Top Story Compliance Related

OFAC has announced it has removed a Zimbabwean from the SDN List. See BankersOnline's OFAC Update for details.

The Bureau has announced a proposal to increase flexibility for mortgage lenders in collecting demographic information. The CFPB’s proposal would provide compliance flexibility for individual mortgage lenders, and would also support the broader mortgage industry’s ability to use consistent forms and compliance practices. Under the proposal, mortgage lenders would not be required to maintain different practices depending on their loan volume or other characteristics, allowing more lenders to adopt application forms that include expanded requests for information regarding a consumer’s ethnicity and race, including the revised Uniform Residential Loan Application. The proposal also contains other amendments to Regulation B and its commentary to facilitate compliance with Regulation B’s requirements for the collection and retention of information about the ethnicity, race, and sex of applicants seeking certain types of mortgage loans. Comments will be accepted for 30 days following publication in the Federal Register.

UPDATE: Published April 4, 2017, with comment deadline of May 4, 2017.

The FDIC and the FRB have jointly announced the completion of the 2015 resolution plans of 16 domestic banks and separately issued guidance to four foreign banks. Resolution plans, required by the Dodd-Frank Act and commonly known as living wills, must describe the company's strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure of the company. For foreign banking organizations, resolution plans are focused on their U.S. operations.

The domestic banks evaluated were: American Express Company, Ally Financial Inc., BB&T Corporation, Capital One Financial Corporation, Comerica Incorporated, Discover Financial Services, Fifth Third Bancorp, Huntington Bancshares Incorporated, KeyCorp, M&T Bank Corporation, Northern Trust Corporation, Regions Financial Corporation, SunTrust Banks, Inc., The PNC Financial Services Group, Inc., U.S. Bancorp, and Zions Bancorporation. The agencies identified shortcomings in Northern Trust Corporation's resolution plan, which must be satisfactorily addressed in the firm's 2017 plan due by December 31.

The SEC has announced the opening of registration for its compliance outreach program seminars for investment companies and investment advisers. The seminars will be offered in Portland, New York City, Boston, and Chicago. They are intended to help Chief Compliance Officers and other senior personnel enhance compliance programs at investment companies and investment advisory firms.

The Federal Reserve Board has announced the execution of a written agreement with Santander Holdings USA, Inc., of Boston, Massachusetts, a bank holding company, and Santander Consumer USA, Inc., of Dallas, Texas, a non-bank subsidiary engaged in automobile financing for dealers and consumers.

The CFPB has announced an enforcement action taken against Experian Holdings, Inc., Experian Information Solutions, Inc., and ConsumerInfo.com, Inc. d/b/a Experian Consumer Services (collectively, Experian) following a review of Experian's marketing practices. The Bureau stated that Experian deceptively marketed credit scores by misrepresenting that those it provided to consumers were the same scores lenders use to determine creditworthiness. The CFPB also said that Experian illegally placed advertisements for its products on webpages that consumers accessed through AnnualCreditReport.com before the consumers obtained their free annual file disclosures. Experian was ordered to pay a $3 million civil money penalty to the CFPB's Civil Penalty Fund, truthfully represent the usefulness of credit scores it sells, and put in place an effective compliance management system. See "Experian pays $3M for deceptively marketing scores," in our Penalty pages, for additional information.

TransUnion and Equifax were penalized by the Bureau in January for similar deceptive credit score marketing and other infractions.

The U.S. District Court for the District of North Dakota on March 17 granted the defendants' motion to dismiss without prejudice the complaint filed by the CFPB against Intercept Corporation et al. on June 6, 2016. The court found that the CFPB complaint did not contain sufficient factual allegations to back up its statements regarding Intercept's allegedly unlawful acts or missions; failed to sufficiently allege facts tending to show that industry standards were violated; failed to plead facts sufficient to support a legal conclusion that consumers were injured or likely to be injured; and failed to include allegations to support a finding that Intercept interfered with consumers' ability to understand the terms of their dealing with Intercept's clients or to support a finding that Intercept took unlawful advantage of consumers.

A joint press release has been issued by the member agencies of the FFIEC regarding their delivery to Congress of a joint report detailing their review of rules affecting financial institutions. The review was conducted as part of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA), which requires the federal banking agencies, along with the FFIEC, to conduct a review of their rules at least every 10 years to identify outdated or unnecessary regulations.

The Consumer Financial Protection Bureau has announced the release of a plan to assess the effectiveness of the Remittance Rule. The CFPB is requesting public comment, including information that would help the assessment. Comments on the plan will be due 60 days after it is published in the Federal Register.

Update: The Bureau's request for public comments is scheduled for publication on 3/24/17. Comments will be accepted through Tuesday, 5/23/17.

The Office of the Comptroller of the Currency has released a list of enforcement actions taken from late January through the end of February 2017 against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. Among those actions were:

• the $1 million CMP (combined with a $7 million penalty ordered by FinCEN) announced earlier against Merchants Bank of California, N.A.
• a cease and desist order and a $1 million CMP for UDAP violations of Section 5 of the Federal Trade Commission Act against First Tennessee Bank, N.A., in connection with billing and marketing, with a third party vendor, of an identity protection product
• a $5,000 CMP and prohibition order issued to a former Tulsa, Oklahoma, banker for misconduct with regard to 15 municipal bond accounts for which the banker's employer served as trustee
• a $5,000 CMP and cease and desist order issued to a former Ohio loan officer for providing false documents and making false or misleading statement in connection with a fraudulent loan, and for misrepresenting to a potential borrower that the Ohio bank had approved a $500,000 line of credit