Top Story Compliance Related

The Securities and Exchange Commission has announced that it has issued an Order charging the New York Stock Exchange and two affiliated exchanges with regulatory failures in connection with multiple episodes, including several disruptive market events. The charges arose from five separate investigations and include the first-ever charged violation of Regulation SCI. The Commission adopted Reg SCI to strengthen the technology infrastructure and integrity of the U.S. securities markets, and today charged two NYSE exchanges with violating Reg SCI’s business continuity and disaster recovery requirement. In settlement, the exchanges agreed to pay a $14 million penalty.

The Basel Committee on Banking Supervision, the Committee on Payments and Market Infrastructures, the Financial Action Task Force and the Financial Stability Board have announced the Correspondent Banking Due Diligence Questionnaire recently published by the Wolfsberg Group, as one of the industry initiatives that will help to address the decline in the number of correspondent banking relationships by facilitating due diligence processes. The questionnaire aims to standardize the collection of information that correspondent banks ask from other banks when opening and maintaining these relationships, such as their ownership, the products and services they offer and their programs for Anti-Money Laundering, Countering the Financing of Terrorism as well as compliance with sanction regimes and Anti-Bribery and Corruption programs. The questionnaire is also part of a cooperative effort by the public and private sectors to recognize Know-Your-Customer utilities as an effective and efficient tool to support due diligence processes.

The FDIC has published the Winter 2018 issue of the FDIC Consumer News, featuring tips on protecting assets. The issued includes information regarding:

• Five things to know about safe deposit boxes and home safes for protecting valuables.
• Criminals who place hidden recording devices at or near automated teller machines (ATMs) and retailer checkout registers.
• How new standards for credit reporting may help consumers improve credit scores and qualify for loans under more favorable terms.

The FDIC has issued a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act. The list covers evaluation ratings that the FDIC assigned to institutions in December 2017. Seventy-nine banks were rated. Eleven were rated outstanding, 67 satisfactory and one needs to improve.

In observance of National Consumer Protection Week (NCPW), March 4-10, 2018, the FDIC will post a new question and answer (Q&A) on a different banking topic each weekday on its National Consumer Protection Week page. The five Q&As will be on the topics of mobile banking, credit and debit card security precautions, safe deposit boxes, credit reports, and debt collectors, along with other consumer information, and will be accessible for reference year-round.

The FTC will host a Twitter chat on March 6, 2018, to discuss the 20th anniversary of the passage of the Children’s Online Privacy Protection Act (COPPA). Acting FTC Chairman Maureen K. Ohlhausen will discuss the FTC's work to enforce COPPA and ensure the FTC's rule implementing the law stays in step with evolving technologies and data collection practices.

The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council has adopted revised ASC Policy Statements, which provide guidance to ensure State appraiser certifying and licensing agencies comply with Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), as amended, and the rules promulgated thereunder. The revised ASC Policy Statements, adopted February 14, 2018, have been published in today's Federal Register, and supersede the current ASC Policy Statements effective today.

The Securities and Exchange Commission has announced the filing of securities fraud charges against a U.K.-based broker-dealer and its investment manager in connection with manipulative trading in the securities of HD View 360 Inc., a U.S.-based microcap issuer. The SEC also announced charges against HD View’s CEO, another individual, and three entities they control for manipulating HD View’s securities as well as the securities of another microcap issuer, West Coast Ventures Group Corp. The SEC further announced the institution of an order suspending trading in the securities of HD View.

The FDIC and Federal Reserve Board announced yesterday they have communicated updated expectations for the next resolution plans of two domestic banks, CIT Group and Citizens Financial Group. The expectations are similar to those communicated to 16 domestic firms in March 2017. Resolution plans, required by the Dodd-Frank Act and commonly known as living wills, must describe the company's strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure of the company.

The CFPB has issued the sixth in its series of requests for information (RFIs) as part of Acting Director Mick Mulvaney's call for evidence to ensure the Bureau is fulfilling the proper and appropriate functions to protect consumers. The latest RFI asks public input about the Bureau's public reporting of consumer complaints. Federal Register publication is expected on March 7, with a 90-day comment period ending June 5, 2018.

The Bureau expects to issue six more RFIs in the "call for evidence" series:

• Rulemaking Processes
• Bureau Adopted Rules
• Inherited Rules
• Guidance and Implementation Support
• Consumer Education
• Consumer Inquiries

UPDATE: The RFI was published in the 3/6/18 Federal Register, with a comment period ending June 4, 2018.