Top Story Compliance Related

The Federal Trade Commission and the Justice Department’s Antitrust Division issued guidance for human resource (HR) professionals and others who are involved in hiring and compensation decisions. HR professionals are often in the best position to ensure their companies’ hiring practices comply with the law and this guidance will help educate and inform them about how the antitrust laws apply to the employment arena.

The U.S. Department of the Treasury has taken action to disrupt the operations, fundraising, and support networks of Hizballah by designating four individuals and one entity pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. As a result of that action, all property and interests in property of those designated today subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Additional information is available in BankersOnline's OFAC Update

The Securities and Exchange Commission has reported that Ernst & Young LLP has agreed to pay more than $11.8 million to settle charges related to failed audits of an oil services company that used deceptive income tax accounting to inflate earnings. Ernst & Young’s payment will be combined with the $140M penalty agreed to in September 2016 by the audit client, Weatherford International, and money collected from two charged Weatherford employees, for a total of more than $152 million that will be returned to investors who were harmed by the accounting fraud.

The Securities and Exchange Commission has announced that Israel-based Bank Leumi has agreed to pay $1.6 million and admit wrongdoing to settle charges that it provided investment advice and induced securities transactions for U.S. customers for more than a decade without registering as an investment adviser or broker-dealer as required under U.S. securities laws. An SEC investigation found that Bank Leumi maintained several hundred securities accounts that were beneficially owned by U.S. customers and managed more than $500 million in securities assets for U.S. customers. To manage and mitigate the risk of violating U.S. laws, Bank Leumi began exiting the U.S. cross border business in 2008. But despite these efforts, approximately 100 U.S. customer securities accounts remained open with the bank three years later, and bank employees continued to have contact with U.S. customers.

Treasury has announced the authorization by general license of transactions involving certain Belarusian entities previously blocked pursuant to an Executive Order. The general license does not generally authorize the release of property blocked by the Order.

On August 6, the CFPB released a final rule making several amendments to the 2013 Mortgage Servicing Rules under RESPA (Regulation X) and TILA (Regulation Z). That rule was published in today's Federal Register at 81 FR 72160. The rule clarifies, revises, or amends provisions regarding force-placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X’s servicing provisions; and prompt crediting and periodic statement requirements under Regulation Z’s servicing provisions. The final rule also addresses proper compliance regarding certain servicing requirements when a person is a potential or confirmed successor in interest, is a debtor in bankruptcy, or sends a cease communication request under the Fair Debt Collection Practices Act, and makes several technical corrections to both regulations. The rule will be effective one year from publication, or October 19, 2017, except for portions for which the effective date will be six months later, or April 19, 2018.

The CFPB also published today, at 81 FR 71977, "Safe Harbors from Liability under the Fair Debt Collection Practices Act for Certain Actions Taken in Compliance with Mortgage Servicing Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)," official Bureau interpretations to clarify the interaction of the FDCPA and specified mortgage servicing rules in Regulations X and Z. The interpretations will also be effective October 19, 2017, except for provisions relating to confirmed successors in interest in Part II.A of the document, which will take effect April 19, 2018..

The FDIC has issued FIL-65-2016 announcing the release of interagency examination procedures that reflect the Department of Defense's (DOD) 2015 amendments to the implementing regulations of the Military Lending Act of 2006 (MLA) and its August 2016 interpretive rule that provides guidance on certain questions received regarding compliance with the rule. The release of these examination procedures is part of the FDIC's ongoing efforts to inform supervised institutions about important bank regulatory developments and to promote transparency in the FDIC's supervisory program. The examination procedures should be helpful to financial institutions seeking to better understand the areas on which the FDIC will focus as part of the examination process. The FDIC is also providing guidance on its initial supervisory expectations in connection with its examinations of financial institutions for compliance with the MLA rule, saying "During early examinations, examiners will evaluate financial institutions' compliance management systems and overall efforts to come into compliance. Specifically, examiners will consider an institution's implementation plan, including actions taken to update policies, procedures, and processes; its training of appropriate staff; and its handling of early implementation challenges."

The FDIC has issued FIL-66-2016 announcing an interagency webinar scheduled for Wednesday, November 9, 2016. The FDIC will be joined by the CFPB, Fed, NCUA, and OCC to discuss overdraft practices. FDIC staff will cover requirements and best practices regarding bank overdraft programs.

The OCC will host two workshops in Houston, Texas, November 29-30, for directors of national community banks and federal savings associations supervised by the OCC. The Risk Governance workshop on November 29 combines lectures, discussion, and exercises to provide practical information for directors to effectively measure and manage risks. The workshop also focuses on the OCC's approach to risk-based supervision and major risks in the financial industry. The Credit Risk workshop on November 30 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change.

The Federal Financial Institutions Examination Council (FFIEC) has announced it has issued an FAQ guide related to the Cybersecurity Assessment Tool (Assessment). The FAQ guide answers questions and clarifies points in the Assessment and supporting materials based on questions received by the FFIEC members over the course of the last year. The FFIEC members developed the Assessment to help financial institutions’ management determine their risk profile and determine the institutions’ inherent risks and cybersecurity preparedness.

• Related OCC Bulletin 2016-34
• Related NCUA press release
• Related FDIC FIL-68-2016