Top Story Compliance Related

The OCC has announced the assessment of a $100 million civil money penalty against Capital One, N.A., and Capital One Bank (USA), N.A. for deficiencies in the bank’s Bank Secrecy Act/Anti-Money Laundering program. The deficiencies, cited in the OCC’s 2015 order against the bank, included weaknesses in its compliance program and related controls; deficiencies in its risk assessment, remote deposit capture and correspondent banking processes; and failing to file suspicious activity reports. In assessing this civil money penalty, the agency found that the bank failed to achieve timely compliance with the OCC’s 2015 order, as required. See our Penalty Page for additional information.

The CFPB has posted a Blog article about its "Complaint snapshot: 50 state report," which reports on both the unique—and shared—challenges reported by people in all 50 states and the District of Columbia since the Bureau started accepting consumer complaints in 2015.

The OCC has released a list of new enforcement actions taken in September against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

A former teller was banned from participation in the banking industry for misappropriation of $22,000 in bank and customer funds in 2004 and a former customer service representative was banned from the industry for unauthorized withdrawals totaling $7,016 in 2016 from the accounts of an elderly customer of the bank.

The former private banking senior manager of a now closed federal branch of the Royal Bank of Canada was banned from the industry and assessed a $100,000 civil money penalty for facilitating transactions in 2013 in which his clients and others made international money transfers between Brazil and the U.S. through an informal network without required due diligence or recordkeeping, for personal gain, in violation of BSA/AML law and regulations.

FATF President Marshall Billingslea, of the United States, chaired the first Plenary meeting of FATF-XXX in Paris on October 17–19, 2018. The main issues dealt with by this Plenary were:

• Operations and streamlining the FATF
• Major strategic initiatives
• Mutual evaluations and follow-up reviews, and compliance
• Other Strategic Initiatives

The FATF also amended its Standards to respond to the increasing use of virtual assets for money laundering and terrorist financing. This includes an amendment of the FATF Recommendations and Glossary to clarify to which businesses and activities the FATF requirements apply in the case of virtual assets.

The NCUA Board on Thursday unanimously approved two actions:

• A supplemental final rule that amends the agency’s 2015 risk-based capital rule to delay the effective date of the rule until January 1, 2020, and raises the asset threshold for a complex credit union from $100 million to $500 million. Update: Published at 83 FR 55467 11/6/2018.
• A proposed rule to clarify, update, and simplify federal credit union bylaws.

The FFIEC has launched its redesigned Bank Secrecy Act/Anti-Money Laundering (BSA/AML) InfoBase website, which is provided for sharing bank examination procedure information with examiners, financial institutions, the public, and other stakeholders. The InfoBase was redesigned to improve the overall experience for users. It includes improved site navigation, enhanced search capabilities, mobile-friendly capability, and new functionality that allows users to download various sections of the FFIEC BSA/AML Examination Manual.

The Treasury Department announced yesterday the Office of Foreign Assets Control identified Colombian national Pedro Luis Zuleta Noscue as a significant foreign narcotics trafficker under the Foreign Narcotics Kingpin Designation Act. Four additional Colombian nationals were also designated for their involvement in the narcotics trafficking activities of Pedro Luis Zuleta Noscue.

As a result of yesterday’s action, all assets in which these persons have an interest in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,466,485 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines for criminal violations of the Kingpin Act.

For identity information on the five individuals, see our OFAC Update.

The Bureau has posted an update to its Fall 2018 rulemaking agenda, which focuses on implementing directives mandated in the EGRRCPA, the Dodd-Frank Act, and other statutes. The Bureau has moved its rulemaking on small business lending data collection to its "long-term actions" list, which also includes plans for defining abusive acts and practices under the Dodd-Frank Act. The update suggests the Bureau will issue a proposal on small loans in January and a proposal addressing the Fair Debt Collection Practices Act in March.

Among the EGRRCPA initiatives, the CFPB plans to issue proposals addressing the expanded exemptions from mortgage escrow requirements for certain creditors with assets of $10 billion or less, and to address some or all of the issues related to various HMDA projects, such as taking another look at the discretionary data added in the 2015 HMDA rule. It also notes that several sections of the EGRRCPA, such as the section 101 provision for qualified mortgage status for certain portfolio loans, don't require regulatory action, but rulemaking may nonetheless be helpful to better implement or clarify those provisions.

The Treasury Department reported Wednesday that OFAC has imposed sanctions on Afaq Dubai, an Iraq-based money services business (MSB) that has been moving money for the Islamic State of Iraq and Syria (ISIS). OFAC named Afaq Dubai as a Specially Designated Global Terrorist under Executive Order 13224, for assisting in, sponsoring, or providing support for, ISIS. As a result of OFAC’s action, all property and interests in property of Afaq Dubai subject to U.S. jurisdiction are blocked and U.S. persons are generally prohibited from engaging in transactions with them. For identity information on Afaq Dubai, see our OFAC Update.

The SEC has issued an order that conditionally exempts affected persons from certain requirements of the federal securities laws for periods following the impact of Hurricane Michael. The order provides regulatory relief to publicly traded companies, investment companies, accountants, transfer agents, municipal advisors, and others affected by Hurricane Michael. The loss of property, power, transportation, and mail delivery due to the hurricane poses challenges for some individuals and entities that are required to provide information to the SEC and shareholders.

• SEC press release