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Top Story Compliance Related

04/12/2021

FDIC request for input on revision of official sign and ad requirements

The FDIC is renewing its February 2020 request for input regarding potential modernization of the official FDIC sign and advertising rules (12 C.F.R. Part 328) to reflect changes in deposit-taking via physical branch, digital, and mobile banking channels. The FDIC last significantly updated the rules in 2006. Last year's request for input was postponed in April 2020 due to shifted priorities during the COVID-19 pandemic.

The FDIC encourages comments from all interested parties. The comment period closes on May 24th.

  • FIL-26-2021
  • 04/12/2021

    Agencies' statement and RFI on BSA model risk management guidance

    The federal banking agencies, in consultation with the Financial Crimes Enforcement Network and the National Credit Union Administration, on Friday issued a joint statement addressing how risk management principles described in the "Supervisory Guidance on Model Risk Management" relate to systems or models used by banks to assist in complying with the requirements of Bank Secrecy Act laws and regulations. The statement further notes that it does not alter existing BSA/AML legal or regulatory requirements or establish new supervisory expectations, and that no specific model risk management framework is required.

    The agencies, along with the National Credit Union Administration and the Financial Crimes Enforcement Network, also announced a request for information on the extent to which the principles discussed in the guidance support compliance by banks and credit unions with BSA/AML and Office of Foreign Assets Control requirements. The agencies are seeking comments and information to better understand bank practices and determine whether additional explanation or clarification may be helpful.

    Comments to the RFI will be accepted for 60 days, through June 11, 2021.

    04/09/2021

    Missouri bank assessed $11,000 flood penalty

    The Federal Reserve Board has announced its assessment of an $11,000 civil money penalty on a Missouri bank for violations of the National Flood Insurance Act.

    04/09/2021

    Fed proposes to automate routine Fed stock adjustments

    The Federal Reserve Board has announced it is requesting public comment on a proposal to automate non-merger-related adjustments to member banks' subscriptions to Federal Reserve Bank capital stock. The automated process would eliminate the need for member banks to file applications to adjust their stock subscriptions—except in the context of mergers—and would significantly reduce the annual reporting burden.

    Regulation I, which governs the issuance and cancellation of capital stock by the Reserve Banks, currently requires that a member bank apply to adjust its stock subscription at least annually and sometimes quarterly. A member bank determines its required stock subscription based on its capital and surplus (or total deposit liabilities for a mutual savings bank) as reported in the member bank's most recent Call Report. The Reserve Banks are developing software that will automatically pull the information needed to calculate member banks' required stock subscriptions from Call Reports and thereby automate the stock adjustment process. Further, the Board proposes that a Reserve Bank would adjust a member bank's stock subscription each time the member bank files a Call Report.

    The proposal would also make certain other technical changes to the regulation. Comments will be accepted for 60 days following publication of the proposal.

    PUBLICATION AND COMMENT PERIOD UPDATE: Scheduled for publication on 4/13/2021, with comments due by 6/14/2021.

    04/09/2021

    Burmese gems enterprise sanctioned

    Yesterday, OFAC designated Myanma Gems Enterprise, a Burmese state-owned entity that is responsible for all gemstone activities in Burma. Gemstones are a key economic resource for the Burmese military regime that is violently repressing pro-democracy protests in the country and that is responsible for the ongoing lethal attacks against the people of Burma, including the killing of children. These sanctions are not directed at the people of Burma.

    Myanma Gems Enterprise was designated under Executive Order 14014, “Blocking Property with Respect to the Situation in Burma,” for being a political subdivision, agency, or instrumentality of the Government of Burma.

    Further identification information on Myanma Gems Enterprise can be found in BankersOnline's OFAC Update.

    04/08/2021

    OFAC sanctions human smuggling organization

    Yesterday, OFAC designated Pakistani national Abid Ali Khan and the Abid Ali Khan Transnational Criminal Organization in accordance with Executive Order 13581, “Blocking Property of Transnational Criminal Organizations.”

