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03/10/2020

OFAC removes Terrorism Sanctions Rule

A final rule has been published a final rule [85 FR 13746] to remove the Terrorism Sanctions Regulations from the Code of Federal Regulations, effective today. OFAC is taking this action because the national emergency on which 31 CFR part 595 was based was terminated by the president on September 9, 2019.

03/10/2020

February Fed CRA evaluation ratings

Our check of the Federal Reserve Board's list of Community Reinvestment Act evaluation ratings reveals that the Fed made 13 ratings public in February 2020. Eleven of the banks whose evaluations were made public received "Satisfactory" ratings. Congratulations to the two banks that received "Outstanding" ratings:

03/09/2020

Bureau announces steps to prevent consumer harm

The CFPB has announced three steps it is taking to advance its strategy for preventing consumer harm:

  • Implementing an advisory opinion program to provide clear guidance to assist companies in better understanding their legal and regulatory obligations through advisory opinions;
  • Amending and reissuing its responsible business conduct bulletin, which articulates that the Bureau intends to provide credit to entities for their responsible conduct based on its extent and significance; and
  • Engaging with Congress to advance proposed legislation that would authorize the Bureau to award whistleblowers who report violations of federal consumer financial law.

Under the advisory opinion program, parties will submit requests for an advisory opinion to the Bureau via its website. To increase transparency and to provide regulatory certainty to all regulated entities and other stakeholders, the Bureau will publish the responding advisory opinion in the Federal Register and on its website. The opinion will include an interpretation of the Bureau’s existing rules.

The revised responsible business conduct guidelines list four categories of responsible conduct -- self-assessing, self-reporting, remediation, and cooperation -- that can be considered with other factors in addressing violations of consumer financial law in supervisory and enforcement matters.

The proposed whistleblower provisions would provide incentives for employees to report wrongdoing to the Bureau that can assist in advancing enforcement cases, especially fair lending cases.

UPDATE: Responsible Business Conduct Bulletin 2020-01 was published at on 3/30/2020.

03/09/2020

FATF guidance on Digital IDs

The Financial Action Task Force (FATF) has issued a Guidance on Digital ID, which reports the number of digital transactions are growing at an estimated 12.7 % annually. By 2022, an estimated 60% of global GDP will be digitized. In any financial transaction, knowing your customer is essential to ensure that the funds involved are not linked to crime and terrorism. However, in a digital context, traditional verification tools do not apply. The FATF has developed the guidance to help governments, financial institutions, virtual asset service providers and other regulated entities determine whether a digital ID is appropriate for use for customer due diligence.

03/09/2020

OCC proposes revised rules on corporate activities and transactions

The OCC has announced a proposal to amend its rules relating to policies and procedures for corporate activities and transactions involving national banks and federal savings associations. Specifically, the proposal would update and clarify the policies and procedures, eliminate unnecessary requirements consistent with safety and soundness, and make other technical and conforming changes. The proposed rule has a comment period ending on May 4, 2020.

The proposal would, among other changes:

  • Make the definition of “well managed” consistent for all filing types.
  • Eliminate the filing requirement for FSAs that adopt without change the OCC’s model or optional bylaws.
  • Add numerous provisions to 12 CFR 5.33 permitting national banks and FSAs to elect to follow the procedures applicable to state banks or state savings associations, respectively, for certain business combinations.
  • For operating subsidiaries:
    • Permit an eligible operating subsidiary of a qualifying national bank or FSA to engage in an activity that is substantively the same as a previously approved bank or FSA activity, respectively, by filing a notice with the OCC (national banks) or an application through expedited review (FSAs).
    • Remove the annual national bank operating subsidiary reporting requirement.
  • For non-controlling investments by a national bank and pass-through investments by an FSA:
    • With prior OCC approval, permit investments in enterprises that have not agreed to OCC supervision.
    • Provide an expedited review procedure for these investments under certain conditions.
    • Expand the investments eligible for notice.
    • Permit investments without a filing in enterprises conducting activities limited to those previously reported by the national bank or FSA in a previous non-controlling investment or pass-through investment filing.
  • Provide procedures for granting and revoking citizenship and residency waivers for national bank directors.
  • Permit national banks to request approval for a reduction in capital over more than four quarters.
  • Change the definition of “troubled condition” for purposes of changes in directors and senior executive officers to align with OCC supervisory practices. The updated definition would specify that an enforcement action (a cease-and-desist order, consent order, or formal written agreement) must require the national bank or FSA to improve its financial condition for it to be considered in “troubled condition” solely as a result of the enforcement action.

03/09/2020

Comments sought re resolutions plans for large foreign banks

The FDIC and the Federal Reserve Board have invited public comment on proposed changes to the guidance for resolution plans submitted by large foreign banks, including plans that are due by July 1, 2021. The updates focus on the agencies' expectations around a firm's derivatives and trading activities and payment, clearing, and settlement activities. The proposed guidance is largely similar to the guidance from March 2017, and includes certain updates based on the agencies' review of the firms' most recent resolution plans and changes to the resolution planning rules. The proposed guidance also seeks comment on objective, quantitative criteria to determine its applicability. As of the date of the proposal, the firms that meet the proposed criteria are the U.S. operations of Barclays, Credit Suisse, and Deutsche Bank. Comments on this proposal will be accepted for 60 days.

Update: Published at 85 FR 15449 on 3/18/2020, with a 48-day comment period ending 5/5/2020.

03/09/2020

CRA analytics data tables

The Federal Reserve Board has released a series of Community Reinvestment Act Analytics Data Tables. This data resource is intended to provide insight into the historical relationship between bank lending activity and regulatory assessments. The tables combine HMDA data, CRA small business and small farm loan data, and manually extracted data from CRA performance evaluations. Bank attributes, deposit, branching, demographic, and other third-party vendor data supplement the tables.

03/09/2020

OFAC FAQ re COVID-19 in Iran

OFAC has issued a new Frequently Asked Question (FAQ) related to the manner in which humanitarian goods or assistance can be provided to the Iranian people in response to the COVID-19 outbreak in Iran, consistent with the Iran-related sanctions administered by OFAC.

03/06/2020

FDIC voluntary retirement and early separation program

The FDIC has announced it will offer voluntary retirement and early separation opportunities to approximately 20 percent of its employees to help reshape the agency's workforce for the future and to enhance preparedness. A recent report indicated that 42 percent of the FDIC's workforce is eligible for retirement within five years, which could deplete the FDIC's institutional experience and knowledge, especially during a crisis. The voluntary retirement and early separation opportunities are "part of a deliberate strategy to further reduce layers of management, acquire new skillsets, and allow the agency to proactively address succession planning prior to any crisis or emergency situation," said Chairman Jelena McWilliams. "This program will enhance our agility, preparedness, and technological transformation."

03/06/2020

Regulators postpone conference due to coronavirus concerns

The Federal Reserve, FDIC, and OCC have issued a joint press release announcing their decision to postpone the 2020 National Interagency Community Reinvestment Conference (NICRC) scheduled for March 9–12 in Denver after careful consideration of the growing public health concerns associated with the coronavirus (COVID-19). The NICRC planning team is working to confirm a date to reschedule the conference as soon as possible later this year.

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