Top Story Compliance Related

The Federal Reserve Board has announced the assessment of a $27 million civil money penalty against Banco Bilbao Vizcaya Argentaria, S.A., Bilbao, Spain (BBVA), and its subsidiary, BBVA Securities, Inc., New York, New York (BSI), for exceeding limits on BSI's securities underwriting and dealing activities previously imposed by the Board. See our Penalty page on this action for further information.

OFAC has added a Mauritanian, Salack Ould Cheikh Mohamedou, to its SDN list as a specially designated global terrorist.

The SEC has announced that Morgan Stanley & Co. LLC has agreed to pay $7.5 million to settle charges it used trades involving customer cash to lower the firm’s borrowing costs in violation of the SEC’s Customer Protection Rule. The Customer Protection Rule is intended to safeguard customers’ cash and securities so that they can be promptly returned should the broker-dealer fail. For further information, see our Penalty Page for this action.

The Consumer Financial Protection Bureau has announced that a consent order has been issued against Military Credit Services, LLC (MCS) for making loans with improper disclosures. This is the CFPB’s second enforcement action against MCS. In 2014, the CFPB, along with the states of North Carolina and Virginia, sued the company for similar violations, and the company was ordered to revise its contract disclosures in 2015. In the current action, the CFPB ordered the company to ensure that its contracts comply with the law. It also required the company to hire an independent consultant to review its practices and to pay a $200,000 civil penalty.

The OCC has released its 22nd Annual Survey of Credit Underwriting Practices, which indicates underwriting practices among national banks and federal savings associations eased for a fourth consecutive year in 2016.

The Federal Reserve Board has announced it has issued a notice of prohibition against two institution-affiliated parties of Regions Bank, Birmingham, Alabama. The individuals, who held senior positions at Regions Equipment Finance Corporation (REFCO), a Regions Bank subsidiary, were recently indicted for bank bribery, wire fraud, money laundering, and conspiracy. According to the indictment, they conspired to defraud Regions and REFCO by directing REFCO to purchase insurance policies from a shell company that paid kickbacks to them. The indictment further alleges that they attempted to conceal those kickbacks by establishing additional shell companies to receive the kickbacks.

The Federal Reserve Board has announced the execution of a written agreement with Rock Bancshares, Inc. and its subsidiary, Heartland Bank, both of Little Rock, Arkansas.

OFAC has announced its designation of seven individuals and eight entities under two Executive Orders related to Russia and Ukraine, and identified two vessels as blocked property. In addition, the names of twenty-six entities identified as subsidiaries of the Russian Agricultural Bank and Novatek were added to the Sectoral Sanctions Identification (SSI) list. See our December 20, 2017, OFAC Update for the details.

The CFPB has announced its filing of complaints against four Virginia-based companies — Spotsylvania Gold & Pawn, Inc.; Fredericksburg Pawn, Inc.; Pawn U.S.A., Inc.; and A to Z Pawn, Inc. The CFPB alleges that the companies misled their customers about the costs of their loans by disclosing deceptively low annual percentage rates (APRs) that did not reflect all of the fees and charges tacked onto the loans.

The Federal Reserve Board has announced its approval of a rule requiring for the first time that large banking organizations publicly disclose certain quantitative liquidity risk metrics. The disclosures will provide market participants and the public with reliable and timely information for evaluating the financial strength and resiliency of the nation's largest banking organizations. The final rule requires large banking organizations to disclose their consolidated Liquidity Coverage Ratio (LCR) each quarter based on averages over the prior quarter. Firms also are required to disclose their consolidated high-quality liquid assets (HQLA) amounts, broken down by HQLA category. Additionally, firms are required to disclose their projected net stressed cash outflow amounts, including retail inflows and retail deposit outflows, derivatives inflows and outflows, and several other measures.

UPDATE: Published at 81 FR 94922 on December 27, 2016, with effective date of April 1, 2017.