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Top Story Compliance Related

11/17/2021

Fed enforcement actions

The Federal Reserve Board has announced two enforcement actions:

  • Industrial and Commercial Bank of China Ltd., Beijing, People's Republic of China; Industrial and Commercial Bank of China Ltd., New York Branch, New York, New York—Written Agreement dated November 4, 2021
  • Consent prohibition order against Laurence E. Bensignor, former executive vice president and general counsel of Eagle Bancorp, Inc., and EagleBank, Bethesda, Maryland—Unsafe and unsound banking practices

11/16/2021

OFAC targets Nicaraguan ministry and officials

On Monday, Treasury announced that OFAC had designated the Public Ministry of Nicaragua (Ministerio Publico de Nicaragua) as well as nine officials of the Government of Nicaragua in response to the sham national elections orchestrated by President Daniel Ortega and Vice President Rosario Murillo. This action targets those who are repressing Nicaraguans for exercising their human rights and fundamental freedoms.

Monday’s action, taken pursuant to Executive Order 13851, “Blocking Property of Certain Persons Contributing to the Situation in Nicaragua,” and the Nicaragua Human Rights and Anticorruption Act of 2018 (NHRAA), now known as the Nicaragua Investment Conditionality Act of 2018 (NICA), is intended to highlight the anti-democratic actions that the Ortega regime has undertaken to alter and corrupt the election process in Nicaragua and solidify the power of Ortega, Murillo and their inner circle.

For the names of the nine designated officials and additional identification information on them and the targeted ministry, see the BankersOnline OFAC Update for November 15, 2021.

11/15/2021

CFPB sues pawn lenders for cheating military families

The CFPB on Friday announced it has filed a lawsuit in a Texas federal district court against FirstCash, Inc. and Cash America West, Inc. The CFPB alleges that the two companies violated the Military Lending Act (MLA) by charging higher than the allowable 36% annual percentage rate on pawn loans to active-duty servicemembers and their dependents. The CFPB also alleges that FirstCash violated a 2013 CFPB order against its predecessor company prohibiting MLA violations. The CFPB is seeking an injunction, redress for affected borrowers, and a civil money penalty.

FirstCash, Inc. is a non-bank corporation operating out of Fort Worth, Texas. FirstCash and its wholly owned subsidiaries operate more than 1,000 pawnshops throughout the U.S. FirstCash is a publicly traded firm with a current market capitalization of about $3.5 billion. Cash America West, Inc. is a wholly owned subsidiary of FirstCash that operates pawn stores in Arizona, Nevada, Utah, and Washington.

The CFPB alleges that between June 2017 and May 2021, FirstCash and Cash America West violated the MLA by making more than 3,600 pawn loans from their Arizona, Nevada, Utah, and Washington stores with an annual percentage rate above the 36% allowed by the MLA. The unlawful loans had APRs that frequently exceeded 200%. The CFPB also alleges that the loan contracts violated the MLA by requiring borrowers to sign away their ability to sue and by failing to make all required loan disclosures. These 3,600 loans are from only a limited period for which the Bureau currently has transactional data, and the stores from which they originated make up only about 10% of FirstCash’s nationwide pawn-loan operations. Accordingly, the CFPB alleges that since October 3, 2016, FirstCash has, together with Cash America West and other wholly owned subsidiaries, made additional pawn loans in violation of the MLA from stores in these and other states.

In 2013, the Bureau ordered Cash America International, Inc. to halt its misconduct against military families, prohibiting Cash America and its successors from violating the MLA. FirstCash is a successor to Cash America and therefore subject to the 2013 order. The Bureau alleges that FirstCash’s violations of the MLA violated the Bureau’s 2013 order.

11/15/2021

FTC requests comment on draft of strategic plan

The Federal Trade Commission has released a preliminary draft Strategic Plan for Fiscal Years 2022–2026 for public review and comment. Every four years, government agencies are required to submit an updated strategic plan that presents strategic goals and objectives for the next five years and describes how the agency will measure success in these areas. The FTC’s last updated strategic plan was prepared in FY 2018, and the current draft tracks closely to that iteration. The FTC welcomes feedback on how the draft plan could be adjusted to reflect the agency’s reinvigorated approach to addressing harms to American consumers, workers, and honest businesses. Public comments on the draft plan may be submitted until November 30, 2021.

11/15/2021

OFAC sanctions Eritrean entities and individuals

On Friday, OFAC designated four entities and two individuals under the authority of Executive Order 14046 in response to the growing humanitarian and human rights crisis and expanding military conflict in Ethiopia. The individuals and entities designated today are the Eritrean Defense Force, the People’s Front for Democracy and Justice, Abraha Kassa Nemariam, Hidri Trust, Hagos Ghebrehiwet W Kidan, and Red Sea Trading Corporation.

