Top Story Compliance Related

OCC Bulletin 2016-17, issued on May 19, 2016, highlights actions that national banks and federal savings associations (collectively, banks) should take and factors they should consider based on the SEC revised money market fund (MMF) rules in effect now and going into effect. Although these rules directly apply only to MMFs, the rules indirectly affect

• banks that make MMFs available to their customers through their fiduciary and custody activities;
• bank programs that automatically sweep funds between deposit accounts and MMFs; and
• banks that invest in MMFs.

The OCC will host risk governance and credit workshops in Milwaukee on June 28-29, for directors of national community banks and federal savings associations. The Risk Governance workshop on June 28 will provide practical information for directors to effectively measure and manage risks. The workshop also focuses on the OCC's approach to risk-based supervision and major risks in the financial industry. The Credit Risk workshop on June 29 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change.

The Treasury Department has announced actions taken to disrupt the fundraising and support networks of al-Qaida, al-Nusrah Front, al-Qaida in the Arabian Peninsula (AQAP), and ISIL by imposing sanctions on six individuals. Treasury's Office of Foreign Assets Control (OFAC) made related additions to its SDN List, and removed several listings for one individual. See our OFAC Update for additional information.

The Office of the Comptroller of the Currency has released a list of recent enforcement actions taken against national banks and federal savings associations. The list includes one cease and desist (C&D) order, two orders to pay civil money penalties (CMPs), one formal agreement, and five orders terminating previous enforcement actions. Stearns Bank, N.A., St. Cloud, Minnesota, received a C&D and an order to pay a $1 million CMP for violations of SAR filing requirements. A $56,500 CMP was assessed against TCF National Bank, Sioux Falls, South Dakota, for violations of the National Flood Protection Act.

The Financial Industry Regulatory Authority (FINRA) has announced it has fined Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) a total of $17 million for widespread failures related to the firms’ anti-money laundering (AML) programs. RJA was fined $8 million and RJFS was fined $9 million for failing to establish and implement adequate AML procedures, which resulted in the firms’ failure to properly prevent or detect, investigate, and report suspicious activity for several years. RJA’s former AML Compliance Officer, Linda L. Busby, was also fined $25,000 and suspended for three months. See "Brokers to pay $17 million for AML failures," in our Penalties pages, for more information.

The CFPB has issued a report finding that one in five borrowers who take out a single-payment auto title loan have their car or truck seized by their lender for failing to repay their debt. According to the Bureau’s research, more than four in five of these loans are renewed the day they are due because borrowers cannot afford to repay them with a single payment. More than two-thirds of auto title loan business comes from borrowers who wind up taking out seven or more consecutive loans and are stuck in debt for most of the year. The Bureau also posted an article on the report and prepared remarks from Director Cordray for the Bureau's press call.

NCUA Chairman Metsger has announced that briefings will be conducted by Board Directors prior to board meetings to discuss issues prior to taking action. Metsger stated, “What we’re doing is giving Board Members an opportunity to talk directly to one another, exchange thoughts and ideas. It also provides the broader credit union community with insight into our thought process. Since no action is being taken, stakeholders will also have the opportunity to consider our discussion and provide early input before any rulemaking begins.”

OFAC has amended the Burmese Sanctions Regulations and updated the SDN List. The regulatory amendments are intended to support trade with Burma; facilitate the movement of goods within Burma; allow certain transactions related to U.S. individuals residing in Burma; and allow most transactions involving designated financial institutions. New FAQs on the Burma Sanctions program were also released. In addition, OFAC, in consultation with the Department of State, removed seven state-owned enterprises and three state-owned banks from the SDN List, but added six companies owned 50 percent or more by persons on the SDN List. For additional information, see our OFAC Update.

The Federal Reserve Board issued an Order for the payment of a Civil Money Penalty of $27,285 by First Community Bank, Glasgow, Montana, on May 11, 2016. The payment was made to the "National Flood Insurance Program," and forwarded via the Board to the Federal Emergency Management Agent (FEMA). Additional information is available in our May 11, 2016, Flood Penalty entry.

The NCUA has announced that 22 federally insured credit unions have consented to civil monetary penalties for filing late Call Reports in the fourth quarter of 2015. Twenty-eight credit unions consented to penalties in the fourth quarter of 2014. The late filers will pay a total of $13,548 in penalties. Individual penalties range from $157 to $2,580. The median penalty was $356.