Top Story Compliance Related

The Department of Housing and Urban Development has reported it has approved a Conciliation Agreement under the Fair Housing Act between the Metropolitan Management Corporation and Lancaster Court Associates, both of Narberth, Pennsylvania, and a family of former tenants. The agreement resolves allegations that the housing providers discriminated against the family when terminating their lease because a member of the family had a second child. The Fair Housing Acts makes it illegal to discriminate in the sale or rental of housing based on race, color, national origin, disability, religion, sex (including sexual orientation and gender identity), and familial status.

The agreement stems from a complaint alleging that Metropolitan Management Corporation and Lancaster Court Associates violated the Fair Housing Act by having an overly rigid occupancy policy that discriminated based on familial status. The complaint alleges that when a baby was born to a family of four, Respondents terminated the family’s lease for a two-bedroom unit because of Respondents’ occupancy policy.

FinCEN reports it is offering a webinar on its YouTube channel this afternoon at 2 p.m. ET on Beneficial Ownership Information Reporting Requirements.

The FDIC has announced the April 2024 updates to its Risk Management Manual of Examination Policies (RMS Manual). This month's updates include:

• Section 6.1 – Liquidity and Funds Management: Updates to Section 6.1 include revisions to incorporate regulatory changes related to brokered deposits; to provide additional guidance regarding uninsured deposits, Federal Home Loan Bank advances, and public funds; to add new sections on evaluating asset encumbrance and intraday liquidity monitoring; and to make other technical edits.
• Section 22.1 – Examination Documentation Modules: Updates to Section 22.1 include the addition of two new Supplemental Modules for Automated Clearing House (ACH) and Wire Transfers.

The following sections of the RMS Manual were updated to include instructions for the review and assessment of government-guaranteed lending (GGL) programs conducted by FDIC-supervised institutions.

• Section 3.2 – Loans: A new section was added to provide background and examination considerations on GGL programs.
• Section 16.1 – Report of Examination Instructions: Instructions for scheduling concentrations in the Report of Examination were enhanced to include considerations relative to GGL programs.

The CFPB on Monday announced it has released a data point research report, Recent Changes in Medical Collection on Consumer Credit Reports, showing that 15 million Americans still have medical bills on their credit reports despite changes by Equifax, Experian, and TransUnion. The 15 million Americans disproportionately live in the South and low-income communities. Collectively, they have more than $49 billion in outstanding medical bills in collections.

This is the CFPB’s second analysis of the changes made by the three national credit reporting companies to reduce the number of medical bills on credit reports. Monday’s report follows the start of a CFPB rulemaking that will consider options to restrict the reporting of allegedly unpaid medical bills on credit reports.

In early March 2022, a CFPB study found an estimated $88 billion in medical bills on Americans’ credit reports. Following that study, the three nationwide credit reporting companies – Equifax, Experian, and TransUnion – announced they would no longer report certain medical bills in collections. The companies announced they would increase the time before medical bills in collections can appear on credit reports – from 180 days to one year. Second, the companies would stop reporting medical bills that had been in collections but were resolved. Third, the companies would remove medical bills below $500 from credit reports.

Monday’s research report found the number of people with medical bills in collections on their credit reports has declined. As of June 2023, about 5% of Americans had unpaid medical bills on their credit reports – down from 14% in March 2022. Older Americans saw the largest improvement – 8.4% of older Americans had medical bills on their credit reports in March 2022 compared to below 3% in June 2023.

For the 15 million Americans with medical bills on their credit reports, the current report finds:

• Many live in low-income communities and the southern U.S.
• The average medical balance on credit reports increased from $2,000 to over $3,100, due to removal of small balances
• Most medical collections balances stayed on credit reports

The FDIC has released a list of enforcement orders issued against FDIC-supervised institutions and institution-affiliated individuals that were issued in March 2024.

