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Top Story Compliance Related


CFPB updates EFT/Reg E FAQs

The CFPB on Monday posted an update of its Compliance Aid, "Electronic Fund Transfers FAQs," including these topics:

  • Coverage: Transactions (5 new or updated FAQs)
  • Coverage: Financial Institutions (4 new or updated FAQs)
  • Error Resolution (4 FAQs—2 new or updated)
  • Error Resolution: Unauthorized EFTs (11 FAQs—5 new or updated)

REGISTER NOW: BOL's Andy Zavoina will analyze the EFT FAQs in a special 90-minute webinar—Reg E Guidance – EFT Compliance—on January 27, 2022. REGISTER NOW!


Phantom debt collectors banned from industry

Defendants threatened consumers with lawsuits and arrest while trying to collect non-existent debts

The Federal Trade Commission on Monday announced a group of phantom debt collectors will be permanently banned from the debt collection industry and required to surrender the contents of numerous bank and investment accounts under the terms of a settlement with the Commission.

The FTC’s complaint against South Carolina-based National Landmark Logistics, filed in July 2020, alleged that the defendants in the case used robocalls to leave deceptive messages claiming consumers faced imminent legal action—lawsuits or even arrest—for unpaid debts.

When consumers returned the calls, the defendants falsely claimed to be from a mediation or law firm, again threatened legal action, and used consumers’ personal information to convince consumers the threats were real. The defendants turned around and pocketed the money, despite the fact that in many instances, consumers did not owe the debt being collected on or the defendants had no right to collect it.

Under the terms of the settlement, National Landmark Logistics, LLC; National Landmark Service of United Recovery, LLC; Silverlake Landmark Recovery Group, LLC; and Jean Cellent will be permanently banned from debt collection of any kind. They will also be banned from buying or selling debt, and from making any misrepresentations to consumers about any goods or services—including from claiming that they are lawyers or represent a law firm.

The settlement also includes a monetary judgment of $12,098,760, which is partially suspended due to an inability to pay. In addition, the defendants will be required to surrender the contents of numerous bank and investment accounts, as well as the title to property located in Philadelphia and a Mercedes SL 550 or the cash value of those assets.


Reserve Banks made 18 CRA ratings public in November

Our monthly review of the Federal Reserve Board's archive of bank CRA evaluation ratings has determined that the Federal Reserve Banks made public 18 evaluation ratings in November. Sixteen of those evaluations received a rating of Satisfactory. One Indiana bank was rated Needs to Improve. Only one bank—Pacific Premier Bank, Irvine, California—received a rating of Outstanding.


OFAC targets abusers of human rights

On Friday, International Human Rights Day, Treasury announced that OFAC had designated 15 individuals and ten entities for their connection to human rights abuse and repression in several countries around the globe. Separately, OFAC imposed investment restrictions on one company in connection with the surveillance technology sector of the People’s Republic of China’s economy, highlighting the human rights abuse enabled by the malign use of technology.

For a list of the new SDN List designations and the addition to OFAC's Non-SDN Chinese Military-Industrial Complex Companies (NS-CMIC) list, see the December 10, 2021, BankersOnline OFAC Update.


Fed reiterates expectations for risk management for large banks

In a Supervision and Regulation letter, the Federal Reserve Board on Friday reiterated its supervisory expectations for large banks' risk management with investment funds. The supervisory message follows a review by the Board of the default and failure of Archegos Capital Management, a concentrated and leveraged fund.

The message describes the Board's existing expectations for large banks' counterparty credit risk management and margin practices, as well as existing practices that do not meet supervisory expectations, and identifies ways to mitigate those practices.


OCC revises Licensing Manual booklets

The OCC has issued Bulletin 2021-60 announcing revised versions of its "Background Investigations," "Capital and Dividends,” "Charters,” “Conversions to Federal Charter,” and “National Bank Director Waivers” booklets of the Comptroller’s Licensing Manual. The revised booklets replace booklets of the same title issued between April 2017 and October 2019. The revised booklets reflect recent changes to 12 CFR 5, make corrections where necessary, and contain updated guidance.


