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Top Story Compliance Related

02/12/2020

FinCEN making more changes to CTR filing instructions

FinCEN ruling FIN-2020-R001, dated Monday, announced Tuesday and effective April 6, 2020 (September 1, 2020 for e-filing batch filers), makes significant changes in CTR filing requirements for transactions involving sole proprietorships and legal entities operating under a "doing business as" (DBA) name. FinCEN states that the changes are being made "to both enhance regulatory efficiency and provide complete and accurate CTR data to law enforcement."

    Sole proprietorships

    • When a sole proprietorship is involved, items 4 through 7 and item 17 (name, gender and date of birth) are those of the individual owner.
    • In states that allow spouses to jointly operate a sole proprietorship, identify the individual whose SSN is attached to the sole proprietorship
    • If the sole proprietor does business in his/her own name, the rest of Part I should reflect the individual owner's information.
    • If the individual owner operates the business under a different name (a DBA name), the DBA name appears in item 8 (alternate name), and complete the rest of Part I (other than items 4-6, 7 and 17) with reference to the DBA name and location of that business
    • If more than one DBA business is involved in the sole proprietor's reported transactions, list only one DBA name in item 8 and complete a separate Part I for each involved DBA business
    • The amount and account number(s) in Items 21 and/or 22 will be the amount an account number(s) associated with the specific location for the reported transaction.

    Legal entities

    • When a CTR is prepared on a legal entity such as a partnership, corporation, or LLC , etc., the Part I section should reflect home office/headquarters data (address, phone number, ID number, etc.) of the entity.
    • When multiple entity locations are involved, a separate Part I section should be prepared for each location involved.
    • Those additional Part I sections should include the entity's legal name in item 4 and alternative name, if any, in item 8.
    • Only one DBA name per Part I. If multiple DBAs are involved, use a separate Part I for each DBA and no DBA name should appear on the Part I for the home office/headquarters.
    • Each of the additional Part I sections will identify the location's address along with other entity data applicable to that location (phone number, etc.)
    • The initial Part I section on the entity home office will show total amount and all account numbers involved in item 21 or 22. The Part I entries for multiple locations will show account number(s) and amounts associated with that location only.

    The new ruling rescinds and replaces FIN-2006-R003 and FIN-2008-R001, both of which were based on the old CTR Form 104.

    02/11/2020

    Supplement to FDIC Procedures Manual issued

    With FIL-8-2020, the FDIC has announced the release of a supplement to its Deposit Insurance Application Procedures Manual that addresses deposit insurance applications involving unique or complex proposals. The FDIC has also released updated versions of the Procedures Manual and the publication, "Applying for Deposit Insurance – A Handbook for Organizers of De Novo Institutions."

    02/11/2020

    Bowman addresses community bankers

    In a presentation at the ABA Conference for Community Bankers, Federal Reserve Board Governor Michelle W. Bowman discussed the interaction between innovation and regulation for community banks. Ms Bowman discussed clearing a path for innovation, and creating the right regulatory environment. Governor Bowman concluded, “I believe that we can create a regulatory environment in which community banks are empowered to innovate, in which supervisors leverage their own knowledge to help banks understand what to look for in a service provider. It's a regulatory environment in which guidance is clear and supervisors are appropriately flexible, and due diligence and third-party evaluations are appropriately scaled. Every bank must decide for itself whether and how to adapt their business models to new technologies, but supervisors and regulators can facilitate innovation at a few key milestones on that path forward.”

    02/10/2020

    OFAC targets Venezuelan national airline

    Treasury has announced that, on Friday, OFAC identified the Venezuelan state-owned airline Consorcio Venezolano de Industrias Aeronauticas y Servicios Aereos, S.A. (Conviasa) as subject to sanctions as part of the Government of Venezuela, under the authority of Executive Order 13884. Friday’s action also identified the Conviasa fleet of aircraft as blocked property of the Government of Venezuela pursuant to E.O. 13884. Conviasa and its fleet have been blocked since the issuance of E.O. 13884 of August 5, 2019, and were added to OFAC’s Specially Designated Nationals List to ensure strengthened compliance with U.S. sanctions.

    For identification information relating to Friday's OFAC action, see this BankersOnline OFAC Update.

    02/07/2020

    Kraninger signals CFPB plans

    In oral and written testimony given yesterday before the House Financial Services Committee, CFPB Director Kathleen Kraninger reported that the Bureau plans to move away from the 43 percent debt-to-income ratio requirement in the qualified mortgage rule, and will propose an alternative such as pricing thresholds to better ensure that responsible, affordable mortgage credit remains available for consumers. The Bureau expects to issue a proposal on changes to the QM rule in May 2020.

    Kraninger reported that the Bureau is evaluating comments received on its proposal to rescind the underwriting portions of its Payday Lending rule. She also reported progress on the Bureau's evaluation of comments relating to the EGRRCPA requirement that the Bureau prescribe regulations under the Truth in Lending Act for residential property assessed clean energy (PACE) loans. Also under review are approximately 100 comments received on the Bureau's proposed amendments to the Remittance Rule (subpart B of Regulation E), and comments on the Bureau's proposed rule to implement the requirements applicable to debit collectors under the Fair Debt Collection Practices Act.

    02/07/2020

    2020 hypothetical stress test scenarios released

    The Federal Reserve and the OCC have released the hypothetical scenarios for the 2020 stress test exercises, which ensure that large banks have adequate capital and processes so that they can continue lending to households and businesses, even during a severe recession. The harshest scenario includes a severe global recession with heightened stresses in corporate debt markets and commercial real estate, and for banks with large trading operations, additional pressure on leveraged loans.

    02/07/2020

    2020 national illicit finance strategy announced

    Treasury has issued the 2020 National Strategy for Combating Terrorist and Other Illicit Financing, which provides a roadmap to modernize the U.S. anti-money laundering/countering the financing of terrorism (AML/CFT) regime to make it more effective and efficient. The strategy identifies key threats, vulnerabilities, and priorities for disrupting and preventing illicit finance activities within and transiting the U.S. financial system, and builds upon and updates the 2018 National Strategy for Combating Terrorist and Other Illicit Financing, pursuant to the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA).

    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.

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