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Top Story Compliance Related

12/31/2019

FTC prevails in case against mortgage relief scammers

The Federal Trade Commission has announced that the U.S. District Court for the District of Nevada has ruled in favor of the Commission in a case against the operators of a scheme that deceived financially distressed homeowners by falsely promising to make their mortgages more affordable. The defendants also charged consumers illegal advance fees and unlawfully told consumers not to pay their mortgages to or communicate with their lenders. The case was originally filed by the FTC in January 2018, and the court issued a temporary restraining order against the company at that time. The court found that the defendants’ practices violated the FTC Act and the Mortgage Assistance Relief Services Rule.

Under the terms of the newly issued final order, the defendants will be permanently banned from the debt relief business and will be banned from misleading consumers about the terms of other financial services they may offer, as well as from making misleading claims in advertisements. The ruling also imposes an $18.5 million judgment against the defendants. The order requires that the contents of numerous bank accounts be turned over to the FTC, along with the proceeds from selling assets belonging to the defendants. Among the assets that will be liquidated are a Park City, Utah ski chalet, an office building, a Mercedes Benz S550, and a Porsche Carerra.

The defendants subject to the order are Preferred Law PLLC; Consumer Defense LLC (Nevada); Consumer Defense LLC (Utah); Consumer Link Inc.; American Home Loan Counselors; American Home Loans LLC; Consumer Defense Group LLC, formerly known as Modification Review Board LLC; Brown Legal Inc.; AM Property Management LLC; FMG Partners LLC; Zinly LLC; Jonathan P. Hanley; and Sandra X. Hanley.

12/30/2019

Regulators issue statement regarding extension of credit for Reg O

The OCC, Federal Reserve Board, and the FDIC have issued a “Statement Regarding Status of Certain Investment Funds and Their Portfolio Investments for Purposes of Regulation O and Reporting Requirements Under Part 363 of FDIC Regulations.” This interagency statement explains that the agencies will exercise discretion not to take action against banks, or against certain asset managers that become principal shareholders of banks (principal shareholder fund complexes), with respect to certain extensions of credit by banks to portfolio companies of the principal shareholder fund complex (fund complex-controlled portfolio companies) that otherwise would violate Regulation O, provided certain eligibility criteria are satisfied.

The federal banking agencies are providing this temporary relief while the Fed, in consultation with the other federal banking agencies, considers whether to amend Regulation O to address this issue.

12/29/2019

Agencies adjust CRA bank size definitions

The FDIC, Federal Reserve Board and OCC have published [84 FR 71738] a final rule adjusting for inflation the definition thresholds for small and intermediate-small financial institutions under their Community Reinvestment Act regulations at 12 CFR Parts 25, 195, 228 and 345.

Effective January 1, 2020, a small bank will be a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.305 billion. An intermediate small bank will be a small bank with assets of at least $326 million as of December 31 of both of the prior two calendar years and less than $1.305 billion as of December 31 of either of the prior two calendar years.

12/27/2019

Extension of comment period on use of CAMELS ratings

On October 31, the FDIC and the Federal Reserve Board published [84 FR 58383] a Request for Information seeking information and comments from interested parties regarding the consistency of ratings assigned by the agencies under the Uniform Financial Institutions Rating System UFIRS (commonly known as CAMELS ratings). The agencies also sought feedback concerning the current use of CAMELS ratings by the agencies in their bank application and enforcement action processes. The RFI stated that the comment period would close on December 30, 2019. The agencies have received requests to extend the comment period. An extension of the comment period will provide additional opportunity for the public to prepare comments to address the questions posed by the agencies. Therefore, the agencies are extending the end of the comment period for the proposal from December 30, 2019, to February 28, 2020. The notice of that extension was published in today's Federal Register.

12/26/2019

SECURE Act changing the IRA rules

With the signing of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), many of the longstanding rules for IRAs and other retirement accounts have been radically changed. Starting with tax year 2020—

  • The maximum age (70½) for IRA contributions has been eliminated.
  • The age at which required minimum distributions must begin has been pushed up from 70½ to 72.
  • Inherited IRAs (except those inherited by the decedent's spouse and certain other individuals) will have to be distributed within 10 years.

Those are just the changes you have probably already heard about. Deborah Crawford will present a special ONE-HOUR BOL Learning Connect webinar on January 24 that will cover the SECURE Act changes that will affect your bank's IRA program starting with the 2020 tax year.

12/24/2019

CFPB annual report on financial literacy

The CFPB has issued its Financial Literacy Annual Report for fiscal year 2019. The Dodd-Frank Act requires the Bureau to report on its work to provide consumers with information to make informed decisions about financial products.

12/24/2019

FBAR deadline pushed back yet again

FinCEN has announced a further extension of time for certain Report of Foreign Bank and Financial Accounts (FBAR) filings in light of the notice of proposed rulemaking FinCEN issued on March 10, 2016, which proposes to revise the regulations implementing the Bank Secrecy Act regarding FBARs. It addresses only those with signature authority over but no financial interest in foreign financial accounts. Other persons required to file FinCEN Form 114 - FBAR must meet the April 15, 2020, deadline. [Editorial Comment: This one has been kicked down the road every year since 2011.]

12/24/2019

FinCEN updated SAR data maps available

FinCEN has made available a new tool that is useful for visualizing aggregate Suspicious Activity Reports (SAR) filed by financial institutions in the United States. The new interactive maps will be accompanied by downloadable SAR data in the near future. The maps are available on FinCEN's SAR Stats web page.

12/23/2019

Treasury and IRS propose rule on misdirected refunds

The IRS has published [84 FR 70462] proposed regulations concerning the procedures for identification and recovery of a misdirected direct deposit refund. The regulations reflect changes to the law made by the Taxpayer First Act. The proposed regulations affect taxpayers who have made a claim for refund, requested the refund be issued as a direct deposit, but did not receive a refund in the account designated on the claim for refund. Comments and requests for a public hearing must be received by February 21, 2020.

12/23/2019

FDIC grants Part 370 exceptions

The FDIC has published [84 FR 70527] a notice, in accordance with its rule regarding recordkeeping for timely deposit insurance determination (12 CFR Part 370), it is providing notice to covered institutions that it has granted a time-limited exception concerning the requirement to maintain official custodian information in deposit account records for government deposit accounts, a time-limited exception concerning the requirement to maintain accurate beneficiary information in deposit account records for informal revocable trust accounts, and an indefinite exception concerning the requirement to maintain certain identifying information for beneficial owners of deposits in low balance, short-term prepaid card accounts. The grants of exception relief were made to specific institutions, and were effective November 26, 2019.

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