Top Story Compliance Related

FinCEN has named ABLV Bank of Latvia an institution of primary money laundering concern, and has issued a finding and proposed rule seeking to prohibit the opening of a correspondent account in the United States for, or on behalf of, ABLV Bank. FinCEN's action was taken under Section 311 of the USA PATRIOT Act. Written comments on FinCEN's proposed rule will be accepted for 60 days following Federal Register publication.
Update: Scheduled for publication on 2/16/2018, with comment period ending 4/17/2018.

The Treasury Department has announced a proposal to repeal 298 tax rules that are unnecessary, duplicative or obsolete. The proposal, to be published tomorrow, would repeal provisions of IRS regulations in three categories:

• those interpreting provisions of the Internal Revenue Code that have been repealed;
• those interpreting provisions of the Code that have been significantly revised and the existing regulations don't account for those revisions; and
• those that are no longer applicable.

Comments on the proposal and requests for a public hearing are due by May 14, 2018.
Update: Corrected publication date to February 15, 2018 (83 FR 6806)

A former employee of Compass Bank, Birmingham, Alabama, and of BBVA Compass Investment Solutions has been issued a consent order of prohibition by the Federal Reserve Board, having pled guilty to one count of bank embezzlement and having agreed to make restitution to the bank in the amount of $206,970.63 as part of his plea agreement. The former employee stipulated in that agreement that he had embezzled money from customers of the bank, resulting in a loss to the bank of between $150,000 and $200,000.

The Trump Administration yesterday announced the proposed Fiscal Year 2019 budget for the U.S. Department of Housing and Urban Development (HUD), a $41.24 billion spending plan that continues or expands support for vulnerable populations including those experiencing homelessness, the elderly and persons living with disabilities. HUD reports that the 2019 budget represents a commitment to fiscal restraint, with a modest one percent increase in discretionary funding over last year's request.

The Securities and Exchange Commission has issued an order instituting an enforcement action against Deutsche Bank Securities Inc., which has agreed to repay more than $3.7 million to customers, including $1.48 million that was ordered as disgorgement. The SEC’s investigation found that traders and salespeople made false and misleading statements while negotiating sales of commercial mortgage-backed securities (CMBS). According to the SEC’s order, customers overpaid for CMBS because they were misled about the prices at which Deutsche Bank had originally purchased them. Deutsche Bank will also pay a $750,000 civil money penalty to the U.S. Treasury.

OFAC has published two new Venezuela-related frequently asked questions. The FAQs provide additional guidance on the debt-related prohibitions in Executive Order 13808, including the meaning of “new debt” for the purposes of the Executive Order and the receipt of certain late payments from the Government of Venezuela, including Petroleos de Venezuela, S.A.

The Bureau has released its modified five-year Strategic Plan that establishes its mission, strategic goals, and strategic objectives. The plan draws directly from the Dodd-Frank Act and refocuses the Bureau’s mission on regulating consumer financial products or services under existing federal consumer financial laws, enforcing those laws judiciously, and educating and empowering consumers to make better informed financial decisions. Among changes from the prior Strategic Plan, the Bureau will now focus on equally protecting the legal rights of all, including those regulated by the Bureau, and will engage in rulemaking where appropriate to address unwarranted regulatory burdens and to implement federal consumer financial law and will operate more efficiently, effectively, and transparently.

The Financial Crimes Enforcement Network (FinCEN) today issued advisory FIN-2008-A001 to financial institutions regarding the Financial Action Task Force's updated list of jurisdictions with strategic anti-money laundering/counter-terrorist financing deficiencies. These changes may affect U.S. financial institutions' obligations and risk-based approaches regarding relevant jurisdictions.

The U.S. Department of the Treasury announced on Friday that OFAC acted to target ISIS’s global facilitation network by designating three individuals and three entities as Specially Designated Global Terrorists under Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. As a result of Friday’s designations, all property and interests in property of these persons subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Identifying information on the designated individuals and entities can be found in our OFAC Update.

The Federal Reserve Board has issued a Notice of Intent to Prohibit Jacob H. Goldstein, former president and CEO of NBRS Financial, Rising Sun, Maryland (a former state member bank merged with assistance into Howard Bank, Ellicott City, Maryland). The Notice of Intent alleges that Goldstein, who also served as chief lending officer for the bank, received the benefit of loans to third parties without disclosing to the bank's board that he benefited from those loans, which violated Regulation O, breached his fiduciary responsibilities to the bank, and caused the bank to operate in an unsafe and unsound manner.

The Notice of Intent gives Goldstein 20 days to file an answer and notifies him of his right to an administrative hearing to issue recommendations to the Board of Governors concerning its intent to prohibit Goldstein from further involvement with any financial institution.