Top Story Compliance Related

HUD has announced that has entered into a Voluntary Compliance Agreement-Conciliation Agreement (VCA-CA) with Cushing Housing Inc. requiring Cushing House to pay $300,000 to individuals, including former tenants, who were subjected to housing discrimination at Cushing’s property.

The agreement stems from a complaint filed by tenants alleging Cushing Housing violated civil rights laws when it failed to address serious, racially motivated harassment that denied them the ability to peacefully enjoy their housing. The harassment was so severe that it left them fearful of leaving their apartment and took a substantial toll on their mental health. The VCA-CA resolves HUD’s October 26, 2022 Letter of Findings, which found Cushing House discriminated against the tenants in violation of Title VI of the Civil Rights Act of 1964.

In addition to the $300,000 payment to complainants and an aggrieved individual, the agreement requires Cushing Housing to establish an anti-harassment policy as well as a fair housing and civil rights compliance policy. Both policies must be made available to all tenants and include formal grievance procedures. Respondents are also required to obtain fair housing and civil rights training for all officers, agents, and employees.

FinCEN has announced it will host a webinar on beneficial ownership information reporting requirements on Wednesday, December 13, at 2 p.m. Eastern Time.

Note: Registration for the webinar has closed, due to high demand.

Yesterday, the Department of the Treasury reported that OFAC has sanctioned two former Afghan government officials — Mir Rahman Rahmani (M. Rahmani) and his son, Ajmal Rahmani (A. Rahmani), collectively known as “the Rahmanis” — for their extensive roles in transnational corruption, as well as 44 associated entities. These individuals and entities were designated under 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 around the world. Through their Afghan companies, the Rahmanis perpetrated a complex procurement corruption scheme resulting in the misappropriation of millions of dollars from U.S. Government-funded contracts that supported Afghan security forces.

Concurrently, the Department of State designated Mir Rahman Rahmani, Ajmal Rahmani, and their immediate family members, under Section 7031(c) of the annual Department of State, Foreign Operations, and Related Programs Appropriations Act for involvement in significant corruption as a public official.

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

OFAC has announced it has entered into a settlement with Nasdaq, Inc. for $4,040,923 related to apparent violations of the Iranian Transactions and Sanctions Regulations by its former Armenian subsidiary, Nasdaq OMX Armenia OJSC, the former owner and operator of the Armenian Stock Exchange (ASE).

Nasdaq OMX Armenia processed trades and settled payments through the ASE platform involving the OFAC-designated Armenian subsidiary of Iran's state-owned Bank Mellat. In doing so, Nasdaq OMX Armenia knowingly engaged in the exportation of services to Iran and the Iranian government, thereby committing 151 apparent violations of the OFAC sanctions on Iran. The settlement amount reflects OFAC’s determination that the apparent violations were non-egregious and voluntarily self-disclosed.

For additional information on OFAC's settlement with Nasdaq, Inc., see this BankersOnline Penalty page.

The Treasury Department on Friday released a Joint Statement on the recent EU – U.S. Financial Regulatory Forum, which took place on December 4–5, 2023, hosted by the U.S. Department of the Treasury and the European Commission.

The Forum emphasized close ongoing EU and U.S. cooperation in a range of areas and focused on six themes: (1) market developments and financial stability; (2) regulatory developments in banking and insurance; (3) anti-money laundering and countering the financing of terrorism (AML/CFT); (4) sustainable finance; (5) regulatory and supervisory cooperation in capital markets; and (6) operational resilience and digital finance. Agency participation varied across themes, with representatives expressing views on issues in their respective areas of responsibility.

The Treasury Department has announced that OFAC has sanctioned 20 individuals for their connection to human rights abuse in nine countries. An additional two individuals were sanctioned under the Department of State’s counterterrorism authority. Furthermore, the Department of State likewise designated individuals in Russia, Indonesia, and the People’s Republic of China (PRC) for visa restrictions pursuant to Section 7031(c) of the Annual Appropriations Act. These actions were taken in concert with measures imposed by partners in the United Kingdom and Canada, which have similarly utilized economic measures to deter human rights abuse globally.

