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Top Story Compliance Related


OCC and FDIC SAR exemption proposals published

The OCC's and FDIC's December 2020 proposals to permit, with FinCEN agreement, certain exceptions to SAR filing requirements, have been scheduled for publication in the January 22, 2021, Federal Register, with a comment period ending on February 22, 2022.


Kraninger resigns as CFPB Director

CFPB Director Kraninger announced Wednesday that she is resigning from her position at the request of the Biden administration. Her resignation was effective yesterday. President Biden will reportedly nominate Federal Trade Commission head Rohit Chopra to head the CFPB.

Pending the nomination and confirmation of a new CFPB director, President Biden has designated David Uejio, the Bureau's chief strategy officer, to be the CFPB's acting director.

Other acting leaders of departments and agencies pertinent to banks include:

  • Matt Ammonn, acting secretary, Department of Housing and Urban Development
  • Andy Baukol, acting secretary, Department of the Treasury
  • Rob Fairweather, acting director, Office of Management and Budget
  • Tami Perriello, acting administrator, Small Business Administration
  • Kevin Shea, acting secretary, Department of Agriculture
  • Al Stewart, acting secretary, Department of Labor


Some pending rules may be slowed

As is typically the practice when there is a change of Administrations in Washington, Executive Branch agencies will temporarily slow their implementation of pending or proposed rules to allow President Biden's appointees or designees the opportunity to review them.

In a Memorandum for the Heads of Executive Departments and Agencies, the White House has directed that no rules (with exceptions for emergency situations or urgent circumstances) should be proposed, issued, or sent to the Federal Register until a department or agency head appointed or designated by the president after yesterday's inauguration reviews and approves the rule. Rules sent to the Office of the Federal Register but not yet published will immediately be withdrawn. Departments and agencies that have published rules that have not taken effect, should consider postponing their effective dates for 60 days to review any questions of fact, law and policy they might raise.

Rules subject to statutory or judicial deadlines will not be delayed or postponed.

Independent agencies such as the Fed, FDIC, and OCC are generally considered not to be subject to the memorandum.


FAQs on SARs and other AML considerations

The FDIC, Federal Reserve Board, FinCEN, NCUA, and OCC have issued responses to frequently asked questions regarding suspicious activity reporting and other AML considerations for financial institutions that are required to submit Suspicious Activity Reports (SARs).

The answers clarify SAR/AML requirements in order to assist financial institutions with their compliance obligations and enable them to focus resources on activities that produce the greatest value to law enforcement agencies and other government users of Bank Secrecy Act (BSA) reporting.

The FAQs address the following topics:

  • requests by law enforcement to maintain accounts
  • receipt of grand jury subpoenas and law enforcement inquiries
  • maintaining customer relationships following the filing of SARs
  • filing SARs based on negative news media searches
  • information provided in SAR data and narrative fields
  • SAR character limits

The FAQs neither alter existing BSA/AML requirements, nor establish new supervisory expectations.


FDIC revises appeals guidelines

The FDIC Board has adopted revised Guidelines for Appeals of Material Supervisory Determinations. The revised guidelines are intended to enhance the independence of appeals decisions and to clarify the procedures and timeframes that apply to appeals when the FDIC is taking a formal enforcement action. The revised guidelines generally replace the existing Supervision Appeals Review Committee (SARC) with an independent, standalone office within the FDIC, known as the Office of Supervisory Appeals (Office). The revised guidelines will take effect when the Office is fully operational; the current guidelines will remain in effect until that time. The FDIC will publish a notice to inform institutions when this occurs. Chairman McWilliams issued a statement on the changes.


OCC Community Development Investments Newsletter

The OCC has published the latest edition of its Community Developments Investments newsletter, “Strengthening Communities With Opportunity Zone Investments.” This edition of Community Developments Investments explains how banks can support distressed communities by making investments in tax-advantaged qualified opportunity funds (QOF) as part of their community development strategies. For example, the newsletter highlights transactions in which a national bank created and sponsored its own QOF. The newsletter also highlights banks that invested in QOFs sponsored by third-party intermediaries. The newsletter discusses tools that banks can use to evaluate the social and economic benefits created by QOF-financed projects in designated opportunity zones.


Fed updates capital planning requirements

The Federal Reserve Board has announced a final rule that updates the Board's capital planning requirements to be consistent with other Board rules that were recently modified. The final rule is generally similar to the proposal. In 2019, the Board finalized a framework that sorts large banks into different categories based on their risks, with requirements that are tailored to the risks of each category. The Board's capital planning requirements for these large banks help ensure they plan for and determine their capital needs under a range of different scenarios.

The rule finalized yesterday reflects that new framework. In particular, firms in the lowest risk category are on a two-year stress test cycle and not subject to company-run stress test requirements. In a change from the proposal, the final rule applies capital planning requirements to large savings and loan holding companies that are not predominantly engaged in insurance or commercial activities.

The rule will become effective 60 days after publication in the Federal Register.


OFAC targets Venezuelan oil sector sanctions evaders

The Treasury Department announced yesterday that OFAC has designated three individuals, fourteen entities, and six vessels for their ties to a network attempting to evade United States sanctions on Venezuela’s oil sector. The principal actors designated include Alessandro Bazzoni, Francisco Javier D’Agostino Casado, Philipp Paul Vartan Apikian, Elemento Ltd, and Swissoil Trading SA. Also designated were nine entities owned or controlled by Bazzoni, D’Agostino, or Elemento, and a number of maritime entities and vessels.

For additional information on the targets of OFAC's action and other designations made by the State Department, see BankersOnline's OFAC Update.


Agencies issue final rules on supervisory guidance

The CFPB, FDIC, NCUA and the OCC have each issued a final rule that codifies the Interagency Statement Clarifying the Role of Supervisory Guidance issued on September 11, 2018 by the OCC, Federal Reserve Board, FDIC, NCUA and the CFPB. By codifying the 2018 Statement, with amendments, the final rule confirms that the OCC, FDIC, and Bureau will continue to follow and respect the limits of administrative law in carrying out their supervisory responsibilities.

Unlike a law or regulation, supervisory guidance does not have the force and effect of law and the agencies not take enforcement actions or issue supervisory criticisms based on non-compliance with supervisory guidance. Rather, supervisory guidance outlines supervisory expectations and priorities, or articulates views regarding appropriate practices for a given subject area.

In contrast to supervisory guidance, regulations do have the force and effect of law and enforcement actions can be taken if regulated institutions are in violation. Regulations are also generally required to go through the notice and comment process.


FinCEN reopens comment period on CVC/LTDA proposal

On January 15, FinCEN published [86 FR 3897] a supplemental notice of proposed rulemaking on recordkeeping and reporting of certain transactions involving convertible virtual currency (“CVC”) or digital assets with legal tender status (“legal tender digital assets” or “LTDA”), identifying additional authority for its proposed rule published on December 23, 2020, providing additional information regarding the reporting form, and reopening the comment period.

FinCEN is providing an additional 17 days (through 2/1/2021) for comments on the proposed reporting requirements regarding information on CVC or LTDA transactions greater than $10,000, or aggregating to greater than $10,000, that involve unhosted wallets or wallets hosted in a jurisdiction identified by FinCEN. FinCEN is providing an additional 45 days (through 3/1/2021) for comments on the proposed requirements that banks and MSBs report certain information regarding counterparties to transactions by their hosted wallet customers, and on the proposed recordkeeping requirements.

In the supplemental notice, FinCEN said that a final rule implementing the proposed reporting requirements would be effective 30 days after its publication, except that the requirement to report counterparty information (if adopted) would not take effect for 60 days.


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