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Top Story Compliance Related

03/26/2020

$40M in HUD grants to fight housing discrimination

HUD has awarded $40 million to fair housing organizations working to confront violations of the Fair Housing Act and help end housing discrimination. The grants are being awarded through HUD’s Fair Housing Initiatives Program (FHIP) and the Fair Housing Assistance Program (FHAP) to help people who believe they have been victims of housing discrimination and to educate the public and housing providers on fair housing laws.

03/25/2020

FTC and Justice to expedite antitrust procedures for public health efforts

The Federal Trade Commission and Justice Department have announced a joint statement detailing an expedited antitrust procedure and providing guidance for collaborations of businesses working to protect the health and safety of Americans during the COVID-19 pandemic.

Under the expedited procedure for COVID-19 public health projects, the agencies will respond to all COVID-19-related requests, and resolve those addressing public health and safety within seven calendar days of receiving all information necessary to vet these proposals. The statement sets out the instructions for businesses wishing to take advantage of this procedure.

03/25/2020

Fed adjusting supervision in light of COVID-19

The Federal Reserve Board has provided additional information to financial institutions on how its supervisory approach is adjusting in light of the coronavirus pandemic, issuing a Statement on Supervisory Activities. In particular:

  • The Federal Reserve will focus on monitoring and outreach to help financial institutions of all sizes understand the challenges and risks of the current environment;
  • To minimize disruption and to focus on outreach and monitoring, the Federal Reserve will temporarily reduce its examination activities, with the greatest reduction in activities occurring at the smallest banks;
  • Large banks should still submit their capital plans that they have developed as part of the Board's Comprehensive Capital Analysis and Review, or CCAR, by April 6. The plans will be used to monitor how firms are managing their capital in the current environment; and
  • To allow firms to focus on heightened risks in this current environment and assist consumers, additional time will be granted for resolving non-critical existing supervisory findings.

The Board recognizes that the current situation is significantly affecting areas of the country in different ways and will work with financial institutions to understand the specific issues they are facing.

03/24/2020

$6.9M sent to victims of office supply scam

The Federal Trade Commission (FTC) is sending refunds totaling more than $6.9 million to small businesses, non-profits, and government agencies targeted by an office supply telemarketing scam that charged them for products they did not order. The FTC alleged that defendants’ victims included child care centers, schools, and police and fire departments. The FTC has begun mailing 13,181 refund checks averaging $525 each to the victims of the scam. Refund recipients should deposit or cash their checks within 60 days, as indicated on the check.

03/24/2020

FDIC's OMWI requests diversity self-assessments

The FDIC's Office of Minority and Women Inclusion (OMWI) has issued FIL-23-2020 requesting diversity self-assessments from FDIC-regulated financial institutions for 2019 in accordance with Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The FDIC's Financial Institution Diversity program is responsible for assessing the diversity policies and practices of its regulated financial institutions per the Standards identified in the Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies (Policy Statement). Participation in the self-assessment program by a regulated institution is voluntary.

03/24/2020

Fed adds new measures to support economy under COVID-19 attack

The Federal Reserve Board announced Monday morning extensive new measures to support the economy. These actions include—

  • Support for critical market functioning. The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy. The FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. In addition, the FOMC will include purchases of agency commercial mortgage-backed securities in its agency mortgage-backed security purchases.
  • Supporting the flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing. The Department of the Treasury, using the Exchange Stabilization Fund (ESF), will provide $30 billion in equity to these facilities.
  • Establishment of two facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.
  • Establishment of a third facility, the Term Asset-Backed Securities Loan Facility (TALF), to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets.
  • Facilitating the flow of credit to municipalities by expanding the Money Market Mutual Fund Liquidity Facility (MMLF) to include a wider range of securities, including municipal variable rate demand notes (VRDNs) and bank certificates of deposit.
  • Facilitating the flow of credit to municipalities by expanding the Commercial Paper Funding Facility (CPFF) to include high-quality, tax-exempt commercial paper as eligible securities. In addition, the pricing of the facility has been reduced.

In addition to the steps above, the Federal Reserve expects to announce soon the establishment of a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses, complementing efforts by the SBA.

03/23/2020

FTC and CFPB report FDCPA enforcement activities

The Federal Trade Commission has provided the CFPB with an annual summary of the Commission’s activities enforcing the Fair Debt Collection Practices Act (FDCPA). The FTC shares enforcement responsibility for the FDCPA with the CFPB, which provides an annual report to Congress about debt collection enforcement activities The annual report highlights both agencies’ efforts to stop unlawful debt collection practices, including law enforcement, education and public outreach, and policy initiatives.

The CFPB also released its annual report to Congress.

03/23/2020

DHS Form I-9 flexibility

The Department of Homeland Security has announced that, due to precautions being implemented by employers and employees related to physical proximity associated with COVID-19, it will exercise discretion to defer the physical presence requirements associated with Employment Eligibility Verification (Form I-9) under Section 274A of the Immigration and Nationality Act (INA). Employers with employees taking physical proximity precautions due to COVID-19 will not be required to review the employee’s identity and employment authorization documents in the employee’s physical presence.

03/20/2020

Joint statement on CRA and COVID-19

The Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency (the agencies) have issued a Joint Statement on CRA Consideration for Activities in Response to COVID-19. The agencies recognize the potential for the Coronavirus Disease (COVID-19) to adversely affect the customers and operations of financial institutions. The agencies encourage financial institutions to work with affected customers and communities, particularly those that are low- and moderate-income. The agencies will provide favorable consideration under the Community Reinvestment Act of certain retail banking services, retail lending activities, and community development activities related to this national emergency.

The FDIC's FIL-19-2020 reports that the statement will be effective through the six-month period after the national emergency declaration is lifted, unless extended by the agencies.

03/20/2020

OCC announces enforcement actions

The OCC has released a list of enforcement actions recently taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

  • A civil money penalty of $50,000 was imposed on Michael S. Fontaine, former chief operational risk officer of U.S. Bank, N.A., Cincinatti, Ohio. This penalty is in addition to the previously reported $450,000 penalty imposed by FinCEN. The Comptroller found that Fontaine failed to take action to address inadequate staffing in the bank's BSA/AML program, allowing them to remain deficient for at least five years; and allowing the bank to implement alert suppression techniques to maintain suspicious activity alert volumes at a level commensurate with those inadequate staffing levels.
  • A formal agreement with Mutual Savings Bank, Hartsville South Carolina, to address concerns relating to board and management oversight, credit oversight and administration, internal controls, internal audit, and liquidity risk management.
  • Removal/prohibition orders were issued to:
    • a former teller at Bank of America, N.A., Charlotte, North Carolina (misappropriation of funds for her own use);
    • a former employee of Bank of America, N. A., Charlotte, North Carolina (misappropriation of at least $29,500 from bank customers for his own use);
    • a former service manager of Wells Fargo Bank, N.A. Sioux Falls, South Dakota (misappropriation of approximately $9,000 from her teller drawer); and
    • a former regional banking private banker at Wells Fargo Bank, N.A., Sioux Falls, South Dakota, who opened an account on behalf of a customer without authorization or knowledge of the customer and designated himself as sole owner and signer for the account. He collected funds as charitable contributions, deposited the funds into the account, and made repeated unauthorized transfers to his personal account.

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