Top Story Compliance Related

The Federal Reserve Board announced on August 1 that it has entered into Written Agreements with Mesquite Financial Services, Inc., Alice, Texas, and the Texas Department of Banking; and with Federal One Holdings, LLC and Admirals Bancorp, Inc., of Milton and Boston, Massachusetts, respectively. The Board also announced the termination of a Written Agreement with First St. Charles Bancshares, Inc., Boutte, Louisiana.

Attorneys general from 19 states and the District of Columbia have sent a letter to Senate Majority Leader Mitch McConnell and Senate Minority Leader Charles Schumer expressing their opposition to S.J. Res. 47, the measure under consideration by the Senate under the Congressional Review Act to disapprove (and thereby void) the CFPB's final arbitration rule.

The OCC has issued a statement by Acting Comptroller of the Currency Keith Noreika regarding the Consumer Financial Protection Bureau’s (CFPB) final rule on arbitration agreements. He expressed concerns that the rule may adversely affect the institutions within the federal banking system and their customers. He said that the rule "may have unintended consequences for banking customers in the form of decreased availability of products and services, increased related costs, fewer options to remedy consumer concerns, and delayed resolution of consumer issues."

Noreika expressed his hope that Congress will use its Congressional Review Act authority "to preserve effective alternatives for consumers to resolve their disputes without lengthy and costly litigation and to reduce the 'piling on' of legal and regulatory burden" that Noreika discussed in his June 22, 2017, testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs.

The CFPB issued a compliance bulletin on Monday warning companies about tricking consumers into expensive pay-by-phone fees. The Bureau said it is concerned about companies potentially misleading consumers about the purpose and amount of certain pay-by-phone fees or keeping them in the dark about much cheaper payment options. The bulletin also reviews guidelines to help consumer financial companies comply with the law.

• Bureau press release

On Monday, July 31, 2017, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated the President of Venezuela, Nicolas Maduro Moros, pursuant to Executive Order 13692, which authorizes sanctions against current or former officials of the Government of Venezuela and others undermining democracy in Venezuela. This means that all assets of Nicolas Maduro subject to U.S. jurisdiction are frozen, and U.S. persons are prohibited from dealing with him. For identification information, see our OFAC Update

The FDIC has amended its regulations regarding Recordkeeping Requirements for Qualified Financial Contracts ("Part 371"), which require insured depository institutions (“IDIs”) in a troubled condition to keep records relating to qualified financial contracts (“QFCs”) to which they are party. The amendments were published in today's Federal Register at 82 FR 35584, with an effective date of October 1, 2017.

The Federal Trade Commission, state, and local authorities will convene the Protecting Military Consumers: A Common Ground Conference in Los Angeles on September 7, 2017, to help educate military consumers and train military attorneys, law enforcement personnel, and consumer protection officials to address consumer fraud and other issues that affect servicemembers and their families. The conference will discuss current and emerging issues affecting servicemembers and their families such as student loans and for-profit colleges, identity theft, imposter scams, debt collections, mortgage disputes and real estate fraud.

Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned six Iran-based subordinates of Shahid Hemmat Industrial Group (SHIG), an entity central to Iran’s ballistic missile program, in response to Iran’s continued provocative actions. The companies were designated pursuant to the global counter-proliferation Executive Order (E.O.) 13382 for being owned or controlled by SHIG. SHIG, which is responsible for the development and production of Iran’s liquid propellant ballistic missiles, is listed in the Annex to E.O. 13382 and is currently sanctioned by the United Nations and the European Union.

As a result of this action, all property and interests in property of those designated today subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. In addition, foreign financial institutions that facilitate significant transactions for, or persons that provide material or certain other support to, the entities designated today risk exposure to sanctions that could sever their access to the U.S. financial system or block their property and interests in property under U.S. jurisdiction.

For identification of the six sanctioned entities, see our OFAC Update.

The FDIC has released a list of 23 administrative enforcement orders issued in June. Those orders included one consent order, four removal and prohibition orders, 13 Section 19 orders, two civil money penalties and three terminations of prior enforcement actions. A Michigan bank was assessed a $3,600 CMP under the Flood Disaster Protection Act, and a former institution-affiliated party of a Chicago, Illinois, bank in receivership was assessed a CMP of $16,000 for unspecified reasons. The same individual was issued a removal/prohibition order based on the FDIC's belief he had "engaged or participated in violations of laws, regulations, or orders issued by the FDIC, unsafe or unsound banking practices, or breaches of fiduciary duty" involving personal dishonesty.

The SEC has issued an Order charging the Halliburton Company with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA) while selecting and making payments to a local company in Angola in the course of winning lucrative oilfield services contracts. Halliburton, which profited by approximately $14 million from the deals, has agreed to pay more than $29.2 million to settle the SEC’s case. The company also agreed to obtain an independent compliance consultant to oversee its anti-corruption policies and procedures in Africa. Former Halliburton vice president Jeannot Lorenz has agreed to pay a $75,000 penalty for causing the company’s violations, circumventing internal accounting controls, and falsifying books and records.