Top Story Compliance Related

The Federal Emergency Management Agency has published a final rule in today's Federal Register identifying communities that will be suspended from the National Flood Insurance Program on July 18, 2017, for noncompliance with the floodplain management requirements of the program. Listed communities include:

• California—portions of Mendocino County
• Maine—portions of Washington County
• Pennsylvania—portions of Fayette County
• South Carolina—Towns of Reevesville and Summerville

The FDIC has issued FIL-24-2017 on behalf of the Federal Financial Institutions Examination Council announcing yesterday's publication of a proposal to make additional burden-reducing revisions and certain other reporting changes to all three versions of the Call Report. The changes would take effect March 31, 2018. To assist financial institutions in understanding how the proposal would affect the three versions of the Call Report, redlined copies of the FFIEC 051, FFIEC 041, and FFIEC 031 report forms showing the proposed burden-reducing changes and equity securities revisions are available on the FFIEC's website (https://www.ffiec.gov/ffiec_report_forms.htm) on the web page for each report form.

The Bureau has released a special edition of its monthly complaint report containing a snapshot of consumer complaints received from each state and the District of Columbia. The report provides statistics on complaint volume, the products and services generating the most complaints, company response rates, and a look at complaints from servicemembers and older Americans. The report also gives a national overview and spotlights narratives submitted by consumers regarding their experience with the CFPB’s complaint process.

• CFPB press release

The Federal Reserve Board has announced a $3 million fine against Bank of New York Mellon Corporation (BNY Mellon) for unsafe and unsound accounting practices after the firm improperly assigned a lower risk weighting to a portfolio of assets, reducing the firm's risk-based capital ratios. BNY Mellon incorrectly assigned the assets a zero-risk weighting, which was improper under the rules in place at the time. As a result of its improper treatment of the portfolio BNY Mellon understated its reported risk-weighted assets and overstated its risk-based capital ratios for nearly 14 quarters. BNY Mellon took action to correct its risk-weighting and risk-based capital ratios when the errors were identified, and is now in compliance. For additional information, see "BNY Mellon fined $3 million for accounting error," in our Penalty pages.

The OCC, Federal Reserve and FDIC have published [82 FR 29147] the FFIEC proposal announced last week for streamlining the Call Reports for a bank with domestic offices only and total assets less than $1 billion (FFIEC 051), a bank with domestic offices only (FFIEC 041), and a bank with domestic and foreign offices (FFIEC 031). Comments are due by August 28, 2017.

OFAC has added Mohammad Yusuf Shah, an individual alternatively described as an Indian and Pakistani national residing in Kashmir, to its list of Specially Designated Global Terrorists. For additional identity information, including several aliases, see our OFAC Update.

The Treasury Department has announced that American International Group, Inc. (AIG) of New York, NY, an international insurance and financial services organization incorporated in Delaware and headquartered in New York, has agreed to remit $148,698 to settle its potential civil liability for 555 apparent violations of OFAC sanctions programs — the Iranian Transactions and Sanctions Regulations; the Weapons of Mass Destruction Proliferators Sanctions Regulations; the Sudanese Sanctions Regulations; and the Cuban Assets Control Regulations. OFAC determined that AIG voluntarily self-disclosed the Apparent Violations, and that the apparent violations constitute a non-egregious case. For more details see our Penalty page.

A release from the June 21-23, 2017, plenary meeting of the Financial Action Task Force (FATF) reports that the main issues dealt with at the meeting included:

• Work on combating terrorist financing, which remains a priority for the FATF
• Work on improving transparency and beneficial ownership
• Adoption of the Report to the G20 Leaders’ Summit
• Impact of recent FATF work on de-risking
• Discussion of the mutual evaluation reports of Denmark and Ireland
• Statement on Brazil’s progress in addressing the deficiencies identified in its mutual evaluation reports, since the FATF’s statement of February 2017
• Two public documents identifying jurisdictions that may pose a risk to the international financial system:
  • Jurisdictions with strategic anti-money laundering and countering the financing of terrorism (AML/CFT) deficiencies for which a call for action applies, including an update on Iran’s engagement with FATF
  • Jurisdictions with strategic AML/CFT deficiencies for which they have developed an action plan with the FATF, including an update on AML/CFT improvements in Afghanistan and Lao PDR
• Adoption of a revision to the interpretative note to Recommendation 7 (Targeted Financial Sanctions Related to Proliferation)
• Proposals to strengthen FATF’s institutional basis, governance and capacity
• Outcomes of the meeting of the FATF Forum of Heads of Financial Intelligence Units, that was held in the margins of the Plenary
• Update on the activities of the FATF Training and Research Institute in Busan, Korea

The OCC will host a Building Blocks for Directors workshop in Lexington, Kentucky, at the Griffin Gate Marriott, August 7-9, for directors, senior management team members and other key executives of OCC-supervised institutions. The workshop combines lectures, discussion, and exercises to provide practical information on the roles and responsibilities of board participation. The workshop focuses on duties and core responsibilities of directors and management, discusses major laws and regulations, and increases familiarity with the examination process.

As the Fed gradually steers the discount rate higher, it has to make some adjustments in the rate tables in Regulation A (Extensions of Credit by Federal Reserve Banks) and Regulation D (Reserve Requirements of Depository Institutions). The Fed published final rules in today's Federal Register making those adjustments again:

• Regulation A—Amendments to § 201.51 (Interest rates applicable to credit extended by a Federal Reserve Bank), effective today, with the rate changes effective June 15, 2017.
• Regulation D—Amendments to § 204.10(b)(5) (Rates for Interest on Required Reserves and Interest on Excess Reserves), effective today, with rate changes effective June 15, 2017.

BankersOnline's Regulations pages will be updated today.