Top Story Compliance Related

The Federal Reserve Board and the FDIC have announced that four foreign banking organizations (FBOs)—Barclays PLC, Credit Suisse Group, Deutsche Bank AG, and UBS—will be required to submit their next resolution plans on July 1, 2017. The agencies jointly determined the 2016 annual resolution plan filing requirement will be satisfied by the submission of 2017 resolution plans.

OFAC has updated its frequently asked questions (FAQs) relating to the lifting of certain sanctions under the joint comprehensive plan of action relating to Iran. Two FAQs related to Financial and Banking Measures (C.15 and C.16) and nine FAQs related to Foreign Entities Owned or Controlled by U.S. Persons (K.14 – K.22) were added. OFAC added these FAQs to provide further clarity on the scope of the sanctions lifting that occurred on Implementation Day of the JCPOA.

The Department of Housing and Urban Development has announced an agreement with First-Citizens Bank & Trust Company, resolving allegations that the bank's predecessor, First Citizens Bank and Trust Co., denied mortgage loans to African American, Latino and Asian American mortgage applicants at a disproportionately higher rate than white applicants. In January 2015, the South Carolina-based bank was merged into First-Citizens Bank & Trust Company, a North Carolina-chartered commercial lender. As the successor, First-Citizens Bank & Trust Company continued to cooperate with HUD throughout the investigation and ultimate resolution. First-Citizens agreed to take several steps to ensure and protect equal access to credit including refraining from unlawful consideration of race or national origin when selecting sites for branch offices and services offered, conducting marketing, and defining Community Reinvestment Act assessment areas.

The National Credit Union Administration has published in the Federal Register a notice and request for information [81 FR 36600] on ways the agency can modernize and improve two vehicles it uses to collect information for regulatory oversight of federally insured credit unions: the Call Report and Profile. The NCUA is seeking stakeholder input in several specific areas, including:

• Specific areas of the Call Report and Credit Union Profile that users find challenging;
• Sections or items that could be made optional for small or non-complex credit unions without compromising the agency’s ability to assess risk in these institutions;
• Items that could be added to the reports to enhance the agency’s analysis of the system’s performance trends;
• Whether Call Report database fields align with a credit union’s internal accounting;
• How the Call Report and Credit Union Profile could be reorganized to reduce credit unions’ reporting burden; and
• Additional suggestions or ideas from credit unions for collecting financial and non-financial information.

Comments must be received by 5 p.m. ET on August 1, 2016.

The CFPB has announced the update of its eRegulations platform by adding Regulations C (HMDA), X (RESPA), and DD (TISA). In addition, the Regulation Z eRegulation has been updated to include all amendments through May 2016.

The Consumer Financial Protection Bureau has filed a complaint in federal court against payment processor Intercept Corporation and two of its executives, Bryan Smith and Craig Dresser, for allegedly enabling unauthorized and other illegal withdrawals from consumer accounts by their clients. The Bureau announced the filing, which alleges that Intercept turned a blind eye to blatant warning signs of potential fraud or lawbreaking by its clients, including actions by federal and state authorities and "sky-high" rates of returned payments because of unauthorized withdrawals, insufficient funds, or invalid or closed accounts.

UPDATE: The U.S. District Court for the District of North Dakota granted the defendants' motion to dismiss without prejudice the complaint against Intercept Corporation et al. on March 17, 2017. The court found that the CFPB complaint did not contain sufficient factual allegations to back up its statements regarding Intercept's allegedly unlawful acts or missions; failed to sufficiently allege facts tending to show that industry standards were violated; failed to plead facts sufficient to support a legal conclusion that consumers were injured or likely to be injured; and failed to include allegations to support a finding that Intercept interfered with consumers' ability to understand the terms of their dealing with Intercept's clients or to support a finding that Intercept took unlawful advantage of consumers.

The Federal Trade Commission has provided its 2015 Annual Enforcement Activities Report to the CFPB. The report covers enforcement and related activities regarding Regulations Z (Truth in Lending Act), M (Consumer Leasing Act), and E (Electronic Fund Transfer Act). It addresses, among other things, the Commission’s enforcement actions related to non-mortgage credit -- including automobile purchases and financing, car title loans, payday lending, and consumer electronics financing -- and mortgage-related credit such as forensic audit scams; rulemaking, research, and policy development related to truth in lending; and consumer and business education regarding truth in lending requirements. It also addresses consumer leasing enforcement actions, as well as negative option and other cases involving electronic fund transfers, and rulemaking related to electronic fund transfers.

The 2015 terror assets report has been released by OFAC. This is the twenty-fourth annual report to Congress on the assets in the U.S. relating to terrorist countries and international terrorism program designees.

The Federal Trade Commission has charged a nationally advertised gold and silver marketing operation with bilking millions from consumers. The FTC seeks to recover money from the defendants to return to their customers, many of whom allegedly lost thousands of dollars to the scheme. According to the FTC’s complaint, the defendants marketed gold and silver as investments, but often failed to deliver the goods. Operating as Discount Gold Brokers, the defendants offered gold and silver “at discounted prices,” with “zero commissions, fees, or expenses,” and at “zero percent above dealer cost.” In response, many consumers used their retirement savings to buy the precious metals, with individual orders ranging from $1,000 to $300,000. The complaint alleges that the defendants required up-front payment via check or wire and some consumers used their family trust or retirement accounts to pay.

The defendants—DiscountMetalBrokers Inc. (formerly known as Discount Gold Brokers Inc. and Discount Metal Brokers Inc., and doing business as Discount Gold Brokers and North American Discount Gold.com); Donald Lee Dayer; Katherina Dayer; and Michael Scott Berman—are charged with violating the FTC Act and the FTC’s Mail, Internet or Telephone Order Merchandise Rule, which requires sellers soliciting orders via mail, internet, or phone to have a reasonable basis to expect that they can ship merchandise within any advertised time frame, or within 30 days if no specific time frame is promised.

OFAC has announced the removal of an entity with an SDNTK designation from the SDN list. See our OFAC update for the details. OFAC also published a new Kingpin Act/Panama-related General License.