Top Story Compliance Related

The Consumer Financial Protection Bureau has published, at 81 FR 64142 in the September 19, 2016, Federal Register a Notice of Availability of Revised Methodology for Determining Average Prime Offer Rates. The methodology statement describes the method used to calculate average prime offer rates for purposes of Regulation C and Regulation Z. The Bureau removed from the methodology statement the references to the sources of survey data used to calculate average prime offer rates. The Bureau's sources for the data used have changed.

The Office of the Comptroller of the Currency has released a list of recently-issued enforcement orders taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. Included were the previously-announced actions taken against First National Bank of Omaha and Wells Fargo Bank, NA, and a consent order to cease and desist and for a civil money penalty of $50,000 against the former chief executive officer and director of First Place Bank (now merged), Warren, Ohio.

The CFPB has posted an article discussing the percentage of fourth-year undergraduate students age 18 to 24 with student loan debt by race. The article reports federal government data shows that over 90 percent of African-American and 72 percent of Latino students leave college with student loan debt, compared to 66 percent of white students and 51 percent of Asian-American students. While Asian-American students may be less likely to borrow federal student loans, separate research has shown that Asian-American students who need to borrow more than $30,000 may be more likely to rely on private student loans to finance their higher education—loans that offer fewer consumer protections for borrowers.

The FDIC has announced the publication of The Affordable Mortgage Lending Guide, Part I: Federal Agencies and Government Sponsored Enterprises, and launched an online resource center to help community bankers learn more about single-family housing products offered by federal agencies and government-sponsored enterprises. The Guide describes federal programs for single-family housing lending that support home purchase, refinance, manufactured housing, and some home improvements. It covers programs that are intended to assist a variety of communities, including rural areas and Native American communities, as well as low- and moderate-income individuals, first-time homebuyers, and veterans. The FDIC's Affordable Mortgage Lending Center is an online resource center featuring data, fact sheets, and mortgage lending studies from the FDIC and other federal resources. The center includes the full version of the guide and also provides links that take the reader directly to the program.

• Related document: FIL-60-2016

In a remarks at the Harvard Kennedy School, Comptroller Curry discussed how the financial system has progressed since the Great Recession, its present strengths, and the need to remain vigilant against risks. Curry stated, “I want to conclude by noting that lessons from 2008 were not really new lessons. Rather, the crisis reminded us of basic principles that have been around since the very first Comptroller of the Currency, Hugh McCulloch, provided sage advice to bankers in 1863. His advice included:

• Let no loans be made that are not secured beyond a reasonable contingency.
• Distribute your loans rather than concentrate them in a few hands.
• Treat your customers liberally, bearing in mind a bank prospers as its customers prosper.
• The capital of a bank should be a reality, not a fiction.”

The U.S. Treasury Department has announced that the Office of Foreign Assets Control has designated ISIL financial facilitators Mohamad Alsaied Alhmidan and Hussam Jamous pursuant to Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. See our OFAC Update for additional details.

HUD has announced the issuance of “Limited English Proficiency” (LEP) guidance that addresses how the Fair Housing Act would apply to claims of housing discrimination brought by people because they do not speak, read, or write English proficiently. More than 25 million people in the United States do not communicate proficiently in English. Housing providers are prohibited from using limited English proficiency selectively or as an excuse for intentional housing discrimination. The law also prohibits landlords from using limited English proficiency in a way that causes an unjustified discriminatory effect.

The Office of the Comptroller has released its bank supervision operating plan for fiscal year (FY) 2017. Supervisory strategies for FY 2017 will focus on:

• Commercial and retail loan underwriting;
• Business model sustainability and viability;
• Operational resiliency;
• Bank Secrecy Act/anti-money laundering compliance management; and
• Change management to address new regulatory requirements.

OFAC has announced the end of the Côte d'Ivoire sanctions program and listed nine entries (for six designated individuals) that have been removed from the SDN List. OFAC also posted a new question to its FAQs on the Burmese Sanctions to clarify the status of that program in light of President Obama's announcement he intends to rescind the Executive Order on which the Burmese Sanctions program is based.

The Los Angeles Times and other media outlets report that the U.S. Senate Banking Committee will hold a hearing on September 20 on the sales tactics used by Wells Fargo Bank employees that led to the recently-announced $185 million in penalties (see our September 9 Top Story) assessed by federal regulators and Los Angeles County. Five members of the committee had released a letter asking that committee chair Senator Richard Shelby investigate the matter. The Times said it first revealed the bank's sales practices in 2013.