Top Story Compliance Related

The Office of Foreign Assets Control has published at 81 FR 43070 in today's Federal Register an interim final rule with request for comments to amend its regulations for the relevant sanctions programs it administers to implement the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The amendments will be effective on, and comments are due by, August 1, 2016.

The CFPB and the Department of Justice have taken joint action against BancorpSouth Bank for discriminatory mortgage lending practices that harmed African Americans and other minorities. The complaint filed by the CFPB and DOJ alleges that BancorpSouth engaged in numerous discriminatory practices, including illegally redlining in Memphis; denying certain African Americans mortgage loans more often than similarly situated non-Hispanic white applicants; charging African-American customers for certain mortgage loans more than non-Hispanic white borrowers with similar loan qualifications; and implementing an explicitly discriminatory loan denial policy. A consent order, which is subject to court approval, would require BancorpSouth to take a number of remedial measures, and to pay a civil money penalty of $3.03 million to the Bureau. Other outlays to be required by the order bring the combined financial impact on BancorpSouth to more than $10.6 million. See "BancorpSouth pays $10.6 million for mortgage practices," in our Penalties section, for additional information.

ICE has announced that two New Mexico residents who were recently charged with health care fraud have been arrested. The indictment included nine health care fraud charges, and one aggravated currency structuring charge for conducting financial transactions in a manner that avoided the filing of Currency Transaction Reports (CTRs). One defendant conducted at least 200 cash withdrawals, each for several thousands of dollars but less than $10,000 and totaling at least $800,000, to avoid the filing of CTRs.

The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has published an interim final rule at 81 FR 42503 in this morning's Federal Register amending the regulations under the Bank Secrecy Act (at 31 CFR Part 1010) to adjust the maximum amount or range, as set by statute, of certain civil monetary penalties within its jurisdiction to account for inflation. The amendments, which will be effective August 1, 2016, include a new section 1010.821 and a new Table with the current and new maximum penalties. Comments on the interim rule are due by August 1, 2016.

The Federal Deposit Insurance Corporation has published amendments to its rules of practice and procedure at 12 CFR Part 308 to adjust the maximum amount of each civil money penalty (CMP) within its jurisdiction to account for inflation. This action is required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The interim final rule, published at 81 FR 42235 in this morning's Federal Register, will be effective August 1, 2016. Comments on the rule will be accepted through September 1, 2016. The rule also includes a technical amendment to the Corporation's regulation on Assessments, 12 CFR Part 327.

The CFPB has released its monthly complaint snapshot, this month highlighting complaints about consumer loans, including vehicle loans and leases, installment loans, title loans, and pawn loans. The report shows that consumers continue to complain about issues managing their loans and problems they encounter when they are unable to pay them off. This month’s report also highlights trends seen in complaints coming from Arkansas.

The Bureau also posted an article, “Consumer Voices on Auto Financing,” discussing the challenges faced by consumers in understanding auto loans. The article is the fourth post in the CFPB blog series on auto loans.

The outcomes of the recently held FATF plenary meeting have been released. The plenary delegates discussed improving transparency and beneficial ownership, and the global response to terrorist financing, including the adoption of a revised Recommendation 8 standard for non-profit organizations. The revised standard aims to ensure that the implementation of Recommendation 8 is in line with the risk-based approach and does not disrupt or discourage legitimate non-profit activities. A statement on Iran was released and the assessments of Austria, Canada and Singapore were discussed.

A Federal Trade Commission release informs consumers and telemarketers about important Telemarketing Sales Rule (TSR) amendments that are now in effect. The changes make it unlawful for telemarketers to use three types of payment methods exploited by con artists and scammers. As of this month, it is illegal for telemarketers to ask consumers to pay for goods or services using cash-to-cash money transfers, such as MoneyGram and Western Union provide, or by providing PIN numbers from cash reload cards such as MoneyPak, Vanilla Reload or Reloadit packs. It is also now illegal for telemarketers to use unsigned checks called “remotely created payment orders” (also called "remotely created checks") to withdraw money directly from consumers’ bank accounts. New business guidance to consumers warns that any telemarketer requesting payment using these methods is a scammer because the payment method is illegal.

The Financial Acton Task Force (FATF) has updated its statements identifying jurisdictions with strategic deficiencies in their frameworks to combat money laundering and the financing of terrorism and proliferation. FATF continues to calls on countries to apply counter-measures to the Democratic People's Republic of Korea. Myanmar and Papua New Guinea were removed from FATF monitoring under its On-Going Global AML/CFT Compliance Process.

The FDIC has released a list of enforcement actions taken during May 2016. The list comprises 15 orders, including one consent order, two removal and prohibition orders, three section 19 orders, two civil money penalties and seven terminations of earlier enforcement actions. Of the civil penalty orders, one for $100,000 was issued, together with a removal and prohibition order, to a former institution-affiliated party of a Utah bank for engaging or participating in "violations of law, unsafe or unsound banking practices, and/or breaches of fiduciary duty as an institution-affiliated party" of the bank. The other civil penalty order, for $40,000, was issued to TSB Bank, Lomira, Wisconsin, for alleged violations of 31 C.F.R. § 1010.306(a)(1) -- the requirement to file CTRs within 15 days of the reportable transactions. An institution-affiliated party of another Utah bank received an order of prohibition from further participation in the affairs of any financial institution upon the FDIC's determination that he violated the Real Estate Settlement Procedures Act and Regulation X by agreeing to pay fees for the referral of mortgage loan business.