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The OCC has issued Bulletin 2024-3 reminding OCC-supervised financial institutions they should be preparing for a May 28, 2024, shortening of the standard securities settlement cycle for most U.S. securities transactions. The Securities and Exchange Commission (SEC) has adopted final rules that shorten the standard settlement cycle for most broker-dealer transactions from the second business day after the trade date (T+2) to the first business day after the trade date (T+1), beginning May 28.

The change will affect banks’ securities activities, including activities related to their investment and trading portfolios and securities settlement and servicing provided to banks’ custody and fiduciary accounts. Banks that offer nondeposit investment products through a third-party broker-dealer should assess the broker-dealer’s preparedness for the new settlement time frames.

The Bulletin includes detailed guidance on how banks should be preparing for the change.

The IRS has announced that businesses do not have to report the receipt of digital assets the same way as they must report the receipt of cash until Treasury and IRS issue regulations.

The Infrastructure Investment and Jobs Act revised the rules that require taxpayers that are engaged in a trade or business to report receiving cash of more than $10,000 by considering digital assets to be cash. Announcement 2024-4 provides transitional guidance as Treasury and the IRS implement the new provisions. This particular provision requires Treasury and the IRS to issue regulations before it goes into effect.

Businesses currently report their receipt of cash (and certain other) payments over $10,000 on Form 8300.

The CFPB on Jan. 17, 2024, announced a proposed rule to limit overdraft fees charged by insured financial institutions with more than $10 billion in assets. The proposal would amend Regulation Z to eliminate the exclusion of overdraft fees greater than required to recoup costs at an established benchmark or at a cost the banks calculate, if they show their cost data, from the definition of "finance charge."

Very large financial institutions would be required to treat overdraft loans like credit cards and other loans and to provide clear disclosures and other protections, using a credit account separate from the consumer's deposit account. It would also amend Regulation E to prohibit very large financial institutions from conditioning an extension of overdraft credit to a consumer on the consumer's repayment by preauthorized electronic fund transfers.

Comments on the CFPB’s proposal will be accepted through April 1, 2024. The CFPB proposes that a final rule relating to the proposal would have an October 1 effective date at least 6 months after the final rule is published in the Federal Register.

• Proposed rule
• Unofficial redline of proposed amendments to Regulations E and Z
• Fact Sheet on the proposed rule
• CFPB Director Rohit Chopra’s prepared remarks on the press call for this announcement
• Publication and comment period update: Published at 89 FR 13852 in the Feb. 23, 2024, Federal Register. Comments are due by Apr. 1, 2024.

The January 2024 update of the FDIC's Consumer Compliance Examination Manual affects two chapters of the Manual:

• Fair Lending Scope and Conclusions Memo (IV-3.1) was updated with technical and formatting changes related to the FDIC's shift from SOURCE to FOCUS.
• Expedited Funds Availability Act (VI-1.1) was updated with technical changes related to regulatory dollar-amount thresholds.

Editorial note: The $5,000 amount in the bullet list in the left column of page VI-1.6 was missed in the update. It should be $5,525. The update itself should have been made about four years ago when Regulation CC was updated. There is another threshold inflation adjustment that should be announced this year with an effective date of July 1, 2025.

On Friday, the Treasury Department reported that OFAC designated two companies in Hong Kong and the United Arab Emirates for shipping Iranian commodities on behalf of the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial facilitator Sa’id al-Jamal. OFAC also identified four vessels as blocked property in which these companies have an interest. The revenue from the commodity sales supports the Houthis and their continued attacks against international shipping in the Red Sea and the Gulf of Aden.

For the names and identification information of the designated entities and vessels, see the January 12, 2024, BankersOnline OFAC Update.

FinCEN has issued Paycheck Protection Program FAQs to re-publish a series of FAQs issued by the U.S. Small Business Administration.

FinCEN has updated its FAQs on Beneficial Ownership Information Reporting. New or updated information dated January 12, 2024, can be found in these sections:

• C (Reporting Company)
• D (Beneficial Owner)
• E (Company Applicant)
• F (Reporting Requirements)
• L (Reporting Company Exemptions)
• M (FinCEN Identifier)

On Thursday, the CFPB announced guidance to consumer reporting companies to address inaccurate background check reports, as well as “sloppy credit file sharing practices.” The two advisory opinions seek to ensure that the consumer reporting system produces accurate and reliable information and does not keep people from accessing their personal data.

• An advisory opinion on Fair Credit Reporting; Background Screening highlights that those reports must be complete, accurate, and free of information that is duplicative, outdated, expunged, sealed, or otherwise legally restricted from public access.
• An advisory opinion on Fair Credit Reporting; File Disclosure highlights that people are entitled to receive all information contained in their consumer file at the time they request it, along with the source or sources of the information contained within, including both the original and any intermediary or vendor source.

The advisory opinions will become effective on publication in the Federal Register.

Publication update: The advisory opinions were published at 89 FR 4171 (Background Screening) and 89 FR 4167 (File Disclosure) in the January 23, 2023, Federal Register.

Yesterday, the Federal Reserve Board announced four consent enforcement orders:

• John Freeze, former chief financial officer for Bank of Jackson Hole, Jackson, Wyoming, received an order of prohibition for misappropriation of documents, including confidential supervisory information
• Three former officers of Farmers and Merchants Savings Bank, Manchester, Iowa, received orders to cease and desist and to pay civil money penalties of $50,000 each, for misappropriation of confidential bank records:
  • Randy Johnson, former executive vice president
  • Chad Kellogg, former senior vice president for commercial lending
  • Jeffrey Hines, former senior vice president for commercial banking

The Federal Reserve Board has published its civil money penalty inflation adjustments for 2024 in the January 12, 2024, Federal Register.