Top Story Compliance Related

Acting Comptroller of the Currency Keith A. Noreika discussed efforts to reduce regulatory burden and expand economic opportunity. In his remarks at the Midsize Bank Coalition of America Chief Risk Officer meeting in Dallas, the Acting Comptroller also highlighted risks facing those banks and the federal banking system.

The OCC will host two workshops at the Holiday Inn Louisville Airport, Louisville, Kentucky, November 14-15, for directors of national community banks and federal savings associations.The Credit Risk workshop on November 14 focuses on credit risk within the loan portfolio. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change. The Operational Risk workshop on November 15 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, and cybersecurity.

The Community Reinvestment Act compliance evaluation performance ratings received by 31 national banks and federal saving associations have been released by the OCC. The evaluations, which were made public in September, included four "outstanding" ratings, 26 "satisfactory" ratings, and one "needs to improve."

OFAC has deleted entries (including aliases) for four individuals and one entity from the SDN List. In addition, changes have been made to entries of seven entities. For specific information see BankersOnline's OFAC Update.

With less than two weeks to go before implementation (if taking advantage of the Bureau's guidance suggesting that implementation three days early is a good idea), the CFPB has announced an interim final rule tweaking one of the early intervention (§ 1024.39 of Regulation X) changes effective October 19. The change only affects servicers who are subject to the Fair Debt Collection Practices Act with respect to mortgage loans on which consumers have invoked their cease communication rights, and it provides a 10-day window for delivery of a modified written early intervention notice under certain specific situations. The interim rule, which has been posted to BOL's Regulations pages for Regulation X, is effective October 19. Comments on the interim rule are due within 30 days of Federal Register publication.

The Bureau also announced a proposed rule that would amend new § 1026.41(e)(5) to adjust the timing requirement for the transition to and from modified periodic statements or coupon books in connection with a consumer's bankruptcy case, in order to alleviate unintended challenges in implementation. Comments on the proposal will be accepted for 30 days following publication in the Federal Register. Any final rule will be effective April 19, 2018.

• Interim final rule amending § 1024.39(d)(3)(iii) of Regulation X
• Proposed rule to amend § 1026.41(e)(5) if Regulation Z

UPDATE: The INTERIM FINAL RULE was published [82 FR 47953] in the Federal Register on October 16, 2017, with comments due by November 15, 2017.
UPDATE: The PROPOSED RULE was published [82 FR 48463] in the Federal Register on October 18, 2017, with a 30-day comment period ending November 17, 2017.

FinCEN has posted a notice that financial institutions affected by Hurricanes Harvey, Irma, and Maria should contact FinCEN and their functional regulators as soon as practicable to discuss any delays in their ability to file required Bank Secrecy Act reports. Institutions seeking to contact FinCEN should call the FinCEN Resource Center at 1-800-949-2732 and select option 8 or e-mail the Resource Center at FRC@fincen.gov.

OFAC has posted a Frequently Asked Question (FAQ) explaining what constitutes “profit” for the purposes of Subsection 1(a)(iv) of Executive Order 13808 (“Imposing Additional Sanctions With Respect to the Situation in Venezuela").

FinCEN has published [82 FR 45182] corrections to the Certification Form in Appendix A to 31 CFR 1010.230 (Beneficial ownership requirements for legal entity customers). FinCEN indicated that all the changes were technical corrections. The corrections were described as follows in the Federal Register document:

"As revised, appendix A (Certification Form) is identical to the original version except for the following: In the first sentence in Part I under the heading “What information do I have to provide?”, the term “foreign persons” is changed to “non-U.S. persons”; and in Part II: The heading of Section II b. is changed to “b. Name, Type, and Address of Legal Entity for Which the Account is Being Opened:”; and in the headings of the last column in the Tables in Section II c and Section II d, the term “Foreign Persons” is changed to “Non-U.S. Persons” and the term “Social Security Number” is added after the term “persons”; and in footnote 1, the term “Foreign Persons” is changed to “Non-U.S. Persons” and “a Social Security Number,” is inserted after the word “provide”.

A quick analysis of the changes suggests that the addition of the "type" of legal entity business (corporation, LLC, etc.) as a required piece of information and of "Social Security number" as an acceptable identifying number for non-U.S. persons will require adjustments in the implementation plans of financial institutions and third-party service providers.

BankersOnline has updated the form in Appendix A to § 1010.230 in its Regulations pages.

The FDIC has released a list of orders of administrative enforcement actions taken against banks and individuals in August 2017. There were a total of 22 orders, four notices, including one notice issued in May, and one adjudicated decision. The administrative enforcement actions in those orders consisted of two consent orders; three removal and prohibition orders; seven Section 19 orders; one civil money penalty; one termination of insurance; eight terminations of consent orders; four notices; and one adjudicated decision.

Under the adjudicated decision, the FDIC Board issued an order removing a board member and former president of an Amarillo, Texas, bank, prohibiting him from participation in the banking industry, and assessing a $200,000 civil money penalty for violations of Regulation O, engaging in unsafe and unsound banking practices, and breaching his fiduciary duties. See our Penalty page for details. There was also an order assessing a $21,000 penalty against a California bank for engaging in a pattern or practice of violations of flood insurance requirements. The three removal/prohibition orders were issued against individuals formerly affiliated with banks in Fort Walton Beach, Florida, Medota, Illinois, and Fort Pierce, Florida.

Notices of charges and hearing are preliminary notices of penalties for which the respondent individual or bank has a right to request a hearing before an Administrative Law Judge. The May 2017 notice was issued to a Louisiana bank alleged to have engaged in an extensive pattern or practice of flood insurance-related violations. The three notices issued in August involve pending removal/prohibition orders issued against two individuals affiliated with a Laredo, Texas, bank, and one individual affiliated with a bank in Everett, Massachusetts.

The Securities and Exchange Commission is providing regulatory relief to publicly traded companies, investment companies, accountants, transfer agents, municipal advisors and others affected by Hurricanes Harvey, Irma and Maria. The loss of property, power, transportation, and mail delivery due to the hurricanes poses challenges for some individuals that are required to provide information to the SEC and shareholders.