Top Story Compliance Related

The Bank of Lake Mills, Lake Mills, Wisconsin, and two institution-affiliated parties (IAPs) have executed settlements with the FDIC for unfair and deceptive practices that violated Section 5 of the Federal Trade Commission Act. As part of the settlement, the bank and the IAPs stipulated to the issuance of respective Orders for Restitution and Orders to Pay Civil Money Penalties The FDIC Orders require restitution of approximately $3 million to harmed consumers, and assess civil money penalties totaling $242,000. The Orders require a restitution plan that covers all past and present borrowers who, from 2013 to 2015, received loans originated by the bank through the IAPs, and were harmed by the practices identified as being unfair or deceptive. For further information, see "Bank of Lake Mills," in our Penalty pages.

Treasury has announced it has agreed to sell all of its remaining 10,291,553 shares of First BanCorp. (FBP) common stock, exiting Treasury’s largest remaining bank investment in the Troubled Asset Relief Program (TARP). The shares were sold at $5.61 per share, recovering $57.7 million to taxpayers.

The Department of Housing and Urban Development has publicized an agreement between Wescom Central Credit Union, based in Pasadena, California, and a married couple, resolving allegations the company denied the couple's mortgage loan application because the wife was on maternity leave. Refusing to provide a mortgage loan or mortgage insurance because a woman is pregnant or on family leave violates the Fair Housing Act's prohibition against sex and familial status discrimination, which includes discrimination against individuals who have or are expecting a child.

The Financial Crimes Enforcement Network (FinCEN) held its third annual Law Enforcement Awards ceremony yesterday at the Treasury Department. FinCEN presented awards to law enforcement agencies that use Bank Secrecy Act reporting provided by financial institutions in their criminal investigations.

The Securities and Exchange Commission has announced that William H. Hinman will be named the new director of the agency’s Division of Corporation Finance. Mr. Hinman recently retired as a partner in the Silicon Valley office of Simpson Thacher & Bartlett LLP, where he was a recognized leader in advising public and private companies in corporate finance matters.

In remarks at a meeting yesterday of the OCC Mutual Savings Association Advisory Committee, Acting Comptroller Noreika discussed the importance of mutual savings associations and community banks to the federal banking system.

The OCC has issued bulletins 2017-16 and 2017-17 announcing the revision of the "Fiduciary Powers" and "Public Notice and Comments" sections of the Comptroller’s Licensing Manual.

FinCEN has announced provided an update on the imposition of the fifth special measure against FBME Bank, Ltd. In its April 14, 2017, order granting FinCEN's motion for summary judgment, the U.S. District Court for the District of Columbia lifted the stay blocking the implementation of the March 31, 2016 Final Rule imposing a prohibition on opening or maintaining correspondent accounts for, or on behalf of, FBME Bank, Ltd. pursuant to Section 311 of the USA PATRIOT Act. On April 28, 2017, the U.S. Court of Appeals for the District of Columbia Circuit denied FBME's motion for a stay pending an appeal of the district court's decision. Accordingly, the Final Rule is in effect.

OFAC has announced it has designated Peruvian national Gino Dusan Padros Degregori as a Specially Designated Narcotics Trafficker (SDNT) pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for playing a significant role in international narcotics trafficking. OFAC also designated Peruvian national Guillermo Jean Pierre Zegarra Martinez, a key financial facilitator for Padros Degregori, for providing material assistance, support, or goods or services in support of the international narcotics trafficking activities of, and acting for or on behalf of, Padros Degregori. Three businesses in Lima, Peru, that are owned or controlled by Padros Degregori, were also designated. [See our SDN Update for identification information on the five designees.] As a result of this action, U.S. persons are generally prohibited from engaging in transactions or otherwise dealing with these individuals and entities, and any assets they may have under U.S. jurisdiction are frozen.

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 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 Title 18 of the United States Code for criminal violations of the Kingpin Act.

The CFPB has released its plan to assess the effectiveness of the RESPA mortgage servicing rule. A request has been posted on the Bureau Blog page seeking comments on the plan, to suggest sources of data, and generally to provide other information that would help with the assessment. Comments will be due 60 days after the plan is published in the Federal Register.

UPDATE: The Bureau's Request for Information is scheduled for publication on May 11, 2017 at https://www.federalregister.gov/d/2017-09361. The deadline for comments will be Monday, July 10, 2017.