing BSA requirements applicable to banks and MSBs by proposing to add reporting requirements for CVC and LTDA transactions exceeding $10,000 in value. Pursuant to the proposed rule, banks and MSBs will have 15 days from the date on which a reportable transaction occurs to file a report with FinCEN. Further, the proposed rule would require banks and MSBs to keep records of a customer’s CVC or LTDA transactions and counterparties, including verifying the identity of their customers, if a counterparty uses an unhosted or otherwise covered wallet and the transaction is greater than $3,000.

Comments on this FinCEN proposal will be accepted for only 12 days from publication, through January 4, 2021.

  • Press release
  • PUBLICATION UPDATE: Published at 85 FR 83840 on 12/23/2020.
  • UPDATE: Proposal and comment period changed— On January 15, FinCEN published [86 FR 3897] a supplemental NPR identifying additional authority for its proposed rule, providing additional information regarding the reporting form, and reopening the comment period. FinCEN is providing an additional 17 days (through 2/1/2021) for comments on the proposed reporting requirements regarding information on CVC or LTDA transactions greater than $10,000, or aggregating to greater than $10,000, that involve unhosted wallets or wallets hosted in a jurisdiction identified by FinCEN. FinCEN is providing an additional 45 days (through 3/1/2021) for comments on the proposed requirements that banks and MSBs report certain information regarding counterparties to transactions by their hosted wallet customers, and on the proposed recordkeeping requirements.
  • FURTHER PUBLICATION AND COMMENT PERIOD UPDATE: On 1/28/2021, FinCEN will publish a third notice to combine the two comment periods and extend the comment deadline for 60 days, through 3/29/2021, on all aspects of the proposed rule.

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