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03/19/2020

OFAC actions on Wednesday

On Wednesday, March 18, OFAC designated four individuals and nine entities under its Counter terrorism and Iran-related sanctions programs.

See BankersOnline's OFAC Update for the names and identifying information for the designated individuals and entities.

03/18/2020

Comments requested on Industrial Bank proposed rule

The FDIC is seeking comment on a proposed rule that would require certain conditions and commitments for approval or non-objection to certain filings involving an industrial bank or industrial loan company (ILC) whose parent company is not subject to consolidated supervision by the Federal Reserve Board. The proposed rule would apply to deposit insurance, change in bank control, and merger filings that involve industrial banks.

The proposal would require a covered parent company to enter into written agreements with the FDIC and the industrial bank to: address the company's relationship with the industrial bank; require capital and liquidity support from the parent to the industrial bank; and establish appropriate recordkeeping and reporting requirements. The proposed rule would codify the FDIC's current supervisory processes and policies with respect to covered industrial banks and ensure the safe and sound operation of these institutions as well as provide the necessary transparency regarding the FDIC's supervisory practices.

A Fact Sheet and statements from Chairman McWilliams and Board Member Gruenberg were also posted. Comments will be accepted for 60 days following Federal Register publication.

03/18/2020

Regulator actions to support household lending

The Fed, FDIC, and OCC have issued a joint press release announcing the following two actions to support the U.S. economy and allow banks to continue lending to households and businesses:

  • A statement encouraging banks to use their resources to support households and businesses; and
  • A technical change to phase in gradually, as intended, the automatic distribution restrictions if a firm's capital levels decline.

The technical rule will be effective upon publication. Issued as an interim final rule, it will have a 45-day comment period. UPDATE: Published at 85 FR 15909 on 3/20/20, with a comment period ending 5/4/20.

03/18/2020

Fed issues Regulatory Capital/Stress Test Rules

The Federal Reserve Board has published [85 FR 15576] a final rule that simplifies the Board's capital framework while preserving strong capital requirements for large firms. The final rule would integrate the Board's regulatory capital rule (capital rule) with the Comprehensive Capital Analysis and Review (CCAR), as implemented through the Board's capital plan rule (capital plan rule). The final rule makes amendments to the capital rule, capital plan rule, stress test rules, and Stress Testing Policy Statement. Under the final rule, the Board will use the results of its supervisory stress test to establish the size of a firm's stress capital buffer requirement, which replaces the static 2.5 percent of risk-weighted assets component of a firm's capital conservation buffer requirement.

The rule, which amends Regulations Q, Y and YY, becomes effective May 18, 2020.

03/18/2020

OFAC actions on March 17

On Tuesday, OFAC added one individual to its Specially Designated Nationals List under Syria-related Executive Order 13894, and removed a number of listings from that list, four of which were also removed from OFAC's Foreign Sanctions Evaders List. The individuals and entities affected are identified in BankersOnline's OFAC Update..

03/17/2020

Fed revises internal appeals and ombudsman policies

The Board of Governors of the Federal Reserve System has published [85 FR 15175] a final policy revising its internal appeals process for institutions wishing to appeal an adverse material supervisory determination and its policy regarding the Ombudsman for the Federal Reserve System. The final appeals process will apply to all material supervisory determination appeals initiated after the effective date, which is April 1, 2020.

03/17/2020

FinCEN urges communication of concerns related to COVID-19

FinCEN has released a notice encouraging financial institutions to communicate COVID-19-related concerns and to stay alert to related illicit activity, similar to fraudulent transactions that occur in the wake of natural disasters. FinCEN is monitoring public reports and BSA reports of suspect behavior connected to COVID-19, and has noted some emerging trends:

  • Imposter Scams – Bad actors attempt to solicit donations, steal personal information, or distribute malware by impersonating government agencies (e.g., Centers for Disease Control and Prevention), international organizations (e.g., World Health Organization), or healthcare organizations.
  • Investment Scams – The SEC urged investors to be wary of COVID-19-related investment scams, such as promotions that falsely claim that the products or services of publicly traded companies can prevent, detect, or cure coronavirus.
  • Product Scams – The FTC and FDA have issued public statements and warning letters to companies selling unapproved or misbranded products that make false health claims pertaining to COVID-19. Additionally, FinCEN has received reports regarding fraudulent marketing of COVID-19-related supplies, such as certain facemasks.
  • Insider Trading – FinCEN has received reports regarding suspected COVID-19-related insider trading.

FinCEN reminded institutions of its Advisory, FIN-2017-A007, "Advisory to Financial Institutions Regarding Disaster-Related Fraud" (October 31, 2017), for descriptions of other relevant typologies, such as benefits fraud, charities fraud, and cyber-related fraud.

For suspected suspicious transactions linked to COVID-19, along with checking the appropriate suspicious activity report-template (SAR-template) box(es) for certain typologies, FinCEN also encourages financial institutions to enter “COVID19” in Field 2 of the SAR template.

03/13/2020

OCC revises Deposit-Related Credit booklet

OCC Bulletin 2020-14, issued yesterday, announces a full revision of the "Deposit Related Credit" booklet of the Comptroller's Handbook, which is prepared for use by OCC examiners in connection with the examination and supervision of national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.

Version 3.0 of the booklet replaces the booklet of the same title and rescinds OCC Bulletin 2018-28, “Deposit-Related Credit: Updated Comptroller’s Handbook Booklet,” which transmitted version 2.1 of the booklet in September 2018. The newest version:

  • reflects relevant OCC issuances published since this booklet was last issued
  • reflects changes to laws and regulations that occurred since this booklet was last issued
  • clarifies applicability of references to covered savings associations
  • includes clarifying edits regarding supervisory guidance, sound risk management practices, or legal language
  • revises certain content for general clarity

03/13/2020

Regulators statement following Tennessee tornadoes

The OCC, Federal Reserve, FDIC, NCUA and the Tennessee Department of Financial Institutions have issued a joint press release stating they recognize the serious impact of tornadoes in Tennessee on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities. A complete list of affected disaster areas can be found at http://www.fema.gov/.

The release offers information on:

  • Lending
  • Use of temporary facilities
  • Publishing requirements relating to branch closings, relocations and temporary facilities
  • Regulatory reporting requirements
  • Community Reinvestment Act consideration for financial institutions' actions
  • Investments

The FDIC has also issued FIL-16-2020 with steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Tennessee affected by severe storms, tornadoes, straight-line winds and flooding.

03/13/2020

Another Russian oil broker targeted

OFAC has announced the designation of TNK Trading International S.A. (TTI) for operating in the oil sector of the Venezuelan economy.

TTI, incorporated in Switzerland, is a subsidiary of Russian state-controlled Rosneft Oil Company. Following the February 18, 2020, Treasury designation of Rosneft Trading S.A. (RTSA), cargoes of Venezuelan oil allocated to RTSA were changed to TTI in order to evade U.S. sanctions.

Identification information can be found in BankersOnline's OFAC Update.

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