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Top Story Compliance Related

11/06/2020

CFPB issues no-action letter to BofA

The CFPB announced yesterday it has granted a no-action letter (NAL) to Bank of America, N.A. regarding certain small-dollar credit products. The NAL provides increased regulatory certainty that the Bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances. Bank of America’s NAL application is based on the NAL Template issued by the Bureau on May 22, 2020 in response to an application from the Bank Policy Institute. The Bureau approved the NAL Template to further competition in the small-dollar lending space, which fosters access to credit while including important protections for consumers who seek small-dollar loan products.

11/06/2020

FinCEN renews GTOs

The Financial Crimes Enforcement Network (FinCEN) has announced the renewal of its Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate. The renewed GTOs are identical to the May 2020 GTOs. The purchase amount threshold remains $300,000 for each covered metropolitan area. The terms of this Order are effective beginning November 6, 2020 and ending on May 4, 2021.

The new GTOs cover certain counties within these major U.S. metropolitan areas: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.

FinCEN's GTOs do not require banks to take any action. We report on them because they may affect a bank's customers.

11/06/2020

OCC Director’s Toolkit updated

The OCC has announced the update of its Director’s Toolkit to help bank directors for national banks and federal savings associations fulfill their corporate governance responsibilities. The Toolkit is a helpful guide for bank directors on strategic issues, risk management, and compliance responsibilities. The updated toolkit includes a revised Director's Book: Role of Directors for National Banks and Federal Savings Associations and adds a new publication, the Director’s Reference Guide to Board Reports and Information.

11/05/2020

FDIC CRA ratings released

The FDIC has posted a list of 72 banks recently evaluated for compliance with the Community Reinvestment Act. The list covers evaluation ratings that the FDIC assigned to institutions in August 2020. Sixty-six banks received a Satisfactory rating, and we congratulate the following six banks, which were rated Outstanding:

11/05/2020

Servicemembers consumer protection webinar

The NCUA and the CFPB will co-host a webinar on financial literacy and consumer financial protections for servicemembers. The November 18 “Financial Readiness Resources and Information for Servicemembers, Veterans, and their Families" webinar is scheduled to begin at 2 p.m. ET and run approximately 45 minutes. Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. Registration is now open.

The NCUA’s Office of Consumer Financial Protection will share financial literacy resources for servicemembers and their families on MyCreditUnion.gov, and provide a brief overview of servicemember consumer financial protection laws and regulations. The CFPB’s Office of Servicemember Affairs will highlight their interactive learning tools and resources for servicemembers and their families.

11/03/2020

SMART payment plan deception ends in CFPB settlement

The CFPB has issued a consent order against SMART Payment Plan, LLC (Austin, Texas), after finding that the company's disclosures of its loan accelerator program were misleading and in violation of the Consumer Financial Protection Act's prohibition against deceptive acts or practices. SMART operates a loan payment accelerator program for auto loans called the SMART Plan that deducts payments from consumers’ bank accounts every two weeks and then forwards these payments every month to the consumers’ lenders. The consent order imposes a judgment against SMART requiring it to pay $7,500,000 in consumer redress and requirements to prevent future violations.

SMART provided consumers individualized “benefits summaries” that purported to state a specific amount of interest savings or other money savings consumers would get by enrolling in the SMART Plan, but SMART’s fees would ordinarily exceed the savings. SMART’s disclosures thus created the misleading impression that consumers would save money using its product.

The ordered consumer redress has been suspended upon SMART's payment of $1,500,000 by December 31, and a $1 civil money penalty to the Bureau (based on SMART'S inability to pay more based on sworn financial statements.

For additional information and a link to the Bureau's consent order, see "SMART Payment Plan LLC settles with Bureau over misleading statements" in the BankersOnline Penalty pages.

11/03/2020

NCUA fair lending and consumer compliance webinar announced

The NCUA has announced it will host a webinar on November 17, 2020, on a range of fair lending and consumer compliance topics. Registration for the “Fair Lending and Consumer Compliance Regulatory Update” webinar is open. The session is scheduled to begin at 3 p.m. Eastern Time and last approximately 60 minutes. The webinar will be closed-captioned and archived online approximately three weeks following the live event.

11/03/2020

OCC CRA evaluations released

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public in October (links are to the evaluation reports):

Of the 22 evaluations listed, 16 were rated satisfactory. We congratulate the six banks whose evaluations were rated outstanding:

11/03/2020

OFAC advisory on risks in dealing in costly artwork

OFAC has issued an "Advisory and Guidance on Potential Sanctions Risks Arising from Dealings in High-Value Artwork," to highlight sanctions risks arising from dealings in high-value artwork associated with persons blocked pursuant to OFAC’s authorities, including persons on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List). Such transactions may play a role in blocked persons accessing the U.S. market and financial system in violation of OFAC regulations.

The advisory describes characteristics of the market for high-value artwork that pose sanctions risks; emphasizes to art galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market the importance of maintaining a risk-based compliance program to mitigate such risks; and highlights that what is commonly described as the "Berman Amendment" to the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) does not categorically exempt all dealings in artwork from OFAC regulation and enforcement.

11/02/2020

FDIC September enforcement orders

The FDIC has issued a list of enforcement orders issued in September, 2020.

  • Banks in Sauk City ($18,500) and Berlin ($15,375), Wisconsin, paid civil money penalties for flood insurance violations
  • The former president of Enloe State Bank, Cooper, Texas (now in receivership) was issued a prohibition order, after an FDIC finding that she originated a significant number of fictitious loans from which she benefited and that led to the bank's financial losses.
  • A former branch manager for First Community Bank, Batesville, Arkansas, was issued a prohibition order after an FDIC finding that she had made unauthorized and fraudulent withdrawals from bank customers' certificate of deposit accounts, from which she received financial gain or other benefit.
  • A former commercial lender for Synovus Bank, Columbus, Georgia, was issued a prohibition order for misappropriation of funds through the creation of a fictitious line of credit, and unauthorized draws from a customer's line of credit and from another customer's account.

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