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Top Story Compliance Related


FTC informs CFPB of debt collection activities

The Federal Trade Commission has provided the Consumer Financial Protection Bureau (CFPB) with an annual summary of its activities in the debt collection arena. The annual report highlights both agencies’ efforts to stop unlawful debt collection practices, including law enforcement, education and public outreach, and policy initiatives. Among the actions taken to combat unfair, deceptive, and otherwise unlawful debt collection practices in 2020, the FTC:

  • led Operation Corrupt Collector, a nationwide federal/state law enforcement sweep and outreach initiative targeting phantom debt collection and abusive and threatening debt collection practices;
  • filed or resolved 7 cases against 39 defendants, and obtained $26 million in judgments;
  • brought the first federal action combating unlawful “debt parking";
  • banned the operator of a debt collection scheme who engaged in serious and repeated violations of law from ever working in debt collection again;
  • deployed educational materials to inform consumers about their rights, and educate debt collectors about their responsibilities, under the FDCPA and FTC Act; and
  • supplied 15,755 copies of a fotonovela (graphic novel) on debt collection, developed for Spanish speakers, to raise awareness about scams targeting the Latino community.


Temporary supplemental leverage ratio changes to expire

The Federal Reserve, OCC, and FDIC have issued a joint press release announcing that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on March 31, 2021. The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 event.


SEC charges owner of investment company with fraud

The Securities and Exchange Commission yesterday charged a New Jersey resident with defrauding investors, who invested millions based on false claims about investments in real estate. The SEC’s complaint alleges that Seth P. Levine, the president and owner of Norse Holdings, LLC, a real estate investment and management company, sold membership interests in limited liability companies that purchased and owned apartment complexes.

According to the complaint, from at least February 2015 through August 2019, Levine raised millions of dollars from more than 60 investors, including family, friends, and other investors. In offering the interests, Levine allegedly used misleading and false representations that masked Norse Holdings’ underlying financial problems and its inability to pay promised returns without using new investor monies or proceeds from a related mortgage fraud. Specifically, the complaint alleges that Levine provided investors with documents reflecting false and inaccurate information concerning the profitability of the apartment complexes; sold overlapping ownership interests to investors using false operating agreements and, at times, forged signatures; frequently commingled investor funds to prop up real estate holdings that were struggling; and paid investors with fake profits generated by the mortgage fraud Levine conducted using the same properties.


OCC enforcement orders announced

The OCC has announced new enforcement actions.

  • A former vice president of business banking at PNC Bank, Wilmington, Delaware, was issued an order of prohibition and to pay a $35,000 civil money penalty for circumventing his bank's Know Your Customer controls and using a straw account holder/signer for a person whose accounts the bank had previously closed for suspicious activity.
  • A $5,000 civil money penalty order was issued to the individual serving as president, chief financial officer and chairman of the board of Chester National Bank, Chester, Illinois, for the bank's repeat violations of 12 CFR 1.5. The bank had failed to document the credit analysis necessary to demonstrate that a bank-owned corporate security remained of "investment grade," despite being downgraded by two credit rating agencies.
  • A former teller at JPMorgan Chase Bank, NA, Columbus, Ohio, was issued a prohibition order for repeatedly misappropriating bank funds and force balancing his cash box to conceal the shortages, which totaled over $9,000.


Individuals' tax deadline extended

The Treasury Department and Internal Revenue Service announced yesterday that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance soon. Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.


State IDs Chinese actors in Hong Kong violations

The State Department has announced that the Secretary of State, in consultation with the Secretary of the Treasury, has determined that 24 foreign persons are materially contributing to, have materially contributed to, or attempt to materially contribute to the failure of the Peoples Republic of China to meet its obligations under the Joint Declaration or the Basic Law, as defined in section 5(g) of the Hong Kong Autonomy Act.

Identification information on the designated individuals can be found in BankersOnline's OFAC Update.


Pennsylvania landlords charged with sexual harassment and retaliation

HUD has announced that it is charging the husband and wife owners of apartments in Oil City, Pennsylvania, with sexual harassment and retaliation against a female resident. HUD’s charge alleges that the husband sexually assaulted the resident when he was in her unit to perform electrical repairs. HUD’s charge further alleges that the owners retaliated against the resident and her infant child after she told the wife about the husband’s harassment.


OFAC penalties adjusted for inflation

OFAC has announced it has published [86 FR 14534] a Final Rule amending its regulations to implement for 2021 the Federal Civil Penalties Inflation Adjustment Act of 1990. This regulatory amendment adjusts for inflation the maximum amount of the civil monetary penalties that may be assessed under relevant OFAC regulations. The rule became effective upon publication.


FTC bans defendants from debt collection industry

The Federal Trade Commission has announced that two South Carolina companies that used robocalls and illegal threats to convince consumers to pay non-existent debts will be permanently banned from the debt collection industry as part of settlements resolving FTC charges they threatened consumers with legal action to collect on debts that did not exist.

Complaints filed by the FTC accused National Landmark Logistics, LLC and Absolute Financial Services, LLC of using illegal robocalls to leave messages with consumers that threatened outcomes from lawsuits to arrest. The messages didn’t identify the caller as a debt collector, and when consumers would return the calls, the defendants would present themselves as mediators or attorneys.

Under the terms of the National Landmark Logistics settlement, defendants Liberty Solutions & Associates, LLC; LSA Processing Systems, LLC; James Dennison; and Eric Dennison will be permanently banned from playing any role in debt collection. They will also be prohibited from making certain misrepresentations to consumers, including whether a consumer owes them a payment, whether they are attorneys or associated with a law firm, or the terms of any refund program. A monetary judgment of $16.4 million, was partially suspended for inability to pay.

Under the terms of their settlements, Lashone Elam (also known as Lashone Caldwell); Absolute Financial Services, LLC; Absolute Financial Services Recovery, LLC; AFSR Global Logistics, LLC; and Talesia Neely will be permanently banned from playing any role in debt collection. They will also be prohibited from making certain misrepresentations to consumers, including whether a consumer owes them a payment, whether they are attorneys or associated with a law firm, or the terms of any refund program. The settlement with the corporate defendants and Elam contains a monetary judgment of $11.2 million, which is partially suspended due to an inability to pay. The corporate defendants will be required to turn over the contents of a number of bank accounts to the FTC, while Elam will be required to turn over $10,000.


FDIC encourages voluntary diversity self-assessment

The FDIC's Office of Minority and Women Inclusion (OMWI) has encouraged all FDIC-supervised financial institutions with 100 or more employees to submit voluntary self-assessments of their diversity policies and practices. The FDIC gathers and analyzes this information in accordance with Section 342 of the Dodd-Frank Act. The window for submissions for the 2020 reporting period is open until June 30, 2021. For more information see—


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