Top Story Compliance Related

The Office of the Comptroller of the Currency has released its bank supervision operating plan for fiscal year 2018. Strategies for the year will focus on:

• Cybersecurity and operational resiliency
• Commercial and retail credit loan underwriting, concentration risk management, and the allowance for loan and lease losses
• Business model sustainability and viability and strategy changes
• Bank Secrecy Act/anti-money laundering (BSA/AML) compliance management
• Change management to address new regulatory requirements

A final rule on qualified financial contracts has been adopted by the FDIC to enhance the resilience and safety and soundness of state savings associations and banks supervised by the FDIC that are affiliated with systemically important U.S. and foreign banking organizations ("covered FDIC-supervised institutions"). The rule will be effective January 1, 2018.

• FDIC's press release

The OCC, FDIC and Board of Governors have issued a joint press release announcing a proposed rule intended to reduce regulatory burden by simplifying several requirements in the agencies' regulatory capital rule. Most aspects of the proposed rule would apply only to banking organizations that are not subject to the "advanced approaches" in the capital rule, which are generally firms with less than $250 billion in total consolidated assets and less than $10 billion in total foreign exposure. The proposal would simplify and clarify a number of the more complex aspects of the existing capital rule. Comments will be accepted for 60 days following publication.

• Notice of proposed rulemaking
• Community bank summary
• Capital Simplifications NPR estimation tool

OFAC has announced actions taken Tuesday to further disrupt North Korea’s access to the international financial system. OFAC designated eight North Korean banks and 26 individuals linked to North Korean financial networks. The individuals sanctioned are North Korean nationals operating in China, Russia, Libya and the United Arab Emirates who act as representatives of North Korean banks. OFAC also identified two banks as part of the Government of North Korea. As a result of today’s action, any property or interests in property of the designated persons in the possession or control of U.S. persons or within the United States must be blocked.

For identification of the designated individuals and entities, see our OFAC Update.

The Bureau Blog features stories received from servicemembers about problems with debt collections practices and complaints.

OCC Bulletin 2017-28, issued Friday, is a reminder of the earlier announcement by the OCC, FRB, and FDIC seeking comment on a proposed rule that would revise their regulations implementing the Community Reinvestment Act. The proposed rule would amend the CRA regulations' definitions of "home mortgage loan" and "consumer loan" to conform to recent changes made by the Consumer Financial Protection Bureau to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The proposed rule would also amend the CRA public file content requirements for consistency with Regulation C, make technical amendments to remove cross references related to the proposed amended definitions, and remove an obsolete reference to the Neighborhood Stabilization Program. Comments on the proposal are due by October 27, 2017.

The Securities and Exchange Commission has approved interpretive guidance to assist companies in their efforts to comply with the pay ratio disclosure requirement mandated by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection. Under the SEC's Pay Ratio rule, registrants must provide pay ratio disclosure for the first fiscal year beginning on or after January 1, 2017, which means that registrants will begin making pay ratio disclosures in early 2018. In general the rule requires registrants to disclose the ratio of the compensation of its principal executive officer (PEO) to the median employee's compensation.

The OCC has issued Bulletin 2017-37 reminding national banks and federal savings associations of the June 21, 2017, issuance by the OCC, FRB and FDIC of the host state loan-to-deposit (LTD) ratios used to determine compliance with section 109 of the Riegle–Neal Interstate Banking and Branching Efficiency Act of 1994 (IBBEA).

OFAC has announced that two South African men have been designated as SDGTs and their names have been added to the SDN List. For identification information, see our OFAC Update.

The CFPB filed a complaint in federal court and issued a proposed consent order yesterday against Top Notch Funding and two individuals associated with the company for lying in loan offerings to consumers who were awaiting payment from settlements in legal cases or from victim-compensation funds. These consumers included former National Football League players suffering from neurological disorders, victims of the Deepwater Horizon oil-rig disaster, and 9/11 first responders. In the complaint and proposed consent order, the CFPB is seeking to prevent Top Notch, its owner Rory Donadio, and his business associate John "Gene" Cavalli from offering or providing such products in the future, and to require them to pay $70,000 in civil money penalties to the CFPB's Civil Penalty Fund. The proposed penalties take into account the defendants' inability to pay more.

• CFPB press release