As a result of today’s action, all property and interests in property of the persons named above that are in the United States, or in the possession or control of U.S. persons, are blocked and must be reported to OFAC. No entity shall be blocked pursuant to E.O. 14046 solely because it is owned in whole or in part, directly or indirectly, by one or more sanctioned persons, unless the entity is itself a sanctioned person.

For identification information on those designated, as well as information on a number of designation removals, see BankersOnline's November 12, 2021, OFAC Update.

11/12/2021

FinCEN Exchange held

On Tuesday, FinCEN convened a virtual FinCEN Exchange with members of the financial industry and law enforcement to discuss FinCEN’s analysis of suspicious activity reporting (SAR) with a transactional nexus to Alabama, Florida, Georgia, Mississippi, and South Carolina. Topics of discussion included an analysis of certain Bank Secrecy Act (BSA) filing statistics for SARs and an analysis of SAR filings related to recent FinCEN advisories.

FinCEN Exchanges support one of FinCEN’s highest priorities—to strengthen public-private partnerships to identify and mitigate threats in order to safeguard our national security and protect communities and citizens from harm. Engagement on specific topics, trends, and typologies between industry, law enforcement, and FinCEN can enhance the value of BSA reporting. Such reporting can assist law enforcement in identifying and addressing potential criminal methodologies, support ongoing investigations, and promote efficient and effective reporting of actionable information by financial institutions.

11/12/2021

Mortgage servicing supervisory flexibility ending

The CFPB, OCC, Board of Governors, OCC, FDIC, NCUA and state financial regulators on Wednesday, November 10, 2021, issued an updated "Joint Statement on Supervisory and Enforcement Practices Regarding the Mortgage Servicing Rules in Response to the Continuing COVID-19 Pandemic and CARES Act."

The temporary supervisory and enforcement flexibility announced in the original (April 2020) joint statement no longer applies, and the agencies will apply their respective supervisory and enforcement authorities, when appropriate, to address any noncompliance or violations of the Regulation X mortgage servicing rules that occur after the date of this statement. These rules include "Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA)," Regulation X (86 Fed. Reg. 34848), which became effective on August 31, 2021.

The new joint statement closes with this paragraph—

  • "The agencies recognize the ongoing challenges faced by mortgage servicers and their efforts to assist customers and members affected by the ongoing COVID-19 pandemic. The agencies continue to encourage mortgage servicers to engage in these efforts. The agencies will consider, when appropriate, the specific impact of servicers’ challenges that arise due to the COVID-19 pandemic and take those issues in account when considering any supervisory and enforcement actions. As part of their considerations, the agencies will factor in the time it takes to make operational adjustments in connection with this joint statement."

Related links:

11/12/2021

Fair Lending interagency webinar

The Federal Reserve Bank of Philadelphia has sent out invitations to the Outlook Live 2021 Fair Lending Interagency Webinar, to be held on December 7, 2021, from 2:00 to 3:30 p.m. Eastern time. Speakers will represent eight federal agencies:

  • Consumer Financial Protection Bureau
  • Department of Housing and Urban Development
  • Department of Justice
  • Federal Deposit Insurance Corporation
  • Federal Housing Finance Agency
  • Federal Reserve Board
  • National Credit Union Administration
  • Office of the Comptroller of the Currency

Topics to be discussed include:

  • Recent Fair Lending Guidance Documents
  • Analyzing HMDA Data
  • Enterprise Fair Lending Data
  • Fintech Risk Management
  • Redlining Self-Assessments
  • Redlining & Marketing
  • DOJ Redlining Initiative and Recent Enforcement
  • JP Morgan Chase Conciliation Agreement

Online registration is required, and is now open.

11/12/2021

FFIEC to send 'Announcements'

The Federal Financial Institutions Examination Council (FFIEC) on Wednesday launched “FFIEC Announcements,” email notifications providing relevant and timely information designed specifically for examiners and practitioners within the financial services sector.

FFIEC Announcements will be distributed to the FFIEC's email subscribers notifying them of updates to the FFIEC's website and InfoBases.

11/12/2021

OFAC targets corrupt Cambodian military officials

On Wednesday, the Treasury Department announced that OFAC has sanctioned two Cambodian government officials, Chau Phirun (Chau) and Tea Vinh (Tea), for their roles in corruption in Cambodia. These individuals were designated pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. The designations were complemented by the U.S. Department of State’s announcement of visa restrictions under Section 7031(c) of the FY 2021 Department of State, Foreign Operations, and Related Programs Appropriations Act on Chau and Tea, and their eligible immediate family members, due to their involvement in significant corruption.

See the BankersOnline OFAC Update for November 10, 2021, for identification information on Chau and Tea.

OFAC has also published a Cambodia Business Advisory on High-Risk Investments and Interactions.

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