OFAC adds sanctions on Anti-Corruption Day

The Treasury Department yesterday announced that OFAC has targeted fifteen individuals and entities across several countries in Central America, Africa, and Europe. Yesterday’s actions were taken under authority of Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of corruption and serious human rights abuse. OFAC’s actions were complemented by the U.S. Department of State’s announcement of visa restrictions under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, targeting several corrupt current and former officials, as well as their immediate family members, and making them ineligible for entry into the United States.

International Anti-Corruption Day has been observed annually on December 9 since the United Nations General Assembly adopted the United Nations Convention against Corruption on October 31, 2003, to raise public awareness of the importance of anti-corruption initiatives in countering corruption and preventing it from undermining democratic institutions, eroding governmental stability, and slowing economic development.

For the names and identification information of the seven individuals and eight entities designated, and one previously designated party whose listing was updated yesterday, see the December 9, 2021, BankersOnline OFAC Update.


Hsu's remarks on reforming overdraft programs

On Wednesday, Acting Comptroller of the Currency Michael J. Hsu spoke at the Consumer Federation of America's 34th Annual Financial Services Conference on the topic "Reforming Overdraft Programs to Empower and Promote Financial Health."

In concluding his remarks, Hsu shared several features of bank overdraft programs that the OCC staff have identified that could support consumer financial health, including banks:

  • requiring consumer opt-in to the overdraft program.
  • providing a grace period before charging an overdraft fee.
  • allowing negative balances without triggering an overdraft fee.
  • offering consumers balance-related alerts.
  • providing consumers with access to real-time balance information.
  • linking a consumer’s checking account to another account for overdraft protection.
  • collecting overdraft or NSF fees from a consumer’s next deposit only after other items have been posted or cleared.
  • not charging separate and multiple overdraft fees for multiple items in a single day and not charging additional fees when an item is re-presented.


OFAC settles with individual for $134K

OFAC has issued an Enforcement Release announcing a U.S. person has agreed to pay $133,860 to settle their potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations. The apparent violations were committed between February 2016 and March 2016 when the U.S. person accepted payment in the United States on behalf of an Iran-based company selling Iranian-origin cement clinker (a cement precursor) to another company for a project in a third country. The U.S. person coordinated and further facilitated the sale of the clinker with a family member working at the Iranian cement company by relaying logistical and shipping information to the purchasing company.

The U.S. person had previously submitted a license request to OFAC to authorize other transactions with Iran and had been denied, receiving a list of details of prohibitions involving Iran.


CFPB reports finding wide-ranging law violations in 2021

The CFPB on Wednesday announced that its Fall 2021 Supervisory Highlights report, issued Wednesday, reveals legal violations identified in the Bureau's examinations in the first half of 2021. Key violations listing in the report include:

  • Mortgage servicers charging improper fees, including late fees and default-related fees, to borrowers enrolled in CARES Act forbearance, and in some cases failed to refund fees until almost a year later.
  • Violations of the Equal Credit Opportunity Act by mortgage lenders who discriminated against African American and female borrowers in the granting of pricing exceptions. In these cases, examiners found the lender lacked oversight and control over how loan officers granted pricing exceptions. Examiners also found lenders who improperly considered small business applicants’ religion in their credit decisions. For religious institutions applying for small business loans, some lenders improperly utilized a questionnaire that contained explicit inquiries about an applicant’s religion.
  • Payday lenders improperly debiting or attempting to debit consumers’ bank accounts. In some instances where consumers called to authorize a loan payment by debit card, lenders’ systems erroneously indicated the transactions did not process, resulting in the improper debiting of additional, identical amounts or unauthorized attempts.
  • Remittance transfer providers failing to investigate whether deductions imposed by some foreign banks constituted a fee that the institutions were required to refund to the sender as part of the error resolution process when a sender filed a claim that funds were not delivered to designated recipients by disclosed availability dates.


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