Top Story Compliance Related

The Department of Housing and Urban Development has published in today's Federal Register a report of administrative actions taken by its Mortgagee Review Board against HUD-approved mortgagees for the fiscal year ending September 30, 2016.

The FDIC has released a list of orders of administrative enforcement actions taken against banks and individuals in February. The list includes a total of 14 orders and one notice. The administrative enforcement actions in those orders consisted of one consent order; five removal and prohibition orders; one Section 19 order; five civil money penalties; one prompt corrective action directive; and one notice.

Three institution-affiliated individuals of Banamex USA, Century City, California, were issued civil money penalty orders totaling $190,000 and two of those individuals were also issued prohibition orders.

Civil money penalties were imposed on Heritage Bank, Erlanger, KY ($8,500); Park Bank, Holmen, WI ($6,300); and United Bank, Osseo, WI ($3,600) for violations of the Flood Disaster Protection Act. The list of specific violations in paragraphs 7 - 42 of the Findings of Fact and Conclusions of Law portion of the Park Bank order are particularly detailed and may be useful for compliance training.

BOL's Andy Zavoina, who watches for trends in Flood Insurance penalties, notes that the FDIC issued the same number of flood CMPs in the three months from December 2016 through February 2017 that it issued in all of 2016, and that the $126,000 in penalties it imposed in those same three months is nearly triple the 2016 total of $45,000.

OFAC has designated one entity and 11 individuals in response to North Korea’s ongoing development of weapons of mass destruction (WMD) and continued violations of United Nations Security Council Resolutions (UNSCRs). The action targets North Korean nationals working as agents of the regime in Russia, China, Vietnam, and Cuba to provide financial support or WMD procurement services for UN- or U.S.-designated sanctioned entities. The names have been added to the OFAC SDN list with North Korea, non-proliferation and/or counter narcotics designations, along with removals and an update. See BankersOnline's OFAC Update for the details.

The FTC has announced that NetSpend Corporation has agreed to settle allegations that the prepaid card company deceived people about access to funds deposited on NetSpend debit cards. NetSpend was ordered to provide monetary relief totaling no less than $53 million.

• Settlement agreement

OFAC has announced it has taken action to disrupt the Islamic State of Iraq and Syria's (ISIS) global financial and facilitation networks by designating two individuals as Specially Designated Global Terrorists pursuant to Executive Order (E.O.) 13224. The individuals designated are Syria- and Iraq-based ISIS members who provide financial and operational support for ISIS's recruitment and attack plotting in Indonesia, Malaysia, and elsewhere in Southeast Asia. The State Department also designated five individuals under E.O. 13224. As a result of those actions, all property and interests in property of the seven individuals subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.

For additional information, see our OFAC Update.

In prepared remarks at the Chamber of Commerce 11th Annual Capital Market Summit, Director Cordray reviewed the current and past activities of the Bureau. He noted, "Since we opened our doors in 2011, the Consumer Bureau has been working hard to reform certain markets that were not working well for consumers and honest businesses. As most of you know, we are the first federal agency with jurisdiction over both the larger banks and the nonbank financial companies that compete with them. Just as an umpire must be authorized to assess the entire field of play, we are tasked with putting compliance standards and expectations for these providers on the same level." The Director then discussed how regulation affects the consumer financial marketplace, the agency's approach to regulatory implementation, the streamlining and modernization of old regulations and making new ones clear, and Congress's requirement that the Bureau conduct retrospective reviews of its significant rules after five years have passed.

FinCEN has published in today's Federal Register a request for comment on a proposed renewal, without change, to an information collection found in existing regulations requiring U.S. financial institutions to establish due diligence policies, procedures, and controls reasonably designed to detect and report money laundering through correspondent accounts that U.S. financial institutions establish or maintain for certain foreign financial institutions. The proposal would extend the requirements titled "Anti-Money Laundering Programs and Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions" (31 CFR 1010.610). Comments will be accepted for 60 days, through May 29, 2017.

In remarks before the National Community Reinvestment Coalition, Comptroller Curry discussed the OCC’s work to promote a vibrant and diverse banking system capable of meeting the needs of consumers, businesses, and communities throughout the nation. Curry stated, “In the last five years, the OCC has devoted a great deal of effort not just to mitigating the fallout from the last financial crisis, but to preventing a recurrence. To this end, we have redoubled our efforts to improve our supervisory processes, including those that ensure fair access for consumers and small businesses and fair treatment of bank customers.” Curry concluded, “I’m proud of what we have accomplished at the OCC and steps we’ve taken to ensure the agency can succeed in this important part of its statutory mission. The OCC has an organizational structure prepared to meet the supervisory challenges of the future. We have sharpened our focus on compliance and consumer protection in a landscape of rapid technological change. We have broken new ground with enhanced compliance policies and enforcement to ensure that vulnerable consumers are treated fairly. We assess community needs when considering merger and acquisition applications and, where necessary, imposed conditions to address fair access and fair treatment through the implementation of CRA plans, when appropriate.”

The Federal Trade Commission released its 2016 Annual Highlights, which demonstrate the agency’s ongoing efforts to protect consumers and promote competition over the past calendar year, and include some of the Commission’s biggest successes to date. The agency’s enforcement highlights address its key legal actions across many sectors, including health care, technology and other consumer products and services. On the policy front, the FTC filed eight amicus briefs on topics such as pharmaceutical markets, reverse payments and the Fair Credit Reporting Act. Staff conducted 20 workshops and conferences on a range of topics including state regulation of auto sales, solar distribution generation, security for startup businesses and a number of tech-driven workshops. The agency’s education highlights tout the agency’s work to help businesses understand their rights and legal responsibilities, and inform people about ways to avoid fraud and deceptive business practices.

The Federal Reserve Board has announced the execution of an enforcement action and the assessment of a $11,000 civil money penalty against the Bank of Star City, Star City, Arkansas, for violations of the National Flood Insurance Act. See our Flood Penalty Page for further information.