• First Fed Bank, Port Angeles, Washington, was assessed a $500,000 civil money penalty for UDAP and RESPA violations
• The Pitney Bowes Bank, Inc., Salt Lake City, Utah, was assessed a $6,098 penalty for failing to take the steps needed to allow the FDIC to debit an account at the bank to pay an FDIC assessment for the last quarter of 2023
• Danielle M. Desrosiers, former EVP of Independence Bank, East Greenwich, Rhode Island, was issued an order of prohibition after determining that she engaged or participated in violations of regulations, unsafe or unsound practices, and breaches of her fiduciary duties owed to the Bank in connection with loan applications submitted by one of the bank’s referral agents and breached her fiduciary duty by failing to document or disclose to the Bank her conflicts of interest with the referral agent.
• Carlene Bartley, formerly an operations specialist at Flushing Bank, Uniondale, New York, was issued an order of prohibition after determining that she embezzled $74,937 from three deceased customers' accounts
• River Bank & Trust, Prattville, Alabama, received a consent order from the FDIC and the State of Alabama Banking Department after the agencies concluded that the bank violated certain provisions of the Bank Secrecy Act and related federal and state regulations
• The Exchange Bank, Skiatook, Oklahoma, was issued a consent order by the FDIC and the Oklahoma State Banking Department for unspecified alleged unsafe or unsound banking practices and violations of law and/or regulations. The order directs the bank to take specific actions to improve its BSA/AML/CFT compliance program.

OFAC has posted a Notice that it has issued Russia-related General License 8I, "Authorizing Transactions Related to Energy."

The Treasury Department yesterday reported that OFAC has sanctioned over one dozen entities, individuals, and vessels that have played a central role in facilitating and financing the clandestine sale of Iranian unmanned aerial vehicles (UAVs) for Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which itself is involved in supporting Iran’s Islamic Revolutionary Guard Corps (IRGC) and Russia’s war in Ukraine.

For identification information on the individuals, entities, vessels, and aircraft that OFAC designated, see BankersOnline’s April 25, 2024, OFAC Update.

The CFPB has releases issue 33 of its Supervisory Highlights report. The findings in this report cover select examinations regarding mortgage servicing completed from April 1 through December 31, 2023.

The report indicates that examiners continue to find supervised mortgage servicers assessing junk fees, including unnecessary property inspection fees and improper late fees. Additionally, examiners found that mortgage servicers engaged in other unfair, deceptive, and abusive acts or practices (UDAAP) such as sending deceptive loss mitigation eligibility notices to consumers. Mortgage servicers also violated several of Regulation X’s loss mitigation provisions.

Outlook Live reports that its April 17, 2024, webinar, "Compliance Resources: Learning Where to Find Answers to Your Compliance Questions," is now available for downloading from the Outlook Live website. The slides were updated to add additional resources.

The Financial Stability Board (FSB) has announced its publication of a report on financial resources and tools for central counterparty (CCP) resolution.

The availability of adequate resources and tools for CCP resolution remains critical for financial stability and for ensuring confidence in the financial system. Progress in implementing the G20 regulatory reforms agreed to after the 2008-09 financial crisis, including the central clearing mandate, has increased the systemic importance of CCPs. While material advances have been achieved to enhance the resilience and recovery of CCPs, it is also necessary to ensure that adequate financial resources and tools are available in resolution to maintain the continuity of critical functions and safeguard financial stability, should resolution become necessary.

The FSB has developed a global standard for financial resources and tools to facilitate the orderly resolution of systemically important CCPs with two expectations:

• Resolution authorities of systemically important CCPs should have access to a set of resolution-specific resources and tools, in addition to recovery resources and tools where these are available to the resolution authority. The resolution toolbox should include a combination of resolution-specific resources and tools from the list of seven in the report. Not all seven resources and tools need to be included. Financial resources and tools have different strengths and weaknesses, and no single resource or tool would be sufficient by itself to meet the resolution objectives.
• Jurisdictions should make their approach to calibrating the resolution-specific resources and tools in the toolbox transparent.

The FSB will monitor implementation for CCPs that are systemically important in more than one jurisdiction through the FSB’s regular monitoring tools. The findings will be aggregated and published in the FSB’s annual Resolution Report.