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Top Story Compliance Related


OCC adjusts CRA bank size definitions

Today, OCC Bulletin 2021-67 announced revisions to the asset-size threshold amounts used to define “small bank or savings association” and “intermediate small bank or savings association” under the OCC's Community Reinvestment Act regulations. The thresholds—which apply to any national bank, federal savings association, or state savings association ("banks")—become effective January 1, 2022. Bulletin 2021-67 adjusts the threshold amounts based on the annual percentage change in a measure of the consumer price index and updates the thresholds included in the OCC’s 2021 CRA final rule.

Beginning January 1, 2022, a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.384 billion is a “small bank or savings association” under the CRA regulations. A “small bank or savings association” with assets of at least $346 million as of December 31 of both of the prior two calendar years and less than $1.384 billion as of December 31 of either of the prior two calendar years is an “intermediate small bank or savings association” under the CRA regulations.


National origin discrimination claims settled

HUD has announced it has reached a Conciliation/Voluntary Compliance Agreement with National Community Renaissance; National Community Renaissance of California; Desert Meadows Housing Partners, LP; Victorville Housing Partners L.P.; and Cathedral Family Housing Partners, L.P., management agents and owners of four HUD-subsidized apartment complexes in southern California, resolving allegations that the property managers refused to rent to or provide adequate language services for applicants with limited English proficiency (LEP).

The case came to HUD’s attention when Inland Fair Housing and Mediation Board, a HUD Fair Housing Initiatives Program agency, filed four complaints after it conducted fair housing tests allegedly showing that on-site managers at the properties refused to rent to LEP persons and told Spanish speaking prospective tenants that they needed to speak English in order to be added to properties’ waiting lists. LEP prospective tenants were also allegedly told that they had to provide their own interpreters.

Under the agreement, the management agents and owners of the properties will pay $9,000 to Inland Fair Housing and Mediation Board, submit documentation attesting to completion of fair housing training, and comply with HUD’s LEP Guidelines entitled “Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons.”


Employee benefit plan report forms rule finalized

The Department of Labor's Employee Benefits Security Administration has published [86 FR 73976] in today's Federal Register final revisions to the instructions for the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan effective for plan years beginning on or after January 1, 2021. These final revisions to the instructions were included in a broader proposal of form and instruction changes published on September 15, 2021. The limited number of instruction changes in this document implement annual reporting changes for multiple-employer plans (including pooled employer plans) that result from statutory provisions in section 101 of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). The other changes to the Form 5500 Annual Return/Report included in the September 2021 proposal will be the subject of one or more separate and later final notices.

The Form 5500 Annual Return/Report for the 2021 plan year generally is not required to be filed until seven months after the end of the 2021 plan year, e.g., July 2022 for calendar year plans, and a 2½-month extension is available.


MLA database update

The Department of Defense has published [86 FR 73263] a Federal Register notice of a scheduled change to the Military Lending Act (MLA) Database. This update adds cadets and midshipmen attending Military Service Academies of the Armed Forces, who are covered borrowers under the MLA, to the population of covered borrowers identified in the MLA database, to correct an error in the database's original development.

The change will be effective February 1, 2022.


OFAC amends weapons proliferation regulation

OFAC has published a final rule [86 FR 73105] in this morning's Federal Register amending the Weapons of Mass Destruction Trade Control Regulations at 31 CFR part 539 to add a June 28, 2005, Executive order as an authority, remove the appendix to the part, and modify three definitions referencing the appendix.

The rule was effective upon publication.


OFAC settles with TD Bank for $115K

OFAC has announced TD Bank, N.A. (Wilmington, Delaware), has agreed to pay $115,005.04 to settle its potential civil liability for two separate matters involving apparent violations of the North Korea Sanctions Regulations and the Foreign Narcotics Kingpin Sanctions Regulations.

In the first matter, TD processed 1,479 transactions totaling $382,685.38 and maintained nine accounts on behalf of employees of the North Korean mission to the United Nations without a license from OFAC. In the second matter, TD maintained two accounts for more than four years for a U.S. resident who was listed on OFAC’s list of Specially Designated Nationals and Blocked Persons (“SDN List”).