    The Abid Ali Khan TCO is a human smuggling organization based in Nowshera, Pakistan, that has facilitated the unlawful smuggling of foreign nationals, including foreign nationals who may pose a national security risk to the United States or its interests, into the United States using various travel routes through Latin America since at least 2015.

    OFAC also designated three other individuals and one entity associated with the Abid Ali Khan TCO.

    For identification information on the designated individuals and entities, see BankersOnline's OFAC Update.

    04/07/2021

    OFAC sanctions violent cartel members and facilitator

    On Tuesday, OFAC designated Carlos Andres Rivera Varela and Francisco Javier Gudino Haro, who are violent members of the Cartel de Jalisco Nueva Generacion (CJNG). These two individuals have allegedly helped orchestrate assassinations using high-powered weaponry on behalf of CJNG, a Mexico-based organization that is responsible for trafficking a significant proportion of the fentanyl and other deadly drugs that enter the United States.

    Also today, OFAC designated travel agent Alejandro Chacon Miranda, who facilitates travel that is often related to illicit activities for senior CJNG members and their allies. Additionally, OFAC designated two businesses located in Mexico.

    For identification information on the three designated individuals and the two businesses, see BankersOnline's OFAC Update.

    04/06/2021

    Proposed mortgage servicing changes to mitigate foreclosure surge

    The Consumer Financial Protection Bureau on Monday announced it has proposed a set of rule changes intended to help prevent avoidable foreclosures as COVID-19 emergency federal foreclosure protections expire. The CFPB’s proposal, if finalized, would:

    • Give borrowers time: To make sure borrowers aren’t rushed into foreclosure when a potentially unprecedented number of borrowers exit forbearance at around the same time this fall, the proposed rule would provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after December 31, 2021. The CFPB is seeking public input on that date, as well as whether there are more limited ways to achieve the same purpose. For example, the CFPB is considering whether to permit earlier foreclosures if the servicer has taken certain steps to evaluate the borrower for loss mitigation or made efforts to contact an unresponsive borrower. This provision, like the rest of the proposal, would only apply to loans secured by a borrower’s principal residence.
    • Give servicers options: The proposed rule would permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application. Normally, with certain exceptions, Regulation X requires servicers to review a borrower for all available options at once, which can mean borrowers have to submit more documents before a servicer can make a decision. Allowing this flexibility could allow servicers to get borrowers into an affordable mortgage payment faster, with less paperwork for both the servicer and the borrower. This provision would only be available for modifications that do not increase a borrower’s monthly payment and that extend the loan’s term by no more than 40 years from the modification’s effective date.
    • Keep borrowers informed of their options: The CFPB also proposes temporary changes to certain required servicer communications to make sure that, during this crisis, borrowers receive key information about their options at the appropriate time.

    The proposed rule would only apply to a mortgage loan that is secured by a property that is a borrower's principal residence. It would not apply to small servicers as defined in section 1026.41(e)(4) of Regulation Z. If finalized as proposed, the rule would be effective on August 31, 2021. Comments will be accepted through May 10, 2021.

    04/05/2021

    FDIC releases CRA evaluation ratings

    The FDIC has issued its list of 51 state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in January 2021. Forty-eight evaluations were rated Satisfactory. The evaluations of these three banks were rated Outstanding:

    04/05/2021

    Blanco leaving FinCEN Friday

    FinCEN Director Kenneth A. Blanco announced on Friday that he will depart FinCEN on April 9, after serving as the organization’s director since December 2017. Michael Mosier, former FinCEN Deputy Director and current Counselor to the Deputy Secretary of the Treasury, will return to FinCEN as Acting Director beginning April 11. AnnaLou Tirol, former Associate Director of FinCEN’s Strategic Operations Division, is serving as FinCEN Deputy Director.

    Also on Friday, Bloomberg reported that Citigroup Inc., hired Blanco as chief compliance officer of its newly created financial crimes unit. Citigroup announced last year it would create the financial crimes unit, integrating its anti-money laundering, sanctions, and anti-bribery teams.

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