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Top Story Compliance Related

10/02/2020

OCC releases CRA ratings

The OCC has released a list of CRA performance evaluations that became public during September. Of the 12 evaluations made public this month, one is rated needs to improve, 10 are rated satisfactory, and one - Inwood National Bank, Dallas, Texas, was rated outstanding.

10/02/2020

OCC 2021 bank supervision operating plan

The OCC yesterday released its bank supervision operating plan for fiscal year 2021. The plan provides the foundation for policy initiatives and for supervisory strategies as applied to individual national banks, federal savings associations, federal branches, federal agencies, and technology service providers. OCC staff members use this plan to guide their supervisory priorities, planning, and resource allocations.

Supervisory strategies for FY 2021 will focus on:

  • credit risk management, commercial and residential real estate concentration risk management, allowances for loan and lease losses, and allowances for credit losses
  • cybersecurity and operational resilience
  • BSA/AML compliance management
  • compliance risk management associated with 2020 pandemic-related bank activities
  • Community Reinvestment Act performance
  • fair lending examinations and risk assessments
  • the impact of a low-rate environment and preparation for the phaseout of LIBOR
  • proper oversight of significant third-party relationships
  • change management over significant operational changes
  • payment systems products and services

    10/02/2020

    Fed Written Agreement with Pennsylvania bank

    The Federal Reserve Board has announced the execution of a Written Agreement with Atlantic Community Bankers Bank, Camp Hill, Pennsylvania, regarding deficiencies in the bank's program for compliance with BSA/AML requirements.

    10/02/2020

    OFAC settles with travel assistance company

    OFAC has announced a settlement with Generali Global Assistance, Inc. (GGA), a New York-incorporated travel assistance services company. GGA agreed to remit $5,864,860 to settle its potential civil liability for 2,593 apparent violations of the Cuban Assets Control Regulations. GGA intentionally referred Cuba-related payments to its Canadian affiliate, thereby avoiding processing reimbursement payments directly to Cuban parties and to travelers while they were located in Cuba. GGA subsequently reimbursed its Canadian affiliate for those payments.

    The statutory maximum civil monetary penalty applicable in this matter is $168,545,000. OFAC determined, however, that GGA voluntarily self-disclosed the Apparent Violations and that the Apparent Violations constitute an egregious case. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (“Enforcement Guidelines”), the base civil monetary penalty amount applicable in this matter is $84,272,500. The settlement amount of $5,864,860 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines.

    In its notice of the settlement, OFAC said this enforcement action highlights the importance of ensuring that sanctions compliance policies and procedures address both direct and indirect sanctions compliance risks, and in particular, highlights the risks of implementing a procedure to process, indirectly, transactions whose direct processing would be prohibited by U.S. sanctions.

    10/01/2020

    FinCEN seeks comments on CDD and EDD requirements

    FinCEN published [85 FR 61104] in the September 29 Federal Register a 60-day notice to renew the Office of Management and Budget (OMB) control number assigned to the regulatory requirements to conduct due diligence and enhanced due diligence over foreign correspondent accounts and private banking accounts.

    In the notice, FinCEN proposes for review and comment a methodology to expand the scope of future estimates of cost and time for purposes of the Paperwork Reduction Act to be more granular in the estimates of resources expended to comply with these regulatory requirements. The notice requests feedback from the industry on or before November 30, 2020.

    10/01/2020

    Morgan Stanley pays $5M for SHO violations

    The SEC announced yesterday it had settled charges against Morgan Stanley & Co. LLC for violations of Regulation SHO, the regulatory framework governing short sales. According to the SEC’s order, the structure of Morgan Stanley’s prime brokerage swaps business resulted in violations of teh regulation. As set forth in the SEC Administrative Order, Morgan Stanley hedged synthetic exposure to swaps by purchasing or selling the securities referenced in the swaps, and it separated its hedges into two aggregation units – one holding only long positions, and the other holding only short positions. According to the order, Morgan Stanley was able to sell its hedges on the long swaps and mark them as “long” sales without concern for Reg SHO’s short sale requirements.

    10/01/2020

    OCC updates TILA exam procedures booklet

    The OCC has issued Bulletin 2020-84 announcing its issuance of a revised "Truth in Lending Act" booklet of the Comptroller's Handbook to reflect revised interagency examination procedures adopted by the Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council (FFIEC). The Bulletin rescinds OCC Bulletin 2018-31, “Truth in Lending Act: Revised Comptroller's Handbook Booklet and Rescissions.”

    10/01/2020

    New and amended OFAC sanctions regulations

    OFAC has posted a notice of recent actions announcing it is adding new Part 520 to 31 CFR Chapter V regulations [85 FR 61816] to implement Executive Order 13928 of June 11, 2020 (“Blocking Property of Certain Persons Associated With the International Criminal Court”).

    In addition, OFAC is amending the Weapons of Mass Destruction Proliferators Sanctions Regulations and Iranian Transactions and Sanctions Regulations at 31 CFR Parts 544 and 560 [85 FR 61823].

    The new regulation and the amendments to Parts 544 and 560 are effective upon publication today in the Federal Register,

    10/01/2020

    Fed proposes update to capital planning requirements

    The Federal Reserve Board has invited public comment on a proposal that would update the Board's capital planning and stress testing requirements in Regulations Y, LL, and YY to be consistent with other Board rules that were recently modified.

    The Board has finalized a framework that sorts large banks into different categories based on their risks, with rules that are tailored to the risks of each category. The current proposal updates the Board's capital planning requirements—which help ensure that firms plan for and determine their capital needs under a range of different scenarios—to reflect that new framework. In particular, firms in the lowest risk category are on a two-year stress test cycle and not subject to company-run stress test requirements and the proposal reflects those changes. The proposal also would seek comment on the Board's existing capital planning guidance applicable to all firms.

    The proposed rule, which would not change firms' capital requirements, has a comment period that will end November 20, 2020.

    PUBLICATION UPDATE: Published at 85 FR 63222 in the October 7, 2020, Federal Register

    10/01/2020

    Treasury continues targeting facilitators of Assad regime

    On Wednesday, Treasury announced that it took action against key enablers of the Assad regime that are associated with the Fourth Division of the Syrian Arab Army, the Syrian General Intelligence Directorate, and the Central Bank of Syria. Specifically, Treasury's Office of Foreign Assets Control (OFAC) added three individuals and 13 entities to the Specially Designated Nationals and Blocked Persons List, pursuant to Syria sanctions authorities.

    At the same time, the State Department acted against three Syrian persons pursuant to Section 2 of Executive Order (E.O.) 13894, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria.”

    For identity information on the six individuals and 13 entities added to the SDN List, and another individual added under the Cuba sanctions, plus information on a new Syria General License, see BankersOnline's OFAC Update.

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