Top Story Compliance Related

In a memo to staff released this week, Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, transferred members of the Bureau's Office of Fair Lending and Equal Opportunity into his office and ended the Office's separate enforcement authority, according to Consumer Reports. A Bureau spokesman said the move was made to "gain efficiency and consistency without sacrificing effectiveness." Critics of the move have suggested that the reorganization will reduce the effectiveness of the CFPB's fair lending enforcement efforts.

The CFPB has updated its Resources for HMDA filers page, adding a 2018 LAR Formatting Tool, and making minor updates to the 2018 Filing Instructions. The 2018 LAR Formatting Tool is designed to assist financial institutions create an electronic file that can be submitted to the HMDA platform. It can be used for data collected in 2018 and reported next year.

The Bureau also updated its Reportable HMDA Data: A regulatory and reporting overview reference chart. If you previously downloaded the 2018 Filing Instructions and/or the reference chart, we recommend you replace them with the newer versions.

The NCUA issued one prohibition order and three notices of prohibition in January, 2018. Four former credit union employees are prohibited from participating in the affairs of any federally insured financial institution. The individuals were employed by credit unions in Huntington, West Virginia; Washington, Pennsylvania; Newberry, Michigan and Columbia, Missouri.

The OCC has issued Bulletin 2018-3 to announce an update of the Municipal Securities Rulemaking Board Rules booklet of the Comptroller’s Handbook. The booklet incorporates updated guidance and examination procedures following changes to the Municipal Securities Rulemaking Board’s (MSRB) rules on best execution, transactions with sophisticated municipal market professionals (SMMP), and regular-way settlement for municipal securities transactions. In addition, technical revisions were made to this booklet to incorporate changes to 12 CFR 10 regulatory filing requirements, which now apply to federal savings associations engaged in municipal securities dealer activities.

The CFPB has announced the second in its promised series of requests for information (RFIs) seeking input on the Bureau's activities. This RFI is on administrative adjudications, and seeks input to better inform the CFPB on the benefits and impacts of its use of administrative adjudications, and to help the Bureau improve its existing process. Publication is scheduled for February 5, with a 60-day comment period ending Friday, April 6, 2018.

The Bureau said the next RFI in the series, on the CFPB's enforcement processes, will be issued next week.

An en banc panel of the U. S. Court of Appeals for the District of Columbia Circuit today handed down a 7 - 3 decision to reverse the October 2016 ruling in PHH Corporation, et al. v. Consumer Financial Protection Bureau that would have allowed the president to dismiss the director of the CFPB at will, rather than only for "inefficiency, neglect of duty, or malfeasance in office," as provided in the Dodd-Frank Act. Today's 250-page decision was based, in part, on a 1935 Supreme Court decision that sustained the constitutionality of the independent Federal Trade Commission to protect the agency's leadership from at-will removal by the president.

Today's decision, however, reinstated the October 2016 opinion of a three-judge panel that stayed and remanded to the Bureau for further proceedings then-Director Cordray's order in the PHH case interpreting section 8(c)(2) of RESPA, ignoring RESPA's three-year statute of limitations with regard to the Bureau's administrative enforcement proceeding, and raising the disgorgement recommendation of an administrative law judge from about $6.4 million to more than $109 million. That puts PHH Corporation's fate and Cordray's RESPA interpretations back into the hands of the Bureau -- albeit with some guidance from the Court of Appeals and without Cordray -- for reconsideration.

The CFPB has posted an article regarding its 2018 list of consumer reporting companies. Included with the list is information on requesting a consumer report, tips on specialty reports, information on how the reporting companies verify a consumer's identity before providing a report, a guide to obtaining a free credit report and other useful information.

OFAC has published a Frequently Asked Question on the Treasury Department report on oligarchs and parastatal entities of the Russian Federation as required by section 241 of the Countering America’s Adversaries Through Sanctions Act (CAATSA).

Treasury's Office of Foreign Assets Control has designated the the Zhao Wei Transnational Criminal Organization (Zhao Wei TCO) under Executive Order 13581, "Blocking Property of Transnational Criminal Organizations." Based in Laos within the Golden Triangle Special Economic Zone (GTSEZ), the Zhao Wei TCO exploits the region by engaging in drug trafficking, human trafficking, money laundering, bribery, and wildlife trafficking, much of which is facilitated through the Kings Romans Casino located within the GTSEZ.

OFAC also designated a network of four individuals and three entities in three countries – Laos, Thailand, and Hong Kong – for their support of the Zhao Wei TCO, or for being owned or controlled by persons designated as part of OFAC's action. As a result of Tuesday's action, all assets of those designated that are under U.S. jurisdiction are frozen, and U.S. persons are generally prohibited from engaging in transactions with them. The designated individuals and entities are identified in our OFAC Update.

The OCC has announced its 2018 schedule of workshops for directors of national community banks and federal savings associations. This year's schedule includes these topics:

• Building Blocks for Directors and Senior Management: Keys to Success
• Risk Governance – Improving Director Effectiveness
• Compliance Risk: What Directors Need to Know
• Credit Risk: Directors Can Make a Difference
• Operational Risk – Navigating Rapid Changes