Top Story Compliance Related

The Federal Trade Commission reports that three Dallas-area auto dealers have agreed to pay a $85,000 civil money penalty to settle charges that they violated a Commission administrative order barring them from deceptively advertising the cost of buying or leasing a car. The FTC’s complaint cited a TV ad targeted at people with major credit problems, such as repossessions or foreclosures. The ad touted vehicles for $250 per month, but in fine print disclosed that the offer was based on a 4.25 annual percentage rate that few, if any, consumers with such major credit issues could obtain. In addition, the FTC alleged that the dealers advertised credit and lease terms without clearly and conspicuously disclosing information required by federal law, and failed to keep records required by the 2014 order.

The Federal Deposit Insurance Corporation's FIL-56-2016, issued yesterday, announced the release of updated technical assistance videos on the Ability-to-Repay and Qualified Mortgages Rule. The updated videos provide financial institution management, compliance officers, and staff with resources for a better understanding of the current requirements of the Ability-to-Repay and Qualified Mortgages Rule. The updated videos can be accessed HERE, in the FDIC's Directors' Resource Center pages.

The Federal Emergency Management Agency has published two final rules in today's Federal Register in which FEMA identifies communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension because of noncompliance with the floodplain management requirements of the program:

• Effective September 30, 2016—specified communities in Georgia and Oklahoma
• Effective October 20, 2016—specified communities in Alaska and California

FinCEN has announced the selection of Thomas P. Ott as Associate Director for its Enforcement Division. Mr. Ott will oversee FinCEN’s Bank Secrecy Act compliance and enforcement program. This includes developing and implementing compliance and enforcement strategies, supervising investigations, enforcement actions, and other activities that have industry-wide, national, and international impact.

The Federal Reserve Board has posted its semiannual update of the Bank Holding Company Supervision Manual, which provides guidance for conducting inspections of bank holding companies and their nonbank subsidiaries.

The Department of the Treasury has announced that OFAC has designated two Mexican nationals and two Mexican companies pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Juan Manuel Alvarez Inzunza, a money launderer, and Jose Olivas Chaidez, a key narcotics trafficker, have been designated as Specially Designated Narcotics Traffickers (SDNTs) for materially assisting, supporting, or providing services to the Sinaloa Cartel and/or high-ranking Sinaloa Cartel members, including Joaquin “El Chapo” Guzman Loera and Ismael “El Mayo” Zambada Garcia and his top lieutenants. OFAC has also designated two Culiacan, Sinaloa-based companies, Nueva Atunera Triton, S.A. de C.V. and Operadora Eficaz Pegaso, which are owned, controlled, or directed by, or acting for or on behalf of, Juan Manuel Alvarez Inzunza. As a result of these actions, all assets of those designated that are within U.S. jurisdiction or are in the control of U.S. persons are frozen, and U.S. persons are generally prohibited from engaging in transactions with them. See our OFAC Update for identification information on the new listings and those removed.

Since June 2000, more than 1,900 entities and individuals have been named pursuant to the Kingpin Act for their role in international narcotics trafficking. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,414,020 million 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 FDIC has issued FIL-53-2016 to announce requests by the FDIC, FRB, and OCC for comment on the proposed new streamlined Call Report announced last week by the FFIEC and published yesterday in the Federal Register. Comments must be submitted by October 14, 2016.

The CFPB has published in today's Federal Register, at 81 FR 54317, the proposal it announced on July 29 (see our earlier Top Story) to amend Regulation Z to clarify and refine the Bureau's TRID Rule. Comments on the proposal are due by October 18, 2016.

The Federal Reserve Board has announced the execution of written agreements with First Bankshares, Inc., Barboursville, West Virginia (financial strength), and Liberty Bank, South San Francisco, California (BSA/AML deficiencies).

The Small Business Administration has published a proposed rule at 81 FR 52595 in the Federal Register to make changes to some of its lending program regulations for clarity and to increase participation in: The Surety Bond Guarantee (SBG) Program, the 7(a) Loan Program, the Microloan Program, and the Development Company Loan Program (504 Loan Program). In addition, the proposed changes will streamline the regulations by removing or revising any outdated regulations. Comments on the SBA proposal are due by October 11, 2016.