Skip to content

Exception Tracking Spreadsheet (TicklerTrax™)
Downloaded by more than 1,000 bankers. Free Excel spreadsheet to help you track missing and expiring documents for credit and loans, deposits, trusts, and more. Visualize your exception data in interactive charts and graphs. Provided by bank technology vendor, AccuSystems. Download TicklerTrax for free.

Click Now!


Top Story Compliance Related

10/26/2020

Agencies propose lower recordkeeping and travel rule threshold

The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board have invited comment on a proposed rule that would amend the recordkeeping and travel rule regulations under the Bank Secrecy Act.

FinCEN and the Board, under their shared authority, are proposing amendments to the recordkeeping rule jointly, while FinCEN is proposing amendments to the travel rule. Under the current recordkeeping and travel rule regulations, financial institutions must collect, retain, and transmit certain information related to funds transfers and transmittals of funds over $3,000. The proposed rule lowers the applicable threshold from $3,000 to $250 for international transactions. The threshold for domestic transactions remains unchanged at $3,000.

The proposed rule further clarifies that those regulations apply to transactions above the applicable threshold involving convertible virtual currencies, as well as transactions involving digital assets with legal tender status, by clarifying the meaning of "money" as used in certain defined terms.

Comments on the proposal will be accepted for 30 days following publication in the Federal Register.

PUBLICATION AND COMMENT PERIOD UPDATE: Published at 85 FR 68005 on 10/27/2020, with a comment period ending 11/27/2020.

10/26/2020

FATF strengthens standards against proliferation financing

Treasury reports that the Financial Action Task Force (FATF) concluded its 32nd plenary meeting on Friday, October 23, by agreeing to revise its standards to further strengthen the global response to the financing of proliferation related to weapons of mass destruction. The endorsement of the new standard is a result of an initiative that began under the U.S. FATF presidency and was adopted by finance ministers of FATF members in 2019.

The FATF also continued its focus on the impact of the COVID-19 pandemic on detecting and countering fraud including attempts to defraud government-backed stimulus programs. The task force also adopted an updated report on trade-based money laundering and recognized progress by a number of jurisdictions in rectifying their AML/CFT deficiencies.

10/26/2020

Russian government research institute sanctioned

On Friday, the Department of the Treasury announced that OFAC had designated, in accordance with Section 224 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), a Russian government research institution—State Research Center of the Russian Federation FGUP Central Scientific Research Institute of Chemistry and Mechanics (TsNIIKhM)—that is connected to the destructive Triton malware. The Triton malware—known also as TRISIS and HatMan in open source reporting—was designed specifically to target and manipulate industrial safety systems, which provide for the safe emergency shutdown of industrial processes at critical infrastructure facilities in order to protect lives.

For detailed identification information on TsNIIKhM, see this BankersOnline OFAC Update.

10/23/2020

CFPB ANPR on consumer access to financial records

The CFPB announced yesterday an advance notice of proposed rulemaking (ANPR) requesting information related to consumer access to financial records.

The CFPB is asking the public how it might most efficiently and effectively develop regulations to implement Section 1033 of the Dodd-Frank Act, which provides for consumer rights to access financial records. When consumers use financial products and services, the providers of those products and services generally accumulate data about those consumers and their use of those products and services. Consumer access to these data allow consumers to manage their financial accounts and can enhance consumers’ control of their financial matters.

Consumers may realize these benefits by authorizing third parties to access these data on their behalf and allowing those third parties to deliver new or improved financial products and services. Use cases for consumer-authorized data include personal financial management, making and receiving payments, assisting consumers with improving savings outcomes, underwriting credit, and many other services.

While consumer access to financial records can enable the development of innovative and beneficial consumer financial products, it can also present consumer risks. The Bureau’s ANPR seeks comments and information on costs and benefits of consumer data access; competitive incentives; standard-setting; access scope; consumer control and privacy; and data security and accuracy.

Comments on the ANPR will be accepted for 90 days following its publication in the Federal Register.

UPDATE ON PUBLICATION AND COMMENT DUE DATE: Published at 85 FR 71003 on November 6, 2020, in the Federal Register, with comments due by February 4, 2021.

10/23/2020

Goldman Sachs fined $2.9B

The Federal Reserve Board has announced it has issued an order to cease and desist and for assessment of a civil money penalty of $154 million against Goldman Sachs Group, Inc., for the firm's failure to maintain appropriate oversight, internal controls, and risk management with respect to Goldman's involvement in a far-reaching scheme to defraud a Malaysian state-owned investment and development company, 1Malaysia Development Berhad (1MDB).

In 2012 and 2013, Goldman arranged and underwrote three bond offerings that raised $6.5 billion for 1MDB. Certain former Goldman bankers in Asia participated in a scheme with Malaysian businessman Low Taek Jho and others to divert substantial portions of the proceeds from the 1MDB offerings for their personal benefit and to pay bribes to certain foreign government officials. Goldman's transaction approval processes and internal controls failed to detect or prevent the scheme or to address obvious red flags around the 1MDB offerings.

The Board is requiring Goldman to improve its risk management and oversight of significant and complex transactions, enhance its due diligence related to these transactions, and improve its anti-bribery compliance program. The Board's action is being taken in conjunction with actions by other authorities including the U.S. Department of Justice, the Securities and Exchange Commission, the New York Department of Financial Services, the U.K. Financial Conduct Authority, and the Bank of England Prudential Regulation Authority, and other foreign authorities. The penalties and disgorgement announced by all of the agencies total approximately $2.9 billion.

10/23/2020

High ranking Hizballah officials and entities designated

OFAC has announced counter terrorism designations, Iran-related designations and updates, foreign interference in U.S. election designations, and a Syria designation update.

