Skip to content

Exception Tracking Spreadsheet (TicklerTrax™)
Downloaded by more than 1,000 bankers. Free Excel spreadsheet to help you track missing and expiring documents for credit and loans, deposits, trusts, and more. Visualize your exception data in interactive charts and graphs. Provided by bank technology vendor, AccuSystems. Download TicklerTrax for free.

Click Now!


Top Story Compliance Related

07/21/2021

Agencies to act jointly on CRA rules modernization

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency on Tuesday issued an interagency statement on Community Reinvestment Act (CRA) Joint Agency Action. The agencies said they are "committed to working together to jointly strengthen and modernize regulations implementing" the CRA. "Joint agency action will best achieve a consistent, modernized framework across all banks to help meet the credit needs of the communities in which they do business, including low- and moderate-income neighborhoods."

The OCC announced it will propose rescinding the Community Reinvestment Act (CRA) rule issued in May 2020 and is committed to working with the Federal Reserve Board and the FDIC to put forward a joint rulemaking that strengthens and modernizes the CRA. The decision to propose rescinding the 2020 rule follows the completion of a review initiated by Acting Comptroller of the Currency Michael Hsu shortly after he took office.

07/21/2021

OFAC issues Venezuela-related license

OFAC has issued a Venezuela-related General License and updated a related FAQ. See the July 20, 2021, BankersOnline OFAC Update for details.

07/20/2021

SEC orders $8.1M returned to investors

The Securities and Exchange Commission yesterday filed a settled action against UBS Financial Services Inc. for compliance failures relating to sales of a volatility linked exchange-traded product (ETP). The Order filed by the SEC indicates the ETP at issue is designed to track short-term volatility expectations in the market as measured against derivatives of a volatility index. According to the order, the issuer of the product warned UBS that it was not appropriate to hold the product for extended periods, and the product’s offering documents made clear that the product was more likely to decline in value when held over a longer period.

The SEC order finds that UBS:

  • prohibited brokerage representatives from soliciting sales of the product and placed other restrictions on sales of the product to brokerage customers, but did not place similar restrictions on certain financial advisers’ use of the product in discretionary managed client accounts
  • adopted a concentration limit on volatility-linked ETPs, but failed to implement a system for monitoring and enforcing that limit for five years
  • prohibited the financial advisers from making additional recommendations of this ETP prior to being contacted by the Commission staff

The order also finds that between January 2016 and January 2018, certain financial advisers:

  • had a flawed understanding of the appropriate use of the volatility-linked ETP
  • failed to take sufficient steps to understand risks associated with holding the product for extended periods
  • purchased and held the product in client accounts for lengthy periods, including hundreds of accounts that held the product for over a year, resulting in meaningful losses

Without admitting or denying the SEC’s findings, UBS agreed to cease and desist from violations of Rule 206(4)-7 of the Investment Advisers Act of 1940, a censure, and disgorgement and prejudgment interest of $112,274 and a civil penalty of $8 million, which will be distributed to investors harmed by the conduct at issue.

07/20/2021

Proposed guidance published

The OCC, FDIC, and Federal Reserve have published [86 FR 38182] their proposed Interagency Guidance on Third-Part Relationships Risk Management, which was announced last week. Comments on the proposal are due by September 17, 2021.

07/20/2021

Large bank resolution plans released

The Federal Reserve Board and FDIC have released the public sections of eight large domestic firms' resolution plans, which are required by the Dodd-Frank Act and commonly known as living wills. Resolution plans describe the company's strategy for rapid and orderly resolution under the Bankruptcy Code in the event of material financial distress or failure. Eight firms were required to submit targeted resolution plans by July 1: Bank of America Corporation; The Bank of New York Mellon Corporation; Citigroup Inc.; The Goldman Sachs Group, Inc.; JPMorgan Chase & Co.; Morgan Stanley; State Street Corporation; and Wells Fargo & Company.

The public sections of the resolution plans are available on the FDIC's and the Federal Reserve's websites.

07/19/2021

Advisory highlights growing Hong Kong risks

On Friday, the U.S. Departments of State, Commerce, Homeland Security and the Treasury issued an advisory to highlight growing risks associated with actions undertaken by the Government of the People’s Republic of China and the Government of the Hong Kong Special Administrative Region (SAR) that could adversely impact U.S. companies that operate in the Hong Kong SAR of the People’s Republic of China.

Businesses, individuals, and other persons, including academic institutions, research service providers, and investors that operate in Hong Kong, or have exposure to sanctioned individuals or entities, should be aware of changes to Hong Kong’s laws and regulations. This new legal landscape, including the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region, could adversely affect businesses and individuals operating in Hong Kong. As a result of these changes, they should be aware of potential reputational, regulatory, financial, and, in certain instances, legal risks associated with their Hong Kong operations.

These risks fall into four categories: risks for businesses following the imposition of the NSL; data privacy risks; risks regarding transparency and access to critical business information; and risks for businesses with exposure to sanctioned Hong Kong or PRC entities or individuals.

OFAC also designated seven individuals under its Hong Kong Executive Order 13936 sanctions. The July 16, 2021, BankersOnline OFAC Update has identification details.

07/19/2021

Robocalling septic tank cleaner company down the drain

The Federal Trade Commission has announced that the owners of a New Jersey-based company that sells septic tank cleaning products agreed to a permanent ban on telemarketing and will pay more than $1.6 million to settle Federal Trade Commission charges that the company and its telemarketer made illegal robocalls to consumers, including tens of millions of calls to numbers listed on the agency’s Do Not Call Registry. In addition, the defendants will turn over a residential property as part of the settlement.

