Top Story Compliance Related

The CFPB has posted a notice that it is updated its Small Entity Compliance Guide and the Guide to Preparing the Short Form Disclosure for Prepaid Accounts. Those guidance documents and other resources for compliance with the rule (which now becomes effective April 1, 2019), can be found on the Bureau's Implementation and Guidance page for the Prepaid Rule.

The Federal Reserve Board has issued a Consent Order to Cease and Desist to the Industrial and Commercial Bank of China, Ltd., Beijing, People's Republic of China, and to the New York City branch of that bank following the most recent examination of the New York Branch by the Federal Reserve Bank of New York, which identified significant deficiencies in the Branch's risk management and compliance with applicable federal and state laws, rules, and regulations relating to anti-money laundering compliance, including the Bank Secrecy Act and rules issued under the Bank Secrecy Act, and with the requirements of Federal Reserve Board Regulation K to report suspicious activity and to maintain an adequate BSA/AML compliance program.

The Order directs the Bank and Branch to make improvements in the areas of their:

• Corporate governance and management oversight
• BSA/AML compliance program
• Customer due diligence
• Suspicious activity monitoring and reporting

The Bank and Branch were also ordered to:

• Arrange for a look-back transaction review by an independent third party covering the Branch's U.S. dollar clearing transaction activity from July 1 through December 31, 2016, (and other periods, if later required) to determine whether suspicious activity was properly identified and reported
• Submit a written plan for OFAC regulation compliance
• Submit a revised internal audit program

The Federal Emergency Management Agency has published a final rule [83 FR 10638, 3/11/2018] identifying communities in Iowa and Louisiana that will be suspended from the National Flood Insurance Program effective March 20, 2018, for noncompliance with the floodplain management requirements of the program. Affected communities include:

• Kossuth County, Iowa: City of Titonka and unincorporated areas
• Vernon Parish, Louisiana: City of Leesville, Towns of Hornbeck and New Llano, and unincorporated areas

Oregon Lithoprint Inc., owner of the News-Register, a twice-weekly community newspaper based in Yamhill, Oregon, has agreed to settle FTC charges that it invited a competitor to collude in an arrangement to divide the market for placement of foreclosure notices.

• Settlement agreement

The Federal Reserve Board has issued a reminder that as of December 31, 2017, it does not offer print versions or subscriptions for its Commercial Bank Examination Manual. The January 2018 update of the manual can be accessed online or by section.

• PDF of entire manual
• Manual by sections

The CFPB has issued a Request for Information (RFI) about the Bureau's rulemaking processes. This is the seventh in a series of RFIs announced as part of Acting Director Mick Mulvaney's "call for evidence" to ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers. The next RFI in the series will address the Bureau's adopted rules, and will be issued next week. The CFPB will begin accepting comments once the RFI is printed in the Federal Register, which is expected to occur on March 9. The RFI will be open for comment for 90 days, ending June 7, 2018.

OFAC has identified two individuals as specially designated global terrorists. For identification details, see our OFAC Update.

The Consumer Financial Protection Bureau has announced a final rule to help mortgage servicers communicate with certain borrowers facing bankruptcy. The final rule gives mortgage servicers more latitude in providing periodic statements to consumers entering or exiting bankruptcy, as required by the Bureau’s 2016 mortgage servicing rule. The rule will become effective April 19, 2018, along with other servicing rule amendments affecting consumers in bankruptcy and successors in interest that go into effect that day.

The changes to section 1026.41(e)(5)(iv) made by this final rule have been incorporated into BankersOnline's Regulations pages.

UPDATE: Published at 83 FR 10553 on 3/11/2018.

The FDIC has issued a Consent Order to pay a $2 million civil money penalty and to make approximately $1.3 million in restitution payments to about 243,000 consumers harmed by unfair and deceptive acts and practices involving the assessing of transaction fees greater than those disclosed by the bank. The FDIC also found that the bank violated the Electronic Funds Transfer Act, the Truth in Savings Act, and the Electronic Signatures in Global and National Commerce Act. See our Penalty Page for additional information.

Yesterday, the Office of Foreign Assets Control increased its pressure on major Mexican heroin traffickers by targeting individuals and companies close to the new leadership of the Ruelas Torres drug trafficking organization (Ruelas Torres DTO). Treasury imposed additional sanctions on eight Mexican individuals and eight Mexican companies linked to the Sinaloa-based criminal organization, which has been led by Joel Efren Ruelas Avila since the 2017 death of his father Jose Luis Ruelas Torres. OFAC acted under the Foreign Narcotics Kingpin Designation Act (Kingpin Act). As a result of Tuesday's action, U.S. persons are generally prohibited from engaging in transactions or otherwise dealing with these individuals and companies, and any assets they may have under U.S. jurisdiction are frozen. For identification information on the individuals and entities OFAC designated on Tuesday, and on three other Kingpin Act listings that OFAC updated, see BankersOnline's OFAC Update.

Penalties for violations of the Kingpin Act range from civil penalties of up to $1,437,153 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to the Title 18 of the United States Code for criminal violations of the Kingpin Act.