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Top Story Compliance Related

04/08/2020

Treasury has updated its PPP FAQs

The Treasury Department has updated its FAQ document on Paycheck Protection Program Loans. Participating banks should "bookmark" that page and check it regularly for updates.

The changes to the FAQs as of April 6 provide these clarifications:

  1. That lenders may rely on borrower certifications as to the applicability of affiliation rules (question 4).
  2. That lenders do not need to re-verify beneficial ownership information for existing customers. (If participating depository institutions have not yet collected beneficial ownership information on an existing customer, they are not required to do so when that customer applies for PPP loans, unless the lender's risk-based BSA compliance program indicates otherwise.) (question 18)
  3. How payroll is defined under the CARES Act, including the calculation of non-cash benefits and coverage of paid leave. (Various questions)
  4. Methods for determining payroll to calculate maximum loan amounts. (various questions)
  5. That lenders who processed applications based on the April 2 interim final rule may rely on the laws, rules and guidance available at the time. (question 17)

04/08/2020

Fed CRA evaluations released in March

Our monthly review of the Federal Reserve's Community Reinvestment Act performance evaluation releases reveals that 16 evaluations were made public in March, all with ratings of Satisfactory or better. We congratulate two Missouri banks that received ratings of Outstanding (links are to their evaluation reports):

04/07/2020

Cantor Fitzgerald pays $3.2M to settle SEC charges

The SEC has reported that Cantor Fitzgerald & Co. has agreed to pay $3.2 million to settle charges for providing the SEC with incomplete and inaccurate securities trading information known as “blue sheet data.” According to the SEC’s order, for almost five years, Cantor Fitzgerald made numerous deficient blue sheet submissions containing missing or inaccurate data for approximately 35 million transactions, largely due to inadequate processes designed to validate the accuracy of its submissions and undetected coding errors. Broker-dealers are required to provide this information, which the SEC uses to carry out its enforcement and regulatory obligations, including investigations of insider trading and other fraudulent activity.

04/07/2020

Russian white supremacist group and leaders designated

The State Department announced yesterday the designation of Russian Imperial Movement, or RIM, and members of its leadership as specially designated global terrorists – the first time in the history that the department has designated a racially or ethnically motivated terrorist group.

Coordinator for Counterterrorism Ambassador Nathan Sales said that RIM is a "terrorist group that provides paramilitary-style training to neo-Nazis and white supremacists, and it plays a prominent role in trying to rally likeminded Europeans and Americans into a common front against their perceived enemies." He went on to say "this designation denies RIM and its leaders and its members access to the United States financial system. Any assets that they had in the United States or that are subject to U.S. jurisdiction are now frozen. We think that that’s going to make it substantially more difficult for them to move money throughout the international financial system."

For further identification information, see BankersOnline's OFAC Update

04/06/2020

FinCEN updates COVID-19 info

FinCEN has posted a notice updating its March 16, 2020 COVID-19 Notice to provide additional information to assist financial institutions in complying with their Bank Secrecy Act (BSA) obligations during the COVID-19 pandemic, and announces a direct contact mechanism for urgent COVID-19-related issues.

FinCEN recognizes financial institutions face challenges related to the COVID-19 pandemic. In addition, FinCEN is committed to promoting the success of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including the need to facilitate expeditious disbursal of CARES Act funds. Accordingly, FinCEN will issue further information, as appropriate, as the CARES Act is implemented and questions arise.

FIN-2020-R001 implementation suspended
FinCEN has suspended implementation of its February 10, 2020, Ruling (FIN-2020-R001) on CTR filing obligations related to transactions of sole proprietorships and entities operating under a DBA name until further notice. Institutions that have already made the necessary changes to implement the Ruling need not revert to prior practice, and may report CTRs in accordance with the suspended ruling. Other institutions should continue to file CTRs involving sole proprietorships and DBAs under the prior practice.

04/06/2020

Temporary rule under FFCRA published

The Wage and Hour Division of the Department of Labor has published [85 FR 19326] temporary regulations to implement public health emergency leave under Title I of the Family and Medical Leave Act (FMLA), and emergency paid sick leave to assist working families facing public health emergencies arising out of Coronavirus Disease 2019 (COVID-19) global pandemic. The leave is created by a time-limited statutory authority established under the Families First Coronavirus Response Act, Public Law 116-127 (FFCRA), and is set to expire on December 31, 2020. The FFCRA and this temporary rule do not affect the FMLA after December 31, 2020. The rule is effective from April 2 through December 31, 2020, and became operational on April 1, 2020.

Gerard Panero will present a BOL Learning Connect webinar, Alternatives to Layoffs During COVID-19, on April 23, 2020.

04/06/2020

Fed posts FAQ on elimination of reserve requirements

Federal Reserve Bank Services has posted an FAQ explaining the March 15 elimination of reserve requirements by the Federal Reserve Board as part of its response to the COVID-19 pandemic. Banks can refer to questions 7 through 16 in particular to get information on how the elimination of reserve requirements may impact a bank's compliance program for limiting depositors' transfers and payments from savings and money market deposit accounts.

04/03/2020

Agencies extend comment period on Volcker Rule modifications

The OCC has announced that the Fed, CFTC, FDIC, OCC, and SEC have extended the comment period on their proposal to modify the Volcker Rule's general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds ("covered funds") from April 1 to May 1, 2020.

04/02/2020

CFPB COVID-19 credit reporting guidance

The Consumer Financial Protection Bureau yesterday released a policy statement outlining the responsibility of credit reporting companies and furnishers during the COVID-19 pandemic. In response to the pandemic, many lenders are being flexible when it comes to consumers’ making payments. The Bureau’s statement underscores that consumers benefit if lenders report accurate information about these arrangements to credit bureaus so that the credit reports of consumers are accurate.

In addition, in response to staffing and resources constraints on lenders and credit bureaus due to the pandemic, the Bureau’s statement also provides flexibility for lenders and credit bureaus in the time they take to investigate disputes. The Bureau specifically states that it does not intend to cite in an examination or bring an enforcement action against firms who exceed the deadlines to investigate such disputes as long as they make good faith efforts during the pandemic to do so as quickly as possible.

04/02/2020

CFPB settles with short-term lender

The CFPB has announced a settlement with Cottonwood Financial, Ltd., which does business under the name Cash Store. Cash Store is based in Irving, Texas, and owns and operates roughly 340 retail lending outlets in Idaho, Illinois, Michigan, New Mexico, Texas, Utah, and Wisconsin. The Bureau found that in the course of marketing, servicing, and collecting on high-interest payday, auto-title, and unsecured consumer-installment loans Cash Store violated the Consumer Financial Protection, Fair Credit Reporting, and Truth in Lending Acts. The consent order requires Cash Store to pay over $1.3 million in redress and penalties.

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