Top Story Compliance Related

The Department of the Treasury announced multiple actions on Wednesday in response to the continued deterioration of the humanitarian situation in South Sudan and the role of officials of the South Sudanese Government in undermining the peace, security, and stability of the country. The Office of Foreign Assets Control (OFAC) designated two South Sudanese government officials and one former official for their roles in destabilizing South Sudan and three companies that are owned or controlled by one of the officials. Additionally, the Financial Crimes Enforcement Network (FinCEN) issued an advisory [FIN-2017-A004] to financial institutions concerning the potential movement of assets belonging to South Sudanese politically exposed persons.

For identification information on the designated individuals and entities, see our OFAC Update.

The CFPB announced Wednesday that it had taken action against an online lead aggregator for steering consumers toward lenders who offered illegal or unlicensed loans that were void in the consumer’s state. The CFPB's press release said Zero Parallel, LLC sold consumers’ payday and installment loan applications to lenders it knew were likely to make void loans that the lenders had no legal right to collect. The CFPB also submitted a proposed order in a separate case that would resolve a pending lawsuit against Zero Parallel’s owner, Davit Gasparyan, for engaging in similarly illegal conduct at his prior company, T3Leads. The CFPB ordered Zero Parallel to end its illegal conduct and pay a $100,000 penalty. The proposed order against Gasparyan, said the CFPB, would prohibit him from engaging in the same abusive practice and require him to pay a $250,000 penalty.

• Consent order against Zaro Parallel, LLC<.li>
• Proposed order with respect to Gasparyan
• Previous complaint against Gasparyan

On Wednesday, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and state bank regulators issued a joint statement that they recognize the serious impact of Hurricane Irma on the customers and operations of many financial institutions and will provide regulatory assistance to affected institutions subject to their supervision. The agencies encouraged institutions in the affected areas to meet the financial services needs of their communities.

The regulators urged bankers to work constructively with borrowers in communities affected by the hurricane, adding that financial institutions may receive CRA consideration for community development loans, investments, or services that revitalize or stabilize federally designated disaster areas in their assessment areas or in the states or regions that include their assessment areas. They also encouraged bankers to appropriately monitor investments in municipal securities and loans that might be affected by the storm, and make prudent efforts as needed to stabilize such investments.

The statement also related a number of regulatory accommodations and other assistance available to assist banks that are heavily impacted by the storm.

FinCEN and the CFPB have issued a joint memorandum on financial institution and law enforcement efforts to combat elder financial exploitation.

OCC Bulletin 2017-33, issued Friday, announced an updated version of the "Change in Bank Control" booklet of the Comptroller’s Licensing Manual.

The OCC has released ratings for 27 national banks and federal savings associations recently evaluated for compliance with the Community Reinvestment Act (CRA). Seven institutions were rated outstanding, nineteen satisfactory, and one needs to improve.

The Consumer Financial Protection Bureau has announced the filing of a proposed final judgment in federal court that would resolve a lawsuit against Prime Marketing Holdings, LLC for illegal credit repair practices. The lawsuit alleges that the company charged illegal advance fees and misled consumers about the cost and effectiveness of its services and the nature of its money-back guarantee. The proposed order would permanently ban the company from doing business within the credit repair industry and require a $150,000 civil money penalty.

The Summer 2017 edition of FDIC Supervisory Insights has been issued and includes articles on liquidity risk trends at community banks and the Bank Secrecy Act (BSA) supervision program.

The OCC has announced it will host two workshops in Chicago on October 3 and 4, for directors of national community banks and federal savings associations.

• The Compliance Risk workshop on October 3 focuses on the critical elements of an effective compliance risk management program and on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Flood Disaster Protection Act, Fair Lending, Home Mortgage Disclosure Act, Community Reinvestment Act, and other compliance areas of interest.
• The Operational Risk workshop on October 4 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, and cybersecurity.

The OCC has issued its CRA examination schedule for the fourth quarter 2017 and first quarter 2018.