  • Two members of Hizballah’s Central Council—Nabil Qaouk and Hassan al-Baghdadi. The Central Council is responsible for identifying and electing the group’s highest decision-making body, the Shura Council, which formulates policy and asserts control over all aspects of Hizballah’s activities, including its military activities.
  • Iraj Masjedi, a general in Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Iran’s Ambassador to Iraq.
  • Five Iranian entities for attempting to influence elections in the United States

The full SDN listings of each of the individuals and entities designated can be found in this BankersOnline OFAC Update.

10/21/2020

Agencies' rule to reduce impact of large bank failures

The federal bank regulatory agencies—The OCC, Federal Reserve Board, and FDIC—have finalized a rule to limit the interconnectedness and reduce the impact from failure of the largest banking organizations. The final rule is substantially similar to the proposal announced last year and complements other measures that the agencies have taken to limit interconnectedness among the largest banking organizations.

U.S. global systemically important bank holding companies, or GSIBs, as well as U.S. intermediate holding companies of foreign GSIBs, are required to issue debt with certain features under the Federal Reserve Board’s “total loss-absorbing capacity,” or TLAC, rule. That debt could be used to recapitalize the holding company during bankruptcy or resolution if it were to fail.

To discourage the largest banking organizations from purchasing TLAC debt, the final rule prescribes a more stringent regulatory capital treatment for holdings of TLAC debt. The regulatory capital treatment in the final rule will help to reduce the interconnectedness between the largest banking organizations and, if a GSIB were to fail, reduce the impact on the U.S. financial system from that failure.

This rulemaking, which becomes effective April 1, 2021, also includes a revision to the Federal Reserve Board’s TLAC requirements that will require GSIBs to report publicly their outstanding TLAC debt.

10/21/2020

FDIC approves temporary Part 363 amendment

The FDIC has issued an interim final rule to provide relief for insured depository institutions that have experienced large cash inflows resulting from participation in the Paycheck Protection Program, the Money Market Mutual Fund Liquidity Facility, and the Paycheck Protection Program Liquidity Facility, or due to other factors such as the effects of other government stimulus efforts, and, absent regulatory action, would be required to incur substantial costs on a temporary basis.

The rule will allow IDIs that have experienced growth to determine whether they are subject to the requirements of Part 363 of the FDIC’s regulations for fiscal years ending in 2021 based on the consolidated total assets as of December 31, 2019. Such IDIs, whose asset growth may be temporary but significant, would be otherwise required to develop processes and systems to comply with the annual independent audits and reporting requirements of Part 363 on a potentially short-term basis.

The rule is effective immediately and remains effective through December 31, 2021, unless extended by the FDIC. Comments on the rule will be accepted for 30 days after it is published in the Federal Register.

PUBLICATION UPDATE: This rule was published at 85 FR 67427 on October 23, 2020. The comment period will end on Monday, November 23, 2020.

10/21/2020

OFAC settlement with Berkshire Hathaway

OFAC has announced a $4,144,651 settlement with Berkshire Hathaway, Inc. (“Berkshire”), a multinational conglomerate holding company based in Omaha Nebraska, and its foreign subsidiary, Iscar Kesici Takim Ticareti ve Imalati Limited Sirket (“Iscar Turkey”).

Berkshire, on behalf of itself and its subsidiary located in Turkey, has agreed to settle its potential civil liability for 144 apparent violations of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR). Specifically, between December 2012 and January 2016, Iscar Turkey exported 144 shipments of cutting tools and related inserts, with a total value of $383,443, to two third-party Turkish distributors knowing that such goods would be shipped to a distributor in Iran for resale to Iranian end-users, including several entities later identified as meeting the definition of the Government of Iran, which would have been prohibited if engaged in by a U.S. person. These transactions appear to have violated § 560.215 of the ITSR. OFAC determined that Berkshire voluntarily self-disclosed the apparent violations on behalf of Iscar Turkey, and that the apparent violations constitute an egregious case.

According to OFAC's Enforcement Release, Iscar Turkey's action violated Berkshire's compliance policies, and Iscar Turkey took steps to obfuscate its dealings with Iran, including concealing these activities from Berkshire. The Apparent Violations occurred under the direction of certain Iscar Turkey senior managers despite Berkshire and other Berkshire subsidiaries’ repeated communications and policies sent to Iscar Turkey regarding U.S. sanctions against Iran and the application of the ITSR to Iscar Turkey’s operations. The General Manager and his employees took certain steps to conceal Iscar Turkey’s activities and plans with Iran such as: (1) utilizing private email addresses that bypassed the controls and visibility of the corporate email system to communicate about orders from Iranian customers; (2) utilizing false names in internal records of Iscar Turkey to conceal transactions; (3) providing false assurances in response to compliance inquiries; (4) providing fraudulent evidence of a compliance training session; and, (5) when the internal investigation was initiated, lying to interviewers and counseling others to lie.

Berkshire voluntarily self-disclosed the apparent violations to OFAC in May 2016 after receiving an anonymous tip in January 2016. Berkshire followed with multiple mitigating actions in cooperation with the OFAC investigation. Those mitigating actions helped reduce the base civil monetary penalty for the violations from $18.4 million to the settlement amount of $4,144,651.

10/20/2020

ACCESS initiative launched by NCUA

NCUA Chairman Hood has announced the launch of the agency’s new Advancing Communities through Credit, Education, Stability, and Support (ACCESS) initiative, which will bring together leaders across the NCUA to refresh and modernize regulations, policies, and programs in support of greater financial inclusion within the agency and the credit union system. Efforts under this program include increasing access to credit and loan products, dedicating resources to help people make smart financial decisions, enhancing existing programs that encourage credit union membership and access to financial services, and fostering inclusive policies and outreach efforts in the community.

Pages

Training View All

Penalties View All

Search Top Stories