The FTC's complaint indicted Environmental Safety International, Inc. or ESI; ESI officers brothers Joseph Carney and Sean Carney; and their brother Raymond Carney, who acted together to initiate more than 45 million illegal telemarketing calls to consumers nationwide between January 2018 and March 2019 to promote ESI’s “Activator 1000” line of septic tank cleaning products. The FTC alleges that 31 million of those calls were made to numbers on the DNC Registry. The Department of Justice filed the complaint and proposed orders on the FTC’s behalf.

The complaint also alleges that ESI sent letters to consumers who agreed to buy their products but had unpaid invoices, falsely claiming that they would be referred to a “national collection agency” or to an attorney. However, ESI never took either of these actions.

In addition to the bans on telemarketing, the settlement orders impose $10.2 million civil penalty judgments against all defendants, which will be partially suspended after Joseph and Sean Carney pay $1,646,210 to the U.S. Treasury, and Raymond Carney pays $15,000.

In addition, Joseph and Sean Carney are prohibited from making material misrepresentations to consumers, including that they would be referred to an attorney or collection agency. They are prohibited from billing or attempting to collect payments from any consumers in connection with the sale of their septic tank cleaning products, and are required to notify all ESI customers with unpaid balances that they no longer have to pay ESI because their balances have been cancelled. Joseph and Sean Carney must also apply for ESI’s dissolution within 30 days.

07/15/2021

FinCEN Exchange on ransomware

FinCEN has announced it will convene a FinCEN Exchange in August 2021 with representatives from financial institutions, other key industry stakeholders, and federal government agencies to discuss ongoing concerns regarding ransomware, as well as efforts by the public and private sectors. The FinCEN Exchange will build upon FinCEN’s November 2020 event on ransomware. FinCEN anticipates that this FinCEN Exchange will assist its government and private sector partners to inform next steps to address ransomware and focus resources to mitigate the threat. This announcement is part of a government-wide effort to combat ransomware.

According to FinCEN, ransomware attacks are a growing concern for the financial sector, given that financial institutions can be targeted by ransomware attacks as well as reputational and financial integrity concerns about the role financial institutions might play in the processing of ransom payments. Efforts to detect and report ransomware payments are vital to prevent and deter ransomware attacks, and to hold these attackers accountable for their crimes. In October 2020, FinCEN issued Advisory FIN-2020-A006 to alert financial institutions to predominant trends, typologies, and potential indicators of ransomware and associated money laundering activities. In addition, in June 2021, FinCEN highlighted ransomware as a particularly acute cybercrime concern in its issuance of the first government-wide priorities for anti-money laundering and countering the financing of terrorism policy.

07/14/2021

SEC takes action against teachers' retirement plan

The Securities and Exchange Commission has announced that TIAA-CREF Individual & Institutional Services LLC (TC Services), a subsidiary of Teachers Insurance and Annuity Association of America (TIAA), will pay $97 million to settle charges of inaccurate and misleading statements and a failure to adequately disclose conflicts of interest to thousands of participants in TIAA record-kept employer-sponsored retirement plans (ESPs).

According an order filed by the SEC, from January 1, 2013, through March 30, 2018, TC Services and its Wealth Management Advisers (WMAs) did not adequately disclose the full nature and extent of their conflicts of interest in recommending to clients that they roll over their retirement assets into a managed account program called “Portfolio Advisor.” The order finds that TC Services failed to adequately disclose compensation practices that incentivized the firm and its WMAs to recommend Portfolio Advisor for reasons other than a client’s particular investment needs. Further, TC Services trained its WMAs to make, and its WMAs made, representations that they offered “objective” and “non-commissioned” advice, “put the client first,” and acted in the client’s best interest while holding themselves out as fiduciaries. TC Services simultaneously applied continual pressure to compel WMAs to prioritize the rollover of ESP assets into Portfolio Advisor over lower cost alternatives. The order also finds that TC Services failed to adopt and implement written policies and procedures reasonably designed to prevent violations of the Investment Advisers Act in connection with rollover recommendations.

Without admitting or denying the SEC’s findings, TC Services agreed to cease and desist from committing or causing any future violations of these provisions, be censured, and pay disgorgement, prejudgment interest, and a civil penalty totaling $97 million that will be distributed to investors through a Fair Fund. The $97 million will be distributed to investors affected by the misconduct and settles both the SEC’s case and a parallel action announced yesterday by the Office of the New York Attorney General

07/14/2021

Agencies propose risk management guidance for 3rd-party relationships

The federal bank regulatory agencies (Board of Governors, FDIC, and OCC) on Tuesday requested public comment on proposed guidance designed to help banking organizations manage risks associated with third-party relationships, including relationships with financial technology-focused entities. The proposed guidance is intended to assist banking organizations in identifying and addressing the risks associated with third-party relationships and responds to industry feedback requesting alignment among the agencies with respect to third-party risk management guidance.

Banking organizations that engage third parties to provide products or services or to perform other activities remain responsible for ensuring that such outsourced activities are conducted in a safe and sound manner and in compliance with all applicable laws and regulations, including consumer protection laws.

Comments must be received within 60 days of the proposed guidance's publication in the Federal Register.

Pages

Training View All

Penalties View All

Search Top Stories