Top Story Compliance Related

The CFPB, in observance of the anniversary of the Equal Credit Opportunity Act (ECOA), has published an article, "What you need to know about the Equal Credit Opportunity Act and how it can help you: Why it was passed and what it is," the first of two articles on ECOA scheduled for the observance.

The FTC has announced that a federal judge has banned from the collection business a group of debt collectors who pretended to be affiliated with the government, and ordered them to pay nearly $11 million, after granting the Federal Trade Commission’s request for summary judgment in a case filed by the agency. The action is part of Operation Collection Protection, a continuing nationwide crackdown on collectors whose illegal tactics include harassing phone calls and false threats of lawsuits and arrest.

The National Credit Union Administration announced it issued five orders of prohibition in October to individuals who have been convicted of crimes of dishonesty and, as a result, are prohibited from participating in the affairs of any federally insured financial institution.

• a former employee of a Manistique, Michigan, credit union who had pleaded no contest to charges of embezzlement and larceny, and had been sentenced to prison and ordered to pay restitution of $9,399;
• a former employee of a Glens Falls, New York, credit union who had pleaded guilty to the charges of grand larceny and falsifying business records, and had been sentenced to prison and ordered to pay restitution of $8,071;
• a former employee of a Toledo, Ohio, credit union who had pleaded guilty to the charges of theft and embezzlement, and had been sentenced to prison and ordered to make restitution of $251,438;
• a former employee of Fairfield, Iowa, credit union who had consented to the issuance of the prohibition order to settle and resolve the NCUA Board's claims against her; and
• a former employee of a Lenexa, Kansas, credit union who had pleaded guilty to charges of wire fraud and embezzlement, and had been sentenced to time served, and ordered to pay restitution of $34,035.

The Financial Acton Task Force (FATF) has released a report on terrorist financing in West and Central Africa. The report looks at the confirmed and suspected funding sources of terrorist groups that are operating in this region. It identifies the terrorist financing risks that are unique to the region, such as cattle rustling. Cash, including foreign currency, also plays an important role in terrorist financing in the West and Central African region. The report identifies challenges that the region faces to regulate financial products and sectors, and emphasizes the need for better cross-border collaboration.

Federal Reserve Financial Services has issued updates to previous authorizations for early U.S. Savings Bond redemptions for counties in North Carolina and Florida affected by severe weather. Each of the notices includes updates to the list of counties affected.

On Friday, October 28, the FDIC released a list of 14 administrative enforcement actions taken against banks and individuals in September. The list consisted of three consent orders; one combined civil money penalty and removal and prohibition order; five Section 19 orders; one voluntary termination of deposit insurance order; and four terminations of consent orders or cease and desist orders.

The Order of Prohibition from Further Participation and to Pay a $5,000 Civil Money Penalty was imposed on a former institution-affiliated party of a Utah bank who "has engaged or participated in violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2607, and its implementing regulation, Regulation X, 12 C.F.R. Part 1024, and/or has engaged or participated in, unsafe or unsound banking practices, and/or breaches of fiduciary duty as an institution-affiliated party of [the bank] by agreeing to pay fees for the referral of mortgage loan business."

The Order of Termination of Insurance was issued in the Matter of Mid America Bank, Janesville, Wisconsin, which the FDIC determined "is not engaged in the business of receiving deposits, other than trust funds."

The Office of the Comptroller of the Currency has released a new list of enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. There were three Cease and Desist (C&D) Orders, seven Civil Money Penalty (CMP) Orders, one Formal Agreement, four Removal/Prohibition Orders, and two Orders for Restitution, including:

• The $20 million CMP and C&D Orders relating to violations of the Servicemembers Civil Relief Act issued to Wells Fargo Bank, announced earlier
• A $2 million CMP issued to First Niagara Bank, for deceptive disclosures relating to overdraft fees
• A consent order banning a former Minnesota bank director from the industry and assessing a $20,000 CMP
• An order banning a former California banker from the industry, and assessing a CMP of $25,000
• Orders banning two former New Mexico bankers and ordering a total of $17,500 in CMPs
• An Order that a former Texas bank director pay a $5,000 CMP for Regulation O violations

The Department of Labor announced yesterday it has published the first in a series of FAQs to be published concerning its "Conflict of Interest" rules regarding retirement investment advice.

The CFPB has issued warning letters to 44 mortgage lenders and mortgage brokers. The Bureau has information that appears to show the lenders and brokers may be required to collect, record, and report data about their housing-related lending activity, and that they may be in violation of those requirements. The CFPB identified the 44 companies by reviewing available bank and nonbank mortgage data. The warning letters warned that entities that meet certain requirements are required to collect, record, and report mortgage lending data, and suggested that recipients review their practices to ensure they comply with all relevant laws. The companies are encouraged to respond to the Bureau to advise if they have taken, or will take, steps to ensure compliance with the law. They can also tell the Bureau if they think the law does not apply to them. The CFPB, in sending these letters, made no determination that a legal violation did, in fact, occur.

The NCUA Board met on October 27, 2016, and announced that it unanimously approved five items:

• A proposed rule to provide further field-of-membership community charter options for federal credit unions.
• A final rule modernizing existing field-of-membership definitions for federal credit unions to improve consumer access to affordable credit.
• A final rule re-naming NCUA’s consumer office as the Office of Consumer Financial Protection and Access to clarify its function and role in promoting consumer access to affordable financial services.
• A final rule adjusting civil monetary penalties for inflation, as required by Congress.
• An interagency proposed rule to implement the private flood insurance requirements for loans in special flood hazard areas contained in a 2012 statute.