The apparent violations in both cases resulted from multiple sanctions compliance breakdowns, including screening deficiencies and human error, and highlight the importance of maintaining and following proper escalation procedures and ensuring adequate employee training. The settlements reflect OFAC’s determination that TD’s apparent violations in both matters were voluntarily self-disclosed and were non-egregious.


SEC fines Nikola Corporation $125 million

The Securities and Exchange Commission has announced that Nikola Corporation, a publicly traded company created through a special purpose acquisition company transaction, has agreed to pay $125 million to settle charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects. The settlement follows the SEC’s litigated action filed earlier this year against Trevor Milton, the company’s founder and former Chief Executive Officer and Executive Chairman.

According to the SEC’s order, before Nikola had produced a single commercial product, Milton embarked on a public relations campaign aimed at inflating and maintaining Nikola’s stock price. Milton’s statements in tweets and media appearances falsely gave investors the impression that Nikola had reached certain product and technological milestones. The order finds that Milton misled investors about Nikola’s technological advancements, in-house production capabilities, hydrogen production, truck reservations and orders, and financial outlook. The order also finds that Nikola further misled investors by misrepresenting or omitting material facts about the refueling time of its prototype vehicles, the status of its headquarters’ hydrogen station, the anticipated cost and sources of electricity for its planned hydrogen production, and the economic risks and benefits associated with its contemplated partnership with a leading auto manufacturer.

The Commission’s order finds that Nikola violated the antifraud and disclosure control provisions of the federal securities laws. Without admitting or denying the Commission’s findings, Nikola agreed to cease and desist from future violations of the charged provisions, to certain voluntary undertakings, and to pay a $125 million penalty. Nikola also agreed to continue cooperating with the Commission’s ongoing litigation and investigation. The order also establishes a Fair Fund to return the penalty proceeds to victim investors.


OFAC sanctions al-Qa'ida network in Brazil

On Wednesday, Treasury announced that OFAC had designated members of a Brazil-based network of al-Qa’ida-affiliated individuals and their companies for providing support to the terrorist group. Yesterday's action targeted three individuals and two entities, including al-Qa’ida operative in Brazil Haytham Ahmad Shukri Ahmad Al-Maghrabi, as Specially Designated Global Terrorists under Executive Order 13224.

The other individuals and entities designated include Mohamed Sherif Mohamed Mohamed Awadd and his furniture company, Home Elegance Comercio de Moveis EIRELI; and Ahmad Al-Khatib and his furniture company, Enterprise Comercio de Moveis e Intermediacao de Negocios EIRELI.

For further identification information on Al-Maghrabi, Awadd, Al-Khatib, and the two furniture companies, see the December 22, 2021, BankersOnline OFAC Update.


Treasury acts to facilitate humanitarian assistance for Afghanistan

The Treasury Department on Wednesday announced that OFAC has issued three General Licenses to facilitate the continued flow of humanitarian assistance and other support for the Afghan people, underscoring the U.S. commitment to support the people of Afghanistan and continue the U.S. government’s longstanding practice of authorizing the provision of humanitarian goods and services to areas affected by U.S. sanctions.

OFAC also issued a Fact Sheet that highlights and consolidates all the relevant authorizations and guidance facilitating the flow of humanitarian assistance, personal remittances, and other support to the Afghan people, and updated three FAQs and issued six new FAQs to provide clarity on the scope of General Licenses and address some of the questions that OFAC has received regarding its sanctions on the Taliban and the Haqqani Network.

For links to the Fact Sheet, General Licenses and FAQs, see the BankersOnline December 22, 2021, OFAC Update.


FinCEN amends civil penalties rule

FinCEN has published in today's Federal Register an amendment to its Bank Secrecy Act civil penalty regulations relating to the requirements for reporting foreign financial accounts and for reporting transactions with foreign financial agencies. The amendment removes civil penalty language, which was made obsolete with the enactment of the American Jobs Creation Act of 2004. The amendment became effective on publication.

The BankersOnline Regulations page for 31 CFR 1010.820 has been updated to reflect the amendment.


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