Top Story Compliance Related

The OCC and the FDIC have issued their lists of institutions scheduled for a CRA examination during the third and fourth quarters of 2017. Both regulators announced they will publish quarterly the next two quarters of scheduled exams, to be more responsive and transparent to the public, and to afford the public more time to offer comments on the CRA performance of the institutions to be examined.

OCC announcement
OCC exam third- and fourth-quarter schedule
FDIC third quarter schedule
FDIC fourth quarter schedule

In response to concerns over the limited availability of state-certified and -licensed appraisers, particularly in rural areas, a joint press release has been issued by the FRB, FDIC, NCUA, and OCC announcing an interagency advisory that highlights two options to help insured depository institutions and bank holding companies facilitate the timely consideration of loan applications:

• Temporary practice permits may allow appraisers credentialed in one state to provide their services on a temporary basis in another state experiencing a shortage of appraisers, subject to state law. The advisory also discusses reciprocity, in which one state allows appraisers that are certified or licensed in another state to obtain certification or licensing without having to meet all of the state's certification or licensing standards.
• Temporary waivers would set aside requirements relating to the certification or licensing of individuals to perform appraisals under Title XI of FIRREA in states or geographic political subdivisions where certain conditions are met. Temporary waivers may be granted when it is determined that there is a scarcity of state-certified or -licensed appraisers leading to significant delays in obtaining an appraisal.

FDIC FIL-19-2017
OCC Bulletin 2017-19

OFAC has announced its designation of four Colombian nationals as Specially Designated Narcotics Traffickers (SDNTs) under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) because of their links to previously designated SDNTs Juan Santiago Gallon Henao, Pedro David Gallon Henao, and La Oficina de Envigado (“La Oficina”). Also designated were five Colombian companies, identified by OFAC as being ultimately owned, controlled, or directed by Juan Santiago Gallon Henao through the help of some of the individuals designated today. See our OFAC Update for additional information.

One part of the question concerning the future of Regulation CC has finally been solved. The Federal Reserve Board has issued a final rule to amend the check collection and return provisions in subparts C and D of the regulation, but left unchanged, for now, subpart B, which covers the funds availability and funds availability disclosure requirements. Rulemaking on subpart B must be done in partnership with the CFPB.

In the final rule, the Board has modified the current check collection and return requirements to reflect the virtually all-electronic check collection and return environment and to encourage all depositary banks to receive, and paying banks to send, returned checks electronically. The Board has retained, without change, the current same-day settlement rule for paper checks. The Board is also applying Regulation CC's existing check warranties under subpart C to checks that are collected electronically, and in addition, has adopted new warranties and indemnities related to checks collected and returned electronically (including those deposited via remote deposit capture and mobile remote deposit capture) and to electronically-created items. The final rule will be effective July 1, 2018.

The Board has also released for comment a proposed amendment to the regulation's existing liability provisions to address situations when it's unknown whether a substitute or electronic check was altered or forged in certain cases. Comments on the proposal will be accepted for 60 days following Federal Register publication. [UPDATE: The proposal was published at 82 FR 25539, with a comment period ending August 1, 2017. The final rulel was published on June 15, 2017, at 82 FR 27552.]

• Final Rule
• Proposed amendment

BOL Guru John Burnett will present a webinar -- "Reg CC, FINALLY a Final Rule" -- on August 8, 2017. Click HERE to register.

The Bureau has posted a quiz for consumers to see how prepared they are to make financial decisions. The quiz contains examples of questions 15-year-olds around the world were tested on to measure how ready they were to make real-world financial decisions.

The Board of Governors of the Federal Reserve System has announced a $41 million penalty and consent cease and desist order against the U.S. operations of Deutsche Bank AG for anti-money laundering deficiencies.

The actions were taken by the Board to address unsafe and unsound practices at the firm's domestic banking operations. The Board identified failures by Deutsche Bank's U.S. banking operations to maintain an effective program to comply with the Bank Secrecy Act and anti-money laundering laws.

The consent order requires Deutsche Bank to improve its senior management oversight and controls related to compliance by the U.S. banking operations with anti-money laundering laws. Our Penalty Page includes a link to a copy of the order.

The Financial Action Task Force (FATF) held a FinTech and RegTech Forum on May 25-26 in San Jose, California. The meeting, hosted by PayPal at its headquarters, was attended by over 150 representatives from the FinTech and RegTech sectors, financial institutions, and FATF members and observers. The forum discussed the significant trends and developments of FinTech and RegTech, and what the financial services landscape could look like in the near future, including peer-to-peer transfers, crowdfunding, distributed ledger-technology or blockchain-based services, analytical tools, KYC utilities, and digital identity.

The FDIC has issued a list of orders of administrative enforcement actions taken against banks and individuals in late March and in April and a Final Decision and Order issued in 2016. The administrative orders included one consent order, five removal and prohibition orders, five Section 19 orders, and four civil money penalties.

The 2016 Order involves a Louisiana bank that received an extensive cease and desist order affecting its directors, CEO, CFO, senior lender, BSA officer and entire compliance program, and an order to pay a $500,000 civil money penalty. There was also a $6,000 CMP assessed on an Iowa bank for violations of the Flood Disaster Protection Act.

There were two CMPs totaling $75,000 assessed on institution-affiliated individuals of an Elkhart, Texas, bank and one for $3,444 on a centennial, Colorado, bank. None of those three CMP orders cited reasons for the penalties.

The CFPB announced yesterday a plan to assess the effectiveness of the Ability-to-Repay/Qualified Mortgage rule (ATR/QM rule). The Bureau is asking the public to comment on the plan, to suggest sources of data, and generally to provide information that would help with the assessment. Comments will be due within 60 days following publication of the request in the Federal Register.

UPDATE: Published at 82 FR 25246 on June 1, 2017, with comments due by July 31, 2017.

The NCUA Board has held its fourth open meeting of 2017 at the agency’s headquarters and unanimously approved three items:

• A proposed rule to provide greater transparency to members of federal credit unions when those credit unions are seeking voluntary mergers
• A proposed rule to enhance due process and provide consistency with other federal financial institutions regulators in the supervisory appeals process
• A proposed rule to provide uniform, comprehensive procedures to govern the agency’s regulatory appeals process