Top Story Compliance Related

The Federal Reserve Board has announced the execution of:

• a cease and desist order issued with the consent of Mode Eleven Bancorp, the holding company of Summit National Bank, both located in Hulett, Wyoming, related to Bancorp's previous strategy focused on providing banking-related services to financial technology companies through certain nonbank subsidiaries
• a written agreement with Steele Bancshares, Inc., Tyler, Texas, and American State Bank, Arp, Texas, related to identified safety and soundness deficiencies at the bank.

The Treasury Department yesterday reported that OFAC has taken additional action against Iranian military revenue generation, targeting Oceanlink Maritime DMCC for facilitating the shipment of Iranian commodities on behalf of Iran’s Armed Forces General Staff and Ministry of Defense and Armed Forces Logistics. OFAC also identified 13 vessels managed by Oceanlink Maritime DMCC as blocked property.

For identification information on the designated company and vessels, see BankersOnline's April 4, 2024, OFAC Update.

The FDIC has released its April 2024 list of FDIC-supervised banks whose latest CRA evaluations have recently been made public. Of the 50 banks listed, two — in Moulton, Texas, and Parker, Colorado — were rated "Needs to Improve," 45 were rated "Satisfactory," and these three received "Outstanding" ratings:

• The Bank of New Glarus, New Glarus, Wisconsin
• First General Bank, Rowland Heights, California
• Rockland Trust Company, Rockland, Massachusetts

The U.S. Department of Housing and Urban Development yesterday announced the award of over $30 million to fair housing organizations across the country under its Fair Housing Initiatives Program (FHIP). The grants will support the efforts of national, state, and local fair housing entities working to address violations of the Fair Housing Act and to end discrimination in housing.

The grant funding will allow the grantees to provide fair housing enforcement by conducting investigations, testing to identify discrimination in the rental and sales markets, and filing fair housing complaints with HUD or substantially equivalent state and local agencies. In addition, grantees will conduct education and outreach activities to inform the public, housing providers, and local governments about rights and responsibilities that exist under the Fair Housing Act.

Our monthly review of the Federal Reserve Board's archive of Community Reinvestment Act evaluations has revealed that the Reserve Banks released 23 evaluations in March 2024. Of those evaluations, 21 received "Satisfactory" ratings. Two banks — First State Bank Southwest, Pipestone, Minnesota; and FirstBank, Lakewood, Colorado — received "Outstanding" ratings.

The OCC has released a list of 19 Community Reinvestment Act performance evaluations that became public during the month of March 2024. Two of the listed evaluations are rated "Needs to Improve," 13 are rated "Satisfactory," and the following four are rate "Outstanding":

• The Clinton National Bank, Clinton, IA
• Native American Bank, National Association, Denver, CO
• Rosedale FS & LA, Baltimore, MD
• TD Bank USA, National Association, Wilmington, DE

The NCUA has announced it issued two prohibition notices and one consent order in March 2024, permanently prohibiting individuals from participating in the affairs of any federally insured depository institution.

• Sarah C. Conley, a former employee of Summit Federal Credit Union, Rochester, New York, received a notice of prohibition, having been convicted of grand larceny in connection with illegal activities at the credit union
• Carlene Bartley, formerly employed by Municipal Credit Union, New York, New York, was issued a notice of prohibition, having pleaded guilty to, and having been convicted on, charges of grand larceny
• Esther A. Olson, a former assistant branch manager of Educational Employees Credit Union, Fresno, California, received a consent order of prohibition, after a finding that she had embezzled funds from member accounts, including the withdrawal of over $60,000 from four different members' share accounts

Bloomberg Law has reported that a federal judge in Texas has blocked banking regulators’ rewrite of their Community Reinvestment Act rules, giving banks a reprieve from new regulations that had been set to take effect today.

The Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency went beyond the bounds of the 1977 Community Reinvestment Act in their final rules issued last October, Judge Matthew J. Kacsmaryk of the U.S. District Court for the Northern District of Texas said in a ruling on Friday.

The court enjoined the agencies from enforcing the regulations pending the resolution of a lawsuit brought in February by the ABA, the U.S. Chamber of Commerce and five national and state associations, and pushed back the April 1, 2024, effective date, along with all other implementation dates, day for day, for each day the court's injunction remains in place.

The FDIC has updated the following sections of its Consumer Compliance Examination Manual (CEM):

• Communicating Findings (II-6.1): Updated to clarify when the self-identification of violations is considered a strength of a bank’s Compliance Management System
• Expedited Funds Availability Act (VI-1.1): Updated with technical changes related to regulatory dollar-amount thresholds and large deposit hold times
• FTC Rule - Preservation of Claims and Defenses (VII-2.1): Removed an invalid exception in a chart

The CFPB has released its 2023 Consumer Response Annual Report. The report indicates that during 2023, the Bureau sent more than 1.3 million complaints to over 3,400 companies for review and response.

The report shows a continued increase in credit or consumer reporting complaints, with more than one million of them sent to the three nationwide consumer reporting companies — Equifax, Experian, and TransUnion.

Consumers also raised issues about fraudulent activity in nearly every product category, including credit or consumer reporting, debt collection, checking or savings accounts, and credit cards.