Top Story Compliance Related

The Federal Reserve Board has announced two enforcement actions against Deutsche Bank AG that will require the bank to pay a combined $156.6 million in civil money penalties. The bank will pay a $136.9 million fine for unsafe and unsound practices in the foreign exchange (FX) markets, as well as a $19.7 million fine for failure to maintain an adequate Volcker rule compliance program prior to March 30, 2016.

• FX enforcement action
• Volcker rule enforcement action

The Office of the Comptroller of the Currency has announced new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

• A California bank was ordered to pay a $58,000 civil money penalty for a pattern or practice of violating the Flood Disaster Protection Act and its implementing regulations.
• A former Wisconsin banker was issued an order to pay $1.6 in restitution to his former bank and a $100,000 civil money penalty, and was banned from the industry for having "recklessly engaged in unsafe or unsound practices in conducting the affairs of the Bank and/or breached his fiduciary duties to the Bank. Respondent also acted with personal dishonesty and a willful and continuing disregard for the safety or soundness of the Bank that constituted a pattern of misconduct, during an extended period of time, that caused the Bank loss and from which he received a benefit."
• A former Citibank, N.A. foreign exchange trader found by the Comptroller to have engaged in a conspiracy with other ForEx traders to suppress or eliminate competition by fixing prices for foreign currencies traded in the U.S. and elsewhere, was issued an order of prohibition banning him from banking.
• A Massachusetts bank was issued a Cease and Desist order requiring improvements in corporate governance, management and staffing, and the adoption of strategic and capital plans.
• The New York, New York, licensed branch of USB, AG, signed a written agreement to address identified deficiencies in the branch's compliance with BSA/AML laws and regulations.

OFAC has announced the addition to its SDN Lists of two Mexican property management companies linked to Abigael Gonzalez Valencia, the leader of the Los Cuinis Drug Trafficking Organization (Los Cuinis DTO). OFAC designated these two Mexican companies today as Specially Designated Narcotics Traffickers (SDNTs) pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). As a result of that action, any assets the designees may have under U.S. jurisdiction are frozen, and U.S. persons are generally prohibited from engaging in transactions with them. For additional information, see our OFAC Update.

The Federal Trade Commission has announced it is seeking comment on proposed changes to TRUSTe's safe harbor program under the agency’s Children’s Online Privacy Protection Rule (COPPA). A notice will be published shortly in the Federal Register of proposed changes to the existing safe harbor program, including the addition of a new requirement that participants conduct an annual internal assessment of third-parties' collection of personal information from children on their websites or online services. Among the questions on which the Commission is seeking comment is whether the mechanisms used to assess compliance with the proposed modified program requirements are effective. The comment period will last for 30 days, until May 24.

The Department of Housing and Urban Development has announced a conciliation agreement with a group of California mortgage lenders to resolve allegations they discriminated against a mortgage applicant based on his national origin. A complaint filed by HUD alleged that American Financial Network of Brea, Benchmark Communities of Fresno, Brigantino Enterprise of Hollister, and an employee of Benchmark Communities failed to prequalify the applicant to purchase a home in Hollister because he is Hispanic. The case came to HUD's attention when the applicant filed a fair housing complaint alleging that he was unfairly denied an opportunity to prequalify for a mortgage loan, precluding him from purchasing a home because he is Hispanic. American Financial Network will pay the man $5,000; Benchmark Communities will provide annual fair housing training for its employees who interact with prospective homebuyers; and American Financial Network will provide annual fair housing training to current and new employees as they are hired.

The Bureau has announced it is updating its 2011 policy governing ex parte presentations. The policy generally requires public disclosure of ex parte communications made to the Bureau's decision-making staff about pending rules. Based on public feedback and CFPB’s own implementation experiences, some updates have been made to ensure the policy continues to foster fairness and transparency in rulemaking proceedings while also encouraging candid input from state entities. Key updates include a new state entity exemption and procedural improvements.

• Updated policy
• Original policy

UPDATE: The revised policy is scheduled for publication in the Federal Register on April 21, 2017, with an effective date of May 22, 2017.

The OCC has announced it will host two workshops at the Crowne Plaza San Antonio Airport in San Antonio, Texas, May 23-24, for directors of national community banks and federal savings associations. The Credit Risk workshop on May 23 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change. The Operational Risk workshop on May 24 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 also reported that space is still available at its community bank workshops in Charlotte, North Carolina on April 25-26. The agency has expanded the invitation to the Charlotte workshops to include executive management and other key management officials of OCC-supervised institutions.

The CFPB has filed a complaint in a federal district court against the debt collection law firm, Weltman, Weinberg & Reis, Cleveland, Ohio, for falsely representing in millions of collection letters to consumers that attorneys were involved in collecting the debt. The law firm made statements on collection calls and sent collection letters creating the false impression that attorneys had meaningfully reviewed the consumer’s file, when no such review had occurred. The CFPB is seeking to stop the unlawful practices and recoup compensation for consumers who have been harmed.

• Press release

The Federal Emergency Management Agency published in today's Federal Register a corrected list of communities in the State of Washington that were suspended on March 7, 2017, from the National Flood Insurance Program for non-compliance with the flood plain management requirements of the program. The list corrects the list published in FEMA's final rule published on March 13, 2017. The communities in the updated list are the cities of Lakewood and Ruston, both in Pierce County.

The OCC Office of Innovation will host two days of office hours for national banks, federal savings associations, and financial technology companies (fintech companies) wishing to discuss the OCC’s perspective on responsible innovation. This initial round of meetings will be held in the OCC's San Francisco Field Office on May 16 and 17, 2017. For more information see the agency's Innovation Home Page.