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Top Story Compliance Related

12/13/2019

NCUA Board actions

The NCUA board has announced its approval of two measures at its meeting on December 12:

  • The operating, capital, and National Credit Union Share Insurance Fund budgets for 2020 and 2021
  • A two-year delay of the effective date of the agency's risk-based capital rule

12/13/2019

FDIC proposes to modernize brokered deposit regs

The FDIC has issued a notice of proposed rulemaking that would modernize its brokered deposit regulations. The proposal would, among other things, modernize the regulatory framework to remove regulatory disincentives to offering deposit accounts to customers through different channels.

The proposal would—

  • establish a new framework for analyzing whether deposits placed through deposit placement arrangements qualify as brokered deposits. These include arrangements between insured depository institutions (IDIs) and third parties, such as financial technology companies, for a variety of business purposes, including access to deposits, as well as IDIs' increasing reliance on new technologies to engage and interact with their customers.
  • revise the "facilitation" prong of the deposit broker definition so that it applies to any person that engages in specified activities, and provide that a wholly owned operating subsidiary be eligible for the "IDI exception" to the "deposit broker" definition under certain circumstances.
  • amend the "primary purpose" exception to apply when the primary purpose of an agent's or nominee's business relationship with its customers in the placement of funds with IDIs. The availability of the primary purpose exception would be clarified for third parties that place deposits through brokerage sweep accounts, under certain conditions, and to third parties whose primary purpose is enabling customers to make payments, under certain conditions.
  • establish an application process for any third party that wishes to use the primary purpose exception, and would require ongoing reporting.
  • continue to consider an agent's placement of brokered CDs as deposit brokering, and such deposits would continue to be reported as brokered

Comments on the proposal will be accepted for 60 days following publication in the Federal Register.

12/13/2019

FDIC and OCC proposal to modernize CRA

The FDIC and the OCC have announced a proposal to modernize the agencies’ regulations under the Community Reinvestment Act (CRA) that have not been substantively updated for nearly 25 years. The proposed rules are intended to increase bank activity in low- and moderate-income communities where there is significant need for credit, more responsible lending, greater access to banking services, and improvements to critical infrastructure. The proposals will clarify what qualifies for credit under the CRA, enabling banks and their partners to better implement reinvestment and other activities that can benefit communities. The agencies will also create an additional definition of “assessment areas” tied to where deposits are located—ensuring that banks provide loans and other services to low- and moderate-income persons in those areas.

Comptroller Otting and FDIC Chairman McWilliams issued statements regarding the publication of the joint notice of proposed rulemaking to modernize the Community Reinvestment Act (CRA) regulations. Comments on the proposal will be accepted for 60 days following Federal Register publication.

12/13/2019

Ortega son sanctioned for money laundering and corruption

Treasury has announced that OFAC has designated Rafael Antonio Ortega Murillo, son of Nicaraguan President Daniel Ortega, and two companies he owns or controls and uses to finance and launder money for the Ortega regime. OFAC also designated Distribuidor Nicaraguense de Petroleo S.A., a company owned or controlled by Rafael Antonio Ortega Murillo as well as by Nicaraguan Vice President and First Lady Rosario Maria Murillo De Ortega, and two other companies owned or controlled by Rafael Ortega.

For identification information on Rafael Ortega and the three companies designated, see BankersOnline's OFAC Update.

12/13/2019

Update on status of Payday Lending Rule

The U.S. District Court for the Western District of Texas (Austin Division) has again continued its stays of the litigation of pending case Community Financial Services Association of America, Ltd. et al v. Consumer Financial Protection Bureau et al and of the August 19, 2019, compliance date of the Bureau's Payday Lending Rule, and ordered that the parties file a Joint Status Report about proceedings related to the Rule and litigation no later than April 24, 2020.

12/12/2019

Operators of debt collection scheme banned

The Federal Trade Commission has announced that, under the terms of a settlement agreement with the Commission, the operators of a scheme that conned consumers into paying non-existent debts will be permanently banned from the debt collection business and from misleading consumers about debt. A complaint filed by the FTC against Global Asset Financial Services Group, LLC alleges that the operators of the company falsely claimed to be attorneys or affiliated with attorneys to pressure consumers into making payments on debts they did not owe, and threatened to take legal action against consumers if they did not pay. In addition to being banned from debt collection, debt brokering activities, and misleading consumers, the defendants also will be banned from misrepresenting to consumers whether they are attorneys.

12/12/2019

McWilliams on Brokered Deposits rule

In her keynote address at the Brookings Institution yesterday, FDIC Chairman Jelena McWilliams spoke on "Brokered Deposits in the FinTech Age." After discussing the history of the general prohibition on brokered deposits at banks with lower capital ratios, which was a reaction to the failures in 1982 of Pacific Coast Bank and Penn Square Bank, McWilliams discussed a revised rule with a new framework for brokered deposits that the FDIC Board is scheduled to vote on today.

12/12/2019

FDIC schedules 'listening session' webinar

FDIC FIL-80-2019, issued yesterday, announces a webinar to solicit feedback regarding its supervisory appeals and dispute resolution processes for FDIC-supervised financial institutions. The session will offer an opportunity for bankers and other interested parties to provide input and recommendations regarding these processes. Participants will also be asked to provide suggestions regarding the role of the Office of the Ombudsman in assisting in resolving disagreements. Participants will be requested to provide suggestions on information that the agency could publish on these topics.

The webinar is scheduled for 1:00 p.m. to 2:30 p.m. EST on Thursday, December&nps;19, using Cisco WebEx conferencing software. A Fact Sheet supplies additional details.

12/12/2019

Fed issued three outstanding CRA evals in November

Our review of the CRA evaluations made public by the Federal Reserve Board in November reveals that, of the 21 evaluations issued that month, 18 received a Satisfactory rating, and these three institutions' evaluations were rated Outstanding (links are to their evaluation reports):

12/12/2019

OFAC designates weapons network and Mahan Air agents

Treasury has announced that OFAC has designated an Iranian shipping network involved in smuggling lethal aid from Iran to Yemen on behalf of the Islamic Revolutionary Guards Corps-Qods Force (IRGC-QF). OFAC also designated three Mahan Air general sales agents—Gatewick LLC, Jahan Destination Travel and Tourism LLC, and Gomei Air Services Co., Ltd—based in the United Arab Emirates and Hong Kong. Mahan Air was designated in 2011 for providing financial, material, or technological support for or to the IRGC-QF. See BankersOnline's OFAC Update for identification details.

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