Top Story Compliance Related

In a presentation at the Marketplace Lending Policy Summit, Comptroller Curry discussed marketplace lending’s risks and associated policy questions. He noted, “Marketplace lending may use new technology or techniques, but it’s still about extending credit to borrowers—something that’s been done for more than 3,000 years. Technology has been part of banking since the beginning. Let’s not forget that the Sumerians' invention of coinage and cuneiform writing were revolutionary technological feats.” Curry indicated the OCC Innovation Framework Development Team will complete a framework this fall which will enable the OCC to assess responsible innovation that encourages and promotes advances in products, services, and processes that serve consumers, communities, and businesses better and more fairly.

OFAC has announced a $4.32 million settlement with PanAmerican Seed Co, to settle potential civil liability for alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). See the details in our BOL OFAC Update, "Seed company makes $4.3 M OFAC settlement."

The Department of Housing and Urban Development has published at 81 FR 63054 in today's Federal Register a final rule amending its fair housing regulations at 24 CFR part 100 to formalize standards for use in investigations and adjudications involving allegations of harassment on the basis of race, color, religion, national origin, sex, familial status, or disability. The rule specifies how HUD will evaluate complaints of quid pro quo (“this for that”) harassment and hostile environment harassment under the Fair Housing Act. It will also provide for uniform treatment of Fair Housing Act claims raising allegations of quid pro quo and hostile environment harassment in judicial and administrative forums. The rule defines “quid pro quo” and “hostile environment harassment,” as prohibited under the Fair Housing Act, and provides illustrations of discriminatory housing practices that constitute such harassment. In addition, this rule clarifies the operation of traditional principles of direct and vicarious liability in the Fair Housing Act context.

The CFPB has announced it has ordered for-profit college chain Bridgepoint Education, Inc., which deceived students into taking out private student loans that cost more than advertised, to discharge all outstanding private loans and to refund loan payments already made by borrowers. Loan forgiveness and refunds will total over $23.5 million in automatic consumer relief. Bridgepoint must also pay an $8 million civil penalty to the Bureau. For additional information on the Bureau's action, see "Bridgepoint Education penalized for student loan practices," in our Penalties pages.

The 2016 Interagency Fair Lending Hot Topics live webinar will be hosted by the Federal Reserve from 2–3 pm ET on October 4, 2016, . During the session, representatives from six federal agencies will discuss a variety of emerging fair lending issues and hot topics, including:

• CFPB updates
• Compliance management
• Redlining
• HMDA validation
• Automobile lending

The presentation will be followed by a Q&A, where speakers will respond to audience questions. .

The FFIEC has announced the revision of the “Information Security” booklet of its IT Handbook. The revised Information Security booklet provides guidance to examiners and addresses factors necessary to assess the level of security risks to a financial institution’s information systems. It also helps examiners evaluate the adequacy of the information security program’s integration into overall risk management. The OCC also issued Bulletin 2016-27 to announce the revision.

The feature article “Housing Financing in Indian Country: Spotlight on HUD’s Title VI Program,” in the September 2016 edition of the OCC Community Development Investments newsletter, describes the HUD Title VI loan guarantee program, and presents examples of how banks have used the program to extend financing for housing in Indian Country. How these activities may quality for Community Reinvestment Act consideration is also reviewed.

The Federal Trade Commission has announced that the owners of a debt relief operation that targeted consumers with outstanding payday loans will be banned from the debt relief business under settlements with the Commission. In February 2015, the FTC filed a complaint alleging that Jared Irby, Richard Hughes, Coastal Acquisitions LLC, PSC Administrative LLC, who typically did business as “Payday Support Center” or “Infinity Client Solutions,” falsely promised to resolve consumers’ payday loans through their hardship program. Once enrolled, consumers stopped making payments to their lenders, but the defendants failed to provide the promised debt relief, and consumers ended up in deeper financial trouble, having paid hundreds of dollars for no reduction or settlement of their loans, according to the agency.

FinCEN FIN-2016-A004, issued September 7, is an advisory on the Financial Action Task Force (FATF) June 2016 update of its list of jurisdictions with strategic AML/CFT deficiencies. These changes may affect U.S. financial institutions’ obligations and risk-based approaches with respect to relevant jurisdictions. For additional information see our June 27, 2016 Top Story, "FATF updates statements on high-risk and non-cooperative jurisdictions."

The OCC has issued a news release and issued Bulletin 2016-26 requesting comments on a proposed rule to prohibit national banks and federal savings associations from dealing and investing in industrial or commercial metals. The proposal covers metal, including alloy, in a physical form primarily suited to industrial or commercial uses. Examples include copper cathodes and aluminum T-bars. If finalized in its current form, this proposal would supersede a prior OCC determination permitting national banks to trade copper cathodes.

Update: The proposed rule was published at 81 FR 63428 on September 15, 2016. Comments close November 14, 2016.