For the names and identification information of the designated parties, a related Global Magnitsky FAQ, and a reminder on OFAC's plan to shut down an FTP server, see this BankersOnline OFAC Update.

Yesterday, the Treasury Department reported that OFAC, in coordination with the United Kingdom, designated two individuals associated with an advanced persistent threat (APT) group that is sponsored by the Russian Federal Security Service (FSB) and has targeted individuals and entities in the United States, United Kingdom, and other allied and partner countries.

Treasury also announced that OFAC has sanctioned 13 individuals and entities responsible for providing tens of millions of dollars’ worth of foreign currency generated from the sale and shipment of Iranian commodities, backed by the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), to the Houthis in Yemen.

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

The Office of the Comptroller of the Currency yesterday reported the key issues facing the federal banking system in its Semiannual Risk Perspective for Fall 2023.

The OCC highlighted credit, market, operational, and compliance risks as the key risk themes in the report. The report also highlights artificial intelligence (AI) in banking as an emerging risk.

A proposed rule to change the Regulation Z exemption of overdraft fees from the definition of finance charges could be on the horizon, based on the CFPB's Fall 2023 Regulatory Agenda. The agenda lists a potential December 2023 Notice of Proposed Rulemaking (NPRM) on the topic, and indicates that the CFPB is considering developing proposed amendments to Regulation Z with respect to the special rules on OD fees that were included by the Federal Reserve Board in 1969.

The Bureau also includes a potential December 2023 NRPM on Fees for Insufficient Funds on the agenda with a December 2023 target date.

Also listed on the agenda in proposed rule stage are the CFPB's proposed rulemaking on Personal Financial Data Rights, a proposal on Mortgage Servicing, a proposal on Supervision of Larger Participants in Consumer Payment Markets, and a proposal on Financial Data Transparency.

Included on the Agenda in the Final Rule stage are amendments to FIRREA Concerning Automated Valuation Models (target date June 2024), a rule on Property Assessed Clean Energy (PACE) Financing (October 2024), a rule to establish a Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders (March 2024), a rule establishing a Registry of Supervised Nonbanks that use Form Contracts with Terms Seeking to Waive or Limit Consumer Legal Protections (March 2024), and the CFPB's proposed rule on Credit Card Penalty Fees (December 2023).

The target dates on federal agency rulemaking agendas are tentative, and are often inaccurate, and the status of the actions listed can change.

The CFPB announced this morning it has taken action against Atlantic Union Bank for illegally enrolling thousands of customers in checking account overdraft programs. The CFPB found that Atlantic Union misled consumers who enrolled in this overdraft service by phone and failed to provide proper disclosures. The CFPB is ordering Atlantic Union to refund at least $5 million in illegal overdraft fees and pay a $1.2 million penalty to the CFPB’s victims relief fund.

The Electronic Fund Transfer Act and its implementing regulation require banks to describe their overdraft service in writing before getting a consumer to opt-in to overdraft coverage for ATM withdrawals and one-time debit card transactions. The CFPB’s consent order describes the bank’s illegal conduct and how it improperly communicated with and enrolled consumers in its overdraft program. Specifically, the bank violated federal law by:

• Charging fees without proper consent: At Atlantic Union Bank branches, employees gave oral descriptions of the bank’s overdraft coverage to new customers who opened checking accounts. Employees sought oral confirmation from customers to enroll in overdraft coverage before providing them with the required written disclosures describing the terms of service.
• Misleading customers about the terms and costs of overdraft coverage: For customers who enrolled in overdraft coverage by phone, Atlantic Union Bank employees did not clearly explain which transactions were covered by the service, and made other misleading statements about the terms and conditions of the service. In some calls, bank employees also omitted key information about the cost of the service and the fact that consumers could incur a hefty overdraft fee for each transaction covered by the service.

For additional information, see "Atlantic Union Bank to pay $6.2M for illegal overdraft fees" in the BankersOnline Penalty Pages.