Top Story Compliance Related

OFAC has announced the designations of three Singapore-based targets–two entities and one individual—for laundering money in support of North Korea. In a related action, the U.S. Department of Justice unsealed criminal charges against the same individual, Tan Wee Beng. The action highlights North Korea’s continued illicit use of the financial system to circumvent sanctions, as well as the U.S. Government’s commitment to safeguard the international financial system and implement existing UN Security Council (UNSC) resolutions. For identity information on the added designations, as well as two updates to existing listings, see our OFAC Update.

HUD has announced that it has charged Melinda S. Moore Housing, Inc., owner of a Christiansburg, Virginia-based low-income housing provider, Metropolitan Property Management, Inc. of Washington, NC, and three managers with discrimination on the basis of disability. HUD’s Charge of Discrimination alleges that the housing providers discriminated against a resident with disabilities when they unreasonably delayed her request to install an automatic door opener to make it easier to use her wheelchair and then evicted her after refusing to allow her extra time, because of illness, to complete the development’s annual income and family composition certification.

An open board meeting of the Board of Governors of the Federal Reserve System will be held at 10:30 a.m. on October 31, 2018. Matter to be considered: Prudential standards for large bank holding companies, savings and loan holding companies, and state member banks. The meeting may be viewed via webcast from a link available on the Board's public website. A link to the meeting documentation will also be available approximately 20 minutes before the start of the meeting.

In a presentation to the attendees of the National Federation of Community Development Credit Unions’ Annual Conference in Clearwater, Florida, NCUA Chairman McWatters announced the awarding of $2 million in Community Development Revolving Loan Fund (CDRLF) grants to 203 low-income credit unions. These funds will be used for digital services and security programs, outreach to underserved areas, and leadership development and training for credit union staff. McWatters also noted there continues to be strong and consistent demand for short-term, small dollar loans. The Chairman stated, “A viable short-term loan program provided by credit unions could be an alternative to high-priced payday loans and a way to break the cycle of debt that traps millions of consumers. Additionally, such a loan program could be a first step in bringing the millions of unbanked and underserved populations into the credit union system.

Yesterday, the seven member nations of the Terrorist Financing Targeting Center (TFTC) took actions to expose and disrupt Taliban actors and their Iranian sponsors that seek to undermine the security of the Afghan Government. The TFTC Member States—the Kingdom of Saudi Arabia, the Kingdom of Bahrain, the State of Kuwait, the Sultanate of Oman, the State of Qatar, and the United Arab Emirates (UAE)—designated nine individuals associated with the Taliban, including those facilitating Iranian support to bolster the terrorist group. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated these key Taliban members and their Iranian regime sponsors in partnership with the other TFTC Member States. For identification of the designated individuals, see our OFAC Update.

• Treasury Department press release

The Federal Reserve Board has announced the execution of a consent prohibition order with Joel Shumate, former senior vice president of First Iowa State Bank, Keosauqua, Iowa, for engaging in improper practices regarding credit origination of loans in violation of the bank’s loan policies prohibiting conflicts of interest. Shumate was found to have originated two loans without disclosing that the loans were to be used by the borrower to buy cattle from Shumate and his father.

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.