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Top Story Compliance Related

09/17/2020

OFAC sanctions two Russians for virtual currency theft

Yesterday, in a coordinated action with the Departments of Justice and Homeland Security, OFAC sanctioned two Russian nationals for their involvement in a sophisticated phishing campaign in 2017 and 2018 that targeted customers of two U.S.-based and one foreign-based virtual asset service providers. American citizens and businesses were among the victims of this malicious cyber-enabled activity, which resulted in combined losses of at least $16.8 million.

Danil Potekhin and Dmitrii Karasavidi were designated pursuant to Executive Order 13694, as amended by E.O. 13757, which targets malicious cyber-enabled activities, including those related to the significant misappropriation of funds or personal identifiers for private financial gain. Potekhin and Karasavidi are also the subjects of an indictment unsealed today by the Department of Justice.

As a result of yesterday’s action, all property and interests in property of the designated persons that are in the possession or control of U.S. persons or within or transiting the United States are blocked, and U.S. persons generally are prohibited from dealing with them. for further identification information on Potekhin and Karasavidi, see BankersOnline's OFAC Update.

09/17/2020

FinCEN proposes amending AML program requirements

FinCEN has published [85 FR 58023] an advance notice of proposed rulemaking in today's Federal Register seeking public comment on potential regulatory amendments to establish that all covered financial institutions subject to an anti-money laundering program requirement must maintain an “effective and reasonably designed” anti-money laundering program.

The ANPRM says any such amendments would be expected to further clarify that such a program assesses and manages risk as informed by a financial institution’s risk assessment, including consideration of anti-money laundering priorities to be issued by FinCEN consistent with the proposed amendments; provides for compliance with Bank Secrecy Act requirements; and provides for the reporting of information with a high degree of usefulness to government authorities.

The regulatory amendments under consideration are intended to modernize the regulatory regime to address the evolving threats of illicit finance, and provide financial institutions with greater flexibility in the allocation of resources, resulting in the enhanced effectiveness and efficiency of anti-money laundering programs.

The ANPRM also seeks comment on proposals to impose an explicit requirement for a risk assessment process and for the Director of FinCEN to issue a list of national AML priorities, to be called FinCEN’s Strategic Anti-Money Laundering Priorities, every two years.

Comments on the ANPRM will be accepted for 60 days following publication, through Monday, November 16, 2020.

09/16/2020

Investment training firm to pay duped consumers

The Federal Trade Commission has announced a settlement that requires Online Trading Academy (OTA) to offer debt forgiveness to thousands of consumers who purchased its “training programs,” while the company’s founder and other individuals will together pay between $5 and $9.1 million and turn over assets. The settlement is expected to result in more than $10 million to benefit injured consumers.

The FTC alleged that OTA had no evidence that purchasers were likely to realize advertised profits, and that the company’s own surveys and third party trading data showed that most purchasers made little to no money. OTA also claimed that its instructors and salespeople were active, successful traders, pointing consumers to their supposed success as evidence the strategy worked. But the Commission alleged those claims were false or unsubstantiated, and that several high-profile OTA pitchmen admitted they did not make significant money trading. Finally, the FTC charged that when consumers realized the truth and asked for their money back, OTA illegally used form contracts to prevent them from telling the government or other consumers about OTA’s deception.

09/16/2020

CFPB outlines proposals for small business lending data

The Consumer Financial Protection Bureau has released its Outline of Proposals Under Consideration and Alternatives Considered for Section 1071 of the Dodd-Frank Act governing small business lending data collection and reporting. The Bureau plans to convene a Small Business Advocacy Review panel in October 2020, to prepare a report that examines the impact of the potential rule on small businesses. The report, along with feedback received from small businesses, will be considered by the Bureau in its rulemaking to implement Section 1071.

Section 1071 requires financial institutions to collect certain data regarding applications for credit for women-owned, minority-owned, and small businesses, and to report that data to the Bureau on an annual basis. The Outline describes proposals that the Bureau is considering to implement Section 1071 along with the relevant law, the regulatory process, and an economic analysis of the potential impacts of the proposals on directly affected small entities.

Comments on the proposals under consideration should be received by the Bureau by December 14, 2020.

