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Top Story Compliance Related

12/10/2019

Insurers settle with OFAC over CACR violations

OFAC has announced two separate agreements with insurers to settle their respective potential civil liability for apparent violations of the Cuban Assets Control Regulations. In each case, OFAC determined that the insurer made a voluntary self-disclosure of the apparent violations, and that the apparent violations constituted a non-egregious case.

12/10/2019

Treasury targets corruption and support networks

On Monday, December 9, International Anti-Corruption Day, the U.S. Department of the Treasury’s Office of Foreign Assets Control targeted corrupt actors and their networks across numerous countries in Europe, Asia, and Latin America. Monday’s action, pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, targeted perpetrators of serious human rights abuse and corruption. Two corrupt Venezuelan officials were also designated, pursuant to Venezuela E.O. 13692, in light of their senior leadership roles in the Maduro regime.

The names and identifying information for the individuals and entities targeted in OFAC's action and an update of a previous Global Magnitsky designee can be found in BankersOnline's OFAC Update.

12/09/2019

OFAC sanctions Iran-backed Iraqi militia leaders

The U.S. Department of the Treasury’s Office of Foreign Assets Control has designated three leaders of Iran-backed militias in Iraq that opened fire on peaceful protests, killing dozens of innocent civilians. OFAC designated Qais al-Khazali, Laith al-Khazali, and Husayn Falih ‘Aziz al-Lami under the Global Magnitsky sanction program for their involvement in serious human rights abuse in Iraq. Additionally, OFAC designated Iraqi millionaire businessman Khamis Farhan al-Khanjar al-Issawi for bribing government officials and engaging in corruption at the expense of the Iraqi people. Identification information on the four designated individuals can be found in BankersOnline's OFAC Update.

12/06/2019

OCC lists 10 Outstanding CRA evals

The OCC yesterday released a list of Community Reinvestment Act (CRA) performance evaluations that became public in November. Of the 22 evaluations listed, 12 are rated "Satisfactory" and these ten are rated "Outstanding" (links are to their evaluations):

12/06/2019

Treasury and Justice target cybercriminals

Russian nationals charged with banking cybercrimes

The U.S. Department of Justice has joined with the U.S. Department of State and the United Kingdom’s National Crime Agency in charging two Russian nationals, Maksim Y. Yakubets and Igor Turashev, with a vast and long-running cybercrime spree that stole from thousands of individuals and organizations in the United States and abroad. They are charged with an effort that infected tens of thousands of computers with a malicious code called Bugat. Once installed, the computer code, also known as Dridex or Cridex, allowed the criminals to steal banking credentials and funnel money directly out of victims’ bank accounts. Their names and those of their associates have been added to the SDN List.

Evil Corp sanctioned for infecting bank computers

OFAC has announced action taken against Evil Corp, the Russia-based cybercriminal organization responsible for the development and distribution of the Dridex malware. The Dridex malware is a multifunctional malware package that is designed to automate the theft of confidential information, to include online banking credentials from infected computers.

Evil Corp has used the Dridex malware to infect computers and harvest login credentials from hundreds of banks and financial institutions in over 40 countries, causing more than $100 million in theft. OFAC's action targets 17 individuals and seven entities to include Evil Corp, its core cyber operators, multiple businesses associated with a group member, and financial facilitators utilized by the group. Identification information on the designated individuals and entities can be found in BankersOnline's OFAC Update.

FinCEN and the CISA (U.S. Cybersecurity and Infrastructure Security Agency) issued a Report on Dridex Malware that provides an overview of the malware, related activity, and a list of previously unreported indicators of compromise derived from information reported to FinCEN by private sector financial institutions. Because actors using Dridex malware and its derivatives continue to target the financial services sector, including financial institutions and customers, the techniques, tactics, and procedures contained in this report warrant renewed attention. Treasury and CISA encourage network security specialists to incorporate these indicators into existing Dridex-related network defense capabilities and planning.

12/05/2019

FinCEN report on increase in fraud against elders

A report has been released by FinCEN indicating that elders face an increased threat to their financial security by both domestic and foreign actors. Elder financial exploitation Suspicious Activity Report filings increased dramatically over the six-year study period, from about 2,000 filings per month in 2013 to a peak of nearly 7,500 filings per month in August 2019. The yearly dollar amount of suspicious activity reported for elder financial exploitation also rose.

FinCEN Director Kenneth A. Blanco said the SARs filed by financial institutions are used to protect the country and its people from harm and provide unique and valuable information on crime and other threats happening in the U.S. and around the world impacting families and communities. He said, "These SARs are also important to filer banks and MSBs because they show trends and patterns in criminal activity. Every financial institution wants to protect its customers, and SAR reporting helps them do that. Awareness of these reporting trends and potential exploitation methods can also help consumers protect themselves."

12/05/2019

FDIC lists CRA eval ratings

The FDIC has issued a list of 71 state nonmember banks to which the FDIC assigned Community Reinvestment Act evaluation ratings in September 2019. A bank in Connecticut received a "Needs to Improve" rating. The other 70 banks received "Satisfactory" ratings.

12/04/2019

Bureau proposes Remittance Rule changes

The CFPB announced Tuesday it has issued a Notice of Proposed Rulemaking relating to the Remittance Rule (subpart B of Regulation E). The proposal—

  • would allow certain banks and credit unions to continue to provide estimates under certain conditions where it could be economically infeasible for these institutions to provide exact disclosures.
  • would increase the safe harbor threshold that determines whether a company makes remittance transfers in the normal course of its business and is subject to the Rule to 500 or fewer transfers annually in the current and prior calendar years. The Bureau said this would reduce the burden on over 400 banks and almost 250 credit unions that send a relatively small number of remittances—less than 0.06 percent of all remittances.
  • requests comment on a permanent exception in the Rule permitting providers to use estimates for transfers to certain countries and the process for adding countries to the safe harbor countries list maintained by the Bureau.

Comments on the proposal will be accepted for 45 days following its publication in the Federal Register.
UPDATE: Published at 84 FR 67132 on 12/6/2019, with comment period ending 1/21/2020.

12/04/2019

Statement on use of alternative data in credit underwriting

Five Federal financial regulatory agencies—the Fed, the CFPB, the FDIC, the OCC and the NCUA— have issued an "Interagency Statement on the Use of Alternative Data in Credit Underwriting" by banks, credit unions, and non-bank financial firms.

The statement notes the benefits that using alternative data may provide to consumers, such as expanding access to credit and enabling consumers to obtain additional products and more favorable pricing and terms. The statement explains that a well-designed compliance management program provides for a thorough analysis of relevant consumer protection laws and regulations to ensure firms understand the opportunities, risks, and compliance requirements before using alternative data.

Alternative data includes information not typically found in consumers’ credit reports or customarily provided by consumers when applying for credit. Alternative data include cash flow data derived from consumers’ bank account records.

12/04/2019

Treasury targets Venezuelan oil shipments to Cuba

The Treasury Department announced Tuesday that OFAC has identified six vessels as blocked property of Petroleos de Venezuela, S.A. (PdVSA) under the authority of Executive Order 13884, which blocks the property and interests in property of the Government of Venezuela. Additionally, OFAC identified the vessel Esperanza as blocked property of Caroil Transport Marine Ltd., which was designated on September 24, 2019, for operating in the oil sector of the Venezuelan economy. The Esperanza was previously listed as the Nedas on the SDN List, which was identified as blocked property on April 12, 2019. For further identification information on the seven vessels, see BankersOnline's OFAC Update.

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