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Top Story Compliance Related

02/07/2020

Mali Sanctions regulations published

OFAC has published regulations [85 FR 7223, 2/7/2020] to implement Executive Order 13882 of July 26, 2019, "Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Mali."

02/06/2020

OCC CRA evaluations released

The OCC has announced its release of a list of Community Reinvestment Act performance evaluations that were made public in January. Of the 28 evaluations listed, 21 are rated Satisfactory and seven are rated Outstanding. Our congratulations to those receiving Outstanding ratings (links are to their performance evaluations):

02/06/2020

CFPB proposing settlement with Think Finance

The CFPB has announced a proposed settlement with Think Finance, LLC, formerly known as Think Finance, Inc., and six subsidiaries, to resolve the lawsuit the Bureau filed on November 15, 2017 (see our 11/16/2017 Top Story). The Bureau alleged that the Think Finance Entities engaged in unfair, deceptive, and abusive acts and practices in violation of the Consumer Financial Protection Act in connection with the illegal collection of loans that were void in whole or in part under state laws governing interest rate caps, the licensing of lenders, or both.

In 2018, the Bureau filed its first amended complaint, alleging that the Think Finance Entities operated as a common enterprise that affiliated with tribal lenders in the offering and collection of online installment loans and online lines of credit to consumers nationwide. The Think Finance Entities, the Bureau alleged, made deceptive demands and illegally took money from consumers’ bank accounts for debts that consumers did not actually owe because the loans were either partially or completely void under the law of 17 states. The Bureau also alleged that the Think Finance Entities provided substantial assistance to two debt collection companies that were also engaged in the illegal collection of loans.

If the proposed stipulated final consent order is entered by the court, it would, among other things, prohibit the Think Finance Entities from offering or collecting on loans to consumers in any of the 17 states if the loan violates state lending laws and from assisting others in engaging in that conduct. The proposed order would also impose a $1 civil money penalty for each of the seven Think Finance Entities.

The proposed settlement is part of a global resolution of the Think Finance Entities' bankruptcy proceeding, which includes settlements with the Pennsylvania Attorney General's Office and private parties in a class action suit. Consumer redress will come from a fund created as part of the global resolution, which is anticipated to have over $39 million available for distribution and may increase.

02/05/2020

Fed CRA evaluation ratings

Our monthly check of the Federal Reserve Board's CRA evaluation ratings reveals that the Board made public 20 ratings in January, including one "Substantial Non-Compliance" rating for a bank in West Memphis, Arkansas, and 17 ratings of "Satisfactory." Our congratulations to the following two banks, which received "Outstanding" ratings (links are to their evaluations):

02/05/2020

FDIC lists banks examined for CRA compliance

The FDIC has released a list of 74 banks examined for compliance with the Community Reinvestment Act whose evaluation ratings were assigned in November 2019. Sixty-nine of the banks received ratings of "Satisfactory." Two were rated "Needs to Improve." Our congratulations to the following three banks, which received a rating of "Outstanding" (links are to their evaluation reports):

02/04/2020

Six credit unions to pay late-filing penalties

The NCUA has posted its Second Quarter Late Call Report Filers List, which indicates six federally insured credit unions were subject to civil money penalties for filing late Call Reports in the second quarter of 2019 and have agreed to penalties totaling $2,259. Each of the six credit unions had filed a late Call Report previously. All six had total assets below $50 million, four with assets of $10 million or less.

02/03/2020

SEC proposals to amend financial disclosure requirements and guidance

The Securities and Exchange Commission has announced that it has voted to propose amendments to modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K. The proposed amendments would eliminate duplicative disclosures and modernize and enhance Management's Discussion and Analysis disclosures for the benefit of investors, while simplifying compliance efforts for companies. The Commission also announced that it is providing guidance on key performance indicators and metrics in Management's Discussion and Analysis.

02/03/2020

FDIC lists enforcement actions

The FDIC has released a a list of orders of administrative enforcement actions taken against banks and individuals in December.

  • The Bancorp Bank, Wilmington, Delaware, was ordered to pay a $7.5 million civil money penalty for BSA/AML violations
  • A former market president and director of Frontier Bank, Omaha, Nebraska, was assessed a civil money penalty of $25,000 and issued a prohibition order for making loans to uncreditworthy borrowers, diverting funds loaned to one customer to the use of another bank customer, and extending credit in excess of his authority.
  • a former branch president and loan officer of People's Bank and Trust Company, McPherson, Kansas, was issued a cease and desist order after the FDIC determined she manipulated payment due dates on loans and overdraft lines to herself and immediate family members, concealing delinquencies from senior management of the bank.

01/31/2020

Bureau sues Citizens Bank, N.A.

The CFPB has announced it has filed a complaint against Citizens Bank, N.A. (Citizens), headquartered in Providence, Rhode Island. The Bureau’s complaint alleges violations of the Truth in Lending Act and its implementing Regulation Z, including violations of amendments to TILA contained in the Fair Credit Billing Act and the Credit Card Accountability Responsibility and Disclosure (CARD) Act.

The complaint alleges that Citizens automatically denied consumers’ billing error notices and claims of unauthorized use in certain circumstances. The complaint further alleges that Citizens failed to fully refund finance charges and fees when consumers asserted meritorious disputes or fraud claims, and failed to send consumers required acknowledgment letters and denial notices in response to billing error notices. It also alleges that Citizens failed to provide credit counseling referrals to consumers who called Citizens’ toll-free number designated for that purpose.

The complaint is not a finding or ruling that the defendant has violated the law.

01/31/2020

Agencies propose modifications of Volcker Rule

A joint press release from the Federal Reserve Board, FDIC, OCC, SEC, and the Commodity Futures Trading Commission announces the agencies are inviting public comment on a proposal to modify regulations implementing the Volcker Rule's general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds—known as "covered funds." The proposal would modify the restrictions for banking entities investing in, sponsoring, or having certain relationships with covered funds. Comments will be accepted through April 1, 2020.

UPDATE: Published at 85 FR 12120 (https://www.federalregister.gov/d/2020-02707) on 2/28/2020, with 33-day comment period ending 4/1/2020.

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