09/16/2020

OFAC targets individual and two entities

The Treasury Department announced Tuesday that OFAC had designated Zineb Souma Yahya Jammeh and Nabah LTD for their roles in providing support to persons previously designated for their own corrupt behavior.

Treasury also announced OFAC's designation of a Chinese state-owned entity located in Cambodia, Union Development Group Co., Ltd., for seizure and demolition of local Cambodians’ land for the construction of the Dara Sakor development project.

Both actions were taken under authority of Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption.

For identification details, see BankersOnline's OFAC Update.

09/15/2020

FDIC guidance on Tropical Storm Isaias regulatory relief

The FDIC has issued guidance with FIL-89-2020 that includes steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Puerto Rico affected by Tropical Storm Isaias.

09/15/2020

FinCEN ending AML exemption for banks without federal regulator

FinCEN has published [85 FR 57129] a Final Rule in today's Federal Register that will remove the anti-money laundering program exemption for banks that lack a Federal functional regulator, including, but not limited to, private banks, non-federally insured credit unions, and certain trust companies.

The final rule requires minimum standards for anti-money laundering programs for banks without a Federal functional regulator to ensure that all banks, regardless of whether they are subject to Federal regulation and oversight, are required to establish and implement anti-money laundering programs, and extends customer identification program requirements and beneficial ownership requirements to those banks not already subject to these requirements.

The rule will be effective November 16, 2020, but carries a compliance date of March 15, 2021.

09/14/2020

SEC modernizes disclosures by banking registrants

The Securities and Exchange Commission has announced it has adopted final rules to update and expand the statistical disclosures that bank and savings and loan registrants provide to investors, in light of changes in this sector over the past 30 years. The rules also eliminate certain disclosure items that are duplicative of other Commission rules and requirements of U.S. Generally Accepted Accounting Standards or International Financial Reporting Standards. The rules replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies, with updated disclosure requirements in a new subpart 1400 of Regulation S-K. The rules are intended to help ensure that investors have access to more meaningful, relevant information about these registrants to facilitate their investment and voting decisions.

The Commission’s rules require disclosure about:

  • Distribution of assets, liabilities and stockholders’ equity, the related interest income and expense, and interest rates and interest differential;
  • Weighted average yield of investments in debt securities by maturity;
  • Maturity analysis of the loan portfolio including the amounts that have predetermined interest rates and floating or adjustable interest rates;
  • Certain credit ratios and the factors that explain material changes in the ratios, or the related components during the periods presented;
  • The allowance for credit losses by loan category; and
  • Bank deposits including average amounts and rate paid and amounts that are uninsured.

The rules will be effective 30 days after publication in the Federal Register and will apply to fiscal years ending on or after December 15, 2021. However, voluntary compliance with the new rules will be accepted in advance of the mandatory compliance date. Guide 3 will be rescinded effective January 1, 2023.

09/11/2020

States all compliant with REAL ID

The Department of Homeland Security reports that, after more than 15 years since Congress passed the REAL ID Act, all 50 states are now in full compliance issuing REAL ID driver's licenses and state identification cards, with most states becoming compliant in the last four years. To date, the 50 states have issued more than 105 million REAL ID-compliant cards, representing 38 percent of all individuals with driver's licenses or ID cards.

On October 1, 2021 – less than 13 months away – full enforcement of REAL ID will take effect at all federally regulated airports, federal facilities, and nuclear power plants.

The Department continues to urge Americans to obtain a REAL ID-compliant card or acceptable alternative, such as a U.S. passport or passport card prior to the October 1, 2021, enforcement deadline.

09/11/2020

OFAC sanctions Russia-linked election interference actors

The Treasury Department has reported that OFAC has designated a Russia-linked individual for attempting to influence the U.S. electoral process. Andrii Derkack, a member of the Ukrainian parliament, was designated as an active Russian agent who has been directly or indirectly engaged in, sponsored, concealed, or otherwise been complicit in foreign interference in an attempt to undermine the upcoming 2020 U.S. presidential election.

Also designated were three Russian nationals -- Artem Lifshits, Anton Andreyev, and Darya Aslanova -- for acting on behalf of the Russian troll factory known as the Internet Research Agency (IRA), known to engage in activities designed to influence the outcome of the 2020 U.S. elections..

For identification details on the four designated individuals, see BankersOnline's OFAC Update.

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